TCR_Public/010822.mbx        T R O U B L E D   C O M P A N Y   R E P O R T E R

          Wednesday, August 22, 2001, Vol. 5, No. 164


ADVOCAT: Extends Stay of Execution in Arkansas Jury Award
AMES: Gets Approval of First-Day Motions & Interim DIP Financing
AMES: Judge Gerber Restricts Trading in Bonds & Unsecured Claims
AMF BOWLING: Panel Seeks Authority to Hire Troutman as Counsel
AVIATION SALES: S&P Cuts Corporate Credit Debt Rating to D

COMDISCO INC: Court Orders Injunction Against Utility Companies
CONCORD CAMERA: S&P Affirms Low-B Ratings
COVAD: Moves to Assume Prepetition Noteholder Voting Agreements
COVAD: Posts Increased Revenues, Lower Losses for Second Quarter
CYPRESS COMMS: Gets Shareholders' Nod For Reverse Stock Split

DELTA MILLS: S&P Drops Corporate Credit Rating to B+ From BB-
DERBY CYCLE: Seeks Bankruptcy Protection in Delaware
FINOVA: Shamis Seeks to Lift Stay Re Alleged Fraud Factoring
FINOVA: Emerges from Chapter 11 & Names New Board of Directors
FLEETPRIDE: S&P Cuts Corporate Credit Rating to CCC+ From B-

FUTURELINK: Second Quarter Loss Tops $18 Million
GUNTHER INTERNATIONAL: Working Capital Deficit Widens in Q2
HYNIX SEMICONDUCTOR: S&P Concerned Over EBITDA Interest Coverage
ICG COMMS: Files Suit Against XO Communications in Cleveland
INTELEFILM CORP.: Receives Delisting Notice From Nasdaq

ITI EDUCATION: Mosaic Technologies Wants To Buy Assets
KEYSTONE CONSOLIDATED: Posts Q2 Net Loss $1.6 Million
LAIDLAW INC.: Sunrise Moves for Inquiry on Laidlaw One Notes
LERNOUT & HAUSPIE: Committee Gets Standing to Prosecute Claims
LLS CORPORATION: S&P Assigns D Rating after Senior Note Default

LOEWEN GROUP: Objects to Cremated Remains Class Claims
LOEWEN GROUP: 3rd Disclosure Statement Approved; 4th Plan On Way
NETNATION: Fails To Meet Nasdaq's Minimum Capital Requirement
NEXTWAVE: UBS Warburg Extends $2.5 Billion Funding Commitment
OWENS CORNING: Unsecureds Panel Hires Anderson Kill

PACIFIC GAS: Creditors Must File Proofs of Claim by Sept. 5
PARAGON CORPORATE: S&P Reacts to Poor Post-Acquisition Results
PILLOWTEX: Seeks Court Approval To Assume Pacts With Alabama Gas
PRECISION PARTNERS: S&P Junks Debt Ratings & Initiates Watch
PRIMUS TELECOMMS: S&P Lowers Ratings & Suspects Tight Liquidity

PSINET INC.: Seeks Extension to Jan. 27 to Make Lease Decisions
RAILWORKS CORP.: S&P Drops Corporate Credit Rating To CCC+
RESEARCH INC.: Can't Comply with Tangible Net-Worth Covenant
SAFETY-KLEEN: Baker Tanks Balks at Lease Rejection
TRITON NETWORKS: Board Approves Liquidation & Dissolution Plan

WHEELING-PITTSBURGH: Court Requires Review of Rothschild Fees
WINSTAR COMMS: Secures Okay For De Minimis Asset Sale Procedures
WORLD COMMERCE: Files Chapter 11 Protection

* Meetings, Conferences and Seminars


ADVOCAT: Extends Stay of Execution in Arkansas Jury Award
Advocat Inc. (Nasdaq OTC:AVCA) and the plaintiffs in the Mena,
Arkansas professional liability case have extended the
standstill of execution relating to the verdict against Advocat
and its subsidiaries totaling $78.425 million.

During the extension, the plaintiffs have agreed that they will
not attempt to execute on the judgment.

The Company has requested that its insurance carriers post a
bond in the full amount of the verdict and is awaiting a
response from them. In the event the Company's insurance
carriers do not post the full amount of the bond, the Company
does not have the financial resources to post a bond in the
amount not covered by insurance.

In that case, if the plaintiffs attempt to execute on the
judgment, the Company would have to consider other alternatives,
including seeking bankruptcy court protection, in order to stay
execution of the judgment. The Company plans to appeal the

Advocat Inc. operated 120 facilities including 56 assisted
living facilities with 5,245 units and 64 skilled nursing
facilities containing 7,230 licensed beds as of March 31, 2001.
The Company operates facilities in 12 states, primarily in the
Southeast, and four provinces in Canada.

For additional information about the Company, visit Advocat's
web site:

AMES: Gets Approval of First-Day Motions & Interim DIP Financing
Ames Department Stores, Inc. (NASDAQ: AMES), secured approval of
its "first-day" motions made in its voluntary Chapter 11
reorganization proceedings.  Among other actions, the approval
of these initial motions confirms Ames' plans to continue its
employee pay and benefit programs uninterrupted, and gives Ames
immediate access to significant DIP (Debtor-In-Possession)

Ames received interim approval from the bankruptcy court for its
$755 million post-petition financing, with $700 million coming
from GE Capital and $55 million from Kimco Funding LLC. The
interim approval immediately makes available to the company up
to $628 million to acquire merchandise, fund daily operations,
pay its associates and retire the existing credit agreements. A
hearing on the final approval of the financing is set for
September 17, 2001. In a separate order, the court approved
continued payment of all employee wages and the continuation of
all employee benefit programs.

"We are encouraged that the court ruled in our favor on all
first-day motions. This assures our ability to keep merchandise
flowing to our stores, take care of our employees, and provide
A+ Service to our customers," said Ames chairman and chief
executive office, Joseph R. Ettore. "We are confident that this
is an important first step towards a successful reorganization
as a strong and profitable company."

Ames Department Stores filed Monday for voluntary reorganization
under Chapter 11 of the U.S. Bankruptcy Code in the Southern
District of New York in order to focus resources on Ames' solid
nucleus of stores and ensure the company's future success. For
more information about the reorganization, please visit the Ames
reorganization section of the Ames' corporate web site
http://www.amesstores.comor call toll-free 1-888-745-7755.

Ames Department Stores, Inc., a FORTUNE 500(R) company, is the
nation's largest regional, full-line discount retailer with
annual sales of approximately $4 billion. With 452 stores in the
Northeast, Mid-Atlantic and Mid-West, Ames offers value-
conscious shoppers quality, name-brand products across a broad
range of merchandise categories. For more information about
Ames, visit http://www.amesstores.comor

AMES: Judge Gerber Restricts Trading in Bonds & Unsecured Claims
One of the valuable assets of the Debtors' estates is their net
operating loss carryforwards, David H. Lissy, Esq., Ames' Senior
Vice President and General Counsel, tells Judge Gerber, As of
February 3, 2001, the Debtors had a consolidated NOL
carryforward for federal income tax purposes estimated at
approximately $1 billion. Projections prepared by Rolando de
Aguiar, Ames' Chief Financial and Administrative Officer, show
that the Debtors expect to use a substantial portion of their
NOL carryforwards to offset future income and dramatically
reduce their federal income tax liability, subject to certain

One of these limitations is contained in 26 U.S.C. Sec. 382,
which limits the NOL deduction when a corporation experiences a
change of ownership. A change of ownership occurs where the
percentage of the stock of a loss company's equity increases by
more than 50 percentage points over the lowest percentage of
stock owned by such shareholders at any time during a three year
moving testing period. The limitations imposed by Section 382 in
the context of a change in ownership pursuant to a confirmed
chapter 11 plan is significantly more relaxed, particularly
where the plan involves the retention or receipt of at least
half of the stock of the reorganized Debtors by shareholders or
qualified creditors. See Sec. 382(l)(5), (6). Qualified
creditors are, in general, those creditors who (A) have held
their claims since at least 18 months prior to the bankruptcy
or, for shorter-lived claims that were incurred in the ordinary
course of the Debtors' business, since such claims were
incurred, or (B) will own less than 5% of the reorganized
Debtors' equity. See id. Sec. 382(l)(5)(E); Treas. Reg. Sec.

In light of these limitations, Mr. Lissy explains, the Debtors
could lose the substantial benefits of their NOL carryforwards
as a result of trading and accumulation of claims by creditors
in claims against and stockholders in interests in the Debtors
prior to emergence from chapter 11. "It is likely that any
realistic chapter 11 plan will involve the issuance of a
substantial portion of common stock to creditors in
satisfaction, either in whole or in part, of the Debtors'
indebtedness," Mr. de Aguiar adds, and in that event, Ames will
want to avail itself of the special relief afforded by Section
382 for changes in ownership under a confirmed chapter 11 plan.
Accordingly, the Debtors assert that they need the ability to
preclude certain transfers, and monitor and possibly object to
other changes in the ownership of stock and claims, to assure
that the 50% ownership change test is not violated prior to the
effective date of a chapter 11 plan in these cases and that the
Debtors have the opportunity to avail themselves of the special
relief provided by Section 382.

By this Motion, the Debtors sought and obtained authority from
Judge Gerber, pursuant to sections 362 and 105(a) of the
Bankruptcy Code, to establish procedures to notify holders of
the Ames 10% Senior Notes, the Hills 12.5% Senior Notes, all
holders of the Debtors' Common Stock, and all holders of general
unsecured claims of proposed procedures that must be satisfied
before the sale or other transfer of such claims may be deemed

Specifically, the Debtors will advise all creditors and
shareholders (whose actions could adversely affect the Debtors'
NOL carryforwards) that:

     * Any person and any entity (within the meaning of Section
382) is stayed, prohibited, and enjoined, pursuant to sections
362 and 105(a) of the Bankruptcy Code, (i) in the case of a
person or entity who does not Own (as defined below) any Senior
Notes or Common Stock, or who Owns less than 5% of each class of
Senior Notes and less than 1.4 million shares of Common Stock,1
from purchasing, acquiring, or otherwise obtaining Ownership of
an amount which, when added to such person's or entity's total
Ownership, if any, equals or exceeds 4.99% of such class of
Senior Notes or 1.4 million shares of Common Stock, or (ii) in
the case of a person or entity who Owns at least 5% of a class
of Senior Notes or at least 1.4 million shares of Common Stock,
from purchasing, acquiring, or otherwise obtaining Ownership of
any additional Senior Notes or Common Stock.

     * Any person or entity who proposes or intends to sell,
acquire, trade, or otherwise transfer or effectuate any transfer
of any general unsecured claim against the Debtors (other than
the Senior Notes) must before any such transaction file with
this Court and serve on the Debtors and their counsel a
proscribed notice at least 30 days prior to such transaction.
The Debtors will then have 30 days after receipt of such notice
to object to such transaction. If the Debtors file an objection,
then the transaction will not be effective unless approved by a
final and nonappealable order of this Court. If the Debtors do
not object within such 30-day period, then such transaction may
proceed solely as set forth in the notice. Further transactions
within the scope of this paragraph must be the subject of
additional notices as set forth herein with an additional 30 day
waiting period.

For purposes of this Motion, (i) "Ownership" of a claim against,
or stock of, the Debtors shall be determined in accordance with
applicable rules under Section 382 and, thus, shall include, but
not be limited to, direct and indirect ownership (e.g., a
holding company would be considered to beneficially own all
shares owned or acquired by its subsidiaries), ownership by
members of such person's family and persons acting in concert,
and in certain cases, the creation or issuance of an option (in
any form), and (ii) any variation of the term "Ownership" (e.g.,
Own) shall have the same meaning.

"It is well-established that a debtor's NOL is property of the
debtor's estate which is protected by section 362 of the
Bankruptcy Code, Martin J. Bienenstock, Esq., at Weil, Gotshal &
Manges LLP, argued at the First Day Hearing. The United States
Court of Appeals for the Second Circuit, in its seminal
decision, Official Committee of Unsecured Creditors v. PSS
Steamship Co. (In re Prudential Lines Inc.), 928 F.2d 565 (2d
Cir.), cert. denied, 502 U.S. 821 (1991), affirmed the
application of the automatic stay and upheld a permanent
injunction against a parent corporation from taking a
worthless stock deduction with respect to its debtor subsidiary
since that would have adversely affected the subsidiary's
ability to utilize its NOL carryforwards postbankruptcy under
the special relief provisions of Section 382. The Second Circuit
held that the debtor's NOL carryforward was property of the
estate under the broad language of section 541 of the Bankruptcy
Code: Including NOL carryforwards as property of a corporate
debtor's estate is consistent with Congress' intention to "bring
anything of value that the debtors have into the estate."
Moreover, "[a] paramount and important goal of Chapter 11 is the
rehabilitation of the debtor by offering breathing space and an
opportunity to rehabilitate its business and eventually generate
revenue." Including the right to a NOL carryforward as property
of [the debtor's] bankruptcy estate furthers the purpose of
facilitating the reorganization of [the debtor]. Id. at 573
(citations omitted). See also Nisselson v. Drew Indus., Inc. (In
re White Metal Rolling & Stamping Corp.), 222 B.R. 417, 424
(Bankr. S.D.N.Y. 1998) ("It is beyond peradventure that NOL
carrybacks and carryovers are property of the estate of the loss
corporation that generated them.").

The Second Circuit further held that the parent corporation's
claiming of a worthless stock deduction in stock of the debtor
subsidiary would effectively eliminate the value of the debtor's
NOL carryforward and thus would be an act to exercise control
over estate property in violation of the automatic stay. Section
362(a) of the Bankruptcy Code operates as a stay of, among other
things, "any act to obtain possession of property of the estate
or of property from the estate or to exercise control over
property of the estate." 11 U.S.C. Sec. 362(a)(3). Accordingly,
"where a nondebtor's action with respect to an interest that is
intertwined with that of a bankrupt debtor would have the legal
effect of diminishing or eliminating property of the bankrupt
estate, such action is barred by the automatic stay. "
Prudential Lines, 928 F.2d at 574.

In Prudential Lines, the parent corporation's interest in its
worthless stock deduction was intertwined with the debtor's NOL.
According to the Second Circuit, if the parent were permitted to
take a wortless stock deduction, it would have an adverse impact
on the debtor subsidiary's ability to carry forward its NOL.
Therefore, "despite the fact that the [parent corporation's]
action is not directed specifically at [the debtor subsidiary],
it is barred by the automatic stay as an attempt to exercise
control over property of the estate." Id.

The Second Circuit went on to hold that the permanent injunction
was also supported by the court's equitable powers pursuant to
section 105(a), which authorizes the court to "issue any order,
process, or judgment that is necessary or appropriate to carry
out the provisions of this title." 11 U.S.C. Sec. 105(a).

Because the NOL was a valuable asset of the debtor, the Second
Circuit refused to disturb the bankruptcy court's finding that
elimination of the right to apply its NOL to offset income on
future tax returns would impede the debtor's reorganization.
Prudential Lines, 928 F.2d at 574.

Similarly, in In re Phar-Mor, Inc., 152 B.R. 924 (Bankr. N.D.
Ohio 1993), chapter 11 debtors moved to prohibit the transfer of
the debtors' stock that could have an adverse effect on the
debtors' ability to claim a NOL carryover. The court held that
the NOL qualified as property of the estate and issued an
injunctive order to protect the assets of the estate and enforce
the automatic stay. Significantly, the court granted the relief
requested even though the stockholders did not state any intent
to sell their stock and even though the debtors did not show
that a sale was pending which would trigger the prescribed
change in ownership under Section 382. Id. at 927. Despite the
"ethereal" nature of the situation, the court observed that
"[w]hat is certain is that the NOL has a potential value, as yet
undetermined, which will be of benefit to creditors and
will assist Debtors in their reorganization process. This asset
is entitled to protection while Debtors move forward toward
reorganization." Id. (emphasis added).

The court also concluded that because the debtors are seeking to
enforce the stay, they did not have to meet the more stringent
requirements for a grant of preliminary injunctive relief:
The requirements for enforcing an automatic stay under 11 U.S.C.
Sec. 362(a)(3) do not involve such factors as lack of an
adequate remedy at law, or irreparable injury, or loss and a
likelihood of success on the merits. The key elements for a stay
. . . are the existence of property of the estate and the
enjoining of all efforts by others to obtain possession or
control of property of the estate. Id. at 926 (quoting In re
Golden Distribs., Inc., 122 B.R. 15, 19 (Bankr. S.D.N.Y. 1990)).

In short, Mr. Bienenstock persuasively argued, it is well-
settled by courts in this and other Circuits that the automatic
stay enjoins actions under section 362(a)(3) which would
adversely affect a debtor's NOL carryforwards. Such actions,
including the trading of claims or common stock, are null and
void ab initio.  (Ames Bankruptcy News, Issue No. 1; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

AMF BOWLING: Panel Seeks Authority to Hire Troutman as Counsel
The Official Committee of Unsecured Creditors of AMF Bowling
Worldwide, Inc. is seeking authority from the Court to employ
and retain the law firm of Troutman Sanders Mays & Valentine LLP
as its local counsel with regard to these Chapter 11 cases.

Robert Hamwee, Chairman of the Official Creditors' Committee of
Unsecured Creditors of AMF Bowling Worldwide, Inc., explains
that the Committee chose Troutman Sanders because of the Firm's
extensive experience and expertise in bankruptcy and insolvency
matters, particularly business reorganizations under chapter 11
of the Bankruptcy Code.

Mr. Hamwee contends that Troutman Sanders also possesses
expertise and experience in practicing before this Court and in
representing creditors' committees in Chapter 11 cases.

Mr. Hamwee reveals that the Committee will also apply to employ
the law firm of Debevoise & Plimpton to serve as co-counsel. The
two firms, Mr. Hamwee assures the Court, will coordinate their
efforts and delineate clearly their respective duties so as to
prevent duplication of services.

