TCR_Public/010830.mbx        T R O U B L E D   C O M P A N Y   R E P O R T E R

          Thursday, August 30, 2001, Vol. 5, No. 170


360NETWORKS: Committee Hires E&Y as Financial Advisors
AMERIJET: Files for Chapter 11 Protection in S.D. Florida
AMES DEPARTMENT: Gets Court Okay to Keep Existing Bank Accounts
AMF BOWLING: Court Okays BSI as Claims Agent for Parent Company

APPLIEDTHEORY: Fails to Comply With Nasdaq Bid Price Requirement
ARMSTRONG HOLDINGS: Court Gives Century Time to Remit Payments
BRIDGE INFO: Reuters Specifies Which Contracts It'll Assume
BUCYRUS INT'L: Talks to Extend Revolving Credit Facility Begin
CARMIKE CINEMAS: Gets Court Okay to Reject 119 Theatre Leases

COMDISCO INC: 5R Processors & Marc/5R Seek Relief from Stay
COVAD COMMS: Employs Houhihan Lokey as Restructuring Advisor
GENESIS HEALTH: Stipulations for WI Facilities Transition Okayed
GENTEK: Fitch Lowers Senior Secured Debt Ratings to BB- From BB
GEOGRAPHICS INC: Fails to Meet Revolver's Financial Covenants

HARNISCHFEGER: Court Okays Motion Re Initial Payment Dates
HEAFNER TIRE: Thinning Liquidity Spurs Moody's Downgrades
IDEFENSE: Files Chapter 11 Petition in E.D. Virginia
IDEFENSE INC.: Case Summary & Largest Unsecured Creditors
IMPERIAL SUGAR: Court Declares Plan Effective

INFU-TECH INC: Files for Bankruptcy Protection in New Jersey
KOMAG INCORPORATED: Chapter 11 Case Summary
LERNOUT & HAUSPIE: Strikes License Agreement with Active Voice
LERNOUT & HAUSPIE: Files Chapter 11 Plan in Delaware
LOEHMANN'S HOLDINGS: Annual Stockholders' Meeting on Sept. 21

LOEWEN GROUP: Asks Court to Deny Kenny Letherer's $1.7MM Claim
LTV CORP: U.S. Trustee Appeals Court's Secrecy Order
METROMEDIA: Moody's Junks Ratings for Lack of Funding Commitment
NETWORK COMMERCE: Nasdaq Delists Shares Due to Lower Bid Price
NOVO NETWORKS: Initiates Reverse Stock Split to Shun Delisting

OWENS CORNING: Reliant Wants Decision on Entex Gas Contract
PACIFIC GAS: Agrees with ISO to Lift Stay to Pursue Arbitration
PILLOWTEX CORP: Court Compels Debtor to Surrender N.C. Facility
PSINET INC: Period to Decide on Real Property Leases Extended
RBX CORP: Emergence from Chapter 11 Protection Successful

STAGE STORES: Reorganized Debtor Applies for Listing on Nasdaq
URANIUM RESOURCES: William Witter Discloses 7.7% Equity Stake
U.S. WIRELESS: Files for Chapter 11 Protection in Delaware
U.S. WIRELESS: Case Summary & 10 Largest Unsecured Creditors
VENCOR INC: Initiates Claims Objection Process

VLASIC FOODS: Treatment of Claims Under The First Amended Plan
W.R. GRACE: Hires Holme Roberts As Special Environmental Counsel
WARNACO GROUP: GECC Moves to Compel Lease Decision & Payments
WASHINGTON GROUP: Raytheon Finds Comfort in Examiner's Report
WHEELING-PITTSBURGH: Moves to Pay Prepetition Sales Commissions

WINSTAR COMMS: MCI Urges Court to Withdraw Interim Utility Order


360NETWORKS: Committee Hires E&Y as Financial Advisors
The Official Committee of Unsecured Creditors of 360networks
inc. wishes to retain and employ E&Y Capital Advisors LLC (EYCA)
as financial advisors, nunc pro tunc as of July 18, 2001.

EYCA, together with its affiliates is widely recognized as one
of the world's leading providers of financial and restructuring
advisory services and related advisory and accounting services.
Moreover, EYCA's professionals have substantial experience in
providing services to troubled companies in connection with in-
and out-of-court reorganizations.

