TCR_Public/010817.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

            Friday, August 17, 2001, Vol. 5, No. 161

                           Headlines

@COMM: Voluntarily Files Chapter 11 In N.D. California
360NETWORKS INC: Moves To Set Up Interim Compensation Procedures
AMERICAN HOMESTAR: Court OKs, Confirms Reorganization Plan
AMF BOWLING: Lease Decision Period Extended To January 2, 2002
BRIDGE INFORMATION: Gets Order To Reject 18 Executory Contracts

CLASSIC COMMUNICATIONS: Hires CSFB as Financial Advisor
COHO ENERGY: Appaloosa, Tepper Take 28.59% Of Common Stock
COMDISCO INC: Seeks Court Approval Of Asset Sale Procedures
CONNECTICARE: S&P Assigns BB Ratings; Says Outlook Stable
CONSUMERS PACKAGING: Court Extends CCAA Protection To Aug 31

COVAD COMMS: Files Reorg Petition To Discharge $1.4-B Debt
COVAD COMMS: Case Summary & 20 Largest Unsecured Creditors
DERLAN INDUSTRIES: Mexican Unit Violates Bank Loan Covenant
EGGHEAD.COM: Enters Deal To Sell Assets To Fry's Electronics
FINOVA GROUP: Unit Files Claims Against Sunterra

GENESIS HEALTH: Time To Decide On Leases Extended To October 22
GLOBAL TELESYSTEMS: Banks Extend Waiver Of Defaulted Facilities
ICG COMMUNICATIONS: Wells Fargo Calls For End Of Stay
INTERNATIONAL KNIFE: Sells Shares In German Unit
K2 DIGITAL: Nasdaq Delists Shares

KELLSTROM INDUSTRIES: Exchange Offer Fails; Exploring Options
KRAUSE'S FURNITURE: Buxbaum Launches GOB Sales in Texas & Calif.
LAIDLAW INC: Safety-Kleen Appears On the Scene
LOEWEN: FSAG Seeks OK For Settlement With Howe Re Colorado Lease
MADGE NETWORKS: Posts Improved Half-Year Results

OWENS CORNING: Committee Gets Court's Nod To Retain Chambers
OXIS INTL: Failure To Raise More Funds May Compel Bankruptcy
PACIFIC GAS: Panel Gets Court Approval To Retain LCG Consulting
PACIFIC GAS: Charges DWR Continues to Overestimate Power Costs
PILLOWTEX CORP: Seeks To Sell Blanket Division Assets

RHYTHMS NETCONNECTIONS: Seeks Modified SEC Reporting Procedures
SAFETY-KLEEN: Reliant Moves To Compel Assumption Of Gas Deal
TACT: Seeks Nasdaq Hearing Re Listing Status
UNIFORET: Creditors Okay Revised Plan Of Arrangement
UNITED SHIPPING: Faces Delisting From Nasdaq

US DIAGNOSTIC: Posts Q2 Net Loss of $12.3M
WAVVE TELECOMMUNICATIONS: Files Chapter 11 in ED California
WEBLINK WIRELESS: Q2 EBITDA Climbs To $4.1M
WHEELING-PITTSBURGH: Claims Ownership Of Follansbee Plant
WINSTAR COMMUNICATIONS: Seeks Court-Ordered Power To Enter Deals

YES CLOTHING: Doubts Cast On Ability To Continue Operations

BOOK REVIEW: PANIC ON WALL STREET: A History Of America's
              Financial Disasters

                           *********

@COMM: Voluntarily Files Chapter 11 In N.D. California
------------------------------------------------------
@Comm, a provider of telemanagement products and services,
announced that the Company plans to reorganize under Chapter 11
of the U.S. Bankruptcy Code.

The filing, made voluntarily on Aug. 15, 2001 in the U.S.
Bankruptcy Court for the Northern District of California, will
enable @Comm to continue to develop and provide innovative and
cost effective call accounting, traffic engineering and
facilities management products and solutions to its
customers and markets it has been serving for 18 years.

@Comm intends to continue its day-to-day operations of
developing and selling its products and supporting its customers
during the process of reorganization.

The company has no long-term debt and does not expect that it
will require any additional financing to continue its current
operations.

"As we enter this process and continue to focus on our customers
and core markets, we plan to maintain our commitments for new
product development. As an example, our new CommView call
accounting and traffic engineering products have been well
received," said @Comm Chief Executive Officer William Welling.

"@Comm has served this market for over 18 years and intends
to continue to service and support fully its customers
throughout this process. Our goal is to emerge from this
reorganization with a healthy financial structure and continue
to be a leader in the Telemanagement industry. In addition, we
will be exploring options to resuming the development of Town
Square, a complete communications voice and data solution
platform for small businesses and carriers," Mr Welling said.

                        About @Comm

@Comm, formerly known as Xiox Corporation, develops, markets and
services a complete line of telemanagement systems and solutions
under the Xiox brand name. These products provide business with
cost-saving capabilities for telephone expense control,
billback, utilization, and fraud control.

Its product line includes an integrated communications system
that provides small businesses and branch offices with smart,
fully integrated telephony and data networking capabilities.

This platform enables advanced communications features,
including new carrier services and applications while
significantly reducing complexity and operating costs.

For more information: visit http://www.atcomm.com


360NETWORKS INC: Moves To Set Up Interim Compensation Procedures
----------------------------------------------------------------
360networks Inc. is seeking the establishment of procedures for
compensation and reimbursement of court-approved professionals
on a monthly basis.

The proposed procedures require each Professional to present a
detailed statement of services rendered and expenses incurred by
such Professional for the prior month. If there were no timely
objection, the Debtors would pay 80 percent of the amount of
fees incurred for the month, with a 20 percent holdback, and 100
percent of disbursements for the month.

These payments would be subject to the Court's subsequent
approval as part of the normal interim fee application process,
which is every 120 days.

Alan J. Lipkin, Esq., at Willkie Farr & Gallagher, in New York,
describes the proposed compensation procedures:

    (a) On or before the 30th day following the month for which
compensation is sought, each Professional will serve a monthly
statement to:

         (i) the Debtors;

        (ii) counsel to the Debtors;

       (iii) counsel to the Administrative Agent to the
             Pre-petition Lenders;

        (iv) counsel to the Committee;

         (v) the Office of the United States Trustee.

    (b) The monthly statement need not be filed with the Court
and a courtesy copy need not be delivered to chambers as
approval of such statement and payment under the procedures set
forth herein is not intended to alter the fee application
requirements outlined in 330 and 331 of the Bankruptcy Code and
the Professionals are still required to serve and file interim
and final applications for approval of fees and expenses in
accordance with the relevant provisions of the Bankruptcy Code,
the Federal Rules of the Bankruptcy Procedure and the Local
Rules of this Court;

    (c) Each monthly fee statement must contain a list of the
individuals who provided services during the statement period,
their respective titles and billing rates, the aggregate hours
spent by each individual, a reasonably detailed breakdown of the
disbursements incurred, and contemporaneously maintained time
entries for each individual in increments of 1/10 of an hour;

    (d) Each person receiving a statement will have 20 days after
its service to review such statement and, if such person has an
objection to the compensation or reimbursement sought in any
particular statement, to serve upon the Professional whose
statement is objected to, and the other Service Parties, a
written "Notice of Objection to Fee Statement" setting forth the
nature of the objection with particularity and the amount of
fees of expenses at issue;

    (e) If no objection is served in accordance with paragraph
(d), at the expiration of the 20-day period, the Debtors shall
promptly pay 80 percent of the fees and 100 percent of the
expenses identified in each monthly statement;

    (f) If the Debtors receive an objection to a particular
statement, then they shall withhold payment on that portion of
the fee statement to which the objection is directed and
promptly pay the remainder of the fees and disbursements in the
percentages set forth in paragraph (e);

    (g) If the parties to an objection are able to resolve their
dispute following the service of Notice of Objection to Fee
Statement and if the party whose statement was objected to
serves on all Service Parties a statement indicating that the
objection is withdrawn and describing in detail the terms of the
resolution, then the Debtors shall promptly pay, in accordance
with paragraph (e), that portion of the fee statement that is no
longer subject to an objection;

    (h) All objections that are not resolved by the parties shall
be preserved and presented to the Court at the next interim or
final fee application hearing to be held by the Court;

    (i) The service of an objection in accordance with  paragraph
(d) shall not prejudice the objecting party's right to
object to any fee application made to the Court in accordance
with the Bankruptcy Code on any ground whether raised in the
objection or not. Further, the decision by any party not to
object to a fee statement shall not be a waiver of, or any kind
of prejudice to, that party's right to object to any fee
application subsequently made to the Court in accordance with
the Bankruptcy Code;

    (j) Approximately every 120 days, but no more than every 150
days, each of the Professionals shall serve and file with the
Court an application for interim or final Court approval and
allowance, pursuant to sections 330 and 331 of the Bankruptcy
Code (as the case may be), of the compensation and reimbursement
of expenses requested;

    (k) Any Professional who fails to file an application seeking
approval of compensation and expenses previously paid under the
procedures set forth herein, when due, shall be ineligible to
receive further monthly payments of fees or expenses as provided
herein until such application is filed;

    (l) The pendency of an application or a Court order that
payment of compensation or reimbursement of expenses was
improper shall not disqualify a Professional from the future
payment of compensation or reimbursement of expenses as set
forth above, unless otherwise ordered by the Court;

    (m) Neither the payment of, nor the failure to pay, in whole
or in part, monthly compensation and reimbursement as provided
herein, shall have any effect on the Court's interim and final
allowance of compensation and reimbursement of any Professional;
and

    (n) Counsel for the Committee may, in accordance with the
foregoing procedure for monthly compensation and reimbursement
of Professionals, collect and submit statements of expenses,
with supporting vouchers, from members of the Committee;
provided, however, that such committee counsel ensures that
these reimbursement requests comply with the Court's
Administrative Orders, dated June 24, 1991 and April 14, 1995,
and any operative guidelines promulgated by the Office of the
Unites States Trustee.

If the Court approves these procedures, Mr. Lipkin says, it will
enable all parties to closely monitor costs of administration.

At the same time, Mr. Lipkin adds, it will also enable the
Debtors to maintain a more level cash flow availability and
implement efficient cash management procedures. (360 Bankruptcy
News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


AMERICAN HOMESTAR: Court OKs, Confirms Reorganization Plan
----------------------------------------------------------
American Homestar Corporation (NQB - Pink Sheets:HSTRQ)
announced that its Plan of Reorganization was accepted by a
large majority of its creditors and confirmed by the Bankruptcy
Court.

The Company and 21 subsidiaries filed their original petitions
under Chapter 11 of the Bankruptcy Code on January 11, 2001.

Under the Plan, the Company will convert most of its unsecured
debt to equity (in the form of Class C Common Stock) or will
make a fractional payment to unsecured creditors who elect such
payment instead of stock. All currently outstanding common and
preferred shares will be canceled.

Also in connection with the Plan, the Company's present
inventory financing source, Associates Housing Finance, LLC., is
providing exit financing of up to $38 million for the purchase
of display models, stock inventory and pre-sold homes. This line
of credit is committed for three years and carries an interest
rate of prime plus 1 percent.

The Company will continue to operate in its core Southwest
market region with 40 company stores and three manufacturing
plants (two of which are currently producing new homes).

The Company will also continue its financing, insurance and
transportation activities.

The Company's Chairman, President, and CEO, Finis F. Teeter,
commented, "Gaining approval and confirmation of our plan is a
milestone event for the Company and for its many constituencies.
The fact that we were able to accomplish this in seven months,
especially given the complex nature of our case, is clear
evidence of our resolve and a vote of confidence as to the
future prospects of the Company.

"As we now emerge from the reorganization process, we have a
solid and significantly de-leveraged balance sheet and all
infrastructure in place. We are constantly gaining momentum
toward our goal of being the leading manufactured housing
company in this region."

American Homestar is a vertically integrated manufactured
housing Company that manufactures, retails, finances, insures,
and transports manufactured homes for its customers.


AMF BOWLING: Lease Decision Period Extended To January 2, 2002
--------------------------------------------------------------
Judge Tice rules that the Motion of AMF Bowling Worldwide, Inc.
for more time to make lease decisions is granted.

The time in which the Debtors may assume or reject leases is
extended to January 2, 2002 provided that such extension shall
be without prejudice to the Debtors' or lessors' right to
request increase or shorten such extension by appropriate notice
or motion.

Judge Tice further rules that the extension does not apply to
the following leases:

  Center #    Center Name   Location         Landlord
  --------    -----------   --------         --------
    210       34th Avenue   Woodside, NY Herricks Fore Plan, Inc.

    167       Hamden Lanes  Hamden, CT   MC Corporation

    568       Fiesta Lanes  San Jose, CA Bernard M. Wolfe,
                                         Trustee for Eflow
                                         Investment Trust II

    155       Country Lanes San Antonio, Kimsward
                            TX

              Playmaster    Bland, MO    Charles L. Bailey and
              Mfg. Facility              Kathryn Bailey

With respect to these leases, the Debtors shall file a motion
with the Court to assume or reject no later than August 31,
2001.

Judge Tice also rules that the lease dated December 1990 between
AMF Bowling Centers, Inc. and Hunt Valley Business Center L.P.
is deemed rejected and terminated. Hunt Valley Business Center
L.P. shall file any proof of claim relating to its lease no
later than September 24, 2001. (AMF Bankruptcy News, Issue No.
5; Bankruptcy Creditors' Service, Inc., 609/392-0900)


BRIDGE INFORMATION: Gets Order To Reject 18 Executory Contracts
---------------------------------------------------------------
Bridge Information Systems, Inc. sought and obtained an order
rejecting 18 executory contracts effective as of March 15, 2001.

With the rejection of these contracts, the Debtors saved
approximately $721,884 per month of unnecessary administrative
expenses. If the Debtors have made any post-petition payments,
Judge McDonald ordered the counterparties of the rejected
contracts to pay back the Debtors immediately.

(A) Data Contracts

Bridge's Data Contracts with these counter parties are deemed
terminated:

    (1) Gas Enerfax

    (2) Waterman

    (3) Technical Dimensions

    (4) Intuition Publishing

    (5) Salomon Brothers International

    (6) Foundation for International (FIBER)

    (7) Liberty Brokerage/Securities Info. Corp.

    (8) The Bond Buyer, Inc.

    (9) Analytics Research Inc.

The aggregate cost to the Debtors for the Data Contracts is
approximately $379,472 per month. These Data Providers
supplied the Debtors with training software for the financial
markets and licenses to access and to distribute a variety of
data, including commodities, energy, bonds, corporate
fundamentals and corporate actions data.

(B) Advertising Contracts

Judge McDonald also approved the rejection of Advertising
Contracts with these counter parties:

    (1) Disson-Furst and Partners

    (2) Kiel Centers Partners, LP & St. Louis Blues

    (3) Kiel Centers Partners, LP

    (4) St. Louis Cardinals, LP

    (5) St. Louis Rams Partnership

    (6) Community Television Foundation of South Florida, Inc.

The Advertising Contracts cost the Debtors approximately
$319,830 per month. Pursuant to these Advertising Contracts,
the Debtors:

    (i) sponsor a cycle team;

    (ii) advertise within the SAVVIS (Kiel) Center;

    (iii) license the use of suites for promotional purposes at
the SAVVIS (Kiel) Center, Busch Stadium and the
America's Center; and

    (iv) sponsor a nightly television broadcast.

The Court also authorized Kiel Centers Partners, LP, to apply
the Debtors' deposit in the approximate amount of $47,750
currently held by KCP pursuant to the Debtors' executory
contract with KCP related to Kiel/Savvis Center Suite #234
against KCP's rejection damage claim arising out of the
rejection of the Savvis Center Contract.

(C) Other Contracts

In addition, the rejection of these contracts was authorized:

    (1) the Xerox Contract, pursuant to which Xerox manages,
operates and provides staffing for the Debtors' print
facilities;

    (2) the Vertecon Contract, pursuant to which Vertecon
provides Web development and design services to Debtors.