The Committee will look to Troutman Sanders to:

   (a) advise the Committee with respect to its powers and
       duties under section 1103 of the Code;

   (b) take action necessary to preserve, protect and maximize
       the value of the Debtors' estates for the benefit of the
       Debtors' unsecured creditors including, but not limited
       to, investigating the acts, conduct, assets, liabilities,
       and financial condition of the Debtors, the operation of
       the Debtors' businesses and the desirability of the
       continuance of such businesses, and any other matter
       relevant to the case or to the formulation and/or
       evaluation of a plan of reorganization;

   (c) prepare on behalf of the Committee motions, applications,
       answers, orders, reports, pleadings and papers that may
       be necessary to the Committee's interests in these
       chapter 11 cases;

   (d) participate in the negotiation, formulation and
       implementations of a plan of reorganization as may be in
       the best interests of the Committee and the unsecured
       creditors of the Debtors' estates;

   (e) represent the Committee's interests with respect to the
       Debtors' efforts to obtain Post-petition financing;

   (f) advise the Committee in connection with any potential
       valuation or sale of assets;

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

   (h) consult with the Debtors' counsel on behalf of the
       Committee regarding tax, intellectual property, labor and
       employment, real estate, corporate, litigation matters,
       and general business operational issues;

   (i) assist the Committee in evaluating the necessity of
       seeking the appointment of a trustee or examiner, and
       requesting such appointment, if deemed appropriate; and

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

Troutman Sanders will bill for its professionals' services at
its customary hourly rates:

               Partners         $240 - $450
               Associates       $125 - $250
               Legal Assistants $ 80 - $125

Philip C. Baxa, Esq., a partner in Troutman Sanders, assures the
Court that Troutman Sanders is a  "disinterested person" as
defined in the Bankruptcy Code and does not hold or represent an
adverse interest to the Debtors' estate.

Out of an abundance of caution, Mr. Baxa discloses that the Firm
has connections with these entities in matters wholly unrelated
to AMF's chapter 11 proceedings:

   Secured Lenders
   Bank of America, N.A.
   J.P. Morgan/Chase Manhattan Bank, N.A.
   Citibank, N.A.
   Foothill Capital Corporation (no active matters)
   General Electric Capital Corporation (no active matters)
   Goldman Sachs & Company (no active matters)

   Other Banking Institutions
   Allied Finance Ltd.
   Allstate Life Insurance
   City of National Bank Credit Agicole Judosuez
   Crestar Bank
   Dresdner Bank AG, NY
   First Union National Bank
   Imperial Bank
   Mellon Bank, N.A.
   Metropolitan Life Insurance Company
   National City Bank/PNC Bank
   The Sakura Bank
   Transamerica Business Credit Corp.

   Trade Creditors
   Brunswick Bowling & Billiards
   Mowhawk Industries, Inc.
   Boise Cascade Office Products Corp.
   Chesapeake Engineering

   Alabama Power Company
   Amerner UE
   American Electric Power
   AT&T (various entities)
   Bell Atlantic,
   BellSouth entities
   Central Power & Light Co.
   Columbia Gas of Virginia, Inc.
   Con Edison (various entities)
   Cox Communication (various entities)
   Dominion Virginia Power (various entities)
   Florida Power Corporation
   Georgia Pacific Corp.
   Lucent Technologies
   Media One
   Midamerican Energy Company
   Pacific Bell
   Pacific Gas & Energy, Sprint
   Time Warner Communications
   Treasurer, Hanover County, Virginia
   Verizon (various entities)
   Xerox (various entities)

   Norfolk Southern Corporation
   Seminary Plaza Shopping Center
   Wells Fargo Bank

   Blackstone Management
   McGuire Woods LLP

Mr. Baxa assures the Court that during the period in which it is
serving as local counsel for the Committee, Troutman Sanders
will not represent any of the entities listed above with respect
to these Chapter 11 cases but will continue to represent the
listed entities in matters unrelated to these Chapter 11 cases.

Mr. Baxa also assures the Court that Troutman Sanders will
periodically review its files during the pendency of these cases
to ensure that no conflicts or other disqualifying circumstances
exist or arise.

If any new relevant facts or relationships are discovered or
arise, Mr. Baxa states that Troutman Sanders will use reasonable
efforts to identify such further developments and will properly
file a supplemental statement. (AMF Bankruptcy News, Issue No.
5; Bankruptcy Creditors' Service, Inc., 609/392-0900)

AVIATION SALES: S&P Cuts Corporate Credit Debt Rating to D
Standard & Poor's lowered its corporate credit and subordinated
debt ratings on Aviation Sales Co. to 'D' from triple-'C'-plus
and triple-'C'-minus, respectively, and removed them from
CreditWatch, where they were placed on April 26, 2001.

The single-'B'-minus rating on the firm's bank facility is
withdrawn, since amounts borrowed have been substantially

Aviation Sales did not make the interest payment due on Aug. 15,
2001, on $165 million 8.125% subordinated notes maturing in
2008. This nonpayment was part of an agreement with the holders
of a majority of the notes to exchange the principal mostly for
new notes, with PIK interest, and 15% of the equity in the
restructured company.

The terms are significantly different from those of the rated
$165 million notes.

Aviation Sales is a leading independent provider of maintenance,
repair, and overhaul services for major airlines.

Aviation Sales Company provides maintenance, repair, and
overhaul (MRO) services to major commercial carriers, airline
leasing companies, and jet engine manufacturers (including Pratt
& Whitney).

Aviation Sales is restructuring: It has sold its redistribution
business (to Kellstrom Industries), as well as its manufacturing
operations and other noncore businesses. Proceeds from the deals
will be used to pay down debt. With the divestitures, MRO
operations -- including aircraft heavy maintenance, component
repair and overhaul services, and engineering services -- are
now Aviation Sales' sole focus. The company operates repair
facilities in the US.

COMDISCO INC: Court Orders Injunction Against Utility Companies
Persuaded that utility services are critical to the continued
operations of Comdisco, Inc., Judge Barliant entered an order
prohibiting Utility Companies from cutting off services to
Comdisco due to their Chapter 11 cases or because of unpaid pre-
petition invoices.

The Utility Companies prohibited from cutting its services to
the Debtors include Ameritech, AT&T, Bell Atlantic, MCI, Qwest,
Sprint, US West, Verizon and Worldcom.

Jack Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher &
Flom, explains that the Debtors receive service from hundreds of
utilities and depend on those utility services to continue
operations and to preserve the value of their assets. Thus, Mr.
Butler argues, the Debtors must be protected from any
interruption of utility services.

According to Mr. Butler, the Utility Companies are not
prejudiced by this injunction because the Debtors have
sufficient funds to pay for post-petition utility service. Mr.
Butler notes that the Debtors' pre-petition payment history and
their proposed debtor-in-possession financing adequately assures
Utility Companies of continued payment for services without the
need for deposits or other security.

The Court also approved the Debtors' proposed procedures for
determining requests for additional assurance:

   (1) For those Utility Companies seeking adequate assurance
       from the Debtors in the form of a deposit or other
       security, they are required to make a request in writing,
       setting forth the location for which utility services
       were provided, so that the request is actually received
       by the Debtors within 25 days from the date of such
       service. The request must also contain a payment history
       for the most recent 6 months and a description of any
       prior material payment delinquency or irregularity.

   (2) If a Utility Company timely and properly requests
       additional adequate assurance that the Debtors believe is
       unreasonable, the Debtors are required to file a Motion
       for Determination of Adequate Assurance of Payment and
       set such motion for hearing within 45 days.

   (3) If a Determination Motion is filed or a Determination
       Hearing scheduled, Utility Companies shall be deemed to
       have adequate assurance of payment until this Court
       enters a final order finding otherwise. Any Utility
       Company that does not timely request in writing
       additional adequate assurance shall be deemed to have
       adequate assurance under section 366 of the Bankruptcy
       Code. (Comdisco Bankruptcy News, Issue No. 3; Bankruptcy
       Creditors' Service, Inc., 609/392-0900)

CONCORD CAMERA: S&P Affirms Low-B Ratings
Standard & Poor's affirmed its ratings on Concord Camera Corp.
and removed them from CreditWatch where they were placed with
positive implications on Nov. 28, 2000. The current outlook is

The CreditWatch action and affirmation follow a sharp decline in
sales and profits and the expectation that earnings weakness
will intensify in the first quarter ending September 2001 and
persist for at least six to 12 months.

The ratings continue to be supported by substantial cash
balances relative to outstanding debt, and also incorporates
consideration of significant business risks, including Concord's
material customer concentrations, limited product diversity, and
modest size.

Revenues in the fourth quarter ended June 30, 2001, dropped 31%
as sales to original equipment manufacturers continued to
plummet and were only partially offset by an increase in direct
sales. Profitability was hurt by less favorable overhead
absorption and labor utilization as well as specific charges
related to restructuring and a bankrupt customer. The weak
economy is expected to continue to depress sales of photography
products over the near term and although Concord's customer
diversity has improved over the past year, it continues to
maintain material, albeit less severe, customer concentrations
that heighten its business risk.

Charge-offs related to the bankrupt customer represented about
10% of total sales last year and this business has yet to be
replaced. Concord estimates that restructuring initiatives could
produce saving of more than $7 million in the current year and
should help it return to profitability.

Over the longer term, Concord should benefit from its strength
as a designer, developer, and manufacturer of low-cost, high-
quality cameras and related imaging products; industry trends to
increase the outsourcing of production; and new business
opportunities related to the growing use of imaging products as
part of other communication and computer products.

At the same time, the company will remain vulnerable to
significant product and customer concentrations, pricing
pressures from retailers and competitors, and the risk of
increased sales volatility because of more rapid technological
change and uncertain customer acceptance of new digital and
hybrid imaging products.

The ratings continue to be supported by cash balances of more
than $100 million that are substantial relative to debt of
approximately $15 million. Cash balances include proceeds from
common stock issued in the second half of 2000.

The company continues to evaluate potential uses of these funds,
including acquisitions or investments and share repurchases
under a recently authorized $10 million program and it is also
likely to be used to fund negative discretionary cash flow in
the near term.

Historically, Concord has maintained cash balances relatively
equal to long-term debt with additional flexibility provided by
various lines of credit.

Standard & Poor's anticipates that Concord will continue to
exercise moderate financial policies and that it will maintain
cash balances higher than its historical levels while earnings
weakness persists.

Standard & Poor's also expects that cash balances will decline
from current levels but that such uses will focus on
acquisitions or investments that should enhance near-term

                        Outlook: Stable

Revenue and profits could remain under pressure for at least the
next six to 12 months although the ratings should continue to be
supported by relatively high cash balances. However, a more
prolonged or severe decline in profits or a material decrease in
liquid assets without an expected improvement in near-term
profitability could lead to a downgrade.

          Ratings Affirmed & Removed From CreditWatch

          Concord Camera Corp.           Ratings

          Corporate credit rating        B
          Senior unsecured debt          B-

COVAD: Moves to Assume Prepetition Noteholder Voting Agreements
Covad Communications Group, Inc. tells the Bankruptcy Court that
its chapter 11 restructuring constitutes a pre-arranged
bankruptcy case with the majority holders of Covad's more than
$1,350,000,000 of outstanding bond debt in four tranches:

   $208,700,000 of 13.5% 1998 senior discount notes due 2008;
   $215,000,000 of 12.5% 1999 senior notes due 2009;
   $425,000,000 of 12.0% 2000 senior notes due 2010; and
   $500,000,000 of 6.0% 2000 convertible notes due 2005.

Although Covad has not yet filed nor formally solicited votes to
accept a chapter 11 plan of reorganization, the Company is
confident that it will have more than adequate support to
confirm a plan in a timely and efficient manner.

In July 2001, Covad began exploring strategic alternatives to
address its operating losses and need to attract new investment.
After extensive, arm's-length negotiations to address these
problems, the Debtor entered into agreements with holders of
more than 54% of that:

   (a) set forth the terms of a consensual restructuring of the
       Debtor's obligations that provides for a distribution to
       the holders of the Notes;

   (b) contemplate the Debtor filing its chapter 11 bankruptcy
       and embodying the terms of that consensual restructuring
       in the Plan;

   (c) require the Noteholders to vote for, and support
       confirmation of, the Plan, subject to compliance with all
       proper solicitation procedures; and

   (d) require Debtor to escrow some $256 million in cash
       consideration payable to the Noteholders under the Plan
       pursuant to the Escrow Agreement.

The plan of reorganization Covad expects to confirm will
eliminate over $1,000,000,000 of indebtedness from the Company's
balance sheet. This deleveraging, Covad hopes, will permit the
Company to attract new investments necessary to reach

Prior to the Petition Date, Covad deposited $256,782,701 in cash
into an escrow account maintained at Citibank, N.A., for benefit
of Wilmington Trust Company, who is acting as the Noteholders'

The Escrow Agreement provides that the Noteholders will be
entitled to the release of the Escrowed Cash if Covad misses any
of various deadlines in the Plan Confirmation process, or if the
Plan is confirmed, that entitles the Noteholders to the Escrowed
Cash. The principal deadlines require Covad to:

   * file its Plan by September 15, 2001,

   * commence solicitation by November 15, 2001, and

   * declare the Plan effective by January 15, 2002.

The Debtor's legal team -- led by Richard M. Pachulski, Esq.,
Brad R. Godshall, Esq., Scotta McFarland, Esq., at Pachulski,
Stang, Ziehl, Young & Jones P.C., in Los Angeles and Laura Davis
Jones, Esq., Christopher J. Lhulier, Esq., and David W.
Carickhoff, Esq., in Wilmington -- tell the Court that Covad
believes that all of the benchmarks imposed by the Escrow
Agreement are attainable.

In the event that Noteholders do not accept Covad's Plan as a
class, the Debtor notes, the Escrow reverts back to the Company.
In the event the Plan is not timely confirmed or Covad defaults
under the voting agreements with the Noteholders, the escrowed
cash will be released to the Noteholder Representative for
distribution to the Noteholders.

This Motion to assume the Escrow Agreement (without debating
whether or not the agreement is a true executory contract) is
required under the voting agreements. Accordingly, by this
Motion, the Debtors ask the Court for permission to assume the
Escrow Agreement pursuant to 11 U.S.C. Sec. 365(a).

The Escrow Agreement, Brad R. Godshall, Esq., relates,
represents the agreement between the Debtor and approximately
54% of its Noteholders to the proposed restructuring of the
Debtor and is an integral component in consummating the proposed
consensual restructuring of the Debtor.

If the Court grants this Motion, Mr. Godshall suggests, the
remaining 46% of the Noteholders will realize that the Debtor's
proposed restructuring is certain and not tenuous. Additionally,
Court approval of this Motion will ensure the Remaining
Noteholders that the approximately $256,000,000 which the Debtor
proposes to pay to the Noteholders is being held in escrow and
is available for distribution if the requisite support of two-
thirds of the Noteholders is obtained.

Accordingly, the Remaining Noteholders will be more likely to
support the Debtor's restructuring and will not fear that the
Debtor's case will turn into a liquidation as have the cases of
many companies involved in this industry.

In connection with this matter, Ed O'Connell, Esq., at Kaye
Scholer, and David S. Rosner, Esq., at Kasowitz, Benson, Torres
& Friedman LLP, represent the interests of the Noteholders and
Wilmington Trust Company. Herman H. Raspe, Esq., at Patterson,
Belknap, Webb & Tyler, LLP, represents Citibank. (Covad
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

COVAD: Posts Increased Revenues, Lower Losses for Second Quarter
Covad Communications Group, Inc. (OTCBB:COVD) reports that its
revenue for the quarter ended June 30, 2001 stood at $87.1
million, representing a 22 percent increase over revenue of
$71.2 million for the quarter ended March 31, 2001 and a 101
percent increase over revenue of $43.2 million for the quarter
ended June 30, 2000.

Loss from operations for the quarter ended June 30, 2001 was
$141.8 million, a 19 percent improvement from the first quarter
loss from operations of $174.7 million.

Contributing to this loss for the second quarter was a
restructuring charge of $2.9 million and a charge of $2.2
million relating to the write-down of goodwill associated with
Covad's BlueStar subsidiaries.

Loss per share improved 12 percent to a loss of $1.01 in the
second quarter of 2001 from a loss of $1.15 in the first quarter
of 2001. This is a slight increase from the loss per share of
$1.00 in the second quarter of 2000.

Revenue for the six months ended June 30, 2001 was $158.3
million, representing a 147 percent increase over revenue of
$64.0 million for the same period of 2000.

Loss from operations for the six months ended June 30, 2001 was
$316.6 million, including $20.0 million in charges for
restructuring and adjustments to the recorded value of long-
lived assets, compared with a loss from operations of $271.0
million for the six months ended June 30, 2000.

"We continue to see improvement in our operating performance,"
said Covad Chairman Charles McMinn. "This is yet another step on
the path to profitability and helps demonstrate that Covad's
business model is delivering results."

Covad's subscriber lines in service increased 4 percent to
333,000 lines, compared with 319,000 lines at March 31, 2001.
This decrease in growth from the first quarter growth of 16
percent is reflective of Covad's continuing work to manage the
migration of lines from distressed partners and from the
company's BlueStar subsidiaries.

Lines in service at the end of the second quarter of 2001
increased 141 percent from Covad's subscriber lines in service
of 138,000 at June 30, 2000.

During the second quarter of 2001, Covad restructured operations
in its BlueStar subsidiaries through an assignment for the
benefit of creditors. Covad expects this decision to potentially
save the Company as much as $75 million over the next 12 months.

As a result of this action, a deferred gain from the de-
consolidation of these subsidiaries in the amount of $55.5
million has been recorded on Covad's balance sheet as of June
30, 2001. Covad expects to recognize this amount as a one-time,
extraordinary gain once the liquidation of BlueStar has been
completed and all liabilities have been discharged.

In addition, Covad Communications Group, Inc. announced the
filing of a petition 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 debt with a face amount of $1.4
billion. It is expected that Covad's DSL network and its
customers will remain unaffected throughout the petition period.

Covad also recently reported signing a memorandum of
understanding (MOU) with lead plaintiffs of a securities class
action litigation pending in federal court in California that
tentatively resolves this litigation.