Mark Brandenburg of Pirelli Cables & Systems, a member of the
Official Committee of Unsecured Creditors, says that the
Committee chose EYCA because it is familiar with the Debtors'
businesses and financial affairs and is thus well-qualified to
provide the services required by the Committee.

The Committee anticipates that EYCA will perform certain
financial analyses for the Committee and provide restructuring
and related advice, in particular:

   (a) analyze the financial position of the Debtors and their
       non-debtor affiliates (including those overseas) with
       particular focus on historical transactions and cash  
       flows between these entities and the assessment of
       current financial position on an entity by entity basis;

   (b) analyze the Debtors' cash flow projections including but
       not limited to, restructuring programs, selling, general
       and administrative structure, and other reports or
       analyses prepared by the Debtors or their professionals
       in order to advise the Committee on the viability of
       continuing operations and the reasonableness of
       projections and underlying assumptions with respect to
       industry and market conditions;

   (c) analyze the financial ramifications of proposed
       transactions, at the specific direction of the Committee
       or its counsel for which the Debtor seeks Bankruptcy
       Court approval including, but not limited to, the cash
       collateral order, DIP financing and assumption/rejection
       of leases;

   (d) analyze the Debtors' internally prepared financial
       statements and related documentation, in order to  
       evaluate the performance of the Debtors as compared to
       projected results on an ongoing basis;

   (e) attend and advise at meetings with the Committee, its
       counsel and representatives of the Debtors;

   (f) prepare or analyze (as appropriate) analyses of the
       potential recoveries to creditors in the event of a
       liquidation of the assets of the Debtors and non-debtor

   (g) assist and advise the Committee and its counsel in its
       analysis of the feasibility of any plan(s) of
       reorganization or strategic transaction(s) relative to
       the potential recoveries in a liquidation;

   (h) interface with and provide Jefferies & Company, Inc., the
       Committee's investment bankers, with all data, reports,
       analyses, etc. prepared by EYCA;

   (i) render expert testimony on behalf of the Committee; and

   (j) provide such other services, as requested by the
       Committee and agreed by EYCA.

EYCA intends to charge for its professional services in:

   (a) monthly hourly fees based on actual time incurred at
       these hourly rates:

       Managing Directors and Principals $550 - 650
       Directors                          475 - 545
       Vice Presidents                    375 - 440
       Associates                         320 - 340
       Analysts                           275
       Client Service Associates          140

   (b) reimbursement of actual and necessary out-of-pocket
       expenses incurred by EYCA in rendering services to the

Prepetition, the Debtors made payments to Ernst & Young LLP, an
affiliate of EYCA, for limited property tax advisory services
performed for the Debtors. Payments for these services totaled
$77,210, but Ernst & Young LLP was not owed any monies relating
to these services and these services are no longer performed by
Ernst & Young LLP.

Andrew Scruton, managing director of EYCA, discloses that the
Debtors are pursuing legal action against Pathnet
Communications, Inc. Although EYCA acts as financial advisor to
the Official Committee of Unsecured Creditors of Pathnet, Mr.
Scruton assures Judge Gropper that EYCA's retention is unrelated
to these Chapter 11 cases and does not include advising this
committee in relation to this legal action.

Mr. Scruton swears EYCA does not represent any interest adverse
to the Committee and will not represent any entity other than
the Committee in connection with these Chapter 11 cases. EYCA is
a "disinterested person" as defined in the Bankruptcy Code, Mr.
Scruton insists. (360 Bankruptcy News, Issue No. 6; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

AMERIJET: Files for Chapter 11 Protection in S.D. Florida
Ft. Lauderdale-based cargo airline Amerijet International has
filed for reorganization under Chapter 11 of the U.S. Bankruptcy
Code, with no interruption to its domestic and international
cargo services. This week, Amerijet also announced an increase
in service to Latin America, with a new route to a third city in

According to Chairman and CEO David Bassett, this action was
precipitated by a combination of factors, including Federal
Express taking over the United States Postal contract from Emery
Worldwide, resulting in Amerijet's loss of a major aircraft
charter contract with Emery in January 2001, which idled six
Boeing 727 aircraft representing one-half of Amerijet's air

Amerijet continues to operate its core cargo business,
consisting of scheduled service and charter service to the
Caribbean, Mexico and Latin America. This core business
represented 75% of the Company's annual revenues prior to the
Emery contract cancellation.