    (3) Dow Jones Telerate Data License Agreement, dated December
1995, between Financial Times Information/Interactive
Data, formerly known as Valorinform, S.A., and Dow Jones
Telerate.

The Debtors eventually withdrew the portion of their Motion,
which sought to reject the Data Distribution Agreement dated
December 1997 between Telerate, Inc. and Interactive Data
Corporation. (Bridge Bankruptcy News, Issue No. 13; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


CLASSIC COMMUNICATIONS: Hires CSFB as Financial Advisor
-------------------------------------------------------
Classic Communications, Inc. (NASDAQ: CLSC) booked for the
quarter ended June 30, 2001 total revenues of $46.1 million, a
sliding 2.1 percent from $47.1 million incurred in the same
period last year.

Basic revenues for the second quarter of 2001 stood at $37.9
million, down 1.5 percent from $38.5 million in the year-ago
period.

While the Company served 19,000 fewer subscribers at June 30,
2001 compared to the end of the second quarter in 2000, the
impact on basic revenue was mitigated by rate increases
implemented in the first quarter of 2001.

The basic rate increases coupled with the addition of 35,000
digital customers has led to an increase in the total monthly
revenue per average basic subscriber from $39.21 for the second
quarter of 2000 to $40.87 for the corresponding period in 2001.

Total operating expenses (excluding depreciation and
amortization) for the three months ended June 30, 2001 were
$33.2 million compared to $28.1 million for the three months
ended June 30, 2000, an increase of 17.9 percent. The increase
is primarily attributable to a $1.3 million increase in
programming expenses due to increased rates charged by
programming vendors and a $3.0 million increase in professional
fees related to the Company's financing and restructuring
activities.

Adjusted EBITDA was $16.8 million for the quarter ended June 30,
2001, compared to $19.0 million for the quarter ended June 30,
2000, a decrease of 11.8 percent.

The Adjusted EBITDA margin for the second quarter of 2001 was
36.4 percent compared to 40.3 percent for the second quarter of
2000.

            Credit Suisse Retained As Advisor

As previously announced, Classic Communications has retained
Credit Suisse First Boston Corporation (CSFB) as a financial
advisor to consider options relating to refinancing, raising new
capital and restructuring existing debt.

CSFB continues to have discussions with the Company's senior
lenders and holders of the Company's subordinated debentures to
pursue a consensual restructuring of the Company's debt. The
Company continues to pursue other alternatives to improve its
liquidity position, including the sale of certain of its small
cable systems.

If the Company is unable to execute the said actions in a timely
manner, the Company may seek to reorganize utilizing the
protections available to it under the federal bankruptcy laws.

The Company is working closely with various venders and its
employees to make certain it can continue to provide quality
service to all of its customers.

Classic Communications, Inc., based in Tyler, Texas, has
approximately 376,500 subscribers in non-metropolitan markets in
Texas, Kansas, Oklahoma, Nebraska, Missouri, Arkansas,
Louisiana, Colorado, Ohio and New Mexico.

Classic trades on the NASDAQ under the trading symbol "CLSC".


COHO ENERGY: Appaloosa, Tepper Take 28.59% Of Common Stock
----------------------------------------------------------
Appaloosa Management L.P. and David Tepper beneficially own
5,351,611 shares of the common stock of Coho Energy Inc., with
sole voting and dispositive powers. This amount represents 28.59
percent of the outstanding common stock of the Company.

In accordance with the terms of the Company's Plan of
Reorganization, which was confirmed by the United States
Bankruptcy Court for the Southern District of Texas pursuant to
an order entered on March 20, 2000, the Purchasers are entitled
to designate two directors to serve on the Company's board of
directors.

The Purchasers designated James Bolin, Vice President and
Secretary of API, and Ronald Goldstein, Vice President and Chief
Financial Officer of the Manager, to serve as two of the
directors on the Company's board of directors.

On August 10, 2001, James Bolin and Ronald Goldstein advised the
Company that they were resigning, effective immediately, as
directors of the Company.

Pursuant to the Company's Plan of Reorganization, the Purchasers
are entitled to fill the vacancies on the Company's board of
directors created by the resignations of Mr. Bolin and Mr.
Goldstein but, as of August 9, 2001, the Purchasers have not
designated replacements for either Mr. Bolin or Mr. Goldstein to
serve on the Company's board of directors.


COMDISCO INC: Seeks Court Approval Of Asset Sale Procedures
-----------------------------------------------------------
Comdisco Inc has filed a motion seeking the Court's approval of
the proposed procedures to sell certain assets of Prism and
other de minimis assets of Comdisco's estates.

When Prism ceased operations last October 2000, it immediately
began liquidating its assets.

Pursuant to a marketing agreement, Comdisco's Telecommunications
Group was tasked to help sell Prism's assets either in place or
individually.

With Telecom's assistance, Prism sold its assets in place in
Pittsburgh, Seattle, Houston, Boston, Philadelphia, and
Washington, D.C., and components in Indianapolis, Kansas City
and St. Louis. Prism's remaining assets that remain to be sold
include switches and office furniture from 29 sites in 20
states.

The Debtors ask Judge Barliant for authority to sell such de
minimis sale assets without seeking court approval. Obtaining
court approval for each sale of assets would only add to the
Debtors' burden in drafting, serving and filing pleadings.
Besides, none of the sale assets are expected to exceed
$1,000,000 in value.

So instead of seeking Court approval, the Debtors propose that
the procedures for the sale of the assets be implemented:

    (a) Debtors will give notice of each proposed sale to:

       (i) the United States Trustee

       (ii) counsel to any official committee formed in these
cases

       (iii) counsel for post-petition lenders

       (iv) any known holder of lien, claim or encumbrance
against the specific property to be sold

       The notice of sale shall specify:

          (1) assets to be sold

          (2) identity of the proposed purchaser

          (3) proposed sale price

    (b) The Notice Parties shall have five business days after
notice is sent to object or request additional time to
evaluate the proposed transaction. If counsel to the
Debtors receives no written objection or written request for
additional time prior to the expiration of such five-day
period, the Debtors shall be authorized to consummate the
proposed sale transaction and to take such actions as
necessary to close the transaction and obtain the sale
proceeds.

    (c) If Notice Party objects to the proposed transaction
within five business days after the notice is sent, the Debtors
and such objecting Notice Party shall use good faith efforts to
consensually resolve the objection. If the debtors and the
objecting Notice Party are unable to achieve a consensual
resolution, the Debtors will not take any further steps to
consummate the proposed transaction without first obtaining
Bankruptcy Court approval of the proposed transaction upon
notice and hearing.

    (d) Liens shall attach to the net proceeds of the sale,
subject to any claims and defenses the debtor may possess with
respect thereto, and any amounts in excess of such liens
shall be utilized by the Debtors in accordance with the
terms of the Debtor's post-petition financing arrangement.

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

Apart from the Prism assets, the Debtors also request that these
procedures apply to other assets of de minimis value. (Comdisco
Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


CONNECTICARE: S&P Assigns BB Ratings; Says Outlook Stable
---------------------------------------------------------
Standard & Poor's assigned its double-'B' counterparty credit
and financial strength ratings to ConnectiCare Inc. The outlook
is stable.

The ratings reflect ConnectiCare's good market position, strong
enrollment growth, significantly improved earnings performance,
and conservative investments.

The strengths are partially offset by the company's weak
capitalization, geographic concentration, and below-average
financial flexibility.

Major Rating Factors:

    - Good market position in Connecticut. ConnectiCare is one of
the leading HMOs in Connecticut. Although the health care
market in Connecticut is highly competitive, ConnectiCare has
a good market position in the state because of a very strong
brand name and the company's commitment and focus locally. The
company has a particularly strong presence in the small- to
medium-sized group business because of an extensive provider
network and its ability to negotiate tailored benefits to meet
the needs of employers in this market segment.

    - Strong enrollment growth. Total enrollment increased
significantly in the past three years. In 2000, ConnectiCare's
enrollment increased by 4.6 percent to 250,522 members, compared
with 239,421 members in 1999, and 220,100 members in 1998. In
first-quarter 2001, enrollment further increased by 6.7 percent
to 267,342 members.

    - Improved operating performance. ConnectiCare's earnings
performance had been below average but improved significantly
in 2000 and 2001 as a result of corrective actions taken by
management in the past two years, including strengthening the
company's underwriting policy, implementing very substantial
rate increases, terminating unprofitable businesses, and
improving quality and service.

    - Conservative investments. The quality of ConnectiCare's
investment portfolio is good and provides ample liquidity for
its operating needs. The composition of the portfolio is
conservative, and it does not have any highly speculative
investments. The current makeup of its investment portfolio
should adequately preserve the company's limited capital base.
Standard & Poor's believes the company's investment policy has
generated adequate returns in the past few years; this
positive trend is expected to continue.

    - Improving capitalization. ConnectiCare's capitalization
level is relatively low but improved significantly in 2000 and
the first six months of 2001. The company's capitalization was
considered weak at year-end 2000, with a capital adequacy
ratio as measured by Standard & Poor's model of about 61
percent. In 2000, ConnectiCare's surplus increased 235.6 percent
to $34.9 million, from $10.4 million at the end of 1999.
Statutory surplus further increased by 36.4 percent in the first
six months of 2001 to $47.6 million. Improved underwriting
performance, along with minimal capital contribution from its
parent, contributed to significant surplus increases in 2000 and
2001.

    - Below average financial flexibility. ConnectiCare's
financial flexibility is below average because of a high debt-
to-capital ratio maintained at ConnectiCare Holding Co. Inc.,
its ultimate parent. Total debt to capital at June 30, 2001, was
a very aggressive 80 percent, which is expected to reduce to
about 70 percent by the end of 2001. Moreover, because of
ConnectiCare's somewhat aggressive growth strategy and its
commitment to being a financially strong company, Standard &
Poor's expects the company will need to raise additional capital
in the future. Standard & Poor's expects the company will be
able to fund part its future capital needs through internal
resources.

           Outlook: Stable

Standard & Poor's expects ConnectiCare's pretax income to be in
the $35-$40 million range for 2001.

The company's total enrollment is expected to increase by about
9 percent in 2001, to about 275,000 members. Its capital
adequacy ratio is expected to be about 90 percent for 2001, with
total capital and surplus of close to $60 million at year-end.

Further improvements are expected for 2002.


CONSUMERS PACKAGING: Court Extends CCAA Protection To Aug 31
------------------------------------------------------------
Consumers Packaging Inc. (TSE:CGC) announced that it has
received an extension to an order from the Ontario Superior
Court of Justice under the Companies' Creditors Arrangement Act
(CCAA).

The Order continues the stay legal proceedings against the
Company in respect of its Canadian operations until August 31.

The Order was first granted on May 23, 2001.

The Company expects to appear in Court during the week of August
27 to seek approval to sell substantially all of its Canadian
glass producing assets, as well as shares on Consumers U.S.
Inc., to Owens-Illinois, Inc. of Toledo, Ohio (NYSE:OI) for
approximately $235 million (Canadian).

Consumers Packaging employs approximately 2,400 people in
Canada. It manufactures and sells glass containers for the food
and beverage industry.

It supplies packaging products for the Canadian juice, food,
beer, wines and liquor industries from three plants in Ontario
(Toronto, Brampton and Milton), and one each in Quebec
(Montreal), New Brunswick (Scoudouc) and British Columbia
(Lavington).

Please visit the company's web site at (www.consumersglass.com)
for further information.


COVAD COMMS: Files Reorg Petition To Discharge $1.4-B Debt
----------------------------------------------------------
Covad Communications Group, Inc. (OTCBB: COVD), the parent
company of Covad Communications Company, announced that it has
filed for reorganization under Chapter 11 of the Federal
bankruptcy code in the U.S. Bankruptcy Court for the District of
Delaware, as part of a voluntary, pre-negotiated plan to
eliminate Covad's $1.4 billion in debt.

It is expected that Covad's DSL network and its customers will
remain unaffected throughout the filing period.

Holders of a majority of Covad's bonds have agreed in writing to
the terms of a debt repurchase that, if approved by the court,
would eliminate Covad's bond debt.

This filing is intended, by way of court approval, to bind 100
percent of Covad's bondholders to the transaction.

Covad's intention to implement this transaction through
reorganization under Chapter 11 was announced on August 7, 2001
and the company expects this process to be complete and emerge
by January 2002.

Covad's operating subsidiaries, which provide DSL services to
customers, are not expected to be included in the court-
supervised proceeding and will continue to operate in the
ordinary course of business without any court imposed
restrictions.

Covad's operating subsidiaries plan to continue their current
operations and business plan while supporting their 1,700
employees, over 330,000 end users, sales support, Covad's
national network, the installation process and vendors outside
of the court-supervised proceeding.

"This filing is a tool to eliminate Covad's debt and
significantly improve our ability to raise the additional
capital we need to get to profitability," Covad CEO Charles E.
Hoffman said.

Mr Hoffman added: "Most importantly, this action does not affect
our operations, customers, network or employees. It is business
as usual for our broadband customers."

Shares of Covad Communications are expected to begin trading
under the symbol COVDQ as a result of this filing.

           About Covad Communications

Covad is the leading national broadband service provider of
high-speed Internet and network access utilizing Digital
Subscriber Line (DSL) technology.

It offers DSL, IP and dial-up services through Internet Service
Providers, telecommunications carriers, enterprises, affinity
groups, PC OEMs and ASPs to small and medium-sized businesses
and home users. These services are currently available across
the United States in 94 of the top Metropolitan Statistical
Areas (MSAs).

Covad's network currently covers more than 40 million homes and
business and reaches approximately 40 to 45 percent of all US
homes and businesses.

Corporate headquarters is located at 4250 Burton Drive, Santa
Clara, CA 95054. Web Site: http://www.covad.com


COVAD COMMS: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Covad Communications Group, Inc.
         4250 Burton Drive
         Santa Clara, CA 95054

Type of Business: Covad Communications Group, Inc. is the parent
                   company of Covad Communications Company and
                   other operations affiliates. Covad is the
                   leading national broadband service provider of
                   high-speed Internet and network access
                   utilizing Digital Subscriber Line (DSL)
                   technology. It offers DSL, IP and dial-up
                   services through Internet Service Providers,
                   telecommunications carriers, enterprises,
                   affinity groups, PC OEMs and ASPs to small and
                   medium-sized business and home users. Covad
                   services are currently available across the
                   United States in 94 of the top Metropolitan
                   Statistical Ateas (MSAs). Covad's network
                   currently covers more than 40 million homes
                   and business and reaches approximately 40 to
                   45 percent of all US homes and business.