Given the perceived uncertainties in the market place regarding
the Company's recent bankruptcy filing and the assignment for
the benefit of creditors of its BlueStar subsidiaries, Covad
expects little to no growth in revenues during the third quarter
of 2001 in comparison to the second quarter of 2001.

Covad does expect continued improvement in its loss from
operations due to the restructuring of its BlueStar subsidiaries
and continued efforts to control costs.

"We recently announced positive developments such as an
agreement to eliminate our bond debt and the potential
settlement of a class action lawsuit," stated Charles E.
Hoffman, Covad's president and CEO.

"Completing these transactions will greatly strengthen the
Company and improve our ability to obtain the additional $200
million that we need to become cash flow positive in the third
quarter of 2003. Most importantly, they will help ensure that
our customers will continue to experience high-speed, always-on
broadband Internet connections on our network," Mr. Hoffman

              About Covad Communications

Covad is the leading national broadband services 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.

Covad 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

Corporate headquarters is located at 4250 Burton Drive, Santa
Clara, CA 95054. Telephone: 1-800-GO-COVAD. Web Site:

CYPRESS COMMS: Gets Shareholders' Nod For Reverse Stock Split
Cypress Communications, Inc. (Nasdaq: CYCO), a leading provider
of bundled broadband communications services, said that its
Board of Directors has voted to execute a one-for-ten reverse
stock split of the company's common stock.

The decision was made shortly after the company's shareholders
approved an amendment to the Cypress Communications' Certificate
of Incorporation authorizing the reverse split at a ratio not to
exceed one-for- fifteen, effective August 27, 2001. The
company's common stock is expected to begin trading at the post-
split price on August 27, 2001.

The purpose of the reverse stock split is to regain compliance
with the minimum bid price requirement of $1.00 per share for
continued listing on the Nasdaq National Market.

The company's appeal of a Nasdaq Staff determination to delist
the company's common stock will be considered by a Nasdaq
Listing Qualifications Panel on August 24, 2001.

The Panel's decision is expected approximately two weeks later.

The company expects that the Panel will view the reverse stock
split favorably and allow the company's common stock to remain
listed on the Nasdaq National Market if the common stock
achieves a minimum bid price of $1.00 per share and maintains
that price for at least ten consecutive trading days. The
reverse stock split will become effective on August 27, 2001,
when the company's common stock will begin trading on a reverse
split basis under the temporary trading symbol "CYCOD" for a
period of 20 trading days.

After the end of this period, the ticker symbol will revert to

The reverse stock split will reduce the number of shares of
common stock presently issued and outstanding from 49,283,582 to
approximately 4,928,358. The company will not issue fractional
shares in connection with the reverse stock split.

After the reverse stock split is effective, ten shares of
common stock will automatically become one share, and each
existing stock certificate will represent one-tenth of the
number of shares shown thereon.

Any fractional share that results from the reverse stock split
will be rounded up to the next whole share. For example, a
holder of 1,000 shares prior to the split will hold 100 shares
after the split. Stockholders of record will soon receive from
the company's transfer agent instructions for the surrender and
exchange of share certificates.

"This is one of a number of initiatives underway to increase
shareholder value. We believe that our continued listing on
Nasdaq is in the best interests of the company as well as our
shareholders," said Frank Blount, Chairman and CEO of Cypress

"Although there can be no assurance that it will produce the
desired consequences, we are hopeful that the reverse split will
enable us to meet and maintain all of the requirements that are
necessary to sustain our listing and preserve the liquidity and
marketability of our common stock."

                About Cypress Communications

Cypress Communications provides comprehensive broadband
solutions to businesses located in commercial office buildings
in major metropolitan markets throughout the United States.

The Company offers a fully integrated, customized communications
package that typically includes high-speed, fiber-optic Internet
connectivity, e-mail services, Web-hosting services, remote
access connectivity, local and long distance voice services with
advanced calling features, feature rich digital telephone
systems and digital satellite business television.

Cypress Communications also wholesales components of its in-
building fiber-optic network infrastructure to other licensed
communications providers.

DELTA MILLS: S&P Drops Corporate Credit Rating to B+ From BB-
Standard & Poor's lowered its corporate credit rating on Delta
Mills Inc. (a wholly owned subsidiary of Delta Woodside, Inc.)
to single-'B'-plus from double-'B'-minus. At the same time, the
senior unsecured debt rating was also lowered to single-'B'-plus
from double-'B'-minus.

The ratings were also placed on CreditWatch with negative

Total rated debt is about $84 million.

The downgrade and CreditWatch placement reflects Delta Mills'
significantly weakened operating performance and related credit
measures for the fiscal year ended June 30, 2001, and the
expectation that such measures will remain pressured in the near

Significant volume declines, especially in the fourth quarter
ended June 2001, due to the sluggish retail environment and
continued challenging market conditions, led to margin pressures
and a significant drop in operating profits. While there is
financial flexibility provided by the company's unused $50
million secured bank facility, the company might need to secure
a waiver or amendment at some future date.

The ratings reflect Delta Mills' leveraged financial profile,
some customer concentration risk, and very competitive, cyclical
apparel market conditions.

The ratings also reflect the fashion risk inherent in apparel
textiles. These factors are offset, in part, by the company's
dominant position in its niche woven textile market, its modest
capital expenditures, and experienced management team.

Delta Mills is a leading domestic manufacturer and marketer of
woven cotton fabrics (about 80% of total volume) and synthetic
fabrics (about 20% of total volume).

The company is a leading producer of fabric for casual dress
slacks such as Levi Strauss & Co.'s Dockers and Haggar Corp.'s
Wrinkle Free slacks, womenswear, and government and career
apparel. Although its business line focus is narrow, the company
estimates that it has a leading market position in the cotton
pants light-weight woven textile market.

However, there is some customer concentration risk, with the top
four customers accounting for about 40% of total sales.

EBITDA to interest for Delta Mills was about 1.4 times, the
operating margin (before depreciation and amortization) was
almost 8%, and total debt to EBITDA was 5.3x for the 12 months
ended June 30, 2001.

Standard & Poor's expects financial measures will remain
pressured in the near term, in light of the current economic
climate and the difficult operating conditions in the textile
industry. Capital expenditures are expected to remain moderate.
During fiscal 2001, the firm repurchased about $32 million of
its senior notes.

Standard & Poor's will meet with the company in the near future
to discuss its operating and financial strategies.

DERBY CYCLE: Seeks Bankruptcy Protection in Delaware
The Derby Cycle Corporation reached an agreement to sell
substantially all of its worldwide operations to Cycle Bid Co.

Cycle Bid Co. is a corporation newly formed to facilitate a
buyout by many of the existing members of management and
shareholders of Derby and its subsidiaries.

Simultaneously, Derby filed a voluntary petition under Chapter
11 of the U.S. Bankruptcy Code in the United States Bankruptcy
Court for the District of Delaware, to effect the sale. Under
the Bankruptcy Code other parties will have an opportunity to
submit bids for the operations through a Court supervised
competitive bidding process.

During this time, Derby's businesses will continue uninterrupted
and will continue to provide their customers with the same
quality of service and products they expect.

The Chapter 11 filing will not have any impact on the operations
in Canada, Germany, South Africa, the United Kingdom, elsewhere
in Europe or Asia. These operations are not in bankruptcy and
continue to trade normally.

Executive Chairman of Derby, Alan Finden-Crofts, who is also
leading the buyout team said: "The financial structure in place
over the last three years has been onerous, and it has been
clear for some time that Derby needs to be fully restructured
through Chapter 11. It is the only way to close the door on
these years and ensure a fresh start. Using the Chapter 11
process will allow other people to make a bid: the most
important thing for employees, customers and suppliers
is that the operations are soundly financed and well managed in
the future."

The terms of the sale agreement with Cycle Bid Co. include an
amount of $20 million to be paid at closing, which is scheduled
to be in September 2001. In addition, Derby's note holders would
participate in any increase in value of the business should it
be sold in the future.

Mr John Schwieters, speaking on behalf of Perseus LLC one of
Derby's largest current equity holders, said:

"We are delighted to be part of the group that is bidding to
take over Derby's operations. Derby has had a difficult time
since its recapitalization in 1998 but we are convinced that, if
our bid is successful, Alan and his management team will make
Derby an investment to be proud of again."

Alan Finden-Crofts added: "Derby has no bank borrowings and
actually has money in the bank. There will be no need for any
additional financing during the process. All our suppliers have
been paid normally, are being paid and will continue to be
paid normally. We are seeking court approval to ensure that this
continues to be so for our U.S. operation. We are very excited
about the Company's future and our customers can look forward to
some great bicycle models to be launched at the trade shows in
the next few months."

FINOVA: Shamis Seeks to Lift Stay Re Alleged Fraud Factoring
Robert Shamis, a shareholder, officer and director of Wishbone
Trading Company, seeks relief from the automatic stay for
Wishbone to proceed with an appeal before the Second Circuit in
connection with alleged scheme and conspiracy participated by
Ambassador Factors Corporation d/b/a Ambassador Factors, a
Division of Finova Capital Corporation, to defraud Wishbone,
causing Wishbone to go under, in order that Ambassador could
recoup advances that it had made to Shamis' predecessor-in-
interest S. Roberts, Inc. based upon Roberts' fraudulent

Wishbone was an apparel exporter located in Hong Kong that
shipped goods primarily to the United States. In December 1993,
Wishbone was placed in receivership and ultimately liquidated in
accordance with Hong Kong law.

Robert Shamis, a citizen of Israel and a British national, was a
shareholder, officer and director of Wishbone. Mr. Shamis is
Wishbone's assignee with respect to claims, inter alia, against

The Finova Group, Inc. has done business in the past several
years as Ambassador Factors Corporation d/b/a Ambassador
Factors, a Rhode Island corporation that provided accounts
receivable factoring services in the garment industry.

The appeal is entitled Shamis v. Ambassador Factors Corporation,
d/b/a Ambassador Factors, a Division of Finova Capital
Corporation et al., 95 Civ. 9818 (RWS) (S.D.N.Y).

                    Wishbone's Claims

The Factual Background presented by Shamis to Judge Walsh, based
upon the findings of the District Court Action, is summarized as
follows (Defendants/Co-defendants in the action include:
Ambassador, Roberts, El Jay, Nathan a/k/a Lawrence Korman,
Mahoney Cohen):

Ambassador began providing factoring services to Roberts by
making advances based upon Roberts' accounts receivables from
inventory that Roberts claimed it had sold to bona fide buyers.
Roberts, like its predecessor El Jay Jrs., Inc. under the common
control of Nathan a/k/a Lawrence Korman, was engaging in a
practice known as fraudulent invoicing. El Jay had engaged in
the fraudulent practice of issuing phoney invoices to obtain
advances on accounts receivable for garment sales that never
occurred and had gone bankrupt as a result.

As with El Jay, Ambassador was charging back to Roberts'
account amounts in excess of ten percent of the sales of goods
Roberts claimed to have shipped (net of returns) because, among
other things, Roberts' customers had never ordered the items.

Based on that so-called "chargeback ratio", Ambassador
declined to provide additional letter of credit financing to
Roberts, so in late October, 1989, Roberts turned to Wishbone
for additional financing.

Rather than disclose El Jay's prior history of fraudulent
invoicing practices and Roberts' excessive chargebacks to
Wishbone, or the fact that it was not receiving the requisite
documentation to substantiate bona fide sales from Roberts
before, Ambassador, through its principal, Howard Rubin,
misrepresented that Roberts was doing well.

Based on this, Wishbone incurred increasing and eventually
crippling debt to finance Roberts' operations until Roberts'
outstanding debt to Ambassador could be satisfied. Such debt to
Ambassador eventually was satisfied in full.

In 1990, Mr. Shamis arranged for an audit of Roberts' finances
by Mahoney Cohen & Company, P.C. under the direction of its
principal, Arnold Cohen. In the course of such audit, Mahoney
Cohen discovered, in the fall of 1990, Roberts' fraudulent
billing practices.

Nevertheless, the truth was not disclosed to Wishbone. To the
contrary, in a meeting with representatives of Wishbone,
Ambassador, Roberts and Mahoney Cohen, Ambassador misrepresented
the nature of Roberts' slow payment problems as stemming merely
from seasonal factors in the garment business.

Korman and Cohen devised a plan, which was joined by Ambassador,
to transfer Roberts' inventory and other assets to a new entity,
Jay Vee, Inc. to avoid Wishbone's security interest and ensure
that Roberts' debt, by this point in the millions of dollars,
would be repaid to Ambassador.

Then, as Wishbone was proceeding on the basis of false
information, including fraudulent financial statements, the
defendants implemented their plan, transferring Roberts'
inventory to Jay Vee with Ambassador's knowledge and agreement,
through Rubin, to factor for Jay Vee with respect to the
Roberts' inventory in which they all knew Wishbone had a
security interest, but they acted in violation of that interest
and did not remit any proceeds to Wishbone.

As the situation worsened into early 1992, Ambassador expressly
signed and approved a statement to Wishbone falsely reflecting a
$2.0 million credit balance in Roberts' (and ultimately,
Wishbone's) favor when, Ambassador and the other defendants in
the action knew Roberts was by then actually, but secretly,
being liquidated.

Finally, because Wishbone was not receiving payments due, owing
and promised by Roberts, its creditors cut its lines of credit,
causing Wishbone to be placed into receivership and liquidated
pursuant to Hong Kong law.

              New York District Court Action

According to the account given by Shamis: Wishbone commenced an
Action in the United States District Court for the Southern
District of New York on November 11, 1995.

Once discovery was underway, Wishbone moved for leave to file
a second amended complaint adding claims against defendants
Ambassador, Roberts, Jay Vee and Korman under the Racketeer
Influenced and Corrupt Organizations Act, 18 U.S.C. section
1961, seq., as well as individual claims by Mr. Shamis against
the defendants.

By Order dated August 17, 1997, Judge Sweet denied that

By Order dated February 20, 1998, Judge Sweet dismissed
certain claims asserted by Mr. Shamis in his individual capacity
against defendants in the Action.

Following the conclusion of discovery, the Action was tried
to a jury over a three-week period beginning April 11, 2000.

Among the causes of action submitted to the jury after
considerable pre-trial motion practice, was a fraud claim
against Ambassador, Roberts, Korman and Mahoney Cohen.

On May 1, 2000, the jury rendered its verdict against all
defendants on all counts, including the fraud claim against
Ambassador and all other co-defendants. Damages were awarded
against Ambassador for $7.2 million jointly and severally on the
common law fraud claim, $2 million on the breach of contract
claim arid 35% of a $10 million punitive damages award.

After the verdict, Ambassador, Roberts, Jay Vee and Korman
moved pursuant to Rules 50 and 59 of the Federal Rules of Civil
Procedure for a judgment notwithstanding the verdict remittitur
and/or a new trial.

On September 21, 2000, Judge Sweet issued a decision, inter
alia, setting aside the $7.2 million fraud verdict against
Ambassador and others, and with it the attendant awards of
punitive damages, but otherwise upholding the verdict.

On October 20, 2000, Wishbone filed a Notice of Appeal with
the United States Court of Appeals for the Second Circuit
seeking, inter alia:

   (1) reversal of that portion of Judge Sweet's Order of
       September 21, 2000 overriding the jury's verdict against
       Ambassador, Roberts, Jay Vee and Korman on the fraud
       claim and punitive damages award;

   (2) reversal of Judge Sweet's Order of August 18, 1997
       denying Wishbone leave to file a second amended complaint
       and assert individual claims of Shamis against
       defendants; and

   (3) reversal of Judge Sweet's Order of February 20, 1998
       dismissing all individual claims by Wishbone against

Mahoney Cohen withdrew its motion upon reaching a post-trial
settlement with Wishbone.

On October 27, 2000, Judge Sweet entered Judgment against the
various defendants, including Ambassador, in accordance with the
Bankruptcy Court's decision on the Rule 50 motion.

Mr. Shamis subsequently moved to amend the Judgment to include
pre-judgment interest at the statutory rate of nine percent on,
among other things, the contract damages awarded against
Ambassador in accordance with New York State Law. By decision
dated January 10, 2001, Judge Sweet granted Mr. Shamis' motion
to amend the Judgment in this regard.

Ambassador filed a Cross-Notice of Appeal on November 13,
2000 seeking review of:

   (1) whether the District Court erred in not dismissing the
       Complaint against Ambassador;

   (2) whether the District Court erred in permitting the filing
       of an Amended Complaint;

   (3) whether the District Court erred in denying Ambassador's
       motion in limine during trial;

   (4) whether the District Court erred in awarding prejudgment
       interest on the breach of contract claim; and

   (5) whether the Court erred in not ruling on a motion by
       Ambassador for a new trial with respect to the fraud

On December 12, 2000, the Second Circuit consolidated both
matters on appeal.

On April 10, 2001, after a briefing schedule was established
for the appeal, but before it was briefed, the Second Circuit
then issued an Order denying the appeal in light of the FINOVA
bankruptcy case.

                     Relief Sought

Mr. Shamis' attorneys at Smith, Katzenstein & Furlow LLP
represent that relief from the automatic stay is warranted on
the bases that:

   - With counsel already knowledgeable about the vast record
     on trail of the action located in New York and prepared to
     argue issues, neither the Debtor, nor the estate, will be
     greatly prejudiced if Mr. Shamis is permitted to proceed
     with the consolidated appeal before the Second Circuit and
     the Second Circuit is also properly positioned to handle
     and adjudicate the matters on appeal most efficiently.

   - unless and until the appeal is decided, the debtor's
     liability in the Action cannot be determined, nor resolved.

   - the jury's trial and the evidence adduced at trial
     substantiate a likelihood that Shamis will prevail on the

   - Although Judge Sweet set aside the fraud verdict based on
     a finding, at odds with the jury's, that Wishbone had not
     done everything in its power to obtain inventory reports
     and other information from Roberts, he never found that
     Ambassador's conduct, but for Wishbone's alleged lack of
     diligence, failed to constitute fraud.