Other cargo airlines and related services industries also have
suffered as a result of the general softness in the contract
service and aircraft resale markets. Amerijet has held
negotiations with its aircraft lenders to address financing
issues and expects that the Chapter 11 filing will assist the
Company in these efforts.

Amerijet is taking this route as a business strategy that will
allow us to focus on our day-to-day operations and our cost
structure, while at the same time help us to reorganize our
business for long-term profitability," said David Bassett,
Chairman and CEO of Amerijet International.

"In fact, over the past year, Amerijet has taken significant
steps to streamline its operations prior to seeking the Court's
protection, and we expect to include many of those measures in
the Company's reorganization plan. Most importantly, this
process will not impact our continued daily operations and cargo
services, which have historically accounted for the vast
majority of the Company's revenues."

Last Friday, Amerijet laid off 22 employees out of a total of
nearly 400 as a cost-saving initiative. The Company is not
planning any additional layoffs during the reorganization

Amerijet currently flies a minimum of 32 flights per week
between the U.S. and within its primary service region of the
Caribbean, Mexico and Latin America, and flies more scheduled,
direct all-cargo service to more destinations in this region
than any other cargo airline.

Amerijet was established in 1974 and is headquartered in Ft.
Lauderdale. The company currently has 375 employees and 25
agents, and provides direct air service to 26 destinations
throughout the Caribbean, Mexico and Latin America. It offers
worldwide service to a total of 553 destinations including its
European and Asian ports. Amerijet maintains 55 offices
worldwide, and a North American road feeder system.

Debtor: Amerijet International, Inc.
        2800 S Andrews Ave
        Ft. Lauderdale, FL 33316

Chapter 11 Petition Date: August 22,2001

Court: Southern District of Florida (Dade)

Bankruptcy Case No.: 01-19048

Judge: A. Jay Cristol

Debtor's Counsel: Michael D Seese, Esq.
                  201 S Biscayne Blvd #1700
                  Miami, FL 33131

Total Assets: $50.4 million

Total Debts: $76 million

AMES DEPARTMENT: Gets Court Okay to Keep Existing Bank Accounts
Ames Department Stores, Inc sought and obtained authority to
maintain its existing bank accounts and continue using its
existing business forms.

The Debtors maintain some 160 bank accounts.  The Debtors
routinely deposit and withdraw funds from these Bank Accounts by
checks, wire transfers, and Automated Clearing House transfers.

David H. Lissy, Esq., Senior Vice President and General Counsel
of Ames Department Stores, Inc., believes that the Debtors'
transition to chapter 11 will be smoother and more orderly, with
minimum disruption and harm to their operations, if the Bank
Accounts are maintained post-petition with the same account
numbers, provided, however, that checks issued or dated prior to
the Commencement Date will not be honored absent a prior order
of the Court.  

Mr. Lissy states that by maintaining existing bank accounts, it
would preserve business continuity and avoid the disruption to
the Debtors' business operations that would necessarily result
from opening new accounts, thereby serving the interest of all
parties in interest.

Mr. Lissy also states that the Debtors continued use of current
correspondence and business forms, substantially in the forms
existing immediately prior to the Commencement Date, without
reference to the Debtors' status as debtors in possession, will
minimize expenses to the Debtors' estates.  It's certainly no
secret that Ames is in chapter 11, Albert Togut, Esq., at Togut
Segal & Segal, notes. (AMES Bankruptcy News, Issue No. 2;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

AMF BOWLING: Court Okays BSI as Claims Agent for Parent Company
AMF Bowling Inc., believes that the most effective and efficient
manner in which to facilitate the process of reviewing,
docketing, maintaining, photocopying & transmitting proofs of
claim is for the Debtors to engage in an independent third party
to act as claims processing agent of the Court.  

The administrative burden of docketing thousands of proofs of
claim and interest, establishing and maintaining an official
claims register and maintaining claims database for effecting
service of notices and other matters in this case will be
substantial to the Office of the Clerk of the Bankruptcy Court.

To reduce this burden to the Office of the Clerk of the
Bankruptcy Court, the Parent files a motion and the Court
approves the appointment & retention of Bankruptcy Services LLC
(BSI) to act as notice and claims agent for the Clerk of Court.