Chapter 11 Petition Date: August 15, 2001

Court: District of Delaware

Bankruptcy Case No.: 01-10167

Debtor's Counsel: Laura Davis Jones, Esq.
                   Pachulski, Stang, Ziehl Young & Jones
                   919 N. Market Street
                   16th Floor
                   Wilmington, DE 19899-8705
                   Tel: 302 652-4100
                   Fax: 302-652-4400
                   Email: ljones@pszyj.com

Total Assets: Approximately $1.1 billion

Total Debts: Approximately $1.4 billion

Debtor's 20 Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Bank of New York              Trustee               $925,000,000
Corporate Trust
Administration
101 Barclay Street
Floor 21 West
New York, NY 10286

United States Trust Company    Trustee              $475,000,000
Corporate Trust
Administration
114 West 47th Street,
25th Floor
New York, NY 10036

Bank of New York              Bond Participant      $339,260,000
Cecil Lamarco
925 Patterson Plank Rd.
Secausus, NJ 07094
(201) 319-3066

Bear, Stearns Securities      Bond Participant      $243,781,000
Corp.
One Merotech Center N
4th Floor
Brooklyn, NY 11201-3862
(347) 643-2302

Chase bank of Texas           Bond Participant      $108,400,000
Debbie Lorenzo
PO Box 2558
Houston, TX 77252-8009
(713) 216-4488

Morgan Stanley & Co. Inc.     Bond Participant       $77,400,000
Victor Reich
One Pierrepont Plaza,
7th Floor
Brooklyn, NY 11201
(718) 754-4019

Chase Manhattan Bank          Bond Participant       $72,215,000
Paula Dabner
c/o JP Morgan investor
Services
14201 Dallas Pkwy
12FL Mail Code 121
Dallas, TX 75240
(469) 477-0081

Goldman, Sachs & Co.          Bond Participant       $71,267,000
180 Maiden Lane
New York, NY 10038
(212) 902-1321

State Street Bank &           Bond Participant       $64,642,000
Trust Company
Joseph J. Callahan
1776 Heritage Drive
Global Corporate Action Unit
North Quincy, MA 02171
(617)985-6453

Neuberger Berman, LLC         Bond Participant       $45,900,000
ADP Proxy Services
Edgewood, NY 11717
(516) 254-7400

Citibank, N.A.                Bond Participant       $42,914,000
David Leslie
3800 Citicorp Center
Tampa, FL 33610-9122
(813) 604-1193

Credit Suisse First           Bond Participant       $39,710,000
Boston Corp.
ADP Proxy Services
Edgewood, NY 11717
(516) 257-7400

Donaldson, Luftkin            Bond Participant       $34,778,000
& Jenrette
Securities Corporation
Al Hernandez
1 Pershing Plaza
Jersey City, NJ 07399
(201) 413-3090

Boston Safe Deposit &         Bond Participant       $34,629,000
Trust Co
Constance Holloway
c/o Melon Bank NA
Pittsburgh, PA 15259
(412) 234-2929

Brown Brothers Harriman       Bond Participant       $33,239,000
& Co
Robert Davide
63 Wall Street, 8th Floor
New York, NY 10005
(212) 493-7946

Deutsche Bank Alex Brown      Bond Participant       $32,400,000
Anne Hyman
Proxy Department
PO Box1776
Baltimore, MD 21203
(410) 308-6266

Bank of America Securities    Bond Participant       $20,708,000
Scott Reifer
655 Montgomery Street
San Francisco, CA 94111
(415) 913-4112

Speers, Leeds & Kellog        Bond Participant       $15,970,000
120 Broadway
New York, NY 10271
(212) 433-7531

Lehman Brothers, Inc.         Bond Participant       $15,800,000
Proxy Department
c/o BSSC
Brooklyn, NY 11201
(201) 524-5627

First Union Securities        Bond Participant       $13,649,000
Steve Farm
8739 Research Drives
Charlotte, NC 28262
(704) 593-7531


DERLAN INDUSTRIES: Mexican Unit Violates Bank Loan Covenant
-----------------------------------------------------------
Derlan Industries Limited (TSE:DRL.) reported second quarter
earnings of $1.2 million (2000 - $13.4 million loss) or $0.04
per share (2000 - $0.46 loss).

Moreover, for the six months ended June 30, 2001 net earnings
were $1.4 million (2000 - $13.1 million loss) or $0.05 per share
(2000 - $0.44 loss).

Revenues were $61.1 million for the quarter compared to $50.3
million in 2000 and $61.1 million in the first quarter of 2001.
Excluding revenues from businesses acquired in the past year,
sales increased by 10 percent for the quarter as compared to the
prior year.

For Q2, manufacturing expenses (excluding depreciation) as a
percentage of sales were 73.7 percent compared to 74.7 percent
in the previous year.

The improvement is due to higher margins in the Aerospace sector
largely offset by decreases in the Pump sector. Selling, general
and administrative (SG&A) expenses for the quarter totaled 12.6
percent of sales compared to 13.6 percent in the prior year.

Corporate costs for the quarter and for the first six months of
2001 decreased by over 30 percent compared to the previous year.
Depreciation and amortization at $2.9 million for the quarter
has increased by $0.4 million over last year.

The increase is primarily due to the inclusion of Derlan Windsor
Gear (acquired in Q1) and Tulsa Pumps (acquired in Q4 2000).

Net interest expense for the quarter increased by $1.1 million
to $3.6 million compared to the prior year due to increased
debt levels.

EBITDA for the quarter before unusual items and special charges,
was $8.3 million, which represents an improvement of $0.6
million from Q1 and $2.4 million from the prior year
comparative.

Cash flow per share for the quarter was $0.16 per share compared
to a loss of $0.21 per share for the prior year. Bank
indebtedness decreased by approximately $1 million in the second
quarter due to improved inflows in the Aerospace sector offset
by decreases in the Pump sector.

For the first six months of 2001 bank indebtedness increased by
$16.2 million. Bank indebtedness increased during this period
because of slower receivable collections and growth in inventory
levels, both of which are expected to improve in Q3.

Also, the acquisition of Derlan Windsor Gear for cash, capital
expenditures, interest payments and the payment of severance
costs impacted Q1 and Q2 cash flows.

Backlog at June 30, 2001 was $254 million, compared to $200
million at June 30, 2000. Excluding companies acquired during
the past year, backlog increased $46.6 million year over year.
Backlog increased approximately $17 million during the quarter
and $35 million since December 31, 2000.

The overall outlook for the second half of the year is
cautiously optimistic. From a cash flow perspective the second
half of 2001 is forecast to be significantly better than the
first half of the year.

Stronger operating results, improved receivables collections, no
planned acquisitions and reduced capital expenditures are all
contributing factors to the higher cash flow forecast. Overall
inventory levels are expected to decrease slightly by the end of
2001.

                        Aerospace

For Q2, Aerospace sales increased 19 percent over the prior year
excluding acquired businesses. Aerospace sales were very strong
in the second quarter and in the first half of 2001. Sales under
long-term supply contracts, small quantity expedited sales and
spares sales were all higher as a result of strong military and
commercial demand.

Also, customer requests to accelerate shipments improved sales
in the first half of the year. The Aerospace sector recorded
higher margins in Q2 compared to Q1 and to Q2 2000. The higher
margins result from product mix and increased profitability on
certain long-term programs.

Spare sales and small quantity expedited sales were strong in
both Q1 and Q2 and carry higher margins.

SG&A expenses in the Aerospace sector increased at a lower rate
than the growth in sales. EBITDA for the Aerospace sector
continued to be strong at $9.8 million for the quarter.
Excluding acquisitions, the increase in Aerospace EBITDA was 52
percent.

The Aerospace cash flow for the second quarter was strong as a
result of high receivables collections and strong earnings.
Backlog has increased by 16 percent in the first six months of
2001 and is 23 percent higher at the end of Q2 than it was a
year ago.

In the first half of May 2001, the union employees of Derlan
Precision Gear in Chicago returned to work, ending a nine-month
strike. Results after the return continue to be encouraging and
profitability is improving.

For the latter half of 2001, the Aerospace sector is expecting a
decline in revenue. The decrease in sales forecast for the
latter half of 2001 in Aerospace is a result of the completion
of some of the long-term contracts in Q2 and early Q3.

Accelerated customer shipments in the first half of the year
will also negatively impact sales in the latter half.
Profitability in the Aerospace sector in the second half of the
year is expected to decrease, due to changes in product mix and
lower revenues.

Aerospace margins and EBIT percentages for the full year are
expected to be at similar levels as in 2000.

The Aerospace sector will continue to further integrate their
operating units. Outsourcing is being reviewed to identify
potential for utilizing the specialties of the various divisions
within the group. Also, duplication of functions within
divisions is being reduced where practical.

The decision in 2000 to cease efforts to divest D-Velco, the
strike settlement in Chicago and the acquisition of Derlan
Windsor Gear, are all key factors in the continued integration
of this sector.

                             Pumps

Sales in the Pump sector decreased 21% for the quarter compared
to the prior year excluding acquired businesses. Sales have been
weak for the first six months of 2001 as a result of lower
government spending in Mexico and customer shipment delays in
Germany.

Also, the sales force infrastructure in Tulsa has taken longer
to implement than originally planned which has negatively
impacted new orders in the first half of the year. Quoting
levels have recently increased at all locations indicating the
likelihood of higher Pump sales in the future.

The Pump sector saw lower margins as a result of poor overhead
absorption due to low sales levels and continued stiff price
competition. Mexican operations were also affected by the
adverse impact of exchange rates.

SG&A expenses for Q2 increased in Mexico and Germany compared to
the prior year. EBITDA for Pumps was a loss of $0.3 million for
the quarter, a decrease of approximately $1.2 million over the
prior year as a result of poor results at all locations. The
operating losses have resulted in increased debt. Also, low
receivables collections impacted cash flows in the quarter.

For the latter half of 2001, Pump operations at all locations
are expected to show improved results as a consequence of
increases in activity and better overhead absorption. Backlogs
in Mexico and Germany have increased by 49 percent since
December 31, and compared to June 30, 2000 have increased over
50 percent.

Also, prices have been showing recent signs of improvements in
the Pump sector.

Integration within the Pump sector continues, with the German
division assisting the U.S. operations in engineering and Mexico
producing many of the castings for the U.S. operations. These
steps will lower overall costs and improve plant utilization.

Derlan is an industrial corporation manufacturing products for
the aerospace and pump industries. The Company has operations in
Canada, the United States, Mexico and Germany. Its shares are
listed on the Toronto Stock Exchange under the symbol DRL.

These interim financial statements have been prepared in
accordance with Canadian generally accepted accounting
principles (GAAP), using the same accounting policies as Note 1
of the Consolidated Financial Statements for the year ended
December 31, 2000.

In the second quarter of 2001, Derlan adopted the new
recommendations of the Canadian Institute of Chartered
Accountants (CICA) Handbook Section 1751, Interim Financial
Statements, which changes the requirements for presentation and
disclosure of interim financial statements and the accompanying
notes.

                      Acquisition

Effective January 29, 2001, the Company acquired substantially
all of the assets of Windsor Gear and Drive Inc.

                     Unusual items

In the first quarter of 2001, the Company recorded a $1.6
million charge for severance and related payments to employees
at Derlan Precision Gear as a result of a new five-year union
agreement. As part of the settlement, staffing levels were
significantly reduced.

In the second quarter of 2000, the Company recorded charges of
$9.2 million related to:

    (a) severance and pension liabilities resulting from
management changes, and

    (b) write off of deferred costs and fixed assets related to
the Aerospace sector.

                 Bank Loan Covenant Violation

A wholly owned subsidiary of Derlan's pump joint venture in
Mexico is currently in violation of covenants pertaining to its
bank loans.

Derlan's 50.1 percent of the joint venture is proportionately
consolidated in these financial statements. Derlan's
proportionate share of those borrowings is included in bank
indebtedness and amounts to approximately $5.1 million at
June 30, 2001.

The assets of the subsidiary have been pledged as security for
these bank loans. As well, the joint venture in Mexico has
guaranteed the bank loans. Derlan's proportionate share of the
assets of the subsidiary pledged as security are carried at an
amount of approximately $10.2 million in these financial
statements. The borrowings are not guaranteed by any other
entity in the Derlan group of companies.


EGGHEAD.COM: Enters Deal To Sell Assets To Fry's Electronics
------------------------------------------------------------
Egghead.com(R), Inc. (Nasdaq: EGGS), a leading Internet direct
marketer of technology and related products, announced that it
has entered into a definitive agreement for the sale of assets
to Fry's Electronics. The agreement provides for consummation of
the sale through a Chapter 11 bankruptcy proceeding.

Egghead.com will continue to operate its business under
Bankruptcy Court supervision pending close of the sale;
thereafter Fry's is expected to operate the Egghead.com site.

Fry's Electronics is a privately held chain of one-stop
electronics shopping superstores based in San Jose, CA.

Approximately one-third of Egghead.com's employees have been
asked to remain with the company as it makes this transition to
ensure continued quality service to its customers. Other
employees have been terminated, and assets of the company not
acquired by Fry's are expected to be sold under Bankruptcy Court
supervision.

"We regret having to take this action, which was forced on us in
recent weeks by a dramatic and unexpected decline in sales,"
said Jeff Sheahan, president and CEO of Egghead.com.

"That made it impossible to reach profitability in the fourth
quarter. We investigated a number of alternatives and were
pleased with Fry's offer to purchase the assets of the company
and continue running the business, as the Egghead brand name is
a strong and vibrant one. We believe this action will allow the
company to realize a value for its assets which will benefit our
creditors."

"The Egghead management team and associates have done an
excellent job of building a strong brand and sizable online
business which enables us to move online quickly with a robust
and proven site," said John Fry, CEO of Fry's Electronics.

Subject to approval of the sale by the Bankruptcy Court, it is
expected that the transaction will close by the end of
September.

               About Egghead.com

Egghead.com is a leading Internet direct marketer of technology
and related products. With an emphasis on Small- to Medium-sized
Business (SMB) customers, Egghead.com offers a wide range of
products from computer hardware and software, consumer
electronics and office products, to sporting goods and vacation
packages.

Its Clearance, After Work and Auction formats offer bargains on
excess and closeout goods and services. Egghead.com combines
broad selection, low prices, and excellent service to provide an
outstanding online shopping experience for businesses and
consumers.

Egghead.com is located on the Internet at
http://www.egghead.com.


FINOVA GROUP: Unit Files Claims Against Sunterra
------------------------------------------------
FINOVA Group subsidiary, FINOVA Capital Corporation is a
creditor asserting secured claims in the aggregate approximate
amount of $115 million against Sunterra Corporation, debtor-in-
possession in a chapter 11 case pending in the Unites States
Bankruptcy Court for the District of Maryland before The
Honorable James F. Schneider.

Sunterra tells the Court it is the world's largest vacation
ownership company, having 90 resort locations and in excess of
300,000 owner facilities in North America, Europe, the Pacific,
the Caribbean and Japan.

Sunterra filed a motion in the FINOVA jointly administered
chapter 11 case for relief from the automatic stay on the bases
that:

    (1) FINOVA has repeatedly thwarted Sunterra's efforts to use
cash collateral amounting to $30 million that is being held in
escrow by FINOVA although FINOVA is adequately protected by a
substantial equity cushion;

    (2) The Replacement DIP Facility approved by the Maryland
Bankruptcy Court may be insufficient to meet Sunterra's need if
not accompanied by Sunterra's ability to use the substantial
amounts of the FINOVA cash collateral;

    (3) FINOVA is an active and frequent participant in
Sunterra's bankruptcy cases but in light of its own bankruptcy
filing, FINOVA has invoked the automatic stay as a bar to
resolution of the issues in the Sunterra cases;

    (4) Granting access to FINOVA's cash collateral is critical
to Sunterra's ability both to operate its business and to
reorganize; FINOVA is embroiled in the Sunterra bankruptcy in
additional ways as a defendant in three adversary proceedings -
Bank of America (BofA), another of Sunterra's purportedly
secured creditors, brought one of the adversary proceedings
seeking to compel FINOVA to release certain liens that BofA
claims FINOVA improperly failed to release pre-petition and the
allegedly affect the value of BofA's purported collateral;
Sunterra filed the other two adversary proceedings against
FINOVA, one of which seeks to recover expenses and the other to
avoid preferential transfers made by Sunterra to FINOVA;

    (5) The Maryland Bankruptcy Court, with its knowledge of the
history of the case, is the right court to have jurisdiction
over the matters cited;

    (6) FINOVA should have no concern that the Maryland
Bankruptcy Court would in any way fail to protect FINOVA's
rights as a creditor in the Sunterra cases;

    (7) Sunterra is not seeking to obtain payment from FINOVA to
detriment other creditors;

    (8) The issues Sunterra seeks to address are issues that must
be resolved before either of the two pending bankruptcies can
reach a successful conclusion;

    (9) FINOVA should not be allowed to use its own bankruptcy
filing as an additional negotiating weapon against Sunterra
while interposing into Sunterra's bankruptcy case when this
suits its purpose.

The Sunterra Committee of Unsecured Creditors filed a Response
in support of Sunterra's motion. The Sunterra Committee
reiterated the needs and adopted the arguments made by Sunterra.

Specifically, the Sunterra Committee made the point that while
FINOVA's rights as a debtor in its own chapter 11 proceedings
should be respected, FINOVA should not be permitted to bring the
Sunterra Bankruptcy to a standstill in light of FINOVA's
bankruptcy filing.

By interposing the automatic stay from its own chapter 11 case,
FINOVA has undermined the jurisdiction of the Maryland
Bankruptcy Court to resolve all issues relating to the property
of Sunterra's estate, the Committee remarked.