   - Mr. Shamis is entitled to secure appelate review to
     establish that the District Court erred in usruping the
     jury's role as the finder of fact in the Action.

                  FINOVA's Objection

FINOVA tells the Court that Shamis' motion for lifting the stay
must be denied because Shamis has failed to meet his burden of
demonstrating "cause" for lifting the stay.

In particular, FINOVA should not be thrown back to litigation
before the confirmation of the plan because both the
confirmation and termination of bankruptcy are imminent, and
Shamis need only wait a short time to resolve his claims without
impeding FINOVA's reorganization.

Furthermore, granting Shamis relief from the stay may encourage
other creditors with similar claims to pursue similar motions
for relief, thereby impeding FINOVA's restructuring efforts.
(Finova Bankruptcy News, Issue No. 11; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

FINOVA: Emerges from Chapter 11 & Names New Board of Directors
The FINOVA Group Inc. (NYSE: FNV) announced its emergence from
Chapter 11 reorganization proceedings today upon effectiveness
of its Plan of Reorganization (the "Plan"). Pursuant to the
Plan, FINOVA Capital borrowed $5.6 billion from Berkadia LLC, an
entity jointly owned by Berkshire Hathaway Inc. and Leucadia
National Corporation. FINOVA Capital elected to borrow less than
the full $6 billion Berkadia commitment because $5.6 billion and
cash on hand was sufficient to fund the Plan.

Beginning August 22, the Berkadia loan proceeds, together with
cash on hand, will be used to pay holders of allowed general
unsecured claims of FINOVA Capital 70% of the principal amount
of those claims, plus 100% of allowed pre-petition and post-
petition interest. On the same day, FINOVA will begin issuing
its 7.5% New Senior Notes for the remaining 30% of principal
amount of those claims. Holders of FINOVA's Convertible Trust
Originated Preferred Securities and of other allowed claims
against other FINOVA entities will be treated in accordance with
the Plan. As part of the Plan, Berkadia has received, through
the issuance of new common shares, a 50% ownership interest in

As described in FINOVA's disclosure statement with respect to
the Plan dated June 13, 2001, FINOVA does not contemplate any
new business activities with new customers. The main objective
of FINOVA's business plan is to maximize the value of its
portfolio through orderly liquidation over time.

Effective immediately, FINOVA's new board of directors is
comprised of Ian M. Cumming, Joseph S. Steinberg, Lawrence S.
Hershfield, R. Gregory Morgan, G. Robert Durham, Kenneth R.
Smith and Thomas F. Boland. Messrs. Cumming, Steinberg and
Hershfield are affiliated with Leucadia National Corporation.
Mr. Cumming is Chairman of the Board of FINOVA, Mr. Steinberg is
President of FINOVA and Mr. Hershfield is Chief Executive
Officer of FINOVA. Mr. Morgan is a partner in Munger, Tolles &
Olson, LLP, counsel to Berkshire Hathaway Inc. Messrs. Durham
and Smith have served on FINOVA's board since 1992. Mr. Boland
is a former senior officer of Citigroup, Inc. and was designated
by FINOVA's Creditors Committee.

William J. Hallinan, FINOVA's Chief Executive Officer since
March 2001, will serve as Executive Vice President, General
Counsel and Secretary.

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

FLEETPRIDE: S&P Cuts Corporate Credit Rating to CCC+ From B-
Standard & Poor's lowered its ratings on FleetPride Inc. and
placed the ratings on CreditWatch with negative implications.

At June 30, 2001, the company had about $255 million of debt

The ratings action reflects further deterioration in
FleetPride's financial flexibility, including the potential for
bank covenant violations in the company's third quarter, and
weak industry fundamentals.

During the past two quarters, cash used in operating activities
was about $14.0 million, leaving just $2.6 million in cash on
hand as the company's main source of liquidity.

By virtue of an earlier bank amendment, FleetPride is unable to
borrow on its revolving bank credit facility through the
remainder of 2001.

Demand for heavy-truck aftermarket parts remains soft due to a
somewhat younger fleet and high diesel fuel prices. Furthermore,
the company experienced difficulties with its information
systems, which created inefficiencies at some of the company's

As a result, financial performance has weakened, with total debt
(excluding debt held by its equity sponsors) to EBITDA of about
9.1 times (x), while EBITDA to interest coverage was just 0.6x.

Deerfield, Ill.-based FleetPride distributes parts for heavy-
duty trucks through more than 175 branches and also provides
repair services. Customers include national and regional
trucking fleets, rental fleets, and independent repair shops.

Standard & Poor's will meet with management to discuss its near-
term financing strategies, including the potential for
additional support from its equity sponsors, and its operating
plan, before taking a further ratings action.


       FleetPride Inc.             To    From

       Corporate credit rating     CCC+  B-
       Secured debt rating         CCC+  B-
       Subordinated debt rating    CCC-  CCC

FUTURELINK: Second Quarter Loss Tops $18 Million
FutureLink Corp. (Nasdaq:FTRL-Q), for the quarter ended June 30,
2001, the company had a loss of $18,056,000 or $1.84 per share
on revenue of $25,213,000 as compared with a loss of $28,603,000
or $3.28 per share on revenues of $33,571,000 for the quarter
ended June 30, 2000.

As previously disclosed, on August 14, 2001, the company and its
U.S. subsidiaries filed voluntary petitions for relief under
Chapter 11 of Title 11 of the U.S. Code, with the U.S.
Bankruptcy Court for the Southern District of New York. The
company's Canadian and European operations were not part of the
Chapter 11 filings.

                       About FutureLink

FutureLink Corp.'s Canadian and European affiliates engage in
the provision of information technology consulting and solutions
offering integration, delivery, management, and maintenance of
software applications for organizations choosing to augment or
outsource their current information technology needs.

FutureLink integrates server-based enterprise-wide software
applications that can be accessed from a centralized or remote

GENESIS HEALTH: Seeks Approval of Prolong Services Deal
Genesis Health Ventures, Inc. & The Multicare Companies, Inc.
seek the Court's approval for their compromise and settlement to
resolve payment matters with Prolong Services Corporation, one
of the important participants in the South Florida market, an
important market for the Debtors currently and prospectively,
but one that is difficult to penetrate and where success depends
very much on forging good business partnerships and reputation.

The Debtors tell Judge Wizmur that about the beginning of
December 2000, Prolong began to withhold payments for services
rendered by or through the Debtors and as of May 31, 2001, owed
the Debtors approximately $1,009,306 for prepetition and
postpetition services.

Prolong has asserted that it has setoff and/or recoupment rights
in connection with the Debtors' failure to pay the Deferred
Consideration and the Contingent Consideration.

The Debtors view the Settlement as a totality, comprised of a
series of transactions and agreements which, taken as a whole,
reflect accommodations of the parties and a global agreement
among them.

These transactions and agreements are not meaningfully
understood as individual, independent components but must be
weighed as a whole, the Debtors represent. In their business
judgment, the Debtors believe that the Settlement, viewed as a
whole, is in the best interest of their estates and creditors.

                Relationship with Prolong

The Debtors have three interconnected business relationships
with Prolong. Starting in 1999, NeighborCare Pharmacy began
providing pharmaceuticals to the Prolong Facilities.

In 2000, shortly before the commencement of the GHV chapter 11
cases, the Debtors purchased Claremont from Prolong, and since
that time, Claremont has provided medical supplies to the
Prolong Facilities. The Debtors continue to provide services to
the Prolong Facilities pursuant to Pharmacy Services Agreements
and the medical supplies and Medicare Part B services

   (A) Pharmaceutical Services Agreements

       Between July 1, 1999 and December 1, 1999, NeighborCare
Pharmacy and Prolong entered into those certain Pharmaceutical
Services Agreements, in which NeighborCare Pharmacy agreed to
provide pharmaceutical supplies and consulting and ancillary
services to the Prolong Facilities.

       For the period from January 2001 through March 2001,
NeighborCare Pharmacy generated approximately $220,000 in
average monthly revenue from the Pharmaceutical Services
Agreements. That figure represents approximately 25% of the
total average monthly revenue (approximately $880,000)
generated during the same period by NeighborCare Pharmacy
through its pharmaceutical, consulting, and ancillary services
to all long-term care facility customers in the South Florida

   (B) Acquisition of Claremont and the Claremont Purchase

       Consistent with its strategic objectives in South
Florida, the Debtors, through ASCO Healthcare, Inc., d/b/a
NeighborCare, entered into that certain Asset Purchase
Agreement, dated March 1, 2000, with Claremont and Prolong, in
which the Debtors acquired Claremont which had been a wholly
owned subsidiary of Prolong. According to the terms of the
Claremont Purchase Agreement, the Debtors agreed to pay:

      * $100,000 cash, plus the value of inventory at closing

      * Up to an additional $900,000 in three annual

       To date, the Debtors have paid only $100,000 to Prolong,
and have not made the first annual installment payment
($300,000) which was due 30 days following the first anniversary
of the closing date of the Claremont Purchase Agreement.

   (C) Medical Supplies & Medicare Part B Services Arrangements

       Prior to the Debtors' acquisition of Claremont, the
Prolong Facilities were related-party customers of Claremont. At
that time, no written contracts existed between Claremont and
the Prolong Facilities to formalize their medical supplies and
Medicare Part B services arrangements. After the Debtors'
acquisition of Claremont, the Prolong Facilities continue to
be customers of Claremont and the medical supplies and
Medicare Part B services arrangements among the parties have
continued without formal contracts.

       Under the continuing medical supplies and Medicare Part B
services arrangements, the Debtors supply Prolong's Palace
Facilities with their requirements for medical supplies, which
includes such items as incontinence products, surgical gloves,
wound care products, and health and beauty products, and
Medicare Part B services, which include various nutritional
products and services. For the period from January 2001
through March 2001, Claremont generated approximately $78,000
in average monthly revenue for the Debtors from the medical
supplies and Medicare Part B services arrangements. That
figure represents approximately 17% of the total average
monthly revenue (approximately $402,000) generated during the
same period by Claremont through its medical supplies and
ancillary services to all long-term care facility customers in

The Debtors view their business relationship with Prolong as
being extremely important to their ability to develop customers
in the South Florida market; a deterioration of the relationship
will have severe and lasting consequences for NeighborCare

                 The Florida Market

The South Florida healthcare market has historically been
difficult to penetrate for national long-term care and ancillary
service providers. The market is comprised mostly of local,
independent owners and small chain operators who share a sense
of solidarity in their business dealings.

For success in this market, it is important to forge business
partnerships with influential operators and develop a reputation
for fulfilling all contractual promises.

Due to the close nature of the marketplace, disputes and
defaults become widely known very quickly. If a service provider
develops a reputation for defaulting on or failing to fulfill
its obligations, the entire market may be closed to that entity.

For these reasons, the Debtors have placed a premium on forging
business partnerships with important participants in the local
market. One of those participants is Prolong Services

Prolong is a diversified local provider of eldercare services in
the South Florida market which owns and manages six eldercare
facilities. In the aggregate, the Prolong Facilities comprise
268 skilled nursing beds and 690 assisted living beds in the
South Florida market.

The Debtors's two operations in the South Florida market -
NeighborCare Pharmacy Services Inc., a pharmaceutical supply
operation located in Deerfield Beach, Florida, and Claremont
Services Corp., a medical supply distribution and Medicare Part
B services operation in Kendall, Florida generate annual
revenues for the Debtors of approximately $10 million and $5
million, respectively, and represent 35% of the Debtors' total
revenue in Florida.

At present, the Debtors provide services to facilities with
approximately 3,800 beds in the South Florida market.

The potential in the market for more business is of great
significance to the Debtors. This includes an additional 14,000
long term care beds, representing as much as $45 million of
additional potential revenues for the Debtors.

                   Terms of The Settlement

   (1) Pharmacy Services Agreements

       Prolong will pay all past due amounts ($758,449 through
May 31, 2001).

   (2) Medical Supplies & Medical Part B Services Arrangements

       Prolong will pay all past due amounts ($250,857 through
May 31, 2001). Prolong and Claremont will also formalize their
business arrangements with written contracts.

   (3) Claremont Purchase Agreements

       The Debtors will pay Prolong the first annual installment
payment of $300,000 and will agree to make the other two annual
installment payments in accordance with the terms of the
Claremont Purchase Agreement. Those payments are based on
formulas relating to the performance of Claremont and are
capped at $600,000.

The Debtors believe that that Settlement is fair, equitable,
reasonable, and beneficial to the estates. It will:

   (i) result in an immediate net payment to the Debtors of
       $709,306 ($1,009,306 less $300,000),

  (ii) avoid any delay in the payment of an additional $396,588
       billed to Prolong,

(iii) avoid any termination of the Pharmacy Service Agreements
       and the services arrangements with Claremont for which no
       formal contract presently exists,

  (iv) avoid protracted and costly litigation, and

   (v) maintain an important business relationship in South

In addition, the parties will enter into formal contracts in
connection with the medical supplies and services provided by
Claremont to the Prolong Facilities. Such an agreement will
further strengthen the relationship among the parties.

The Debtors expect that the announcement of such contracts will
also benefit their continuing marketing efforts with other
healthcare operators in the South Florida market.
(Genesis/Multicare Bankruptcy News, Issue No. 12; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

GUNTHER INTERNATIONAL: Working Capital Deficit Widens in Q2
Gunther International Ltd.'s systems sales include sales of
high-speed assembly systems, upgrades to previously sold systems
and inc.jet imager systems, ink and ancillary products.

Systems sales for the three months ended June 30, 2001 decreased
$855,000, or 27%, to $2.3 million from $3.2 million for the
three months ended June 30, 2000. The greatest factor in this
decrease was the 38% reduction in the sales of high speed
assembly systems from $2.7 million in 2000 to $1.7 million in

Backlog consists of total contract price less revenue recognized
to date for all signed orders on hand. Based on the order
backlog as of June 30, 2001, second quarter sales of high-speed
assembly systems will be considerably lower than the first
quarter revenues stated above.

Through July 31, 2001, the Company received additional orders of
high-speed assembly systems for $1.1 million.

Inc.jet sales for the three months ended June 30, 2001 increased
to $617,000, or 37%, from $449,000 for the three months ended
June 30, 2000. The increase in sales is primarily due to an
increased market acceptance for the imager and an increase in
ink sales to end users.

Maintenance sales increased $302,000, or 12%, to $2.7 million
for the three months ended June 30, 2001 from $2.4 million for
the three months ended June 30, 2000 as a result of a larger
number of systems under service contract and price increases in
service contracts between the periods.

For fiscal 2000 and 2001 and the three months ended June 30,
2001, the Company incurred net losses of $(759,000), $(284,000)
and $(663,000), respectively. For fiscal year 2001, cash of
$744,000 was provided by operations while in fiscal year 2000
and the three months ended June 30, 2001, cash used for
operations was $1.1 million and $227,000, respectively.

At June 30, 2001, the Company has a deficiency in working
capital of $1.1 million and a stockholders' deficit of $3.9
million.  At March 31, 2001 and June 30, 2001, backlog for high-
speed assembly system and upgrade orders, consisting of total
contract price less revenue recognized to date for all signed
orders on hand, was $1.3 million and $300,000, respectively, as
compared to $4.2 million and $3.4 million at March 31, 2000 and
June 30, 2000, respectively.

HYNIX SEMICONDUCTOR: S&P Concerned Over EBITDA Interest Coverage
Standard & Poor's revised the outlook on its long-term rating on
Korea-based Hynix Semiconductor Inc. (Hynix) and its subsidiary
Hynix Semiconductor Manufacturing America Inc. (HSMA) to
negative from stable.

At the same time, Standard & Poor's affirmed its single-'B'
long-term corporate credit ratings on the two companies.

The outlook revision reflects the worsening prospects for
Hynix's profitability and cash flow protection measures amid a
severe market downturn in the company's mainstay dynamic random-
access memory (DRAM) business.

DRAM prices have fallen by an unforeseen level in recent months,
which is placing severe pressure on the company's earnings
generation and weakening its financial flexibility. In the
second quarter of 2001, the company posted an operating loss of
Korean won (W) 266 billion, compared with an operating profit of
W69 billion in the first quarter of the year.

EBITDA net interest coverage for the second quarter of the year
is estimated at 1.0-1.5 times, an extremely low level.

In June 2001, Hynix successfully raised US$1.25 billion in new
equity and secured W5.627 trillion in debt rescheduling and
short-term financing arrangements from its principal bank

This allowed the company to alleviate the short-term liquidity
pressures it faced as a result of its high debt usage and
concentration of debt maturities in 2001 and 2002.

However, current harsh market conditions are once again
tightening Hynix's liquidity position, making it difficult for
the company to undertake enough capital spending to improve, or
even maintain, its technological and cost competitiveness.

The company is likely to require additional financial support
from its creditors to maintain its competitive position in the
global DRAM market while meeting its debt obligations in 2001
and 2002.

                       Outlook: Negative

A continuation of adverse conditions in the DRAM market would be
likely to have an adverse effect on the company's credit
standing and financial flexibility.

The ratings on Hynix will be lowered if the company's
competitive position is eroded.

Failure to restore some degree of financial flexibility through
additional financing and/or a lengthening of the average debt
maturity schedule will also lead to a downgrade of the company.

ICG COMMS: Files Suit Against XO Communications in Cleveland
ICG Communications, Inc. filed a complaint with the United
States District Court in Cleveland against XO Communications,
Inc., seeking injunctive relief and damages to protect its
customers from unfair trade practices.

ICG alleges XO misrepresented ICG to its existing customers
using proprietary and confidential information violating unfair
trade practices and trademark laws.

ICG is one of the nation's top tier telecommunications providers
of data network infrastructure, facilities and management
including point-to-point broadband services, dedicated Internet
access and dial-up Internet access.

The complaint charges that XO sales personnel, some of whom are
former ICG employees, deliberately misused ICG's trademark on
letterhead and envelopes and other ICG information in an attempt
to misinform and wrongfully take business.