Kevin Huennekens, Esq., at Kutak Rock LLP in Richmond, Virginia
states the claims service provided by BSI will relieve the Clerk
of the administrative burden of docketing, numbering, processing
and maintaining proof of claim files and registers for the
significant number of claims that may be filed in this case.  

Mr. Huennekens discloses that BSI is a firm that specializes in
providing claims management, consulting and computer services in
connection with Chapter 11 cases.  Mr. Huennekens contends that
BSI is qualified for this engagement as it has performed
identical service to numerous Chapter 11 cases.

The Court assigns BSI with the responsibilities to:

   a) maintain official claims register the provides for each
      claim the docketed the claim number assigned, the date
      received, the name & address of the claimant & agent, if
      applicable, that filed such proof of claim and the
      classification of such claim;

   b) establishing procedures acceptable to the Clerk for
      transmittal of proofs of claim between the Clerk & BSI;

   c) recording all transfers of claims and providing any notice
      of such transfers required under Federal Rule of
      Bankruptcy Procedure 3001;

   d) effecting changes to the official claims register pursuant
      to orders of the Court;

   e) upon request providing additional copies of the official
      claims register to the Clerk or the Parent;

   f) maintaining official mailing lists of all entities that
      have filed proofs of claim in this case, which lists shall
      be available upon request of the Clerk or the Parent;

   g) assisting the Debtors in fulfilling all of its claims &
      notice-related obligations including:

     i) assisting with the preparations of the Parent's
        schedules, statements & lists;

    ii) providing the Parent with consulting support necessary
        to enable the Parent to effectively manage and reconcile
        claims and to provide the requisite notices throughout
        this case;

   iii) provide such other administrative services that may be
        requested by the Parent;

   h) upon request by the Clerk or the Parent, furnishing notice
      to all entities entitled to receive notice in this case of
      matters including, without limitation, the commencement of
      the Parent's Chapter 11 cases, the meeting of the
      creditors pursuant to section 341 of the Bankruptcy Code,
      the last date of filing of proofs of claim, the approval
      of the disclosure statement and hearing to consider
      confirmation of the Parent's chapter 11 plan, and filing
      with the Court, with a copy to the Clerk, an affidavit of
      service relating to each notice;

   i) at the close of the Parent's chapter 11 case, boxing and
      transporting all original documents, including proofs of
      claim, in the manner and form and to the location
      prescribed by the Clerk; and upon completion of its duties
      and obligations in this case, preparing and submitting a
      proposed order to the Court terminating the employment and
      retention of BSI as agent for the Clerk; (AMF Bankruptcy
      News, Issue No. 6; Bankruptcy Creditors' Service, Inc.,

APPLIEDTHEORY: Fails to Comply With Nasdaq Bid Price Requirement
AppliedTheory Corp. (Nasdaq: ATHY), an Internet services and
managed Web hosting partner to hundreds of large enterprise
customers, announced that it received a Nasdaq staff
determination on August 22, 2001, indicating that the Company
has failed to comply with the $1.00 minimum bid price required
for continued listing of its common stock on the Nasdaq National
Market as required by Nasdaq Marketplace Rule 4450(a)(5) or to
regain compliance with that rule in accordance with Marketplace
Rule 4310(c)(8)(B), and as a result, the Nasdaq staff has
determined to delist the common stock of the Company from the
Nasdaq National Market.

The Nasdaq staff also advised the Company that it does not meet
the continued listing requirements for "public float" under
Maintenance Standard 2, as set forth in Marketplace Rule

The Company has requested a hearing before a Nasdaq Listing
Qualifications Panel to review the staff determination. The
hearing is expected to occur within 45 days of the hearing
request filing. Currently the tentative hearing date is set for
October 4. At the hearing, the Company intends to request
additional time to bring the Company into compliance with the
$1.00 minimum bid price requirement and that the Panel
reconsider the Nasdaq staff determination to delist the
Company's common stock from the Nasdaq National Market.

Although there can be no assurance that the Panel will grant the
Company's request for continued listing or that the Company's
shares will continue to be listed on the Nasdaq National Market,
the hearing request stays delisting of the Company's securities
pending the Panel's decision.