The Committee notes that, throughout the Sunterra Bankruptcy,
the Maryland Bankruptcy Court has been mindful that it is in the
best interest of all parties in interest in the Sunterra
Bankruptcy for the cases to proceed as expeditiously as
possible, and the Maryland Bankruptcy Court has consistently
shown that it is mindful of the interests of Sunterra's
creditors, including FINOVA.

Additionally, the Maryland Bankruptcy Court indicated that
it will protect, as needed, the jurisdiction of the Delaware
Bankruptcy Court, the Committee tells Judge Walsh.

Judge Walsh entertained the request and also the objection of
FINOVA and issued an order granting Sunterra' motion.
Specifically, Sunterra's motion was granted to the extent that
the automatic stay is lifted and/or annulled with respect to the
following contested matters and adversary proceedings in the
Sunterra cases:

      (a) Bank of America, N.A. v. Finova Capital Corporation,
Adv. Proc. No. 01-5052-JS

      (b) Sunterra Corporation, et al. v. Finova Capital
Corporation, Adv. Proc. No. 01-5126-JS

      (c) Sunterra Corporation, et al. v. Finova Capital
Corporation, Adv. Proc. No. 01-5127-JS

      (d) Debtors' Motion for Order Authorizing Use of Cash
Collateral.

Judge Walsh also instructed that lawful asset sales conducted in
the Sunterra case will not require the automatic stay to be
lifted, provided that all liens on such assets will attach to
the proceeds of such sales in the same amount and with the same
validity and priority as such liens attached to the assets sold.

The Agreed Order jointly presented to the Court by Richards,
Layton & Finger, P.A., Gibson, Dunn & Crutcher LLP (Attorneys
for the Debtors), Zuckerman Spaeder LLP and Whiteford, Taylor &
Preston, L.L.P. (Attorneys for Sunterra) and Ferry & Joseph,
P.A. and Shapiro, Sher & Guinot (Attorneys for the Creditors
Committee in Sunterra) provides that the effectiveness of the
Agreed Order will be subject to the approval by both the
Delaware Bankruptcy Court and the Maryland Bankruptcy Court.
(Finova Bankruptcy News, Issue No. 11; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


GENESIS HEALTH: Time To Decide On Leases Extended To October 22
---------------------------------------------------------------
With the Court's blessing, the time for Genesis Health Ventures,
Inc. & The Multicare Companies, Inc. to assume or reject their
unexpired leases of nonresidential real property and facility
leases is extended to the earlier of (a) October 22, 2001 and
(b) the date on which an order is entered confirming a plan of
reorganization for the Debtors, without prejudice to the lessors
to file a motion with the Court for a reduction of such time,
and without prejudice to the rights of the Debtors to request
further extensions of time pursuant to section 365(d)(4) of the
Bankruptcy Code.

The Debtors convinced the Court that they continued to make
progress since the previous extension was granted but need
additional time to assess the value of each lease to avoid
inadvertent rejection of a valuable lease or a premature
assumption of a burdensome lease which may lead to substantial
administrative expense obligations. (Genesis/Multicare
Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


GLOBAL TELESYSTEMS: Banks Extend Waiver Of Defaulted Facilities
---------------------------------------------------------------
Global TeleSystems, Inc. (GTS) (OTC:GTLS; NASDAQ EUROPE:GTSG;
Frankfurt:GTS) announced that Deutsche Bank, Dresdner Bank and
Bank of America (the Bank Group), which are providing financing
to GTS' Global TeleSystems Europe Holdings B.V. subsidiary, have
agreed to further extend the waiver of any defaults under their
facility caused by GTS' election to not make interest payments
on GTS Europe's publicly-traded debt while the company works
toward a debt restructuring plan with bondholders.

The current waiver has now been extended until August 31, 2001.
GTS and the Bank Group continue their discussions, aimed at
replacing the current financing agreement with a longer-term
financing facility.

GTS also announced that it has postponed its Annual
Shareholders' Meeting from September 5, 2001 due to its ongoing
restructuring. The company will advise the public when a new
date for the annual meeting is established.

Consistent with its previously announced restructuring, GTS
advised that it has decided not to make the cash interest
payment, due 15 August 2001 on its 9 7/8 percent US$105 million
Senior Notes due 2005 and that its subsidiary Global TeleSystems
Europe B.V has decided not to make the cash interest payment due
on its 11.5 percent US$265 million Senior Notes due 2007.

The non-payment of cash interest on these bonds will not
constitute events of default under the indentures governing
these securities unless interest is not paid by September 14,
2001.

GTS also announced that neither it nor Global TeleSystems Europe
BV anticipate making any further interest payments on their
publicly-traded debt and (in the case of GTS) preferred stock,
pending the conclusion of their discussions with bondholders,
aimed at a consensual restructuring of the obligations under
such securities.


ICG COMMUNICATIONS: Wells Fargo Calls For End Of Stay
-----------------------------------------------------
Wells Fargo Bank West f/k/a Norwest Bank Colorado, NA,  Judge
Walsh to terminate the stay to permit the Bank to draw upon
collateral accounts.

On January 12, 1999, Kathleen M. Miller, Esq., at Smith
Katzenstein & Furlow LLP, relates, ICG Communications (the
Debtor) entered into an Application and Agreement for
Irrevocable Standby Letter of Credit in the amount of $500,000
with Wells Fargo.

On that same date, the Debtor entered into a General Security
Agreement providing Wells Fargo with a security interest in the
accounts identified in the Agreement.

The Letter of Credit was issued July 2, 1999, and GE Capital
Financial, Inc., of Salt Lake City is the beneficiary.

The Debtor also executed an Application for Standby Letter of
Credit up to $2,731,500 dated October 25, 2000, and on that same
date executed a Security Agreement giving Wells Fargo a security
interest in certain accounts identified in the Agreement.

The Letter of Credit was issued on November 3, 2000, and Red
Cart Market of Emerville, California, is the beneficiary.

The Debtor also executed an Application for Standby Letter of
Credit up to $661,408 dated July 16, 1999, and on that same date
executed a Security Agreement giving Wells Fargo a security
interest in certain accounts identified in the Agreement.

The Letter of Credit was issued on July 26, 1999, and Adler
Office Associates, Ltd. of Miami, Florida is the beneficiary.

Wells Fargo Bank now asks Judge Walsh to permit it to exercise
its rights to offset amounts paid on the Letters of Credit by
the proceeds of the demand deposit accounts which were posted as
security for the Letters, and further relief from the stay to
offset future advances made on the Letters of Credit against the
demand deposit accounts.

The Bank makes a simple argument. Until the Letters of Credit
expire, there is no available equity in each of the pledged
accounts for the benefit of the Debtor. Additionally, unless and
until the pledged demand deposit accounts become available to
the Debtor, they cannot be deemed necessary for the effective
reorganization of the Debtor. (ICG Communications Bankruptcy
News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


INTERNATIONAL KNIFE: Sells Shares In German Unit
------------------------------------------------
International Knife & Saw, Inc., a Delaware corporation, sold on
June 6, 2001 all of the issued and outstanding capital stock of
IKS Klingelnberg GmbH, a wholly owned German subsidiary of the
Company, to Diether Klingelnberg and TKM GmbH i.G., a company
organized under the laws of Germany, together with Mr.
Klingelnberg, for approximately $11.7 million in cash.

The Company expects to record a loss on the sale of IKSK of
approximately 11.2 million. The loss is subject to adjustment
based on final closing values and transaction expenses.

The proceeds from the sale were immediately applied to repay all
indebtedness and other obligations owed by the Company to
Deutsche Bank AG, the Company's senior lender.

Mr. Klingelnberg and Thomas W.G. Meyer are managing directors
and stockholders of TKM. Mr. Meyer is a minority stockholder of
IKS Corporation, a Delaware corporation and the parent of the
Company.

In addition, until April 20, 2001 Mr. Klingelnberg served as a
director of the Company and Parent, and until May 31, 2001 Mr.
Meyer served as an Executive Vice President of the Company and
Parent.

At the time of the sale, Mr. Meyer was the Chief Executive
Officer of IKSK.

The amount of consideration paid to the Company for the issued
and outstanding capital stock of IKSK was determined by arms
length negotiation between the Board of Directors of the Company
and the Purchasers.

In connection with the sale, the Purchasers agreed that, for a
period of 18 months and subject to certain conditions, IKSK
would continue the existing trading arrangements between the
Company and IKSK with respect to current products manufactured
by IKSK and purchased by the Company.

Prior to the sale, the holders of a majority in aggregate
principal amount of the Company's Series B 11-3/8 percent Senior
Subordinated Notes due 2006 consented to the sale and waived
compliance by the Company with the provisions of Section 4.14
(Limitation on Transactions with Affiliates), Section 4.15
(Change of Control), Section 4.16 (Limitation on Asset Sales)
and Article Five of the Indenture governing the Notes, as well
as any other relevant provisions of such Indenture, to the
extent applicable to the transaction.


K2 DIGITAL: Nasdaq Delists Shares
---------------------------------
The common stock of K2 Digital, Inc. (OTC: KTWO), a strategic
digital services company, has been delisted from the Nasdaq
SmallCap Market as of the open of business on Wednesday, August
15, 2001. This move was made pursuant to the decision of a
Nasdaq Listing Qualifications Panel.

On March 13, 2001, the Staff of the Nasdaq Stock Market notified
K2 that it had failed to demonstrate a closing bid price of at
least $1.00 per share for 30 consecutive trading days and was in
violation of Nasdaq Marketplace Rule 4310(c)(4).

In accordance with applicable Nasdaq Marketplace rules, K2 was
provided a 90-day grace period, through June 11, 2001, during
which to regain compliance.

On June 20, 2001, K2 requested a hearing, which effectively
stayed the delisting. However, after submission of materials in
support of K2's position to the Panel, the Panel has informed K2
that its common stock will be delisted.

K2 has been informed by the NASD that K2's common stock will be
eligible to trade on the OTC Bulletin Board under the same
symbol.

                       About K2 Digital

K2 Digital (NASDAQ: KTWO, KTWOW), a strategic digital services
company, provides consulting and development services including
analysis, planning, systems design, creative, and
implementation.

Ranked by Deloitte & Touche among the fastest growing technology
companies in both 1999 and 2000, K2 constructs user-centric
digital channels that map to corporate goals. K2's process-
driven approach utilizes the strategic, conceptual, technical
and marketing experience it has developed since 1993 to help
multi-divisional and global companies maximize their Internet
opportunities.

Its clients include ABB, Bristol-Myers Squibb, ING Aetna
Financial Services, Morgan Stanley, Preferred Hotels & Resorts,
Silversea Cruises and WorldCom.

For more information, please visit http://www.k2digital.com


KELLSTROM INDUSTRIES: Exchange Offer Fails; Exploring Options
-------------------------------------------------------------
Kellstrom Industries, Inc. (NASDAQ:KELL) announced that its
exchange offer for up to $54 million of its outstanding series
of 5-3/4 percent convertible subordinated notes due October 15,
2002 (CUSIP Nos. 488035AC0 and U48787AA0) and/or up to $86.25
million of its outstanding series of 5-1/2 percent convertible
subordinated notes due June 15, 2003 (CUSIP No. 488035AE6) (the
old notes), in any combination totaling no more than $96 million
in aggregate, lapsed in accordance with its terms on August 15,
2001.

It was a condition of the exchange offer that holders of old
notes tender (and not withdraw) a minimum of $85 million in
aggregate principal amount of old notes.

This condition was not satisfied.

As of 5:00 p.m., New York City time, August 15, 2001, the
Company received tenders from holders of $7.5 million in
aggregate principal amount of the 5-3/4 percent convertible
subordinated notes and $10.2 million in aggregate principal
amount of the 5-1/2 percent convertible subordinated notes, or
$17.7 million in aggregate principal amount of old notes.

Accordingly, since the minimum acceptance condition was not
satisfied, the exchange offer lapsed in accordance with its
terms and Kellstrom will not accept for payment and will not pay
for any tendered old notes.

All tendered old notes will be promptly returned to noteholders.

Although there can be no assurances of success, the Company is
exploring several alternative scenarios with respect to
restructuring its convertible subordinated debt.

Kellstrom is a leading aviation inventory management company.
Its principal business is the purchasing, overhauling (through
subcontractors), reselling and leasing of aircraft parts,
aircraft engines and engine parts.

Headquartered in Miramar, FL, Kellstrom specializes in
providing: engines and engine parts for large turbo fan engines
manufactured by CFM International, General Electric, Pratt &
Whitney and Rolls Royce; aircraft parts and turbojet engines and
engine parts for large transport aircraft and helicopters; and
aircraft components including flight data recorders, electrical
and mechanical equipment and radar and navigation equipment.


KRAUSE'S FURNITURE: Buxbaum Launches GOB Sales in Texas & Calif.
----------------------------------------------------------------
Buxbaum Group launched store-closing sales on August 16, 2001 at
25 retail locations operated by Krause's Furniture, Inc. (Amex:
KFI) of Brea, Ca. The stores, most of which are located in Texas
and California, include three Castro Convertible showrooms in
the Northeast.

The Krause's and Castro brands are both renowned for made-to-
order sleeper sofas.

As previously announced, Krause's expects to continue to operate
its 57 remaining showrooms throughout the country, all of which
had generated profits, as well as its manufacturing facilities.

The company, a vertically integrated manufacturer and retailer
of made-to-order upholstered furniture and accessories, filed
for protection under Chapter 11 of the Federal Bankruptcy Code
on July 20 in the U.S. Bankruptcy Court in Santa Ana, Ca.

Buxbaum Group of Encino received court approval yesterday to
administer the sale of the merchandise at the 25 stores being
closed.

All inventory on hand, valued at approximately $9.5 million at
retail, will be sold at a minimum discount of 25 percent-off
original prices, payable in cash or by credit card. No checks
will be accepted, and Krause's consumer financing programs will
not be available in the stores being closed.

Four of the nine stores being closed in Texas are located in
Houston; the other five are in the metro Dallas area, including
locations in Arlington, Dallas, Friendswood, Plano and
Southlake.

The stores closing in California are in Chula Vista, La Mesa,
Los Angeles, Montclair, Palm Desert, Sacramento, San Bernardino,
Santa Clarita and Van Nuys.

The remaining Krause's stores closing are in Lakewood, Wash.;
Clackamas, Ore.; Albuquerque, N.M., and Las Vegas, Nev. Three
Castro Convertible stores will be shuttered in Brookfield,
Conn.; Metuchen, N.J.; and Elmhurst (Queens), N.Y.

Earlier this year, the company had closed 11 under-performing
showrooms in various markets. With the new and previously
announced closings, Krause's will no longer have a retail
presence in the Atlanta, Chicago, Colorado Springs, Dallas, Fort
Lauderdale, Houston and Portland, Ore. markets. The showrooms
that will be closed as well as those already shuttered had
significant operating losses in fiscal 2001.

Krause's currently has 988 employees and plans to retain
approximately 880 following the store closures.

In its court petition, Krause's cited the current economic
environment as the primary cause of its Chapter 11 filing.

At the time of the filing, the company also announced that it
has obtained a new debtor-in-possession (DIP) financing
commitment from its primary lender and oral commitments from its
key vendors to supply raw materials. With the new financing and
commitments from key vendors to resume shipments of raw
materials, the company said it will be able to operate its
factory and produce and ship existing as well as new orders.

Krause's also disclosed that it had received a proposal from a
group that includes current members of management, some current
investors, as well as new investors who would form a new company
to purchase the 57 remaining showrooms, the ongoing distribution
centers, the factory in Brea, as well as its contract division.

The DIP financing is designed to support operation of the 57
showrooms through September 30, 2001. If the sale of assets is
not completed by that date, Krause's anticipates that all of its
showrooms would liquidate inventory and then cease operations.
Nonetheless, the new financing has been arranged so that the
company will be able to fulfill all customer orders even if the
showrooms cease operation.

The new financing, the proposed purchase of assets by the new
company and other arrangements outside the company's ordinary
course of business are subject to Bankruptcy Court approval.