"We understand the intense and competitive nature of our
industry right now but in no way should this environment support
unethical behavior that ultimately harms customers and tampers
with marketplace forces," said Bernie Zuroff, Executive Vice
President and General Counsel at ICG. (ICG Communications
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

INTELEFILM CORP.: Receives Delisting Notice From Nasdaq
iNTELEFILM Corporation (Nasdaq:FILM) received notice from The
Nasdaq Stock Market that its shares of common stock will be
delisted from the Nasdaq National Market as of the open of
business on Monday, August 20, 2001.

The notice stated that the Nasdaq Listing Qualifications Panel
had denied iNTELEFILM's request to transfer its shares of common
stock to the Nasdaq SmallCap Market.

According to the notice, iNTELEFILM shares may immediately be
eligible to trade on the OTC Bulletin Board pursuant to an
exemption which permits a broker-dealer to publish in, or submit
for publication in, a quotation medium, quotations for a
security immediately after such security is no longer authorized
for quotation on The Nasdaq Stock Market, subject to certain

As a result of the panel's decision, trading in iNTELEFILM
shares, if any, will be conducted in the over-the-counter market
in the so-called "pink sheets" or on the OTC Bulletin Board.

Selling iNTELEFILM shares will be more difficult because it is
likely that smaller quantities of shares will be bought and
sold, transactions will be delayed, and security analyst and
news media coverage of iNTELEFILM will be reduced. These factors
may result in lower prices and larger spreads in the bid and ask
prices for iNTELEFILM shares.

iNTELEFILM plans to seek review by the Nasdaq Listing Council of
the panel's decision. However, the institution of such a review
will not stay the panel's decision to delist iNTELEFILM shares
as of the open of business on Monday, August 20, 2001.

JUNE 30, 2000

iNTELEFILM posted for the quarter ended June 30, 2001 revenues
of $4,912,000 from $15,437,000 in the second quarter of 2000 to
$10,525,000 in the second quarter of 2001. The Company's
revenues for the six-months ended June 30, 2001 decreased from
$37,177,000 in 2000 to $22,980,000 in 2001, a $14,197,000

During the six months ended June 30, 2001, the Company incurred
a net loss of $5,605,054 and used $1,617,000 in cash for
operations resulting in a working capital deficit of $3,604,000
compared to a deficit of $148,000 at December 31, 2001.
Moreover, the Company has failed to comply with certain
financial covenants relating to minimum net tangible worth,
maximum operating losses, and certain reporting requirements
under its loan and security agreement with its senior lender,
General Electric Capital Corporation.

On June 19, 2001, GE Capital agreed to forbear from exercising
its rights and remedies under the loan and security agreement
related to these defaults until September 30, 2001.

As a result of the Company's recurring losses, negative working
capital and negative cash flow from operations, the Company's
independent certified public accountants included an explanation
paragraph in their opinion on the Company's December 31, 2000
Consolidated Financial Statements wherein they expressed a
substantial doubt about its ability to continue as a going

                         *   *   *

iNTELEFILM is a leading US television commercial production
company, iNTELEFILM (formerly Children's Broadcasting
Corporation) also produces music videos and related media. Its
clients are primarily advertising agencies (Leo Burnett, Young &
Rubicam) representing advertisers such as AT&T, McDonald's,
Kodak, and NIKE.

The company recently formed DCODE, which helps clients with
strategy, budget, and various stages of production. iNTELEFILM
also is appealing a verdict (1999) in a case against ABC/Disney
to reclaim $20 million in damages. The company has also
announced plans to sell its Chelsea Pictures and Curious
Pictures subsidiaries.

ITI EDUCATION: Mosaic Technologies Wants To Buy Assets
Mosaic Technologies Corporation, a national technology education
provider, is interested in acquiring the assets of ITI Education
Corporation, the Halifax-based technology school with seven
branches across the country.

ITI was placed into receivership late last week.

"We believe fully in ITI's potential," said Don Whitty, Mosaic's
President and CEO. "We would not be showing this interest if we
did not believe in the school's curriculum, the quality of its
highly effective personnel and its outstanding students."

"Mosaic's team has the management skills that are needed in
order to return ITI to strong financial health and
profitability," Whitty said.

Whitty also said that he has every confidence in the future of
Canada's high-tech industry. "Despite recent high-profile
downturns, this is still where the future is at. There continues
to be a strong demand for top-quality students from top-quality
schools, and that is where Mosaic's expertise lies," he said.
"We want to see ITI continue to operate under new ownership and
a revamped structure."

"We are prepared to assist the receiver, Ernst & Young," Mosaic
Chairman Rick Buckingham said. "We want to keep ITI operational
in the long term," he explained. "We want to assure ITI's
creditors, students and employees that Mosaic believes in the
school's future and that we are committed to its long-term

Mosaic has informed Ernst & Young of its desire to move forward
quickly in order to minimize any negative impact on students,
staff and the curriculum.

"Moving ahead quickly is also in the best interest of the
creditors," Buckingham said. "And, of course, we must look after
the interests of ITI's current students."

Mosaic announced profits last week for the fifth straight
quarter. It is publicly traded on the Canadian Venture Exchange
(CDNX) under the symbol MAC.

               About Mosaic Technologies Corporation is an advanced educational
technologies company headquartered in Fredericton, NB. It is
actively involved in classroom-based training through its
Applied Multimedia Training Centres -- Calgary, Alberta, and
Winnipeg, Manitoba, Pitman Business College -- Vancouver, British Columbia,
and ICT Institute -- in Regina,

>From the company's Miramichi, New Brunswick, operation, Mosaic
designs and develops world-class products and services for its
customers and clients by integrating traditional teaching
methodologies with technology-enhanced interactive learning

KEYSTONE CONSOLIDATED: Posts Q2 Net Loss $1.6 Million
Keystone Consolidated Industries, Inc. (NYSE: KES), which failed
to make a $4.8 million interest payment due on its Senior
Secured Notes earlier this month, posted for the 2001 second
quarter ended June 30, 2001, a net loss of $1.6 million, down
from a net loss in the 2000 second quarter of $3.4 million.

For both of the six-month periods ended June 30, 2001 and 2000,
Keystone reported a net loss of $5.3 million.

Keystone is an integrated wire and wire products producer.

                      Second-Quarter Review

Net sales of $86.3 million in the 2001 second quarter were down
10% from $95.4 million during the same period during 2000. This
decline in net sales was due primarily to a 3% decline in
shipments of Keystone's steel and wire products combined with a
$44 per-ton decline in overall steel and wire product selling
prices partially offset by a $1.2 million increase in Garden
Zone's sales.

Carbon steel rod shipments increased 28% during the 2001 second
quarter compared with the 2000 second quarter, while per-ton
selling prices declined 4%. Industrial wire shipments declined
23% while selling prices declined 6% and fabricated wire
products shipments declined 13% while selling prices declined

Billet production during the 2001 second quarter increased to
189,000 tons from 137,000 tons during the second quarter of

The primary reason for this increase was the abnormally low
production level during the 2000 quarter due to extended outages
incurred in connection with the correction of the infrastructure
problems related to Keystone's capital improvements that were
completed during 1998 and a "break-out" that occurred at the
Company's electric arc furnace during June 2000.

Keystone did not purchase any billets during the second quarter
of 2001 as compared to 8,000 tons purchased during the 2000
second quarter. Rod production during the 2001 second quarter
increased to 186,000 tons from 150,000 tons during the 2000
second quarter primarily as a result of the higher billet
production during the 2001 second quarter.

Gross profit during the 2001 second quarter increased to $5.8
million from $3.9 million in the 2000 second quarter. This
increase in gross profit was due primarily to lower purchased
billets, lower costs for scrap steel and improved production
efficiencies all partially offset by the lower sales volume and
per-ton selling prices of the Company's products and higher
costs for natural gas.

The lower per-ton selling price of Keystone's steel and wire
products during the second quarter of 2001 and higher natural
gas costs adversely impacted gross profit by $7.8 million and
$700,000, respectively. Relative improvement in production
efficiencies during the 2001 second quarter resulted primarily
from 2000 second quarter production outages and a furnace
"break-out" that adversely impacted gross profit in that quarter
by approximately $3.6 million.

Selling expense was $1.7 million in the second quarter of both
2001 and 2000.

General and administrative expense increased to $4.5 million
during the second quarter of 2001 as compared to $4.2 million
during the second quarter of 2000 primarily due to an
unfavorable legal settlement in 2001 of $500,000 partially
offset by the impact of reductions in salaried headcount
resulting from employees accepting Keystone's early retirement
package during the fourth quarter of 2000.

Keystone currently anticipates the total 2001 overfunded defined
benefit pension credit will approximate $3.0 million.

Interest expense in the second quarter of 2001 was lower than
the second quarter of 2000 due principally to lower interest

                      Six-Month Review

Net sales of $164.1 million in the first six months of 2001 were
down 14% from $191.8 million during the same period during 2000.
This decline in net sales was due primarily to an 11% decline in
shipments of Keystone's steel and wire products combined with a
$25 per-ton decline in overall steel and wire product selling
prices partially offset by a $1.5 million increase in Garden
Zone's sales during the first six months of 2001.

Carbon steel rod shipments during the first six months of 2001
approximated shipments during the first six months of 2000 while
per-ton selling prices declined 5%.

Industrial wire shipments declined 24% while per-ton selling
prices declined 5%. Fabricated wire products shipments during
the first six months of 2001 declined 14% as compared to the
first six months of 2000 while per-ton selling prices declined

The increased billet production during the second quarter of
2001 as compared to the 2000 second quarter more than offset the
lower production levels during the 2001 first quarter. As a
result, billet production during the first six months of 2001
increased to 352,000 tons from 332,000 tons during the first six
months of 2000.

Keystone did not purchase any billets during the first six
months of 2001 as compared to 8,000 tons purchased during the
first six months of 2000. Despite increased rod production
during the second quarter of 2001 as compared to the 2000 second
quarter, low rod production during the first quarter of 2001
resulted in a decline in rod production during the first six
months of 2001 to 336,000 tons from 348,000 tons during the
first six months of 2000.

The decline was due primarily to intentional production
curtailments during the first quarter of 2001 designed to avoid
using high cost natural gas and to allow billet inventories to
build in anticipation of planned outages for repair and
maintenance projects in the steel mill during that quarter.

Gross profit during the first six months of 2001 declined to
$7.2 million from $10.3 million in the first six months of 2000.
This decrease in gross profit was due primarily to the lower
sales volumes, lower overall per-ton selling price of Keystone's
steel and wire products and higher natural gas costs, partially
offset by lower costs for scrap steel and purchased billets
and $1.6 million of business interruption insurance proceeds
received in the 2001 first quarter related to incidents in prior

In addition, the adverse impact on gross profit from production
outages amounted to approximately $800,000 during the first six
months of 2001 and $5.3 million in the first six months of 2000.
The lower per-ton selling price of the Company's steel and wire
products during the first six months of 2001 adversely impacted
gross profit by $8.4 million while the effect of higher natural
gas costs adversely impacted gross profit by $3.7 million.

Selling expense during the first six months of 2001 of $3.3
million was, as a percentage of sales, comparable with selling
expense in the same period in 2000.

General and administrative expense declined from $9.3 million
during the first half of 2000 to $7.8 million during the first
half of 2001, primarily due to the reduction in salaried
headcount and a $650,000 reimbursement of legal fees received in
2001, partially offset by the unfavorable legal settlement.

Interest expense during the first six months of 2001 was lower
than the same period in 2000 due principally to lower interest

           Outlook for the Remainder of 2001

Keystone announced a $15 per-ton increase in carbon steel rod
selling prices for all shipments after July 1, 2001. The Company
has also announced increases of from 3% to 6% in fabricated wire
products selling prices effective with shipments after September
1, 2001. Several other domestic producers have announced similar
fabricated wire products price increases.

Carbon steel rod imports continue to cause disruption in the
marketplace as evidenced by a $9 per-ton decline in carbon steel
rod selling prices during the 2001 second quarter from the
average for all of the year 2000.

As a result, Keystone management believes it is too early to
determine the extent to which the announced July carbon steel
rod selling price increase will be realized. Despite strong
market demand and anticipated increased selling prices,
management believes Keystone will record a net loss during the
third quarter of 2001 and will record a net loss for calendar
2001 due primarily to higher energy and interest costs,
continued high levels of imported rod and relative lower overall
product selling prices.

At June 30, 2001, the Company has recognized a net deferred tax
asset of $31.5 million. The Company periodically reviews the
recoverability of its deferred tax assets to determine whether
such assets meet the "more-likely-than-not" recognition

At June 30, 2001, based on all available evidence, the Company
concluded no deferred tax asset valuation allowance was needed.
The Company will continue to review the recoverability of its
deferred tax assets, and based on such periodic reviews, the
Company could recognize a valuation allowance related to its
deferred tax assets in the future.

Although operating results improved due to improved operating
efficiencies, medical cost sharing arrangements and other
initiatives, the prolonged downturn in the steel industry
continues to adversely effect Keystone's liquidity and capital
resources. In response, the Company has been required to defer
capital expenditures, defer maintenance expenditures and delay
payments to vendors and other creditors to the extent possible.

Despite these measures, the Company's availability under its
primary revolving credit facility is limited ($1 million at
August 15, 2001 after consideration of outstanding payments to
creditors) and a significant portion of the Company's accounts
payable are past due compared to stated terms. As a result of
the above factors, on August 1, 2001, Keystone did not
make a $4.8 million interest payment due on its Senior Secured

Under the governing indenture, a failure to make a scheduled
interest payment for thirty days will give the holders of the
Notes the right to accelerate the unpaid portion of the Notes.
Such a failure also gives the trustee for the Notes the ability
to take certain actions and to exercise certain remedies on
behalf of holders of the Notes.

The Company has requested a consent from holders of the Notes,
asking them to defer exercising their right to accelerate the
payment of the Notes pursuant to the acceleration provisions of
the governing indenture until November 1, 2001, and to direct
the trustee of the Notes to not take any action or exercise any
remedy available to the trustee as a result of the Company's
failure to make the interest payment.

Keystone plans to evaluate possible restructuring alternatives
to improve its overall financial condition, including the
potential conversion of the Notes into equity securities of the
Company. Keystone has received an agreement from its primary
revolving credit lender to forbear remedies available to it
solely as a result of the Company's failure to make the August
1, 2001 interest payment on the Notes.

LAIDLAW INC.: Sunrise Moves for Inquiry on Laidlaw One Notes
Sunrise Partners, L.L.C., holds $16,600,000 of the 15-3/4%
Enchangeable Notes issued by Laidlaw One under an Indenture
dated November 28, 1995, and guaranteed by Laidlaw, Inc. Those
Notes are redeemable for cash based on the value of United
States Filter Corporation (NYSE:USF) common stock or in USF

Sunrise, Jonathan L. Flaxer, Esq., and Janice B. Grubin, Esq.,
at Golenbock, Eiseman, Assor & Bell, explain, understands that
Laidlaw repurchased some of the Exchangeable Notes in 1998 and
that, in 1999, Vivendi Eau Acquisition Corp., acquired USF, at
which time Laidlaw sold its shares in USF to Vivendi for $88.4
million. Sunrise suggests that Laidlaw's public filings with
securities regulators raise more questions than they answer.

Laidlaw's Plan proposes to classify holders of the Exchangeable
Notes with all other Laidlaw Noteholders and to settle certain
claims of all noteholders against certain bank lenders and
Laidlaw. Sunrise needs information to determine the propriety of
the Debtors' proposal.

Accordingly, by this Motion, Sunrise seeks an order from Judge
Kaplan permitting it to examine Ivan R. Cairns, Laidlaw USA's
Vice President and Secretary, and any other people Laidlaw can
identify who can testify about matters related to USF and the
Exchangeable Notes, and to produce copies of all relevant
documents pursuant to Rule 2004 of the Federal Rules of
Bankruptcy Procedure. (Laidlaw Bankruptcy News, Issue No. 4;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

LERNOUT & HAUSPIE: Committee Gets Standing to Prosecute Claims
The Official Committee of Unsecured Creditors of Dictaphone
Corporation, and Dictaphone Corporation, present Judge Wizmur
and the parties interested in the estates, with a stipulation
that, effective immediately, the Dictaphone Committee is granted
authority to investigate and prosecute claims against Lernout &
Hauspie Speech Products N.V. arising from L&H's acquisition of
Dictaphone in May 2000 and related matters in both Belgium and
the United States.

The Dictaphone Committee will file any claims brought in the
United States in the United States Bankruptcy Court for the
District of Delaware.

The Debtors, individually or collectively, will not contest the
jurisdiction of the United States Bankruptcy Court over the
Dictaphone estate claims, or assert that the Dictaphone
Committee's participation in the concordat is a submission to
jurisdiction of the Dictaphone estate claims in Belgium, or a
waiver of any right or remedy under United States law.

The Debtors and the Committee each reserve all rights,
arguments, and positions with respect to which entity will
prosecute additional claims, if any, against additional third
parties arising from the Dictaphone acquisition and related
matters, and nothing in this stipulation is a waiver or
acknowledgement of any right, argument or position in that
regard; provided, however, that nothing in the stipulation will
restrict the Debtors or the Dictaphone Committee from
investigating or analyzing such claims.

In connection with the investigation and prosecution of the
Dictaphone estate claims by the Dictaphone Committee, Milbank
Tweed Hadley & McCloy, and Liedekerke Wolters Waelbroeck
Kirpatrick & Cerfontaine will represent L&H with respect to the
Dictaphone estate claims.

Neither the Debtors nor the Dictaphone Committee waive the right
to seek appropriate relief on any issue of conflict of
representation that may arise in these cases relating to issues
other than those expressed addressed in this stipulation.
(L&H/Dictaphone Bankruptcy News, Issue No. 10; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

LLS CORPORATION: S&P Assigns D Rating after Senior Note Default
Standard & Poor's lowered its corporate credit, senior secured,
and senior subordinated debt ratings on LLS Corp. to 'D'.

At the same time, the ratings were removed from CreditWatch,
where they were placed on April 2, 2001, in recognition of
heightened concerns about weak operating performance and
liquidity pressures.