If the Company's shares do not continue to be listed on the
Nasdaq National Market, trading, if any, would likely be
conducted in the over-the-counter market in the so-called "pink
sheets" or on the OTC Bulletin Board, which was established for
securities that do not meet the Nasdaq Stock Market listing

"Today AppliedTheory executives are communicating with employees
and customers around the country to explain the NASDAQ listing
status. We are emphasizing that this equity market issue will
not impact the company's operating ability to provide service to
our customers," said AppliedTheory CEO Danny E. Stroud.

"We know that our business strategy and positioning are
resulting in increasingly strong operating results. We are proud
of our loyal and growing customer base and value our employees.
We have every reason to be confident in AppliedTheory's future."

Industry pioneer AppliedTheory combines its unparalleled
knowledge base with the ability to build, integrate and manage
Internet business solutions in an increasingly complex online
economy. AppliedTheory's proactive responsiveness to changing
business requirements has earned the company a 95 percent
retention rate from customers that include AOL, America's Job
Bank and Ingersoll-Rand.

The company offers a comprehensive and fully integrated suite of
managed hosting, connectivity and security services, providing
one of the industry's most reliable single sources for large
enterprise Internet needs.  For additional information about the
company, visit

ARMSTRONG HOLDINGS: Court Gives Century Time to Remit Payments
Judge Farnan denies the Motion to compel Armstrong Holdings,
Inc. to assume compromise agreement filed by Century Indemnity
Company and orders Century to remit to the Trust the payment
originally due to the Trust on January 5, 2001, as provided in
the Settlement Agreement, and further to remit to the Trust any
further payments provided for in the Settlement Agreement as and
when such payments are due under the terms of the Settlement
Agreement; however, Judge Farnan makes this Order without
prejudice to Armstrong Holdings, Inc. or the Trust seeking
recovery from Century of interest on the January payment from
January 5, 2001, to the date the January payment is actually
made, and without prejudice to Century's right to oppose any
such requested recovery.

Century Indemnity Company, appearing through Curtis J. Crowther
of Wilmington, and Leonard P. Goldberger of the Philadelphia
firm of White & Williams LLP, immediately asks Judge Farnan to
reconsider and amend his Order, saying that the order drafted by
the Court does not accurately reflect his decision reached at
the conclusion of the hearing on the Motion.

Without any prior notice to Century, and without having listed
the matter on the agenda letter for hearing, AWI presented Judge
Farnan with a proposed form of Order at the hearing on Century's
Motion. Century did not receive a copy of the Order until some
days later. Without having been provided any prior notice,
Century never had the opportunity to review or comment on the
proposed form of the Order.

Mr. Crowther says that this presentation of an Order at the
hearing, especially without giving Century a prior opportunity
to review its terms and/or present its views on whether its
business terms are unreasonable or otherwise inconsistent with
the relief announced at the hearing, is unfair, overreaching,
and unprofessional.

The Order, Mr. Crowther says, contains unreasonable business
terms. The Order compels Century to make payment within three
business days of the Order's entry.  Considering the size of the
January payment, it is impossible for Century to complete its
internal process required to liquidate sufficient assets
necessary to make the January payment that quickly - especially
considering that Century was neither consulted about the
proposed terms of the Order, nor notified of the hearing.  It is
unreasonable and unfair to place Century in the position of
violating the Order because it is impossible to comply with its

Further, the Order is also unfair and overreaching because it is
otherwise inconsistent with Judge Farnan's actual ruling on the
Motion at the first hearing.  Century thus asks Judge Farnan to
extend the time for it to remit the January payment, indicate
that the Motion is denied without prejudice and upon the exact
terms as the oral ruling, and strike any direction that Century
make any further payments provided for in the Settlement
Agreement as being inconsistent with this Court's ruling at the

Moving with equal promptness, Judge Farnan enters an amended
Order giving Century more time to make the payment and deleting
any provision regarding future payments under the Settlement
Agreement. (Armstrong Bankruptcy News, Issue No. 9; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

BRIDGE INFO: Reuters Specifies Which Contracts It'll Assume
Reuters has finally indicated which executory contracts and
unexpired leases it wants Bridge Information Systems, Inc. to
assume and assign to them at the closing of the acquisition
pursuant to the Purchase Agreement.  Thus, the Debtors ask Judge
McDonald to enter an order:

    (a) authorizing, but not requiring, the assumption and
        assignment of the Designated Contracts;

    (b) approving and fixing the Cure Amounts related to such
        Designated Contracts;

    (c) approving the form of the Debtors' notice of the Closing
        or, alternatively, one or all of the Option Closings,
        and thereby affecting the assumption and assignment of
        the appropriate Designated Contracts hereunder (the
        Assumed Contracts); and

    (d) approving the terms of the Purchase Agreement, which was
        separately filed with the Court.