Buxbaum Group provides inventory appraisals, turnaround and
crisis management and other consulting services for banks and
other financial institutions with retail, wholesale/distribution
and consumer-product manufacturing clients.

The firm also provides liquidation services on consumer-product
inventories, machinery and equipment, and buys and sells
consumer-product inventories.


LAIDLAW INC: Safety-Kleen Appears On the Scene
----------------------------------------------
Lawyers representing Safety-Kleen Corp. and its debtor-
affiliates, attempting to reorganize under chapter 11 before the
United States Bankruptcy Court for the District of Delaware,
entered their appearance in Laidlaw Inc's Chapter 11 cases.

David S. Kurtz, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in Chicago, enters his appearance as lead counsel for
Safety-Kleen, assisted by J. Gregory St. Clair, Esq., in
Skadden's New York office.

William F. Savino, Esq., Daniel F. Brown, Esq., and Beth Ann
Bivona, Esq., at Damon & Morey, LLP, serve as local counsel to
Safety-Kleen in Buffalo.

Safety-Kleen advises the Courts that it holds "significant"
claims against Laidlaw for indemnification arising under the
1997 Rollins Environmental Services, Inc., Stock Purchase
Agreement and Merger Agreement. (Laidlaw Bankruptcy News, Issue
No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900)


LOEWEN: FSAG Seeks OK For Settlement With Howe Re Colorado Lease
----------------------------------------------------------------
Funeral Services Acquisition Group, Inc. (FSAG), one of the
debtors in the cases, was an assignee of all the right, title
and interest of the Original Tenants, Rocky J. Wells and
Kathleen Wells under a Lease Agreement with Howe Building
Partnership (Landlord) with respect to the real property and a
mortuary-chapel building and garage building situated at 2121
11th Street, Boulder, Colorado.

The initial term of the Lease was from August 1, 1991 to July
31, 1996, with an option on the part of the Original Tenants to
renew the Lease for up to four additional five-year terms. The
rent for the initial term was $5,000.00 per month. The rent for
the first year of the first renewal term was $5,833.33 per
month; thereafter, the monthly rent for the renewal terms is to
be increased annually by 3% of the monthly rent for the
immediately preceding year.

On July 31, 1991, the Original Tenants also executed a
promissory note payable to Mr. William B. Howe in the principal
amount of $200,000.00, plus interest at the rate of 8% per
annum. Under the Note, principal and interest are payable in 144
monthly installments of $1,600.25, provided that any amounts
outstanding on July 31, 2003 (the last scheduled payment date)
become immediately due and payable on that date. The outstanding
principal balance under the Note as of the Petition Date was
approximately $165,268.00. Sections 23(b)(ii) and 24 of the
Lease provide that the failure to make any payments due under
the Note constitutes an event of default under the Lease.

Pursuant to an Assignment of Lease and Consent, FSAG also
assumed the Original Tenants' obligations under, and agreed to
pay, the Note.

Following the commencement of its chapter 11 case, FSAG
continued to pay rent as it became due under the Lease, in
accordance with section 365(d)(3) of the Bankruptcy Code. FSAG,
however, did not continue to make payments under the Note on the
basis that its remaining obligations under the Note constitute
prepetition claims that it has no ability or authority to pay,
absent authority under a confirmed plan of reorganization or
another order of the Bankruptcy Court providing for the payment
of such claims.

The Partnership took the contrary position that, pursuant to
Section 24 of the Lease, the payments due under the Note
constitute postpetition obligations under the Lease that FSAG,
as a debtor in possession, is required to pay pursuant to
section 365(d)(3) of the Bankruptcy Code.

When FSAG indicated to the Partnership by a notice that it
wanted to renew the term of the Lease for an additional five
years, beginning August 1, 2001, the Partnership, refused,
asserting that FSAG's renewal option could not be exercised so
long as the Lease was in default and that FSAG's failure to make
the payments otherwise due under the Note constituted a default
under Sections 23(b)(ii) and 24 of the Lease.

The Partnership therefore asserted that the Lease would
terminate without renewal, according to its terms, on July 31,
2001.

FSAG wants to continue to occupy the leased premises because the
funeral home and mortuary business located on it generates
considerable net cash flow and the Debtors contemplates the
continued operation of the funeral home and mortuary business
following reorganization.

Moreover, the Debtors do not believe that it would be cost-
effective or beneficial to attempt to relocate this business to
another location at this time.

    The Settlement Agreement and the Amendment to the Lease

To resolve their differences and disputes, FSAG, the Partnership
and Mr. Howe have agreed to enter into the Settlement Agreement.

The primary terms of the Settlement Agreement, the effectiveness
of which is subject to the approval of the Court, are as
follows:

    (1) FSAG and the Partnership agree to enter into an amendment
to the Lease;

    (2) The Note will be deemed discharged and satisfied and of
no further force or effect upon (a) execution of the Amendment,
(b) the Court's approval of the Settlement Agreement and the
assumption of the Amended Lease by FSAG and (c) the payment by
FSAG to the Partnership of $12,387.72 within 5 business days
after the Court enters an order approving the Settlement
Agreement, the balance of the rent due under the Amended Lease
for the months of May, June, July and August 2001.

    (3) The parties exchange releases other than their respective
obligations under the Amended Lease and the Settlement
Agreement.

    (4) Immediately upon (i) the execution of the Amendment, (ii)
approval of the Settlement Agreement and the assumption of the
Amended Lease by the Court and (iii) the payment to the
Partnership as agreed upon, proofs of claim filed by the
Partnership or Mr. Howe against FSAG or any of the other
Debtors in their respective chapter 11 cases will be deemed
withdrawn with prejudice.

By the Amendment, the Partnership and FSAG seek to amend the
following three components of the Lease: (a) the term of the
Lease and the renewal options, (b) the rent due under the Lease
and (c) references to the Note within the Lease.

The primary terms of the Amendment are as follows:

    (1) The existing term of the Amended Lease will expire on
April 30, 2004. FSAG then will have the right to renew the
Amended Lease for two additional consecutive terms of three
years each.

    (2) For the period from May 1, 2001 to April 30, 2002, the
monthly payments under the Amended Lease will be $9,662.40. For
the period from May 1, 2002 to April 30, 2003, the monthly
payments under the Amended Lease will be $9,865.28. For the
period from May 1, 2003 to April 30, 2004, the monthly
payments under the Amended Lease will be $10,074.23. In
addition, on or before January 5, 2002, FSAG is required to
make a rental payment to the Partnership in the amount of
$40,000.00.

    (3) The monthly rent during the first renewal period will
increase each year and will be as follows:

                                  Annual       Monthly
                                 Amount Due    Payment
                                 ----------    ---------
        5/1/2004 to 4/30/2005    $88,673.52    $7,389.46
        5/1/2005 to 4/30/2006    $91,333.68    $7,611.14
        5/1/2006 to 4/30/2007    $94,073.76    $7,839.48

        The monthly rent during the second renewal period will
increase each year and will be as follows:

                                  Annual       Monthly
                                Amount Due    Payment
                                ----------    ---------
        5/1/2007 to 4/30/2008   $96,895.92    $8,074.66
        5/1/2008 to 4/30/2009   $99,802.80    $8,316.90
        5/1/2009 to 4/30/2010   $102,796.92   $8,566.41

    (4) All references to the Note are deleted under the Amended
Lease.

The Debtors notes that, in addition to enabling them to continue
to operate business on the leased premises, the Settlement
Agreement resolves their disputes under the lease in an
efficient and cost-effective manner.

FSAG believes that the modification to FSAG's renewal options
under the Amended Lease, shortening the renewal terms from five
years to three years, provides the Debtors with desired
flexibility to react to changes in the Colorado market.

The Debtors also believe that the terms of the Settlement
Agreement are fair and reasonable.

Therefore, FSAG seeks the entry of an order:

    (a) approving the Settlement Agreement and the terms and
conditions set forth therein, pursuant to section 363 of the
Bankruptcy Code and Bankruptcy Rule 9019; and

    (b) authorizing the assumption of the Amended Lease, pursuant
to section 365 of the Bankruptcy Code. (Loewen Bankruptcy News,
Issue No. 43; Bankruptcy Creditors' Service, Inc., 609/392-0900)


MADGE NETWORKS: Posts Improved Half-Year Results
------------------------------------------------
Madge Networks N.V. (NASDAQ NM: MADGF), a global supplier of
advanced networking product solutions, sustained a group net
income of $11.4 million, or $0.21 per share, for the half-year
period ended June 30, 2001. The figure swung from a net loss of
$38.0 million, or loss of $0.88 per share, made in the year-ago
period.

Group net income for the 2001 period includes special gains of
$9.3 million.

Madge Networks group revenues for the six months ended June 30,
2001 were US$44.2 million, compared to revenues for the six
months ended June 30, 2000 of $70.4 million.

Pro forma revenues from continuing operations2 for the six
months ended June 30, 2001 were $42.7 million, as opposed to
revenues from continuing operations of $61.3 million for the six
months ended June 30, 2000.

Pro forma net income from continuing operations for the first
half of 2001 was $13.7 million, or $0.25 per share, a turnaround
from a net loss from continuing operations of $4.7 million, or
$0.11 per share, for the first half of 2000.

Excluding special gains of $9.3 million, pro forma net income
from continuing operations for the half-year ended June 30, 2001
was $4.4 million, or $0.08 per share.

The special gains relate primarily to the sale of Red-M shares,
concluded in April 2001.

Earnings from pro forma continuing operations before interest,
taxes, depreciation, amortization (EBITDA) and excluding special
gains for the six months ended June 30, 2001 were $9.5 million,
compared to $3.9 million for the same period in 2000.

Continuing operations exclude the results of Madge.web,
Novations and Video Networking. In accordance with U.S.
generally accepted accounting principles, Madge.web, must be
presented as a discontinued operation.

As previously announced, Madge.web's U.K. and Singapore
subsidiary companies, Madge.web Ltd. and Madge SE Asia Pte Ltd.,
were put into administration and interim judicial management,
respectively, in accordance with their local laws, in processes
broadly similar to chapter 11 in the United States.

Madge.web's Dutch subsidiary Madge.web B.V. is under insolvent
liquidation.

The Novations line of business was discontinued with Madge.web,
and the Video Networking line of business was sold by
Madge.connect in the third quarter of 2000.

The Red-M group, since April 12, 2001 when it secured external
funding, is no longer a subsidiary of the Madge group but is
classified as an associate company.

In accordance with generally accepted accounting principles the
results of Red-M, from April 12, 2001, are no longer fully
consolidated into the accounts of Madge Networks and are now
accounted for under equity accounting principles.

Madge Networks recognizes its allocable percentage of Red-M's
net loss, which as at June 30, 2001 reduced the carrying value
of its investment in Red-M to zero.

Madge Networks ended the second quarter with $14.7 million in
cash, including $8.9 million that is restricted. The company's
liquidity position during the second quarter was reduced by the
funds provided to the administrators of Madge.web, as previously
announced, and to other Madge.web entities.

While the financial outcome of the administration is not
certain, the company expects a portion of the $6.3 million
funding provided to be returned to Madge Networks. The timing
and the amount of the returned funds are not certain, and our
ability to mitigate our exposure to the Madge.web liabilities
could materially impact our liquidity position.

The management recognizes a requirement to increase short-term
liquidity and is focused, during the third quarter of 2001, on
addressing the issue by seeking additional sources of working
capital and the possible sale of assets.

"The first half of 2001 has been a period of substantial change
for Madge Networks," said Madge Networks CEO Martin Malina.

Mr Malina added, "We are however pleased with the performance of
our Madge.connect business; it continues to deliver
profitability and generate cash. While the outcome of the
administration of Madge.web Ltd. and the other Madge.web
entities is not yet certain, we are focusing on the future plans
for the company.

"We continue to streamline the cost base to underpin cash
generation from our current operations and will be exploring new
business opportunities to leverage our existing assets and core
competencies and to position Madge Networks for the future."

           About Madge Networks N.V.

Madge Networks N.V. (NASDAQ NM: MADGF), through its
Madge.connect subsidiary, is a global supplier of advanced
networking product solutions to large enterprises, and is the
market leader in Token Ring. Madge Networks also has an
associate company, Red-M(TM), a leading supplier of
Bluetooth(TM) wireless networking product solutions.

The Company's main business centers are located in Wexham
Springs, United Kingdom and Milpitas, California. Information
about Madge's complete range of products and services can be
accessed at http://www.madge.com


OWENS CORNING: Committee Gets Court's Nod To Retain Chambers
------------------------------------------------------------
The Official Committee of Unsecured Creditors of Owens Corning
(the Debtors) has sought and obtained an order from the Court to
employ and retain Chambers Associates Incorporated (CAI) as
asbestos claims consultant.

John P. McDonagh of The Chase Manhattan Bank, co-chair of the
Committee, discloses that the Committee selected CAI because of
its extensive and diverse experience, knowledge and reputation
in the asbestos claims field, its understanding of the issues
involved in chapter 11 cases, and because the Committee believes
that CAI is well qualified to provide asbestos claims consulting
services and expertise that are required by the Committee in
these cases.

Mr McDonagh reveals that CAI's experience includes providing
consulting services, advice and expert testimony for the debtor
on asbestos claims in the National Gypsum reorganization, as
well as acting as a court-appointed claims expert in the Celotex
reorganization.

The Committee believes that the services of CAI is necessary and
appropriate and will assist the Committee in the negotiation,
formulation and implementation of a plan of reorganization, and
accordingly believes that retention of CAI by the Committee is
in the best interest of the creditors, the Debtors and their
estate.

Mr McDonagh states that the services CAI will perform to the
Committee includes:

    a) estimating the incidence of exposure to the company's
products;

    b) estimate claims filing by disease;

    c) estimating the company's asbestos liability;

    d) analyzing and responding to the issues relating to the
setting of bar date;

    e) assisting in the development of claims procedure to be
used in financial models of payments and assets of a claims
resolution trust;

    f) testifying in court on behalf of the Committee if
necessary;

    g) performing any other necessary services as the Committee
or the Committee's counsel may request from time to time with
respect to any asbestos related issue.

Mr McDonagh reveals that CAI will be compensated on an hourly
basis to be paid by the Debtors plus out-of-pocket expenses
incurred by CAI in relation to this engagement.

The current hourly rates of CAI are:

    President $425
    Vice President/Senior Consulting Associate $200-350
    Senior Associate/General Counsel $200-300
    Project Manager $100-185
    Research Assistant/Associate $50-100
    Administrative, Technical & Support Staff $40-60

Leticia Chambers, President of CAI, discloses that it has
conducted a conflict check regarding its relationship with the
Debtors, their creditors, equity holders and other parties-in-
interest.

Ms Chambers discloses that it had discovered these
connections:

    a) CAI has had professional relationships with Johns-Manville
Corporation, Morgan Lewis & Bockius, PricewaterhouseCoopers,
LLP. In addition CAI provides professional services to the
Council of Infrastructure Financing Authorities, of which Merill
Lynch Capital Markets, Paine Webber and Golman Sachs are
members.

    b) During the period 1988-1990 CAI was engaged by a law firm
representing a coalition of companies that had sold products
containing asbestos and an affiliate of the Debtors, Fiberboard,
was a member of that coalition.

    c) In 1998 CAI was engaged by the law firm representing
Travelers Insurance in the asbestos related bankruptcy of
Wallace and Gale, an insulation company.

    d) CAI currently represents a coalition of publicly traded
partnerships, which includes Enron, for partnership tax related
issues.

Ms Chambers discloses that CAI has not been retained by any
other person or entity other than the Committee and will not
accept any engagement or perform any service in these cases for
any entity other than the Committee is the Court approves the
employment of CAI. (Owens Corning Bankruptcy News, Issue No. 15;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


OXIS INTL: Failure To Raise More Funds May Compel Bankruptcy
------------------------------------------------------------
OXIS International, Inc. (OTCBB:OXIS) and (Nouveau Marche:OXIS),
booked a net loss of $1,756,000, or $0.18 per share, for the
quarter ended June 30, 2001, rising from $1,101,000, or $0.12
per share, for the second quarter of 2000.