The downgrades follow the company's disclosure that it failed to
make its Aug. 1, 2001, interest payment on its $100 million,
11.625% senior subordinated notes and its scheduled principal
payment due on July 31, 2001, under the company's bank loan.

The company also entered into a forbearance agreement with its
bank group under which lenders agree to forbear from default
remedies until Oct. 31, 2001.

LLS retained a financial advisor to review the company's
financial position and it is in discussions with bank lenders
and note holders regarding strategic alternatives.

Based in Buffalo Grove, Illinois, LLS is a fully integrated
custom designer and manufacturer of plastic products used in
medical devices, food and beverage, and other consumer packaging

The company's operating performance has been severely hampered
by delays in new product rollouts and lower demand
internationally, resulting in significantly weakened credit
protection measures and a distressed liquidity position.

          Ratings Lowered, Removed From CreditWatch

           LLS Corp.                       To    From

           Corporate credit rating         D     B
           Senior secured debt rating      D     B
           Senior subordinated debt rating D     CCC+

LOEWEN GROUP: Objects to Cremated Remains Class Claims
Upon the Final Settlement of a class action regarding the
disposition of certain cremated remains, each member of the
Plaintiff Class released and discharged The Loewen Group, Inc.
from any and all liability relating to or arising from the
claims asserted in the State Court Action. The State Court has
given final approval of the Settlement and has found that the
Defendant Debtors have fully performed their obligations under
the terms of the 1999 Settlement Agreement.

Accordingly the Debtors seek the Court's authority disallowing
the proofs of claim (nos. 4642 through 4654) filed by Suzanne T.
Hoeffner and various other claimants in connection with the
class action.

The class action, filed in the Superior Court of the State of
California, County of Sacramento, was originally captioned as
Suzanne T. Hoeffner et al. v. The Estate of Allan Kenneth Vieira
et al., Case No. 97AS02993. (Loewen Bankruptcy News, Issue No.
43; Bankruptcy Creditors' Service, Inc., 609/392-0900)

LOEWEN GROUP: 3rd Disclosure Statement Approved; 4th Plan On Way
The Loewen Group announced that, at a hearing of the United
States Bankruptcy Court for the District of Delaware held last
week, all objections to its Third Amended Disclosure Statement
were resolved or overruled subject to certain modifications to
be embodied in a Fourth Amended Plan of Reorganization and
Fourth Amended Disclosure Statement.

At last week's hearing, Loewen's legal team -- Jones, Day,
Reavis & Pogue lawyers Richard M. Cieri, Esq., and Charles M.
Oellermann, Esq., in Cleveland and Henry L. Gompf, Esq., and
Gregory M. Gordon, Esq., in Dallas -- told Judge Walsh that the
Third Amended Plan was widely supported by the principal
creditors and creditor groups in these cases, including the
Official Committee of Unsecured Creditors, the indenture
trustees for all eight series of the Debtors' bond indebtedness,
the largest bank and bond creditors, including the agents for
the Debtors' two largest credit facilities and individual
bondholders holding in excess of $1 billion of debt, and
potentially the largest unsecured creditor of the Debtors,
Blackstone Capital Partners II Merchant Banking Fund L.P.  This
support, the Debtors stressed, was achieved through many months
of difficult negotiations, including a court-ordered mediation.
As a result of the persistence and commitment of the parties,
the negotiations were ultimately successful in resolving
numerous complex and divisive issues through, among other

     (a) a compromise of disputes among creditors with claims
under the Collateral Trust Agreement as to the proper
treatment of the various series of debt at issue in the
CTA litigation;

     (b) an agreement as to the terms of new debt to be issued
by the reorganized company;

     (c) a consensual framework for corporate governance,
including the selection of directors for the reorganized

     (d) a negotiated increase in recoveries by unsecured

     (e) an agreement to resolve Blackstone's claims and to
transfer full ownership of the Rose Hills company and
assets to the reorganized company; and

     (f) agreements on a multitude of other issues such as
creditor attorneys' fees, indemnification claims and
treatment of the Monthly Income Preferred Securities.

The Court has scheduled September 4, 2001 to review and approve
the modifications, which are intended to clarify and supplement
the disclosures provided in the Disclosure Statement.

The Company anticipates that solicitation will proceed according
to a schedule presented to the Court. This schedule contemplates
creditor voting on the Plan beginning mid-September 2001 and a
confirmation hearing to be held on November 27-29, 2001.

Based on this schedule, the Company remains on track to emerge
from Chapter 11 protection before the end of the year.

John Lacey, Chairman of The Loewen Group, said: "We are pleased
that the recent hearing was successful in resolving objections
to the Disclosure Statement and that we are now moving on
schedule toward voting on the Company's Plan of Reorganization.
From the hearing, it is clear that the Plan has the support of
both the Company's principal creditor groups and the Official
Unsecured Creditors Committee. While some parties, with disputed
or smaller claims, may continue to oppose the Plan during the
confirmation process, we continue to believe that it is in the
best interest of the creditors and are very pleased with the
level of support shown by our major stakeholders at last week's

Based in Toronto, The Loewen Group Inc. currently owns or
operates approximately 970 funeral homes and 350 cemeteries
across the United States, Canada and the United Kingdom. The
Company employs approximately 11,000 people and derives
approximately 90 percent of its revenue from its U.S.

NETNATION: Fails To Meet Nasdaq's Minimum Capital Requirement
NetNation Communications, Inc. (Nasdaq: NNCI) received a Nasdaq
Staff Determination dated August 16, 2001 indicating that the
Company fails to comply with the minimum $35,000,000 common
stock market capitalization required for continued listing as
set forth in Nasdaq Marketplace Rule 4310(c)(2)(B)(ii), and that
its securities are, therefore, subject to delisting from the
Nasdaq SmallCap Market at the opening of business on August 24,
2001 unless it appeals this determination.

The Company intends to file an appeal and request a hearing
before a Nasdaq Listing Qualifications Panel to review the Staff
Determination and to present the Company's plan to regain
compliance for continued listing.

Until the Panel reaches its decision, NetNation's common stock
will remain listed and will continue to trade on the Nasdaq
SmallCap Market. There can be no assurance the Panel will grant
the Company's request for continued listing.

In the event that the Panel determines to delist the Company's
common stock, the Company's common stock may continue to trade
on the OTC Bulletin Board's electronic quotation system.

NetNation was incorporated under the laws of the State of
Delaware on May 7, 1998, under the name Collectibles
Entertainment Inc. for the purpose of operating an online sports
card and other tradeable memorabilia distribution business.
Collectibles changed its name to NetNation Communications, Inc.
on April 14, 1999 in conjunction with the acquisition of a web-
site hosting business based in Vancouver, Canada.

The common shares of NetNation currently trade on the Nasdaq
Small Capitalization Market under the ticker symbol "NNCI".

NetNation has four wholly-owned subsidiaries: NetNation
Communications Inc., NetNation Communications UK Ltd., NetNation
Communications (USA) Inc., and DomainPeople Inc. NetNation
entered into the web hosting business through its acquisition of
the Canadian Subsidiary.

The Canadian Subsidiary is a private company incorporated under
the laws of the Province of British Columbia, Canada on February
19, 1997. The Canadian Subsidiary became a wholly owned
subsidiary on April 7, 1999 pursuant to an agreement between the
shareholders of the Canadian Subsidiary and Collectibles (the
"Share Purchase Agreement").

Pursuant to the Share Purchase Agreement, Collectibles acquired
9,000,000 Class A common shares and 1,000,000 Class B preferred
shares of the Canadian Subsidiary, being all of the issued and
outstanding shares of the Canadian Subsidiary. The purchase
price for the shares of the Canadian Subsidiary was $1,000,000
in Canadian currency, which was paid by the issuance of
10,000,000 common shares of Collectibles.

Upon conclusion of the acquisition, Collectibles changed its
name to NetNation. NetNation is an internet infrastructure
solutions provider focused on meeting the needs of small and
medium-sized enterprises and individuals who are establishing a
commercial or informational presence on the Internet. NetNation
competes in the shared and dedicated web hosting, server co-
location and domain name registration markets. It's products and
services are sold worldwide, directly to customers and through
value added resellers.

For the quarter ended June 30, 2001, NetNation achieved net
earnings of $14,596 ($0.00 per share) as compared to a net loss
of $635,191 ($0.04 per share) for the same period in 2000 and
for the six month period ended June 30, 2001, net earnings of
$32,656 ($0.00 per share) as compared to a net loss of
$1,217,493 ($0.08 per share) for the same period in 2000.

NEXTWAVE: UBS Warburg Extends $2.5 Billion Funding Commitment
NextWave Telecom Inc. today announced that UBS Warburg has
committed to provide the company with $2.5 billion in debt
financing to fund the construction of its nationwide 3G wireless

UBS Warburg has also been engaged by NextWave to serve as the
company's financial advisor and will assist the company in
consummating its plan of reorganization.

"We are pleased to have formed a relationship with a world-
renowned financial institution such as UBS Warburg. Their
financial resources and global wireless expertise will help us
deploy our advanced IP-based wireless network and introduce the
next-generation, high-speed mobile Internet services that the
market is demanding," said Allen Salmasi, NextWave's Chairman
and Chief Executive Officer.

NextWave will utilize the financing to support the deployment of
its third-generation CDMA2000 wireless network. NextWave's
nationwide network will provide broadband mobile data service at
speeds of up to 2.4 megabits per second and support a wide range
of next-generation mobile applications including full web
access, streaming video, high-fidelity audio downloads,
multimedia messaging, and corporate VPN access.

On August 6, 2001 NextWave filed and announced its plan of
reorganization, which is now pending before the Federal
Bankruptcy Court of the Southern District of New York. Today's
announcement is in connection with the equity and debt financing
committed to fund NextWave's plan of reorganization, and is
subject to various terms and conditions, and to NextWave's
successful consummation of its plan of reorganization.

About NextWave:

NextWave Telecom, Inc., headquartered in Hawthorne, N.Y., was
organized in 1995 to provide high-speed wireless Internet access
and voice communications services to consumer and business
markets on a nationwide basis. NextWave is currently
constructing a third-generation CDMA2000 1X network in all of
its 95 PCS markets whose geographic scope covers more than 168
million POPs coast to coast, including all top 10 U.S. markets,
28 of the top 30 markets, and 40 of the top 50 markets.
NextWave's "carriers' carrier" strategy allows existing carriers
and new service providers to market NextWave's network services
through innovative airtime arrangements. For more information
about NextWave, visit their Web site at

OWENS CORNING: Unsecureds Panel Hires Anderson Kill
Owens Corning's Official Committee of Unsecured Creditors sought
and obtained an order from the Court to employ Anderson Kill &
Olick P.C. as special counsel to the Committee.

John P. McDonagh of Chase Manhattan Bank, co-chair of the
Committee states that the Committee wishes to employ Anderson
Kill for the purpose of representing interests of trade creditor
and bondholder members of the Committee to the extent that such
interests diverge from those of the Committee as a whole in
connection with the prosecution of the Debtors' chapter 11

The bondholder and trade creditor members of the committee chose
Anderson Kill due to the fact that it has considerable
experience and knowledge in connection with these cases and in
the field of creditor's rights and business reorganization under
chapter 11 as well as other areas of law related to these
chapter 11 cases, including corporate and banking law related

Mr. McDonagh states Anderson Kill will charge for its legal
services on an hourly basis in accordance with its ordinary and
customary hourly rates in effect plus out-of-pocket
disbursements incurred in connection with these cases.

The current range of hourly rates charged by Anderson Kill are:

             Senior Shareholders $310-600
             Junior Shareholders $165-295
             Paraprofessionals   $90-145

J. Andrew Rahl, Jr., a member of the law firm Anderson Kill,
contends that no member of the firm has had or presently any
connection with the Debtor or any other parties-in-interest in
matters to be engaged in and are disinterested persons in
connection with these cases.

Mr. Rahl reveals that Anderson Kill has long been active in
aspects of asbestos litigation which are unrelated to the
Debtors or Anderson Kill's proposed engagement in these cases.

Mr. Rahl states that Anderson Kill has represented the Center
for Claims Resolution (CCR), a joint defense organization of a
number of asbestos defendants that defends asbestos claims
nationwide, since its inception in 1990. The Debtors have never
been members of CCR.

Mr. Rahl discloses that Anderson Kill also regularly represents
policy-holders in insurance coverage matters but has not
represented the Debtors in their insurance coverage disputes.

Mr. Rahl also adds that Anderson Kill has represented General
Electric Corporation and some of its affiliates in insurance
coverage matters. Anderson Kill is also representing
Metropolitan Life Insurance Company, a member of the Committee,
in insurance coverage matters.

Mr. Rahl states that Anderson Kill has represented official and
ad hoc committees and groups of bank and public debt and equity
holders of more than 50 other issuers and borrowers since 1990,
all of which are unrelated to these cases.

Anderson Kill believes that some of these institutions that are
members of these committees now hold, or have in the past,
claims and securities of the Debtors possibly in positions of
significant size.

Some holders of the Debtors debt include Conseco Capital
Corporation, Grace Brothers, Pacholder Associates, PPM America
Special Investments, CBO II, Weyland Advisors and Whippoorwill

Mr. Rahl also discloses that Anderson Kill has represented
Jackson National Life Insurance Company, a co-chair of the
Committee with these cases as well as substantial number of
cases. Mr. Rahl also states that Fleet Bank another member of
the Committee, is a lender to Anderson Kill and has represented
Fleet or its affiliates in a number of cases.

In addition Anderson Kill also represented other member of the
Debtors' bank group such as The Bank of Tokyo-Mitsubishi, Ltd.,
Chase Hambracht & Quist and KBC Bank, N.V.

Lastly Mr. Rahl states that Anderson Kill represented in
unrelated bankruptcy and restructuring matters 5+% stockholders
of the Debtors such as Alliance Capital Management, LLP,
Anderson & Sherrard, LLP, Vanguard/Windsor Fubds, Inc., nd
Wellington Management Co., Inc. (Owens Corning Bankruptcy News,
Issue No. 15; Bankruptcy Creditors' Service, Inc., 609/392-0900)

PACIFIC GAS: Creditors Must File Proofs of Claim by Sept. 5
William J. Lafferty, Esq., at Howard, Rice, Nemerovski, Canady,
Falk & Rabkin, reports that Robert L. Berger & Associates, the
Court-appointed Noticing Agent in chapter 11 cases of Pacific
Gas and Electric Company, completed the task of mailing
customized proof of claim forms and notices of the September 5,
2001, deadline by which all creditors must file their proofs of
claim to all known creditors.

Robert L. Berger indicates that it mailed notices to 144,000
known potential claimants.

Berger and the Debtors also advise the Court that they set-up a
toll-free telephone number at 1-800-743-5000 to field creditors'
questions concerning the mechanics of filing proofs of claim.
(Pacific Gas Bankruptcy News, Issue No. 11; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

PARAGON CORPORATE: S&P Reacts to Poor Post-Acquisition Results
Standard & Poor's lowered its rating on Paragon Corporate
Holdings Inc.'s $115 million 9.625% senior unsecured debt to 'D'
from double-'C', and at the same time, lowered its corporate
credit rating on the company to 'SD' from double-'C'.

The rating downgrades follow the company's completion of its
exchange offer for all of its outstanding 9.625% senior notes
due 2008. Tender or consents with respect to 95% of the $115
million of notes were received.

While details regarding the amount of consideration that was
offered have not been made public, Standard & Poor's believes
that the offer was made at a deep discount to the face value of
the notes, resulting in impairment of the bondholders.

Paragon is a manufacturer and distributor of printing equipment
and supplies. The company has reported very weak operating
results during the past two years, including a $22.9 million
loss from continuing operations and negative EBITDA of $1.3
million for fiscal 2000.

The poor results were due to a number of factors, including weak
equipment and supplies sales in domestic and international
markets, unabsorbed manufacturing costs, the negative impact of
discontinued product lines, and increased corporate expenses
related to an acquisition.

PILLOWTEX: Seeks Court Approval To Assume Pacts With Alabama Gas
Fieldcrest Cannon Inc. and Alabama Gas Corporation (Alagasco)
are parties to a series of Natural Gas Supply and Service
Agreements entered into sometime in the mid-1990s. Under these
agreements, Fieldcrest obtains natural gas that they would use
in its towel weaving facility in Phenix City, Alabama.

According to Michael G. Wilson, Esq., at Morris, Nichols, Arsht
& Tunnell, the termination provisions under the Natural Gas
Supply and Service Agreements vary.

During the year prior to Petition Date, Mr. Wilson discloses
that Fieldcrest's monthly obligations to Alagasco ranged from
$60,000 to $100,000. As of the filing of these Chapter 11 cases,
Fieldcrest owed Alagasco two months' worth of pre-petition usage
amounting to $155,468.

Mr. Wilson reminds the Court that Alagasco earlier filed a
motion for entry of an order determining adequate assurance of
payment to Alagasco and a motion for entry of an order modifying
the automatic stay to allow the termination of the Natural Gas
Supply and Service Agreements.

Since then, Mr. Wilson relates, Fieldcrest and Alagasco
continued negotiations on the issues raised by Alagasco until
they were able to reach a satisfactory resolution. Both parties
agreed to terminate the Natural Gas Supply and Service
Agreements and enter into a new agreement for Fieldcrest's
continued use of Alagasco's pipeline into the Phenix City
Facility at standard tariff rates, Mr. Wilson notes.

They decided that Alagasco would no longer provide gas or buy
gas for Fieldcrest, Mr. Wilson adds.

However, the dispute was not entirely resolved. According to Mr.
Wilson, there were still certain specific terms of the parties
continuing relationship that needed further negotiation.

Now that both parties reached a new agreement, Fieldcrest seeks
the Court's approval of their assumption of the modified Natural
Gas Supply and Service Agreements.

Mr. Wilson says both parties are determined to enter into an
Agreement and Amendment to Special Services and Related
Agreements by and between Alagasco and Fieldcrest. Fieldcrest
believes that the assumption of modified agreements is "the most
cost-efficient method of meeting the natural gas needs of the
Phenix City Facility.