According to Deborah M. Buell, Esq., at Cleary, Gottlieb, Steen
& Hamilton, in New York, the assumption and assignment of the
Designated Contracts is an integral part of the proposed Reuters
Sale and should be approved by the Court.

The Debtors propose that assumption and assignment of Designated
Contracts only be effective as those parties to whom the Debtors
send an Assignment Notice, indicating that there will be a
Closing, or, alternatively, an Option Closing and indicating the
date upon which the Designated Contract listed herein will
become an Assumed Contract.

Among the contracts and leases that the Debtors seek to assume
and assign to Reuters are license agreements, vendor contracts,
customer contracts, subscriber contracts, data contracts,
contributor contracts, distribution agreements, master
agreements, contract for services, software development, website
development, trade or redistributor services, telecom
agreements, operational agreements, facilities agreements,
message transmission agreements, etc.  

Some of these contracts and leases have cure amounts ranging
from $0 to over $100,000.  Those agreements with cure amounts of
$100,000 or more are:

-----------                     -----------------     ----------
AP Telecommunications, Inc.            n/a              $117,000
AT&T                             Contract Tariff        $773,936
AVAYA                            PBX                    $189,421
Ease Technologies Inc.           Software License       $183,119
GOVPX                            Distribution           $250,000
Maryville Data Systems, Inc.           n/a              $271,928
SAP America                            n/a              $129,599
Standard & Poor's                Letter Agreement       $157,572
Tulett Financial Information                            $236,250
SAP America                      SAP System             $129,599
Standard & Poor's Rating Group   Data Contracts         $157,572
Ease Technologies                Software License       $183,119

Under the proposed Purchase Agreement, Ms. Buell explains,
Reuters will be responsible for payment to the Debtors of the
cure payments.  The Debtors ask the Court for an order providing
that the cure payments the Debtors listed in their Motion shall
constitute the required cure payments, unless a written
objection to any such amount is:

    (a) filed with the Court by the counterparty disputing such
        amount on or before August 23, 2001 and

    (b) served by the counterparty so as to be received on or
        before 5:00 p.m. (St. Louis Time) on August 23, 2001 by:

         (i) the Debtors at these addresses:

             (A) Cleary, Gottlieb, Steen & Hamilton, One Liberty
                 Plaza, New York, NY 10006, Attn: Deborah M.

             (B) Bryan Cave LLP, 211 North Broadway, Suite 3600,
                 St. Louis, MO 63102-2750, Attn: Gregory D.
                 Willard; and

        (ii) Reuters at Weil, Gotshal & Manges LLP, 767 Fifth
             Avenue, New York, NY 10153, Attn: Richard P.

(Bridge Bankruptcy News, Issue No. 14; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

BUCYRUS INT'L: Talks to Extend Revolving Credit Facility Begin
Net sales of Bucyrus International, Inc., for the quarter and
six months ended June 30, 2001 were $67,646,000 and
$132,348,000, respectively, compared with $67,481,000 and
$133,473,000 for the quarter and six months ended June 30, 2000,

Net sales of repair parts and services for the quarter and six
months ended June 30, 2001 were $52,703,000 and $102,013,000,
respectively, which was a decrease of .2% and 2.4% from the
quarter and six months ended June 30, 2000, respectively. Net
machine sales for the quarter and six months ended June 30, 2001
were $14,943,000 and $30,335,000, respectively, which was an
increase of 1.7% and 4.8% from the quarter and six months ended
June 30, 2000, respectively.

Net loss for the quarter and six months ended June 30, 2001 was
$6,021,000 and $10,626,000, respectively, compared with a net
loss of $11,849,000 and $23,345,000 for the quarter and six
months ended June 30, 2000, respectively. Non-cash depreciation
and amortization charges for the quarter and six months ended
June 30, 2001 were $4,256,000 and $8,378,000, respectively,
compared with $4,340,000 and $8,666,000 for the quarter and six
months ended June 30, 2000, respectively.

The Company is highly leveraged and recent developments
(particularly low sales volumes) have had an adverse effect on
the Company's liquidity.