The increase in net loss is primarily attributed to an $885,000
write-down of inventory and equipment relating to operations
that were closed during the quarter and to increased selling,
and general and administrative costs.

These charges were partially offset by reduced research and
development expenses.

Total revenues for the quarter rose to $841,000 from $779,000 in
last year's corresponding period.

For the first six months of 2001, OXIS reported a net loss of
$2,904,000, or $0.30 per share, a slight increase from
$2,069,000, or $0.24 per share, for the first half of 2000.

Total revenues for the period were pegged at $1,841,000, up from
$1,722,000 recorded in the same period the previous year.

The Company pointed out that its cash reserves have been almost
completely exhausted, leaving it without sufficient capital to
sustain ongoing operations. Its working capital decreased from
$2,511,000 at December 31, 2000, to $149,000 at June 30, 2001,
largely as a result of 2001's first half net loss.

The Company stated that it is attempting to secure additional
funds through asset sales, investments, or loans, but that it
could not provide any assurance that it will be able to raise
any additional funds, or that any funds will be available to it
on acceptable terms. It also noted that any equity financing
will probably be significantly dilutive to current shareholders.

The failure to secure additional funds within the next several
months would materially affect the Company and its business, and
might compel it to cease operations or to seek protection of the
courts through reorganization, bankruptcy or insolvency
proceedings.

Consequently, shareholders could lose their entire investment in
the Company.

During the quarter ended June 30, 2001:

    * The Company's health products segment terminated its
instrument manufacturing operations and its wellness services
program. All remaining employees of those operations were
terminated, and the Company began negotiating the sale of the
remaining inventories and equipment of those businesses.

      Accordingly, the inventory and equipment have been written
down to their estimated net realizable value, resulting in a
charge to cost of sales of $885,000 charge to cost of sales
during the quarter.

    * In accordance with his commitment with the Company, Joseph
F. Bozman, Jr.'s employment, including his tenure as president
and chief executive officer, terminated effective June 30,
2001. Mr. Bozman remains a member of the OXIS Board of
Directors and Executive Committee.

In Mr. Bozman's place, the Board of Directors has appointed Ray
R. Rogers as interim Chairman of the Board, President and Chief
Executive Officer. Mr. Rogers previously served in those
executive positions. It is contemplated that a permanent chief
executive officer will replace him if and when the Company
succeeds in securing additional working capital.

While the Company continues to believe that its therapeutic
products and technologies have considerable promise, their
commercial success is dependent on the Company's ability to
develop business alliances with biotechnology and/or
pharmaceutical companies with the resources necessary to develop
and market them.

There can be no assurance as to the success of the Company's
efforts to develop such alliances.

OXIS, headquartered in Portland, Oregon, focuses on developing
technologies and products to research, diagnose, treat and
prevent diseases associated with damage from free radical and
reactive oxygen species - diseases of oxidative stress.

The Company holds the rights to three therapeutic classes of
compounds in the area of oxidative stress.


PACIFIC GAS: Panel Gets Court Approval To Retain LCG Consulting
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of Pacific Gas and
Electric Company has sought and obtained Judge Montali's
permission to retain LCG Consulting "to perform
forward price curve consulting services for gas and energy
prices".

In a less-cryptic fashion, Committee Co-Chairs Clara Strand and
Kenneth E. Smith explain that LCG will prepare models for the
Committee that forecast the price of electricity and natural gas
through calendar year 2011.

LCG is a research and development organization involved in
electricity deregulation and model development for the
competitive electric industry.

Returning to the jargon, LCG will provide the Committee and its
legal and financial advisors with consulting and advisory
services concerning:

    (1) electricity price forecasts for the NP 15 and SP 15
delivery points in California developed on a monthly basis
through the end of calendar year 2003 and annually thereafter
through 2011;

    (2) monthly natural gas price forecasts for shipments into
California at Malin and Topock, in conjunction with shipments
over PG&E-Northwest, El Paso Natural Gas and Kern River
Pipeline, through the end of calendar year 2011;

    (3) scenario analysis to include price forecasts at one
standard deviation from the expected values; and

    (4) expert testimony, if needed.

LCG will charge the estate:

    (A) a flat $55,000 fee for development of the initial set of
gas and energy price forecasts;

    (B) a flat $15,000 fee for development of monthly probability
distribution of the price forecasts; and

    (C) in the event expert testimony is required, $300 per hour
for services performed by LCG Principals and $250 per hour for
services performed by LCG Senior Consultants.

Dr. Rajat K. Deb discloses that LCG has previously performed
services for a number of parties related to PG&E, including
G&E, the California Independent System Operator, GWF Power
Systems, Enron Corp. and its affiliates, Dynergy Power
Marketing, Inc., Duke Energy, Puget Sound Energy, the CPUC, and
the California Energy Commission.

Dr. Deb assures the Court that none of those engagements related
to the Debtor's chapter 11 case in any way. (Pacific Gas
Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


PACIFIC GAS: Charges DWR Continues to Overestimate Power Costs
--------------------------------------------------------------
Pacific Gas and Electric Company issued the following statement
on the state Department of Water Resources' (DWR) thrice-revised
Revenue Requirement, which it filed last week with the
California Public Utilities Commission (CPUC):

"Based on the limited information provided by DWR, Pacific Gas
and Electric Company believes DWR has substantially
overestimated the forecast cost of spot power purchases, and
substantially overestimated the forecast cost of natural gas.
These overestimates combine to make DWR's 2001-02 revenue
requirement more than $3.1 billion higher than it would be if
estimates which reflect the current market realities, rather
than financial or political considerations, were used. More than
$1 billion of this apparent 'padding' of the revenue requirement
has been assigned to PG&E's customers; the other two utilities'
customers are assigned the remaining $2 billion.

"Despite repeated requests for information as to how DWR came up
with its numbers, department officials continue to refuse to
give the public the information needed to understand and analyze
its revenue demand.

"Pacific Gas and Electric Company and others have asked DWR to
host public evidentiary hearings, as required under state law.
The department recently refused to hold its own public hearing,
claiming the CPUC regulatory proceeding is addressing public
concerns over its revenue demand. Yet in that very same CPUC
regulatory proceeding, DWR has rejected requests for any type of
CPUC-sponsored public hearings, claiming it is exempt from any
further review by the public or the CPUC regarding the basis or
reasonableness of its request or costs.

"Due to the lack of information submitted by DWR, PG&E is able
to make only limited estimates of how DWR developed its revenue
requirement, and can only guess as to whether it is accurate.

"The continuing difficulties in understanding DWR's revenue
requirement estimate reinforces the need for the revenue
requirement to be developed in an open forum which has process
rights for the participants, including full access to the
information DWR is using to develop its estimates. At issue
are up to $68 billion dollars of costs to utility consumers for
years to come, $13 billion in 2001 and 2002 alone. This works
out to an average of $6,800 for each of the 10 million electric
customers within the service areas of PG&E, Edison and SDG&E.
Pacific Gas and Electric Company continues to urge that DWR's
revenue requirement receive the appropriate level of public
comment and review prior to adoption and inclusion in rates. DWR
has refused PG&E's request for hearings, and the current CPUC
'rush to judgment' does not provide for such hearings or public
comment."


PILLOWTEX CORP: Seeks To Sell Blanket Division Assets
-----------------------------------------------------
Pillowtex Corporation and its debtor-affiliates want to sell
their Blanket Division Assets after determining that they are no
longer necessary for the successful operation of their
businesses.

According to William H. Sudell, Jr., Esq., at Morris Nichols,
Arsht & Tunnell, the Blanket Division Assets are subject to
first-priority liens in favor of the Debtors' pre-petition and
post-petition senior secured lenders.

It may also be subject to statutory liens of governmental units
for unpaid ad valorem real property and personal property taxes,
Mr. Sudell adds. When the Blanket Division Assets will be sold,
Mr. Sudell says the liens of the Secured Lenders and any
governmental units will attach to the net sales proceeds.

As part of the agreement of the Debtors' pre-petition secured
lenders to permit the Debtors to grant priming liens under the
Debtors' debtor in possession financing facility, Mr Sudell
says, the Debtors and the Secured Lenders agreed that the net
proceeds from the sale of the Blanket Division Assets would be
used to pay down the Debtors' obligations to the Pre-Petition
Lenders.

Accordingly, Mr. Sudell notes, after payment of any taxes
subject to statutory liens, the net cash proceeds will be paid
to the Pre-Petition Lenders as required by the Final DIP
Financing Order.

Mr. Sudell relates that the Debtors have been marketing the
Blanket Division Assets since late last year. Mr. Sudell says
about 40 companies were preliminarily identified then, the list
was narrowed down to 16 companies.

Only 11 companies executed confidentiality agreements in a form
satisfactory to the Debtors, Mr. Sudell explains, so they were
provided with an executive summary of the Blanket Division
Assets and selected financial information. At first, Mr. Sudell
notes, it was only Core Point Capital that submitted an
Expression of Interest.

According to Mr Sudell, certain members of the management team
of Debtor, Beacon Manufacturing Company, were participating with
Core Point in the proposed acquisition. Most of the other
companies eventually backed out, Mr. Sudell says.

However, Mr Sudell relates, Core Point would not proceed with
the due diligence phase of the transaction and negotiation of
definitive documentation unless the Debtors agreed to reimburse
Core Point for its expenses (up to $100,000) under certain
limited circumstances.

According to Mr Sudell, the Debtors were able to obtain the
Court's approval to enter into the reimbursement agreement.

However, Core Point subsequently withdrew from the transaction.
Fortunately, Mr Sudell notes, the expense reimbursement
agreement expired without any expenses being paid. But Beacon
Management continued to pursue the transaction and began
searching for a new financial partner, Mr Sudell tells the
Court.

After Beacon received preliminary commitments for financing, Mr
Sudell says, the Debtors and Beacon began negotiating definitive
documentation.

As those negotiations neared completion, Mr Sudell notes, the
Debtors decided that Beacon Management's bid would be the
Initial Bid.

Mr Sudell explains that up until the last few weeks, Beacon
Management's bid was the only bid the Debtors received. But the
Debtors have now received Expressions of Interest from two other
potential purchasers. Mr. Sudell notes one of those purchasers
have never undertaken due diligence while the other is still
completing its due diligence.

The Debtors and Beacon Management ultimately negotiated the
Asset Purchase Agreement dated July 27, 2001, Mr. Sudell informs
Judge Robinson.

Mr Sudell explains that the Purchase Agreement was entered into
by Debtor Beacon Manufacturing Company and Beacon Acquisition
Corporation, a corporation formed by the Initial
Bidder for the purposes of the acquisition.

Although Debtor Pillowtex Corporation is not a party of the
Purchase Agreement, Mr. Sudell says, it will guarantee Beacon's
performance of its obligations under the Purchase Agreement.

The primary terms of the Purchase Agreement are:

    (a) Beacon agrees to sell the Blanket Division Assets to the
Initial Bidder for an estimated purchase price of
$14,000,000, subject to certain adjustments based on
inventory levels, pre-paid items and accrued but unpaid
items as of the closing date. The Blanket Division Assets
include substantially all real and personal property (other
than certain property in Mauldin, South Carolina and
Newton, North Carolina), contracts and intellectual
property used exclusively in connection with the blanket
business as well as all transferable permits, goodwill and
going concern value. The Blanket Division Assets do not
include cash and cash equivalents, accounts receivable,
insurance policies or Ralph Lauren inventory. In addition,
the Initial Bidder agrees to assume certain liabilities.
In particular, the Initial Bidder will assume all
liabilities arising under the terms of the contracts that
will be assumed and assigned to the Initial Bidder and,
with certain limited exceptions, all environmental
liabilities associated with the Blanket Division Assets.

    (b) The Initial Bidder paid an earnest money deposit of
$850,000 upon the execution of the Purchase Agreement,
which is governed by a separate Deposit Escrow Agreement,
and agrees to pay the remainder of the Estimated Purchase
Price at closing: delivery of (1) a three-year promissory
note in the principal amount of $1,340,000 and (2) cash in
an amount equal to the estimated Purchase Price less
$600,000, the Deposit and the amount of the promissory
note. The promissory note is subordinated to the liens of
the Initial Bidder's principal lender and is due in full in
one payment at the end of the term of the promissory note.
The Initial Bidder must also deliver at closing $700,000 to
the escrow agent under a Purchase Price Escrow Agreement.
Of the Purchase Price Escrow Amount, $600,000 will be
applied toward the Estimated Purchase Price and $100,000
will be applied, to the extent necessary, for any post-
closing purchase price adjustments that Beacon would
otherwise have to pay the Initial Bidder. The Purchase
Price Escrow Agreement provides that $500,000 of the
Purchase Price Escrow Amount will be held by the escrow
agent to secure the Debtors' obligations under the Purchase
Agreement to indemnify the Initial Bidder from losses
arising from breaches of representations, warranties or
covenants and that $200,000 of the Purchase Price Escrow
Amount will be held to secure the parties' obligations for
post-closing adjustments.

    (c) The Debtors will assume and assign to the Initial Bidder
certain executory contracts and unexpired leases as set
forth in Schedules 6.6.2, 6.7.2 and 6.8 to the Purchase
Agreement and designated to be assigned to the Initial
Bidder. Contracts not listed on Schedule 6.8 are deemed to
be "Excluded Assets" pursuant to Schedule 1.1.

    (d) The Purchase Agreement contains standard representations
and warranties between the Debtors and the Initial Bidder,
which expire after one or three years depending on the
particular representation or warranty. Beacon agrees to
indemnify the Initial Bidder against any losses resulting
from a breach of any representation, warranty or covenant
in the Purchase Agreement. However, Beacon's
indemnification obligation with respect to any breach of
representations or warranties is capped at $4,500,000 and
includes only losses incurred after the Initial Bidder
incurs losses aggregating $350,000.

    (e) Pursuant to a License Agreement to be entered into
between the parties, the Debtors agree to license to the Initial
Bidder certain trademarks for use in certain territories
for a period of three years. The Initial Bidder, in
return, is required to pay certain royalties.

    (f) The Debtors and the Initial Bidder will also enter into a
Transaction Services Agreement pursuant to which the
Debtors will provide certain services, primarily accounting
and information technology, to the Initial Bidder for
agreed upon fees until March 31, 2002. Beacon has also
agreed to lease to the Initial Bidder on a short-term basis
and upon certain terms (including the payment of rent) a
warehouse facility in Mauldin, South Carolina.

    (g) The Initial Bidder agrees to employ 700 employees on the
closing date and not to effect any layoffs that would
potentially trigger the Worker Adjustment and Retraining
Notification Act of 1988 for a period of 91 days following
the closing date.

    (h) If Beacon terminates the Purchase Agreement as a result
of a better offer for the Blanket Division Assets, Beacon must
return $600,000 of the Deposit to the Initial Bidder. If
following such termination, Beacon consummates a Superior
Transaction, then Beacon is required to return the
remainder of the Deposit to the Initial Bidder pursuant to
the terms of the Deposit Escrow Agreement. Upon
consummation of the Superior Transaction, or if the
Superior Transaction has not closed by September 28, 2001,
Beacon must also pay the Initial Bidder a break-up fee in
the amount of $450,000 and reimburse the Initial Bidder for
its reasonable and necessary out-of-pocket expenses
actually incurred by it in connection with the Purchase
Agreement, not to exceed $250,000.

Mr Sudell assures the Court that the Debtors have religiously
followed the terms of the Global Bidding Procedures Order.

By this motion, the Debtors seek the Court's authority to:

      (i) sell their Blanket Division Assets to the Purchaser on
the terms set forth in the Purchase Agreement, free and clear
of all liens, claims, encumbrances and other interests.

     (ii) assume and assign contract to the Purchaser; and

    (iii) enter into the Purchase Agreement, the additional
agreements contemplated in the Purchase Agreement, and any
related agreements that the Debtors deem necessary or
appropriate to consummate the sale.