The principal terms of the Amendment are:

   (a) As a cure of all then-existing defaults under the Natural
       Gas Supply and Service Agreements under section 365 of
       the Bankruptcy Code, Fieldcrest will pay the Pre-Petition
       Balance to Alagasco in a lump sum, cash payment upon
       Court approval of the Amendment and assumption of the
       Natural Gas Supply and Service Agreements.

   (b) The term of each of the Natural Gas Supply and Service
       Agreements will be extended for two years after
       execution, to be continued thereafter from year to year
       until either party cancels by providing 180 days' written
       notice to the other party.

   (c) The Debtors will not pay any security deposit to
       Alagasco, provided, however, that Alagasco may file a
       motion with the Court requesting a reasonable security
       deposit if Fieldcrest's average monthly obligation under
       the Natural Gas Supply and Service Agreements, as
       amended, materially exceeds $100,000.

   (d) Alagasco may deliver invoices to Fieldcrest as frequently
       as every 15 days, to be payable within 15 days after

   (e) Late payments will be subject to interest accruing at the
       prime rate then in effect at SouthTrust Bank in
       Birmingham, Alabama.

   (f) Alagasco will charge Fieldcrest for transportation of
       natural gas to Phenix City at a set price per decatherm.
       The set transportation price will differ for natural gas
       the Debtors purchase from Alagasco and natural gas the
       Debtors purchase from other suppliers. The set
       transportation prices, which Fieldcrest views as very
       favorable, are confidential and have been redacted from
       the Amendment.

   (g) Alagasco's right to terminate services under the Natural
       Gas Supply and Service Agreements for reason of
       Fieldcrest's failure to make payments thereunder when due
       will be subject to the Rules and Regulations of the
       Alabama Public Service Commission then in effect.

Fieldcrest believes that assuming the modified Natural Gas
Supply and Service Agreements is in the best interests of its
estates and creditors because it will provide Fieldcrest with
several benefits, such as:

   (1) the competitive advantage of better pricing than
       Fieldcrest could obtain from alternative suppliers of
       natural gas of the same quantity;

   (2) the freedom from having to post a substantial security
       deposit; and

   (3) the security of a long-term contractual relationship
       extended well beyond the original terms of the Natural
       Gas Supply and Service Agreements.

At the same time, Mr. Wilson notes, Fieldcrest's assumption of
the modified Agreements guarantees the continued supply of high
volumes of natural gas that is necessary for their operations.
(Pillowtex Bankruptcy News, Issue No. 11; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

PRECISION PARTNERS: S&P Junks Debt Ratings & Initiates Watch
Standard & Poor's lowered its ratings on Precision Partners Inc.
At the same time, all ratings were placed on CreditWatch with
negative implications. About $100 million of debt securities is

The rating actions reflect the company's weaker-than-expected
operating performance, as well as its heavy debt burden, very
constrained liquidity and heightened financial risk. Performance
continues to be weaker than expected due to weak industry
fundamentals and ongoing operational issues at several of the
company's facilities.

Credit protection measures remain weak with total debt to EBITDA
of about 5.8 times and interest coverage of 1.6x as of June 30,

Hazlet, N.J.-based Precision Partners is a leading supplier of
precision manufactured metal parts, tooling, and assemblies for
original equipment manufacturers (OEMs).

The company continues to be negatively impacted by weak
aerospace and auto markets, which has caused sales volumes at
its Galaxy and Certified Fabricators subsidiaries to be below
expected levels.

In addition, the company experienced higher-than-expected start-
up costs (excess overhead and tooling problems) at the company's
Nationwide truck axle facility. Also, Precision Partners was
negatively impacted by longer than normal summer plant shutdowns
by several of the company's automotive customers.

Precision Partners is currently undertaking initiatives to help
improve operating efficiency, profitability, and liquidity,
including restructuring operations, reducing capital
expenditures, rationalizing facilities, and reducing fixed

However, in the near term, Precision Partners' financial
flexibility is extremely limited as the company has a $6 million
interest payment associated with its subordinated notes due
Sept. 15, 2001. In addition, the company has a $1.15 million
debt amortization payment associated with its term loan due
Sept. 30, 2001.

As of July 18, 2001, Precision Partner's $22 million revolving
credit facility was fully drawn and the company had about $7.6
million in cash.

Standard & Poor's will continue to monitor the company's plan to
improve operating performance and cash generation. The company
will remain on CreditWatch until near-term liquidity issues have
been resolved. If performance and liquidity become further
constrained, the ratings will be lowered.

      Ratings Lowered, Placed on CreditWatch Negative

        Precision Partners Inc       To   From

        Corporate credit rating      CCC  B
        Senior secured rating        CCC+ B+
        Subordinated debt rating     CC   CCC+

PRIMUS TELECOMMS: S&P Lowers Ratings & Suspects Tight Liquidity
Standard & Poor's lowered its ratings on Primus
Telecommunications Group Inc. The ratings remain on CreditWatch
with negative implications.

The downgrade is based on Standard & Poor's heightened concerns
about the company's liquidity, in light of the fact that it is
expected to have funding requirements beyond 2001 for which a
funding source has not yet been secured. Given current capital
market conditions, the company's ability to secure additional
funding remains highly uncertain.

Primus is an international long-distance telecommunications
carrier that has increasingly focused its attention on providing
data services to small to midsize businesses and residential
customers worldwide. Yet the lower-margin, highly price-
competitive voice business still represents the majority of its
revenue base.

The company has been adversely impacted by the effects of
foreign currency on many of its non-U.S. originated businesses
in recent periods. In addition, Primus has scaled back low-
margin, U.S.-originated carrier business with various
financially fragile customers.

These factors, coupled with a slowdown in worldwide economic
growth, have significantly limited the company's growth
prospects over the past six to 12 months. This has negatively
impacted the company's financial profile, with operating cash
losses for the six months ended June 30, 2001, totaling $3.1
million on a debt balance of $800 million.

To combat such pressures, the company has begun to reduce
overall corporate headcount and institute other cost saving
measures. Primus has scaled back its business plans to reflect
its limited access to capital, including lowering its estimates
for capital expenditures for 2001 to $100 million to $125
million, down $50 million from the previous forecast.

Primus also indicates that it expects to achieve a much more
limited degree of revenue growth than previously anticipated,
with concomitant operating cash flows totaling only $10 million
to $15 million for 2001.

Primus faces the challenge through the remainder of 2001 of
continuing to reduce overhead expenses, significantly ramping up
operating cash flows, and raising additional money to support

Cash balances of $156 million at June 30, 2001, coupled with
some additional vendor financing availability, are not
considered sufficient to fund the company's requirements beyond
2001. Absent receipt of additional funding in the near
term, Primus's ratings will be lowered.

    Rating Lowered & Retained on CreditWatch Negative

      Primus Telecommunications Group Inc.   To    From

      Corporate credit rating                CCC+  B-
      Senior unsecured debt                  CCC   CCC+
      Subordinated debt                      CCC-  CCC

PSINET INC.: Seeks Extension to Jan. 27 to Make Lease Decisions
PSINet, Inc., and its debtor-affiliates ask the Court to
authorize, pursuant to section 365(d)(4) of the Bankruptcy Code,
an extension of the date by which they must assume or reject the
Unexpired Leases through and including, January 27, 2002,
without prejudice to (x) the Debtors' right to seek a further
extension of the Deadline or (y) the right of any lessor to
request that the Deadline be shortened with respect to a
particular Unexpired Lease.

The requested 180 day extension of the Deadline falls well
within the acceptable parameters of such extension periods
granted by courts in other Chapter 11 cases of this size,
stature and complexity, attorneys for PSINet at Wilmer, Cutler
tell Judge Gerber.

It is irrefutable, Wilmer, Cutler represents, that the Unexpired
Leases are valuable assets of the Debtors' estates and are
integral to the continued operation of their businesses.

The properties leased by the Debtors under the Unexpired Leases
include: office space, hosting centers providing web hosting
services to the Debtors' customers; and the "point of presence"
and "colocation" sites, which are needed to connect customers to
the Debtors' network.

It is beyond dispute that the Debtors cannot operate their
business without the Unexpired Leases. At least in the short
term, it is impossible for the Debtors to find suitable
replacements for the Leased Sites.

However, given the complexity of the Debtors' cases and the
sheer number of leases at issue and the Debtors' limited
resources, the Debtors have been unable to make reasoned
decisions as to whether to assume or reject all the Unexpired
Leases within sixty days of the Petition Date.

The Debtors have incurred billions of dollars of indebtedness
and are attempting to proceed upon a dual track of pursuing a
stand-alone debt plan and the potential sale of assets located
around the world.

Given the number of legal and business issues facing the Debtors
due to the size, nature, and truly international scope of the
business of the Debtors and their nondebtor affiliates, it is
beyond dispute that the Debtors' cases are extremely complex.
There are over 300 Unexpired Leases.

Therefore, an extension of the period is warranted to avoid the
forfeiture of right to assume any Unexpired Lease as a result of
the "deemed rejected" provision of section 365(d)(4) of the
Bankruptcy Code, or premature decisions in assumption with the
resultant imposition of potentially substantial administrative
expenses on their estates, Wilmer, Cutler puts forward its view.

The Debtors' attorneys represent that the requested extension
meets well the criteria that Courts have considered in for
granting an extension under section 365(d)(4) of the Bankruptcy
Code, namely:

   (a) the significance of the leases to the debtors' business
       and to the plan of reorganization;

   (b) the complexity of the case and the number of leases it

   (c) whether the debtor has had sufficient time to
       intelligently appraise its financial situation and the
       potential value of the leases to the formulation of its
       plan; and

   (d) whether the debtor's lessors would be prejudiced by an
       extension of time.

The Debtors' attorneys represent that the Lessors would not be
prejudiced by the proposed extension of the deadline

   (i) the Debtors will remain obligated and timely perform
       all obligations under the Unexpired Leases;

  (ii) the requested extension is for a finite rather than
       "open-ended" period of time; and

(iii) any lessor may request that the Court shorten the
       proposed Deadline with respect to a particular Unexpired
       Lease in accordance with section 365(d)(2) of the
       Bankruptcy Code, with the Debtors retaining the burden of

Further, the Debtors indicate that they do not currently intend
to wait until the proposed Deadline to make a determination as
to the assumption or rejection of the Unexpired Leases.

The Debtors submit that the extension of the Deadline through
and including January 27, 2002 is in the best interest of the
Debtors and their respective estates inasmuch as it will avert
the statutory forfeiture of valuable assets and avoid the
Debtors' incurring needless administrative expenses by
minimizing the likelihood of an inadvertent rejection of a
valuable lease or premature assumption of a burdensome one.

The Debtors also requested an interim extension of the period in
which they may assume or reject the Unexpired Leases pending
consideration of the motion by the Court at a hearing on August
20, 2001.

The Court, finding that there is sufficient cause for the
request, issued a Bridge Order authorzing extension of the
period to and including such time as an order adjudicating the
motion is entered by the Court. (PSINet Bankruptcy News, Issue
No. 6; Bankruptcy Creditors' Service, Inc., 609/392-0900)

RAILWORKS CORP.: S&P Drops Corporate Credit Rating To CCC+
Standard & Poor's lowered its ratings on RailWorks Corp., and
placed the ratings on CreditWatch with negative implications.

At March 31, 2001, RailWorks had about $377 million in debt

The ratings action reflects RailWorks' limited financial
flexibility. In addition, the action reflects Standard & Poor's
heightened concerns that unless the company is able to secure
additional debt capacity from its secured lenders or obtain a
capital infusion in the very near term, RailWorks may not be
able to make its October 2001 bond interest payment.

Furthermore, on August 15, 2001, the company filed a NT-10Q
stating that it will report a significant net loss for the
quarter ended June 30, 2001, which may further strain RailWorks'
ability to obtain adequate liquidity.

Recently, the company obtained the third amendment to its bank
credit agreement, which, among other items, waived any potential
default or event of default with regards to meeting financial
covenants for the period ended June 30, 2001.

Given RailWorks' June 26, 2001 announcement that the company
would miss earnings expectations for the last three quarters of
2001 (originally given to the public on May 5, 2001); the
frequency that the company has gone to its secured lending group
seeking amendments; and that future modifications to the bank
credit agreement will need 100% support of the revolving bank
lenders and 66.66% of the term B loan holders, obtaining an
additional amendment or a waiver may prove challenging.

The company has placed a heavy focus on working capital
initiatives, divested of two business units, and continues to
pursue potential de-leveraging activities.

However, RailWorks has not been able to meaningfully improve its
financial flexibility, with a modest amount of availability
under a $15 million over advance line of credit as its main
source of financial flexibility. Furthermore, the over advance
facility matures on Sept. 30, 2001. Should the company fail to
get additional financial support, Standard & Poor's believes
that it will be very difficult for the company to meet its
October, 2001 bond interest payment of about $9.6 million.

RailWorks provides construction, maintenance, and associated
rail products to Class I and regional railroads, passenger rail
and transit rail authorities, and commercial and industrial

Markets served are large, highly fragmented, mature, and
cyclical. Prospects in the transit sector should remain solid as
project awards from TEA-21 programs ramp up.

However, continued softness in the Class I rail and industrial
markets, has lead to further pricing pressures and reduced
opportunities in the firm's rail products and services, and
track, groups.

Standard & Poor's will meet with management to discuss its near-
term financing strategies, and analyze, what, if any, erosion to
the business profile may be occurring during this period of
financial stress, before taking further rating actions.

         Ratings Placed on CreditWatch Negative
         RailWorks Corp.               To    From

         Corporate credit rating       CCC+  B
         Senior secured debt rating    CCC+  B
         Subordinated debt rating      CCC-  CCC+

RESEARCH INC.: Can't Comply with Tangible Net-Worth Covenant
Research, Inc. (NASDAQ:RESR) booked a net loss of $6,711,000, or
$5.05 per share diluted, on net sales of $3,020,000 for the
three-months ended June 30, 2001, swinging from a net income of
$219,000, or $0.16 per share diluted, on net sales of $6,442,000
in the third quarter last year.

In the nine months ended June 30, 2001, Research, Inc. reported
a net loss of $7,551,000, or $5.70 per share diluted, on net
sales of $13,261,000, as opposed to a net income of $743,000, or
$0.55 per share diluted, on net sales of $20,794,000 in first
nine months of last year.

The company said that pre-tax charges of approximately $4.2
million were applied in the third quarter for inventory and
fixed asset impairment as well as severance costs related to the
discontinuation of its reflow oven business.

Deferred tax credits of approximately $3.4 million were also
written off in the third quarter, since the company no longer
qualifies for such credits based on its current financial

Research, Inc. said that its business was severely affected by
the downturn in electronics markets in recent quarters
necessitating the discontinuation of its reflow oven business in
June. In July, the company also announced that orders for its
ink drying and paper transport units by a major customer
had been deferred for the next four to six months.

The company is continuing to pursue the possible sale of its
reflow oven business and other product lines, as well as working
with its unsecured creditors to reduce amounts owed and to
extend the payment timeframe.

In addition, the company said that it has received notice from
its bank that the company's credit agreement will not be renewed
when it expires on December 31, 2001, as a result of non-
compliance with the tangible net-worth covenant.

The company said that it is currently seeking to establish a
credit relationship with another lending institution.

Research, Inc. designs and manufactures complete product
solutions based on its core competency: the precise control of
heat. The company targets high-growth markets worldwide
including printing (ink drying and paper transport systems) and
plastics extrusion.

Research, Inc. is headquartered in Eden Prairie, Minn. The
company's common stock trades on the Nasdaq SmallCap Market
under the symbol: RESR. Additional news and information can
be found on the company's Web site at

SAFETY-KLEEN: Baker Tanks Balks at Lease Rejection
Appearing through Peter Marrone, its Credit Manager, Baker Tanks
objects to the Safety-Kleen Corp.'s Motion to reject Baker's
leases, telling Judge Walsh that the Debtor has not yet returned
the roll-off boxes which are the subject of the lease it is
attempting to reject, and notes that in its Motion the Debtors
make no mention of any intention on its part to return the boxes
if the motion is granted.

Baker points out that the Debtor cannot both reject the contract
and retain the benefits. If the Motion is granted, the Debtors
should be concurrently ordered to return the roll-off boxes to
Baker, empty of contents and in clean condition.

Baker says it is unaware of what use the Debtor has made of the
boxes, but given the nature of the Debtor's business it is
"certainly conceivable" that the roll-off boxes may now contain
hazardous materials, or revenants thereof. It is not reasonable
to place the responsibility of disusing of any hazardous
materials, or any potential clean-up or personal injury
liability, upon Baker, which is not the generator of the waste.

Accordingly, the Debtor should be ordered to return the roll-off
boxes to Baker, empty of contents and in clean condition,
regardless of whether the contents of the boxes are, or are not,
hazardous materials.

Baker believes that the Debtor has "misplaced" the roll-off
boxes and is presently unaware of their location. That being
said, the Debtor rented the roll-off boxes several years ago,
and until the Petition Date the Debtor has been paying the
monthly rental -- which seems to Baker hard to believe if the
roll-off boxes were no longer in the Debtor's possession.

In the event that the Debtor rejects the lease and can't find
the boxes, the Debtor is liable to Baker for their replacement
costs: $1,000 for one and $4,045 for the other. Further,
the Debtor owes the sum of $5,973.54 for postpetition unpaid
rent. (Safety-Kleen Bankruptcy News, Issue No. 19; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

TRITON NETWORKS: Board Approves Liquidation & Dissolution Plan
Triton Networks Systems, Inc. (Nasdaq:TNSI) announced that its
Board of Directors has unanimously voted to liquidate and
dissolve the Company, subject to approval by the holders of a
majority of its outstanding shares.

Subject to stockholder approval of a Plan of Liquidation and
Dissolution, the Company plans to sell its assets, including
inventory, property and equipment and intellectual property,
discharge its liabilities, and distribute the net proceeds to

Based on current information, the Company estimates that assets
available for distribution to stockholders will be between $0.75
and $0.95 per share.