While the Company indicates it believes that current levels of
cash and liquidity, together with funds generated by operations
and funds available from the Revolving Credit Facility, will be
sufficient to permit the Company to satisfy its debt service
requirements and fund operating activities for the foreseeable
future, there is no assurances to this effect and the Company
continues to closely monitor its operations.

The Company is subject to significant business, economic and
competitive uncertainties that are beyond its control.
Accordingly, there can be no assurance that the Company's
performance will be sufficient for the Company to maintain
compliance with the financial covenants under the Credit
Agreement, satisfy its debt service obligations and fund
operating activities under all circumstances.

At this time, the Company believes that future cash flows will
be sufficient to recover the carrying value of its long-lived

The Company has recently begun negotiations to extend the
Revolving Credit Facility and modify its terms and financial
covenants as well as investigate other financing alternatives
such as a sale and leaseback of its land and buildings in South
Milwaukee, Wisconsin.

At June 30, 2001, the Company had approximately $955,000 of open
capital appropriations. The Company's capital expenditures for
the six months ended June 30, 2001 were $1,448,000 compared with
$1,695,000 for the six months ended June 30, 2000. During the
second six months of 2001, the Company expects to continue
spending close to the level of the first six months of 2001.

The long-term debt to equity ratio at June 30, 2001 and December
31, 2000 was 4.4 to 1 and 4.7 to 1, respectively. The long-term
debt to total capitalization ratio at June 30, 2001 and December
31, 2000 was .6 to 1 and .8 to 1, respectively.

If borrowings under the Revolving Credit Facility at June 30,
2001 were classified as long-term, the long-term debt to equity
ratio and long-term debt to total capitalization ratio at June
30, 2001 would have been 6.4 to 1 and .8 to 1, respectively.

Total capitalization is defined as total common shareholders'
investment plus long-term debt plus current maturities of long-
term debt and other short-term obligations.

Bucyrus International (formerly Bucyrus-Erie Co.) makes large
excavation machinery used for surface mining. Its products,
which include walking draglines, electric mining shovels, and
blast-hole drills, are used for mining coal, gold, iron ore, and
other minerals.

Bucyrus markets primarily to large companies and quasi-
governmental agencies operating in South America and Australia,
Canada, China, India, South Africa, and the US. The company also
provides replacement parts and services to the surface mining

American Industrial Partners Acquisition Company owns Bucyrus.

CARMIKE CINEMAS: Gets Court Okay to Reject 119 Theatre Leases
Carmike Cinemas, Inc.'s total revenues for the quarter ended
June 30, 2001 were $108.9 million, a decrease of 3.4% from
$112.7 million for the quarter ended June 30, 2000. For
the quarter ended June 30, 2001, the Company's average admission
price was $4.76, its average concession sale per patron was
$2.16 and the attendance per average screen was 6,500. ]

For the quarter ended June 30, 2000, the Company's average
admission price was $4.71, its average concession sale per
patron was $2.03 and the attendance per average screen was
5,823. The increase in per screen attendance as well as per
patron admissions and concessions was offset by the lower screen
count, resulting in the decrease of total revenue.

The average revenue per screen increased by 15% to approximately
$46,000 for the three months ended June 30, 2001 from $40,000
for the three months ended June 30, 2000. Carmike operated 330
theatres with 2,366 screens at June 30, 2001 compared to 439
theatres with 2,815 screens at June 30, 2000.

Net income for the three months ended June 30, 2001, was $2,275
as compared with net loss of $(40,961) for the three months
ended June 30, 2000.

Total revenues for the six months ended June 30, 2001 decreased
2.7% to $208.6 million from $214.3 million for the six months
ended June 30, 2000. This decrease consists of a $3.8 million
decrease in admissions and a $1.9 million decrease in
concessions and other.

For the six months ended June 30, 2001, the Company's average
admission price was $4.78, its average concession sale per
patron was $2.09 and the attendance per average screen was
12,370. For the six months ended June 30, 2000, the Company's
average admission price was $4.57, its average concession sale
per patron was $1.97 and the attendance per average screen was

The increase in per screen attendance as well as per patron
admissions and concessions was offset by the lower screen count,
resulting in the decrease of total revenue. The average revenue
per screen increased by 14.8% to $86,836 for the six months
ended June 30, 2001 from $75,657 for the six months ended June
30, 2000.