The Debtors contend that assuming and assigning the Contracts to
the Purchaser as part of the sale is in the best interest of
their estates and creditors. Mr Sudell explains that the
contracts are important to the continued operation of the
Blanket Division Assets, which require continued use of certain
specialized equipment and machinery and maintenance of certain
agreements with suppliers.

Without the contracts, Mr Sudell says, the value of the Blanket
Division Assets and the purchase price would be significantly
lower. According to Mr Sudell, the Debtors promise to cure
defaults under the contracts as necessary.

The Debtors will also show that the parties of the contract have
adequate assurance of the Purchaser's future performance, Mr
Sudell adds.

                 Objections

(A) CIT Group/Equipment Financing, Inc.

    According to Jan A. T. van Amerongen, Jr., Esq., at Reed
Smith, CIT has not been served with a copy of the motion or the
proposed purchase agreement. What CIT received was only a notice
regarding the motion and the proposed purchase agreement.

    Mr van Amerongen explains that CIT is a party-in-interest to
these bankruptcy cases because CIT has leased and financed
various equipment to and for the Debtors. With respect to the
financed equipment, Mr. van Amerongen says, CIT has already
filed a motion for relief from stay.

    Mr van Amerongen notes it is impossible for CIT to determine
from the Notice whether any of the equipment is subject to the
motion and the purchase agreement.

    If any of the equipment is included, CIT objects to approval
of the motion and the purchase agreement since:

       (a) with respect to the leased equipment, the Debtors do
not have the right to sell the equipment and have not met the
requirements necessary for assumption and assignment of the
lease agreements under the Bankruptcy Code; and

       (b) with respect to the financed equipment, CIT has not
consented to such a sale, and the Notice indicates that the
proceeds from the sale will be paid to other entities, and
consequently the Debtors have not met the requirements
necessary for a sale free and clear of liens under
Bankruptcy Code.

(B) United States Trustee

    Patricia A. Staiano, the United States Trustee for Region 3,
also objects to the relief sought by the Debtors, on the grounds
that the initial overbid of $1,250,000 appears to be excessive,
given that the total break-up fee ($450,000), expense
reimbursement ($250,000 - maximum) and the $100,000 bidding
increment is $800,000. (Pillowtex Bankruptcy News, Issue No. 11;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


RHYTHMS NETCONNECTIONS: Seeks Modified SEC Reporting Procedures
---------------------------------------------------------------
Rhythms NetConnections Inc. (OTC Bulletin Board: RTHMQ), a
provider of broadband communication services, has sent to the
Securities and Exchange Commission (SEC) a no-action letter,
requesting that, while the Company is in reorganization
proceedings pursuant to Chapter 11 of the United States
Bankruptcy Code, it will be permitted to file, under cover of
Forms 8-K, copies of each of its Monthly Reports within 15
calendar days after the Monthly Report is due to the Bankruptcy
Court and the U.S. Trustee's Office, in lieu of filing the 10-Qs
and 10-Ks.

The Company has not filed and, pending a response from the SEC,
does not intend to file its Quarterly Report on Form 10-Q for
the fiscal quarter ended June 30, 2001.

                Company Background

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 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.


SAFETY-KLEEN: Reliant Moves To Compel Assumption Of Gas Deal
------------------------------------------------------------
Reliant Energy Entex, represented by John D. Demmy of the
Wilmington firm of Stevens & Lee, and by Russell R. Johnson III,
of Richmond, Virginia, asks Judge Walsh to order the Debtors to
assume or reject an executory contract dated September 1991
between Entex and Rollins Environmental Services, Inc., the
predecessor to Safety-Kleen (Deer Park), Inc.

The agreement was a gas sales contract for Safety-Kleen Corp's
(the Debtor) facility at 2027 Battleground, Deer Park, Texas.

By its terms, the agreement is automatically renewed for a one-
year term unless either party provides the other with written
notice of termination at least 30 days prior to the end of the
term.

As the Debtor failed to provide Entex with notice before June 1,
2001, the contract renewed for an additional year. Entex sells
gas to the Debtor on a monthly basis, and the Debtor has agreed
to pay for the gas at the contract rate until at least July 1,
2002.

Both parties thus have reciprocal obligations, making this an
executory contract.

Entex asserts that the gas supplied under the contract is
significantly below the market price. The market price of this
gas is $2,975,980, while the contract price is $2,103,134.30.
resulting in postpetition saving to the Debtor of $872,845.70.
Entex could have sold this gas for the higher market price, and
continues to be able to do so with the gas it supplies the
Debtor in present and future months as well.

Entex is being prejudiced by not being able to sell the contract
gas on the open market, and by the delay in payment due in July
2000.

The amount of Entex' prepetition claim against the Debtor is
$111,844.62. The Debtor has thus realized savings of nearly
eight times the cure amount for this contract.

In this case, the Debtor wants to retain the benefits of the
below-market rates, while at the same time refusing to tender
the cure amounts. While Entex advises Judge Walsh it understands
why the Debtor would want to do this, Entex believes that Judge
Walsh should not permit the Debtor to continue to receive the
benefit without the burden of paying the cure amount.

Before filing this Motion, Entex, through counsel, attempted by
phone and telecopy to contact the Debtor's counsel to determine
the Debtor's position on assumption or rejection of this
agreement.

Entex argues that allowing the Debtor to reject and breach the
contract after receiving postpetition benefits under it breaches
the principals that:

    (a) A debtor cannot reject a contract and maintain the
benefits;

    (b) A debtor is required under the Bankruptcy Code to either
accept or reject the entire contract, which includes the
benefits and the burdens.

Accordingly, in order to avoid an unjust result and one that is
described as violative of these principles, Judge Walsh would
need to require the Debtor to disgorge the postpetition benefits
that they improperly obtained. To accomplish this, the Court
would have to award Entex an administrative claim for the
reasonable value of the gas it provided the Debtor, which would
be an amount equal to the difference between the below-market
rates in the contract, and then open market rates.

To avoid this injury to the estate, Judge Walsh need only
require the Debtor to immediately accept or reject this
contract. (Safety-Kleen Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


TACT: Seeks Nasdaq Hearing Re Listing Status
--------------------------------------------
PR Newswire, Aug 15, 2001

TACT (Nasdaq: TACX) announced it has requested a hearing before
Nasdaq Listing Qualification Panel to review the Staff
Determination, which was served to the Company, indicating that
the Company failed to comply with the Minimum Bid Price and
Market Value of Public Float requirements for continued listing
of its securities. Therefore, the Company's securities was
deemed subject to delisting from the Nasdaq National Market.

The panel will determine whether the Company's stock will
continue trading on the Nasdaq National market or if it will
transition to the Nasdaq Bulletin Board System.

There can be no assurance, though, that the Panel will grant the
Company's request for continued listing. If the Company's stock
transitions to the Bulletin Board System, it will continue to
trade under its current ticker symbol.

            About TACT

TACT (Nasdaq: TACX) is an end-to-end IT Services and e-Services
provider to Fortune 1000 companies and other large
organizations.

TACT provides its clients with modernization services, which
include the e-Valuation of systems that should be replaced and
rewritten, enhanced, converted or Web Enabled. Replacement
systems are written or re-written as Web Based utilizing state
of the art leading tools such as Java and Visual Studio.

More information about TACT(R) can be found at its web site at
http://www.tact.com


UNIFORET: Creditors Okay Revised Plan Of Arrangement
----------------------------------------------------
UNIFORET INC. and its subsidiaries, Uniforet Scierie-Pate Inc.
and Foresterie Port-Cartier Inc. (the COMPANY) announced that
the required majority of creditors in each of the six of seven
classes have approved the Company's amended plan of arrangement
under the Companies' Creditors Arrangement Act.

The Plan sets out the terms of the restructuring of their debts
and obligations.

On the other hand, further to proceedings instituted by a few
of the US Noteholders, the meeting of the class of US
Noteholders-creditors is still temporarily suspended by Court
order rendered on July 26, 2001 until settlement of the
composition of that class of creditors.

It is only on September 18, 2001 that the Court will fix the
hearing dates for those proceedings.

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

Uniforet Inc. is an integrated forest products company, which
manufactures softwood lumber and bleached chemi-thermomechanical
pulp.

It carries on its business through its subsidiaries located in
Port-Cartier (pulp mill and sawmill) and in the Peribonka area
in Quebec (sawmill). Uniforet Inc.'s securities are listed on
The Toronto Stock Exchange under the trading symbol UNF.A, for
the Class A Subordinate Voting Shares, and under the trading
symbol UNF.DB, for the Convertible Debentures.


UNITED SHIPPING: Faces Delisting From Nasdaq
--------------------------------------------
United Shipping & Technology, Inc. (US&T, Nasdaq:USHP) has
received a Nasdaq Staff Determination on August 13, 2001,
indicating that the Company failed to comply with the minimum
bid price requirement for continued listing.

The Company's securities are, therefore, subject to delisting
from the Nasdaq SmallCap Market.

The Company has been granted a hearing before the Nasdaq Listing
Qualifications Panel to review the Staff Determination; the
Company believes it can establish compliance with the required
Nasdaq Marketplace Rules.


US DIAGNOSTIC: Posts Q2 Net Loss of $12.3M
------------------------------------------
US Diagnostic Inc. (OTCBB:USDL) posted for the quarter ended
June 30, 2001 a net revenue of $15.4 million, down from $39.2
million in net revenues for the corresponding period last year.

The decrease resulted primarily from the sale of imaging
centers, a process that began in May 2000 (the sold facilities).

Net revenue relating to those centers that are still in
operation as of June 30, 2001 (the open centers) was $13.3
million for the second quarter of 2001 compared to $12.6 million
for the second quarter of 2000. The increase in net revenue of
the open centers is related to a 6 percent increase in scan
volume.

The net loss for the second quarter was $12.3 million ($.55 for
both basic and diluted loss per share) versus net income of $.3
million ($.01 for both basic and diluted earnings per share) for
the second quarter of 2000.

The results for the quarter ended June 30, 2001 included asset
impairment losses of $15.5 million, a $4.6 million net gain on
sale of subsidiaries and an extraordinary gain, net of taxes of
$.5 million related to early extinguishment of debt. The results
for the quarter ended June 30, 2000 included a $10.2 million net
gain on sale of subsidiaries and a minority interest gain on
sale of subsidiaries of $5.2 million.

For the six months ended June 30, 2001, the Company's net
revenue stood at $32.4 million down from $77.7 million for the
same period last year. The decrease resulted primarily from the
sale of the sold facilities.

Net revenue relating to the open centers was $26.0 million for
the six months ended June 30, 2001 compared to $24.7 million for
the six months ended June 30, 2000. The increase in net revenue
of the open centers is related to a 7 percent increase in scan
volume.

The net loss was $13.4 million ($.60 for both basic and diluted
loss per share) as opposed to a net loss of $4.5 million ($.20
for both basic and diluted loss per share) for the six months
ended June 30, 2000.

The results for the six months ended June 30, 2001 included
asset impairment losses of $15.5 million, a $9.0 million net
gain on sale of subsidiaries, a $3.3 million minority interest
gain on sale of subsidiaries and an extraordinary gain, net of
taxes of $.5 million related to early extinguishment of debt.
The results for the six months ended June 30, 2000 included a
$10.2 million net gain on sale of subsidiaries and a minority
interest gain on sale of subsidiaries of $5.2 million.

The Company's sales of its imaging centers pursuant to the Plan
of Restructuring were not completed within the one-year time
period following the approval of the Plan on July 21, 2000. As a
result, effective June 30, 2001, the Company is treating as
continuing operations its remaining operations that had
previously been presented as discontinued operations.

The accompanying condensed consolidated statements of operations
have been reclassified to reflect this presentation.

Based on current estimates, unless the Company can successfully
sell imaging centers at favorable prices and terms, obtain
additional significant financial resources (which is unlikely),
or restructure its debt, the Company's current cash and cash
from operations will be insufficient to meet its anticipated
cash needs.

Furthermore, the Company has defaulted on the March 31, 2001
interest payment on its 9 percent Subordinated Convertible
Debentures due 2003 (the Debentures).

Also, the Company has defaulted on its obligation to repurchase
Debentures, required as a result of failing to maintain
consolidated net worth of at least $18.0 million. On May 1,
2001, the Company received a default notice from the Trustee
under the Debenture Indenture (Indenture).

These defaults could give rise to an acceleration of the
maturities of the Debentures.

In addition, the Company is prohibited from borrowing additional
amounts because doing so would cause non-compliance with certain
Indenture covenants and constitute an additional default under
the Indenture.

Furthermore, the Company failed to pay the $10.0 million
principal amount (and accrued interest) of its 6 percent
Convertible Notes that matured on June 30, 2001 (the Notes).
This failure constitutes a default under the Notes and may also
constitute a cross default under other of the Company's debt
instruments which could entitle the holders of such instruments
to accelerate their maturity.

In light of the Company's financial condition and prospects, as
well as these defaults and other potential defaults which may
also constitute cross defaults under other debt instruments
permitting the acceleration of such debt, the Company will
require a restructuring of its debt and is currently engaged in
negotiations with its secured and unsecured lenders.

The Company, accordingly, has suspended its imaging center sales
except in special circumstances while pursuing a proposed debt
restructuring with the assistance of its financial advisor,
Imperial Capital LLC, and its counsel, Greenberg Traurig, P.A.

The Company has also begun discussions with its secured debt
holders as well as an ad hoc committee of unsecured debt holders
that has retained legal counsel and a financial advisor.

Unless the Company can successfully restructure its
indebtedness, sell additional imaging centers or otherwise
obtain liquidity in the short term, the failure to make the
payments described above and other payments that are due, the
related defaults and potential cross defaults, the lack of
working capital and the inability to incur additional debt will
have a material adverse effect on the Company's ability to
maintain its operations, as well as its financial condition.

If these matters cannot be resolved successfully, the Company
would be required to pursue other options, which could include
seeking a reorganization, or its creditors could file an
involuntary bankruptcy petition against the Company under the
federal bankruptcy laws.

US Diagnostic Inc. is an independent provider of radiology
services with locations in 10 states and owns, operates or
manages 37 fixed site diagnostic imaging facilities.


WAVVE TELECOMMUNICATIONS: Files Chapter 11 in ED California
-----------------------------------------------------------
Wavve Telecommunications Inc. (Wavve), a California corporation,
announced that it was filing a voluntary petition for relief
under chapter 11 of Title 11, US Code in the Bankruptcy Court
for the Eastern District of California.

The Company will continue to operate the data center in
Sacramento while in Chapter 11 providing its customers with the
same level of quality service they have been receiving.

Wavve is a limited partner in the partnership that owns this
facility.

"As a major provider of colocation, network connectivity
internet and managed services, Wavve Telecommunications has been
adversely affected by the severe economic problems which are
currently plaguing the telecommunications, dot-com and
technology industry sectors," said Lou Kirchner, president and
COO of Wavve Telecommunications.

"By seeking protection under the Bankruptcy Code Wavve will be
able to restructure its debt and long term vendor contracts to
reflect today's market realities. We will emerge from bankruptcy
and stronger and more viable entity." Wavve is a wholly owned
subsidiary of Wavve Telecommunications, Inc., a Canadian
corporation, which is traded on the Vancouver stock exchange
(Wavve-Canada).

                   Company Background

Wavve Telecommunications is a leading provider of colocation,
network connectivity, Internet and managed services. Wavve also
offers value-added end-to-end application services including web
and content hosting, virtual ISP services, e-commerce and e-
business applications to enterprise, industrial, and ISP
customers with mission-critical Internet-based businesses and
operations.

By outsourcing web-based infrastructure and application systems
to Wavve, our customers can maintain strategic focus on their
core business while leveraging the power of the Internet. For
more information about Wavve and our services, please visit us
at http://www.wavve.comor call 916/679-2100.


WEBLINK WIRELESS: Q2 EBITDA Climbs To $4.1M
-------------------------------------------
WebLink Wireless, Inc. (OTC Bulletin Board: WLNKA) announced
that consolidated EBITDA in the second quarter of 2001, driven
by the performance of the Wireless Data Division, was $4.1
million, a $3.0 million improvement over the prior quarter.