Pending final stockholder action, the Company has begun making
preparations for the orderly wind down of its operations,
including headcount reductions, securing continuing support for
its existing customers, seeking purchasers for the sale of its
intellectual property and other tangible and intangible assets,
and providing for its outstanding and potential liabilities.

Additionally, the Company is evaluating an expression of
interest received today from a third party for the cash purchase
of all of the outstanding stock of the Company. Since the
prospective purchaser must first complete its investigation of
the Company's business, these discussions may not result in a
purchase offer.

In light of the Board of Directors' decision, Skip Speaks,
President and Chief Executive Officer; Mark Johnson, Chief
Operating Officer; Michael Clark, Vice President of Engineering
and Dan Gulliford, Vice President of Product Development have
resigned effective August 20, 2001. Mr. Speaks has agreed to
remain on the Company's Board of Directors. The Company's Chief
Financial Officer, Ken Vines, has been appointed Chief Executive

Subject to the outcome of the discussions with the prospective
third party purchaser, the Board currently intends to call a
special meeting of the stockholders, expected to be held in
early October 2001, to approve the Plan of Liquidation and

A Proxy statement describing the Plan would be mailed to
stockholders approximately 30 days prior to the meeting.

In reaching its decision that the liquidation and dissolution of
the Company would be in the best interests of the stockholders,
the Board of Directors considered a number of factors, including
the Company's recent financial performance, prevailing economic
conditions and unsuccessful efforts to sell or merge the

Early this year there was a rapid deterioration in the market
for fixed broadband wireless access equipment, particularly in
the U.S. By the second quarter, three of the four major fixed
wireless CLEC's in the U.S. had filed for bankruptcy protection.

The Company's revenue had declined from $9.5 million in the
fourth quarter of 2000 to $1.9 million in the second quarter of
2001, and the net loss for the first half of 2001 was $(40.6)
million. Based on these conditions, the Company significantly
downsized its operations to reduce costs and conserve cash,
while reviewing alternative business strategies.

In January 2001, the Company engaged Broadview International to
assist in identifying and evaluating strategic alternatives,
including the sale or merger of the Company. Broadview contacted
a large number of prospective acquirers or merger partners, both
domestic and international. Discussions were held with a number
of companies.

After a careful review, the Board of Directors concluded that
none of the acquisition or merger opportunities available to the
Company would be likely to provide stockholders with as much
liquidity or value as could be achieved through a liquidation
and dissolution.

The Company has not had time to evaluate the expression of
interest received today from a prospective purchaser.

The Board of Directors also considered whether to continue the
current strategy of maintaining operations, managing expenses
and waiting for a market recovery.

There were a number of risks associated with such a strategy.
Timing of a market recovery remains cloudy, and it now appears
likely that there will be a protracted period of weak demand for
the Company's products.

At the current time, the Company has a minimal backlog of
customer orders, and prospects for material revenue over the
next few quarters is limited. Although the Company has the
financial resources to weather a lengthy market downturn,
significant amounts of cash would be required to continue
operations and remain competitive, including significant
expenditures to develop international sales channels and to
support research and development activities needed to enhance
existing products and develop new products.

Furthermore, employee retention would continue to become
increasingly difficult. In light of these risks, there is a
substantial possibility that a strategy of waiting for a market
recovery would cause a continued erosion of the Company's cash,
asset value and employee base, thus reducing stockholder value
without any assurance of a future recovery.

In addition, the Company's stock is trading below the
anticipated cash liquidation value of the shares. For these
reasons, the Board of Directors concluded that liquidation and
dissolution of the Company would have the highest probability of
returning the greatest value to the stockholders.

If the Company's stockholders approve the Plan of Liquidation
and Dissolution, the Company will file a Certificate of
Dissolution promptly after the stockholders vote, and
stockholders will then be entitled to share in the liquidation
proceeds based upon their proportionate ownership at that time.

Under Delaware law, the Company will remain in existence as a
non-operating entity for three years from the date the Company
files a Certificate of Dissolution in Delaware, and will
maintain a certain level of liquid assets to cover any remaining
liabilities and pay operating costs during the dissolution

During the dissolution period, the Company will attempt to
convert its remaining assets to cash and settle its liabilities
as expeditiously as possible.

Assuming stockholder approval of the Plan, the Board of
Directors currently anticipates that an initial distribution of
liquidation proceeds will be made to stockholders within 75 days
after the stockholders' meeting.

A portion of the Company's assets will be held in a contingency
reserve, and the Board of Directors anticipates that
stockholders could periodically receive additional distributions
subsequent to the initial distribution.

Incorporated in the state of Delaware on March 5, 1997 and is
based in Orlando, Florida, Triton Networks provides broadband
wireless equipment that enables communications service providers
to deliver high-speed, cost-effective voice, video and data
services to their business customers.

Triton's Invisible Fiber(R) products combine high transmission
speeds and the reliability of fiber optic networks with the
flexibility, low cost and rapid deployment of wireless
technologies. Its products meet the same carrier class standard
of reliability used for fiber optic networks, and can be
seamlessly incorporated into existing fiber optic and wireless
networks or used to build new networks.

Its products feature proprietary technologies that enable
service providers to install more units in a service area than
would be possible with conventional broadband wireless
technologies, permitting them to serve more users and generate
more revenues.

Early this year, the Company signed a multi-year agreement with
Agilent Technologies to distribute and resell, on an exclusive
basis, a new broadband wireless product, which operates in the
60 Gigahertz unlicensed frequency. It expects to sell this
product, beginning in late 2001, to companies who do not have
frequency licenses, which could significantly expand its
customer base.

WHEELING-PITTSBURGH: Court Requires Review of Rothschild Fees
According to parties at the hearing of Wheeling-Pittsburgh Steel
Corp.'s application to hire Rothschild, Inc. as investment
banker, Judge Bodoh first requires that any and all compensation
paid to Rothschild by the estate be subjected to his prior
review and approval.

Judge Bodoh also stated that his Order was not to be construed
as barring any future objection by any party to such
applications for approval of payment of compensation.

Judge Bodoh expressly retains exclusive jurisdiction over any
disputes arising under the Rothschild retention agreement, and
requires that any expansion of the services to be rendered by
Rothschild be submitted through the same procedures as the
present application. (Wheeling-Pittsburgh Bankruptcy News, Issue
No. 9; Bankruptcy Creditors' Service, Inc., 609/392-0900)

WINSTAR COMMS: Secures Okay For De Minimis Asset Sale Procedures
Winstar Communications, Inc. sought and obtained Court approval
of proposed procedures to sell certain assets of de minimis
value free of any liens and without further Court approval.

Judge Joseph Farnan of the Bankruptcy Court of Delaware approved
the notice and sale procedures to be implemented, which include:

   (a) If the proposed sale price for any single Surplus Asset
       does not exceed $50,000 and the aggregate price for all
       Assets to be sold to any one purchaser does not exceed
       $250,000, then the Debtors shall be authorized to sell
       such Assets for cash to the purchaser making the highest
       offer, without further court Order.

   (b) If the proposed sale price for any particular Surplus
       Asset exceeds $50,000 but is $250,000 or less, and the
       sale price for all Surplus Assets to be sold exceeds
       $250,000 but is $500,000 or less, the Debtors shall sell
       such Assets for cash to the highest bidder but upon five
       days' notice to:

          (i) the United States Trustee;

         (ii) counsel for the Creditors' Committee;

        (iii) counsel for the agent under the Debtors' debtor-
              in-possession financing facility;

         (iv) counsel for the agent under the Debtors'
              prepetition secured financing facility, and

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

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

          (i) the assets to be sold;

         (ii) the identity of the proposed purchaser (including
              a statement of any connection between the
              purchaser and the Debtors);

        (iii) the proposed sale price, and

         (iv) the Debtors' estimate of the current value of the
              assets to be sold.

   (d) The Notice Parties shall have five days after the notice
       is served to object or request additional time to
       evaluate the proposed transaction. Objections must be
       timely delivered by facsimile to the Debtors' counsel. If
       counsel receives no written objection or request for
       additional time within the five-day period, the Debtors
       shall be authorized to close the transaction and obtain
       the sale proceeds. If a Notice Party provides a request
       for additional time, such Notice Party shall have 15 days
       to object to the proposed transaction.

   (e) If a Notice Party objects to the proposed transaction
       within five days after the notice is sent, the Debtors
       and such objecting Party shall use good faith efforts to
       consensually resolve the objection. If no consensual
       resolution is made, the Debtor shall not consummate the
       proposed sale without obtaining further Court approval.

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

   (g) In the even a sale price exceeds the parameters
       established in this Motion, the Debtors will provide
       notice to all appropriate parties in accordance with the
       applicable provisions of the Bankruptcy Code.

These procedures for resolving claims will not be applicable to
sales or assets that involve an "insider". Any such sale will
require separate individual hearings as prescribed by the
Bankruptcy Code. (Winstar Bankruptcy News, Issue No. 9;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

WORLD COMMERCE: Files Chapter 11 Protection
World Commerce Online, Inc. (OTCBB: WCOL), a leading provider in
web-enabled technology business solutions for the global
perishable and consumer packaged goods industries, filed for
protection under Chapter 11 of the Bankruptcy Code.

The Company has not attained sufficient cash flow from
operations to fund the on-going business and additional bridge
loan financing that heretofore had been secured during the
latter half of 2000 and the first seven months of 2001 was not

Consequently, the Company was not able to fund the current
operating costs of the business or meet the near term
obligations of existing unsecured creditors.

Joseph H. Dugan, President and CEO of WCO, said, "The decision
to file for Chapter 11 was made after long and careful
deliberation. The decision is designed to preserve the value of
WCO's assets for its secured and unsecured creditors and provide
WCO with the ability to achieve its business objectives and
thereby allow for full or partial repayment of WCO's legitimate

WCO will manage its operations as a debtor-in-possession and it
hopes to present a viable reorganization and restructure plan by
early fall of 2001. WCO will continue to operate while seeking
to complete debtor-in-possession financing. It is the goal of
WCO to emerge from Chapter 11 as a financially stable and
operationally sound organization.

                         About WCO

Founded in 1994, WCO (OTCBB:WCOL) is a technology company that
enables businesses in the perishable products industries and
beyond with e-commerce business solutions. With its Licensed and
Hosted solutions, WCO provides its customers with access to
global markets while providing maximum security and data
integrity and complete control over sensitive business

WCO's FreshPlex Technologies(TM) currently powers numerous
Private and Branded Trading Communities throughout the global
perishable products industries.

WCO is headquartered in Orlando, Florida.

The company's revenues for the three months ended March 31, 2001
was approximately $1.5 million compared to $0.05 million for the
three months ended March 31, 2000, an increase of $1.45 million
or 2,900%. The increase resulted primarily from recognition of
license fees and implementation fee revenue in the first quarter
of 2001.

For the three months ended March 31, 2001, revenue was generated
primarily from two sources: approximately $0.9 million, or 60.0%
of total revenue in license fees, and approximately $0.5
million, or 33.0% of total revenue, in implementation service

In addition, the company recognized approximately $0.07 million,
or 5.0% of total revenue, in hosted solution fees and
approximately $0.03 million, or 2.0% of total revenue, in other

Meanwhile, its net cash used in operating activities was
approximately $3.6 million for the same period, as opposed to
$3.7 million in the year-ago period. This use of cash was
primarily due to the company's net losses in each of those

For the three months ended March 31, 2001, the net loss was
offset by an increase in accounts payable and accrued
liabilities, a non-cash charge of approximately $5.5 million for
the issuance of warrants in connection with notes payable, a
non-cash stock-based compensation charge of approximately $0.4
million, a non-cash charge of approximately $0.5 million for the
amortization of warrants for professional services, and
depreciation and amortization expense of approximately $1.6

For more information about WCO and its e-commerce business
solutions, visit

* Meetings, Conferences and Seminars
August 22-24, 2001
   Association of Insolvency and Restructuring Advisors
      Florida CPE Courses for Financial Advisors, Attorneys
      and Turnaround Specialists
         Hyatt Regency Pier Sixty Six, Fort Lauderdale, Florida

September 6-9, 2001
   American Bankruptcy Institute
      Southwest Bankruptcy Conference
         The Four Seasons Hotel, Las Vegas, Nevada
            Contact: 1-703-739-0800 or

September 7-11, 2001
   National Association of Bankruptcy Trustees
      Annual Conference
         Sanibel Harbor Resort, Ft. Myers, Florida
            Contact: 1-800-445-8629 or

September 10-11, 2001
      Fourth Annual Conference on Corporate Reorganizations
         The Knickerbocker Hotel, Chicago, IL
            Contact 1-903-592-5169 or

September 13-14, 2001
      Corporate Mergers and Acquisitions
         Washington Monarch, Washington, D. C.
            Contact: 1-800-CLE-NEWS or

September 14-15, 2001
   American Bankruptcy Institute
      ABI/Georgetown Program "Views from the Bench"
         Georgetown University Law Center, Washington, D.C.
            Contact: 1-703-739-0800 or

October 3-6, 2001
   American Bankruptcy Institute
      Litigation Skills Symposium
         Emory University School of Law, Atlanta, Georgia
            Contact: 1-703-739-0800 or

October 12-16, 2001
      2001 Annual Conference
         The Breakers, Palm Beach, FL
            Contact: 312-822-9700 or

October 16-17, 2001
   International Women's Insolvency and Restructuring
   Confederation (IWIRC)
      Annual Fall Conference
         Somewhere in Orlando, Florida
            Contact: 703-449-1316 or

October 28 - November 2, 2001
   IBA Business Law International Conference
   Including Insolvency and Creditors Rights Sessions
      Cancun, Mexico
         Contact: +44 (0) 20 7629 1206

November 15-17, 2001
      Commercial Real Estate Defaults, Workouts, and
         Regent Hotel, Las Vegas
            Contact:  1-800-CLE-NEWS or

November 26-27, 2001
      Seventh Annual Conference on Distressed Investing
         The Plaza Hotel, New York City
            Contact 1-903-592-5169 or

November 29-December 1, 2001
   American Bankruptcy Institute
      Winter Leadership Conference
         La Costa Resort & Spa, Carlsbad, California
            Contact: 1-703-739-0800 or

January 31 - February 2, 2002
   American Bankruptcy Institute
      Rocky Mountain Bankruptcy Conference
         Westin Tabor Center, Denver, Colorado
            Contact: 1-703-739-0800 or

January 11-16, 2002
   Law Education Institute, Inc
      National CLE Conference(R) - Bankruptcy Law
         Steamboat Grand Resort, Steamboat Springs, Colorado
            Contact: 1-800-926-5895 or

February 28-March 1, 2002
      Corporate Mergers and Acquisitions
         Renaissance Stanford Court, San Francisco, CA
            Contact: 1-800-CLE-NEWS or

March 3-6, 2002 (tentative)
      Norton Bankruptcy Litigation Institute I
         Park City Marriott Hotel, Park City, Utah
            Contact:  770-535-7722 or

March 8, 2002
   American Bankruptcy Institute
      Bankruptcy Battleground West
         Century Plaza Hotel, Los Angeles, California
            Contact: 1-703-739-0800 or

March 20-23, 2002
      Spring Meeting
         Sheraton El Conquistador Resort & Country Club
         Tucson, Arizona
            Contact: 312-822-9700 or

April 10-13, 2002 (tentative)
      Norton Bankruptcy Litigation Institute II
         Flamingo Hilton, Las Vegas, Nevada
            Contact:  770-535-7722 or

April 18-21, 2002
   American Bankruptcy Institute
      Annual Spring Meeting
         J.W. Marriott, Washington, D.C.
            Contact: 1-703-739-0800 or

April 25-27, 2002
      Fundamentals of Bankruptcy Law
         Rittenhouse Hotel, Philadelphia
            Contact:  1-800-CLE-NEWS or

May 13, 2002 (Tentative)
   American Bankruptcy Institute
      New York City Bankruptcy Conference
         Association of the Bar of the City of New York
         New York, New York
            Contact: 1-703-739-0800 or

June 6-9, 2002
   American Bankruptcy Institute
      Central States Bankruptcy Workshop
         Grand Traverse Resort, Traverse City, Michigan
            Contact: 1-703-739-0800 or

June 27-30, 2002
      Western Mountains, Advanced Bankruptcy Law
         Jackson Lake Lodge, Jackson Hole, Wyoming
            Contact: 770-535-7722 or

July 11-14, 2002
   American Bankruptcy Institute
      Northeast Bankruptcy Conference
         Ocean Edge Resort, Cape Cod, MA
            Contact: 1-703-739-0800 or

August 7-10, 2002
   American Bankruptcy Institute
      Southeast Bankruptcy Conference
         Kiawah Island Resort, Kiawaha Island, SC
            Contact: 1-703-739-0800 or

October 9-11, 2002
   INSOL International
      Annual Regional Conference
         Beijing, China
            Contact: or

October 24-28, 2002
      Annual Conference
         The Broadmoor, Colorado Springs, Colorado
            Contact: 312-822-9700 or

December 5-8, 2002
   American Bankruptcy Institute
      Winter Leadership Conference
         The Westin, La Paloma, Tucson, Arizona
            Contact: 1-703-739-0800 or

April 10-13, 2003
   American Bankruptcy Institute
      Annual Spring Meeting
         Grand Hyatt, Washington, D.C.
            Contact: 1-703-739-0800 or

December 3-7, 2003
   American Bankruptcy Institute
      Winter Leadership Conference
         La Quinta, La Quinta, California
            Contact: 1-703-739-0800 or

April 15-18, 2004
   American Bankruptcy Institute
      Annual Spring Meeting
         J.W. Marriott, Washington, D.C.
            Contact: 1-703-739-0800 or

December 2-4, 2004
   American Bankruptcy Institute
      Winter Leadership Conference
         Marriott's Camelback Inn, Scottsdale, AZ
            Contact: 1-703-739-0800 or

The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday.  Submissions via
e-mail to are encouraged.


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

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 Go 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, 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.

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