EBITDA is defined as earnings (loss) before interest, taxes,
depreciation and amortization, amortization of stock
compensation, and restructuring/reorganization charges. Capital
expenditures were $2.4 million compared to $9.0 million in the
first quarter.

The Wireless Data Division's recurring revenue increased
sequentially 19.4 percent to $19.6 million from $16.4 million in
the prior quarter. EBITDA improved dramatically to $1.5 million
from a negative $4.8 million, resulting in positive EBITDA one
full quarter earlier than previously expected.

The Wireless Data Division added 40,399 net new subscribers in
the second quarter (after deducting approximately 27,000 units
that a major customer transferred to its own network) to end the
quarter with 517,511 subscribers. Monthly ARPU (average revenue
per unit) remained relatively constant at $13.14.

"This is a major accomplishment, as we have increased Wireless
Data units in service while sharply reducing our cost
structure," said John D. Beletic, the Company's chairman and
chief executive officer.

The Traditional Paging Division's recurring revenue declined to
$34.0 million from $39.1 million in the prior quarter, and
EBITDA declined to $3.2 million from $6.1 million. Units in
service declined by 210,079 to 1,403,625 as the market for
traditional paging services continues to erode. ARPU remained
relatively stable at $7.50.

On a consolidated basis, recurring revenues decreased to $53.6
million from $55.5 million in the prior quarter. Free cash flow,
defined as EBITDA less capital expenditures, increased by $9.6
million to $1.7 million from negative $7.9 million.
Restructuring charges of $2.5 million associated with office
closings and the May work force reduction were recognized in the
second quarter.

                   Reorganization

On May 23, 2001, the Company and its two operating subsidiaries
each filed a petition for reorganization under Chapter 11 of the
U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the
Northern District of Texas. The case was assigned to Judge
Steven A. Felsenthal.

On July 20, 2001, the Company announced that it won approval by
the U.S. Bankruptcy Court of $15 million of debtor-in-possession
(DIP) financing. The DIP financing will be provided by the two
principal lenders in the Company's currently outstanding bank
credit facility.

The DIP financing is secured by a superpriority lien on
substantially all of the Company's assets, matures on December
31, 2001, and is conditioned on compliance with financial and
other covenants.

In conjunction with the order approving the DIP financing, the
Bankruptcy Court also issued an agreed scheduling order
providing that the Company will, as planned, take steps to
proactively seek a standalone transaction with new financing or
a merger or sales transaction upon which the Company expects to
base a plan for emergence from Chapter 11.

As of August 15, 2001, the Company had no borrowings outstanding
under the DIP financing and $5.0 million in cash. As previously
disclosed, the Company plans to utilize the Chapter 11 process
to convert its senior notes (totaling approximately $470.2
million in accreted value at May 23, 2001) into equity.

At June 30, 2001, the Company has senior secured debt
outstanding of approximately $90.4 million, none of which is
anticipated to be converted to equity in any reorganization.

The Company recognized approximately $1.2 million of
reorganization expense in the quarter associated with the
bankruptcy and DIP financing and anticipates significant
expenses as it proceeds with its Chapter 11 reorganization.

           Changes in the Board of Directors

N. Ross Buckenham, President of the Company, was elected a
director of the Company by the Board of Directors. Mr. Buckenham
has been with the Company for over five years, and President for
almost four years. "Ross brings a wealth of knowledge about the
Company and the industry to his new position," said Beletic. "He
will be a valuable resource as we work through the Chapter 11
process."

Pamela Reeve has resigned as a director of the Company.

"For many years Pamela has been a sounding board for me and the
entire Board," Beletic said. "We appreciate her contributions to
WebLink Wireless over the years."

WebLink Wireless, Inc. is a leader in the wireless data
industry, providing wireless email, wireless instant messaging,
information on demand and traditional paging services throughout
the United States.

The Company's nationwide 2-way network is the largest of its
kind, reaching approximately 90 percent of the U.S. population
and, through a strategic partnership, extends into Canada. The
Dallas-based company, which serves more than 1.9 million
customers, recorded total revenues of $290 million for the year
ended December 31, 2000.

For more information, visit the website at
www.weblinkwireless.com.


WHEELING-PITTSBURGH: Claims Ownership Of Follansbee Plant
---------------------------------------------------------
Wheeling-Pittsburgh Steel Corporation (WPSC), appearing through
Scott N. Opincar and James M. Lawniczak of the Cleveland firm of
Calfee, Halter & Griswold, together with Michael E. Wiles and
Richard F. Hahn of the New York firm of Debevoise & Plimpton,
tell Judge William Bodoh that WPSC owns and operates a coke-
making facility in Follansbee, West Virginia.

WPSC also told Judge Bodoh that the said plant uses substantial
quantities of high-volatile coking coal and low-volatile coking
coal in the production of coke.

Before the Petition Date, WPSC obtained its requirements for
low-volatile coking coal through a purchase order contract with
Bluestone. Shortly after the Petition Date, WPSC negotiated an
interim agreement with American Metallurgical Coal Supply LLC
(AMCS) for the supply of low-volatile coking coal at a price
that was lower than the price hinder which the Bluestone
purchases had been made.

AMCS anticipated that it would supply such coal from a mine that
was to open in the Whites Mountains. In the interim, AMCS had
the right to supply low-volatile coking coal from other sources
at different prices.

The White Mountain mine has not yet begun production, and AMCS
has failed to deliver the quantities of low-volatile coking coal
that WPSC ordered. AMCS has delivered two notices contending
that AMCS's mistake in predicting output from the White Mountain
mine, and various other events at other mines, constitute "force
majeure" that excuses AMCS from meeting its obligations. WPSC
disputes whether any proper "force majeure" events have
occurred.

Regardless of the merits of that dispute, however, the fact
remains that WPSDC is without an assured source of supply of the
low-volatile coking coal that WPSC requires.

WPSC's coke-making facilities include coke ovens that cannot be
shut down without risking the destruction of the ovens. In the
absence of adequate supplies of low-volatile coking coal from
AMCS, WPSC has had to make "spot" purchases at prices up to $72
per ton.

Furthermore, such "spot" purchases have not been available in
sufficient quantities, resulting in reductions in coke
production. WPSC has had to compensate for the lack of coke in
its steel-making operations by burning extra natural gas in its
blast furnaces (at considerable expense). The reduced coke
output also has eliminated opportunities for WPSC to sell
coke at a profit.

In the absence of assurances that AMCS can or will meet its
obligations, WPSC has negotiated an agreement with Bluestone
that will provide for the simultaneous assumption and
modification of the Bluestone Purchase Order.

The Agreement will provide WPSC with an assured source of supply
of low-volatile coking coal through at least December 31, 2002,
at a price of $40 per ton for the months of August through
December 2001; $39 per ton for the calendar year 2002; and a
slightly adjusted price (based on a PPI adjustment formula) if
the contract is extended past 2002. These prices are
considerably below current market prices and are far below
current "spot" prices.

The Agreement also requires WPSC to make a "cure" payment of
roughly $3.2 million, representing the unpaid prepetition debt
under the Bluestone Purchase order. Approximately $1.2 million
of that sum will be paid in August 2001l, and the remaining $2
million balance of the cure payment would be paid in 12 equal
monthly installments.

Although the proposed cure payment is substantial, WPSC has
determined that it is reasonable in light of (1) the absence of
alternative assured supplies of low-volatile coking coal that
WPSC requires, and (2) the below-market prices that will be
available.

WPSC will also reserve its rights to recover, from AMCS, the
difference between the costs of coal under the Agreement
(including the cure payment that otherwise would not have been
required) and the price of coal under WPSC's contract with AMCS.

In addition, it is evident that WPSC's coke-making facilities
are profitable.

The Agreement permits an assignment, by WPSC, in the event of
any sale of the coke-making facilities. WPSC is therefore
confident that it can and will derive value from the assumption
and modification of the Bluestone Purchase Order, regardless of
how WPSC's operations might eventually be restructured during
these chapter 11 cases.

WPSC therefore tells Judge Bodoh that it believes the assumption
and simultaneous modification of the Bluestone Purchase Order
under the Agreement is in the best interests of WPSC's estate
and of its creditors and other parties in interest.

Recognizing the importance of this relief to the Debtor's
operation of its business, Judge Bodoh promptly enters an Order
granting her approval of this assumption and modification.
(Wheeling-Pittsburgh Bankruptcy News, Issue No. 9; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


WINSTAR COMMUNICATIONS: Seeks Court-Ordered Power To Enter Deals
----------------------------------------------------------------
Winstar Communications, Inc. files a motion for an entry of an
order granting the Debtors authority to consummate transactions
without requesting further Court approval in:

    (1) transfer or other disposition by the Debtors of certain
debt or equity interests in various international non-debtor
affiliates

    (2) to use funds from Debtors' estate to pay fees of local
counsel or related expenses.

Laura E. Janke, International Counsel for Winstar
Communications, Inc., states the international non-debtor
affiliates are imposing significant burdens in their efforts to
reorganize due to virtually no capital available to fund further
development or continue operations.

Ms Janke claims that these affiliates would continue to require
diversion of funds and management time and attention from the
Debtors' business in the US unless request is granted.
Furthermore, Ms Janke contends that such relief is intended to
eliminate such burdens as quickly as possible at a minimal cost
to the Debtors.

In connection with these transactions, Ms Janke discloses that
Winstar may be required to transfer or dispose debt or equity
interests in the affiliates at little or no consideration.

The Debtors do not believe such debt or equity interest have any
significant realizable value exists and any realizable value is
outweighed by the benefits to the Debtors' estates to be
achieved by the transactions.

Ms Janke reveals that the Debtors may be required to pay for
local counsel's fees or related expenses but the Debtors
anticipate that the fees to be paid from the Debtors'
estates will exceed $50,000 per transactions or $250,000
aggregate.

Ms Janke adds that in the event that any debt or equity interest
has value that could realize in excess of $1 million, the
Debtors will provide notice to all appropriate parties.

The Debtors propose the following procedures to be implemented
in lieu of separate notice and hearing for each transaction:

    a) The Debtors and applicable international non-debtor
affiliate shall be authorized to consummate such transaction
without further court notice to the Court or any other party
in interest but upon five days notice to:

       (1) the Office of the United States Trustee,

       (2) counsel to the Creditors' Committee,

       (3) counsel for the agent under the Debtors' DIP financing
facility,

       (4) counsel for the agent under the Debtors' pre-petition
secured financing facility and

       (5) any other holder of any lien, claim or encumbrance
relating to any asset of the Debtors that is part of any
such transaction.

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

       (i) assets to be sold or otherwise subject to
disposition by the applicable international non-debtor
affiliate,

       (ii) if applicable, nature of the debt or equity interest
of WCI or Winstar International proposed to be transferred
or otherwise subject to disposition and the estimated
value of such interest,

       (iii) identity of proposed purchaser or acquiror and any
Debtor or international non-debtor affiliate,

       (iv) terms of such transaction, and

       (v) amount of funds to be paid by any Debtor for local
counsel's fees or related expenses.

    c) Notice parties shall have 5 days after the notice is
served to object to or request additional time to evaluate the
proposed transaction. Objection and requests for additional
time must be timely delivered by facsimile to the Debtors'
external counsel and internal counsel. If counsel received
no written objection or written request for additional time
prior to expiration of the 5-day period, the Debtors and
applicable non-debtor affiliate shall be authorized to
consummate the transaction and to take such action as are
necessary in connection therewith. If a notice party
provides a written request to counsel to the Debtors for
additional time to evaluate the proposed transaction, such
notice party shall have an additional 10 days to object to
the proposed transaction.

    d) If a notice party objects to a proposed transaction within
5 days after notice is sent, the Debtors and such objecting
notice party shall use good faith efforts to consensually
resolve the objection. If the Debtors and the objecting
notice party are unable to achieve a consensual resolution,
the Debtors seek and obtain Bankruptcy Court approval of the
transaction upon notice and hearing.

    e) Nothing in the foregoing procedures shall prevent the
Debtors, in their sole discretion, from seeking Bankruptcy
Court approval at any time of any transaction upon notice
and hearing. (Winstar Bankruptcy News, Issue No. 9; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


YES CLOTHING: Doubts Cast On Ability To Continue Operations
-----------------------------------------------------------
Yes Clothing Inc. as at June 30, 2001, has liabilities in excess
of assets totaling approximately $2.0 million, as well as a
shareholders' deficit of $2.0 million.

These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management intends to
satisfy or restructure its debt, which contemplates that the
Company will satisfy substantially all its obligations through
the issuance of common stock, among other things.

There are no assurances that the Company will be successful in
satisfying or restructuring its debt and/or seeking capital to
resume operations.

In July 1997, due to a lack of trade credit and working capital,
Yes Clothing temporarily suspended operations pending receipt of
additional capital or third party credit.

The Company began liquidating inventory and other assets at
below cost. On December 17, 1997, the Company filed for
protection from its creditors under Chapter 11 of the United
States Bankruptcy Code. In March 1998, Yes was dismissed from
its bankruptcy proceedings.

There were no operations during first quarter of fiscal 2001,
and 2000. As a result, there were no revenues or cost of
revenues. Total general and administrative expenses increased
$12,300 from $20,000 in fiscal 2000 to $32,300 in fiscal 2001.
The increase is attributed to accrued expenses for services
rendered to the company.

           Capital Resources and Liquidity

Yes Clothing currently receives financial support from
NewBridge. Company future depends on its ability to execute a
plan of reorganization which consists of the satisfaction of
obligations primarily through the issuance of shares of common
stock, among other things.

As stated previously, there are no assurances that the Company
will be successful in satisfying or restructuring its debt
and/or seeking capital to resume operations.


BOOK REVIEW: PANIC ON WALL STREET: A History Of America's
              Financial Disasters
---------------------------------------------------------
Author:      Robert Sobel
Publisher:   Beard Books
Softcover:   469 Pages
List Price:  $34.95
Review by:   Gail Owens Hoelscher

"Mere anarchy is loosed upon the world, the blood-dimmed tide is
loosed, and everywhere the ceremony of innocence is drowned; the
best lack all conviction, while the worst are full of passionate
intensity."

What a terrific quote to find at the beginning of a book on a
financial catastrophe! First published in 1968. Panic on Wall
Street covers 12 of the most painful episodes in American
financial history between 1768 and 1962. Author Robert Sobel
chose these particular cases, among a dozen or so others, to
demonstrate the complexity and array of settings that have led
to financial panics, and to show that we can only make ;the
vaguest generalizations" about financial panic as a phenomenon.
In his view, these 12 all had a great impact on Americans of the
time, "they were dramatic, and drama is present in most
important events in history." They had been neglected by other
fiancial historians. They are:

       William Duer Panic, 1792
       Crisis of Jacksonian Fiannces, 1837
       Western Blizzard, 1857
       Post-Civil War Panic, 1865-69
       Crisis of the Gilded Age, 1873
       Grant's Last Panic, 1884
       Grover Cleveland and the Ordeal of 183-95
       Northern Pacific Corner, 1901
       The Knickerbocker Trust Panic, 1907
       Europe  Goes to War, 1914
       Great Crash, 1929
       Kennedy Slide, 1962

Sobel tells us there is no universally accepted definition if
financial panic. He quotes William Graham Sumner, who died long
before the Great Crash of 1929, describing a panic as ".a wave
of emotion, apprehension, alarm. It is more or less irrational.
It is superinduced upon a crisis, which is real and inevitable,
but it exaggerates, conjures up possibilities, take away courage
and energy."

Sobel could find no "law of panics" which might allow us to
predict them, but notes their common characteristics. Most occur
during periods of optimism ("irrational exuberance?"). Most
arise as "moments of truth," after periods of self-deception,
when players not only suddenly recognize the magnitude of their
problems, but are also stunned at their inability to solve them.
He also notes that strong financial leaders may prove a
mitigating factor, citing Vanderbilt and J.P. Morgan.

Sobel concludes by saying that although financial panics have
proven as devastating in some ways as war, and while much
research has been carried out on war and its causes, little
research has been done on financial panics. Panics on Wall
Street stands as a solid foundation for later research on the
topic.


                            *********


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, Ronald Villavelez
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 ***