Net income for the six months ended June 30, 2001, was $1,029,
as compared to a net loss of   $(49,081) for the six months
ended June 30, 2000.

The Debtors are operating their businesses as debtors-in-
possession under Chapter 11, and continuation of the Company as
a going concern is contingent upon its ability, among other
things, to generate sufficient cash from operations and obtain
financing sources to meet future obligations.

In connection with the formulation of a plan of reorganization,
management, along with DKW, has been reviewing the performance
of each of the Company's theatres.  Under the Bankruptcy Code,
the Debtors may elect to assume or reject real estate leases,
employment contracts, personal property leases, service
contracts and other executory prepetition contracts, subject to
Bankruptcy Court approval.

To date the Debtors have received approval to reject 119 theatre
leases and have filed a motion to reject two additional theatre

The Company has been incurring and will continue to incur
significant professional fees and other restructuring costs. The
Company anticipates that it may incur additional impairments of
long-lived assets in connection with the Chapter 11 Cases and
the ongoing restructuring of its business operations during
fiscal year 2001.

Among the largest theater chains in the US, Carmike has about
2,400 screens at some 350 locations in 35 states. The company
traditionally has been the only exhibitor in small to midsized
markets, but it is moving into bigger markets with the
introduction of multiplexes that average 14 screens apiece.

The company also owns a small chain of family entertainment
centers called Hollywood Connection, featuring rides and games
alongside multiplex theaters. In 2000 Carmike filed to
reorganize its business under Chapter 11 and has since sold more
than 100 of its theaters. Chairman C.L. Patrick and family own
about 53% of the company

COMDISCO INC: 5R Processors & Marc/5R Seek Relief from Stay
Comdisco, Inc. is presently engaged in a civil action against
5R Processors, Ltd. and MARC/5R, Ltd before the United States
District Court for the Western District of Wisconsin.

Lawrence A. Stein, Esq., at Huck, Bouma, Martin, Jones &
Bradshaw, P.C., in Wheaton, Illinois, explains that the Debtors
seek to enforce an allegedly oral agreement to sell used
computer equipment to 5R Processors, Ltd., and Marc/5R, Ltd.  

Mr. Stein adds that the Debtors seek judgement against 5R
Processors, Ltd., and Marc/5R, Ltd. in the amount of

Prior to Petition Date, Mr. Stein relates, his clients were
preparing a motion for leave to file an omitted counterclaim in
the case.  When 5R Processors, Ltd., and Marc/5R, Ltd. were
about to file the motion, Mr. Stein says, they were informed
that the Debtors filed for bankruptcy.

Thus, 5R Processors, Ltd. and Marc/5R Ltd. ask Judge Barliant to
lift the automatic stay to allow them to file their motion for
leave to file an omitted counterclaim.

Mr. Stein explains that the counterclaim may be characterized as
compulsory.  So if his clients are not allowed to file such
motion, Mr. Stein says, the Debtors will surely argue that the
counterclaim is barred because of his clients' failure to file
the compulsory counterclaim at the appropriate time.

The trial of the civil action will start on November 26, 2001.

In their counterclaim, 5R Processors, Ltd. and Marc/5R Ltd.
insist that they are entitled to $386,777 as reasonable value of
the services they performed in receiving, auditing and
processing the equipment. (Comdisco Bankruptcy News, Issue No.
3; Bankruptcy Creditors' Service, Inc., 609/392-0900)

COVAD COMMS: Employs Houhihan Lokey as Restructuring Advisor
Covad Communications Group, Inc. applies to retain and employ
Houlihan Lokey Howard and Zukin as its restructuring advisor and
investment banker to provide services in connection with these

Laura Davis Jones, Esq., at Pachulski Stang Ziehl Young & Jones
P.C. in Wilmington, Delaware, discloses that the Debtor seeks to
retain Houlihan because of the firm's extensive experience in
developing and implementing restructuring strategies,
negotiating and obtaining post-petition debtor-in-possession
financing and providing service and assistance in connection
with significant asset sales for financially troubled companies
and debtors in chapter 11 proceedings.  

Ms. Jones adds that the national reputation and extensive
experience of Houlihan Lokey will add credibility to the
reorganization strategies that the Debtor implements and will
boost confidence of employees, customers, vendors and potential
transaction partners.  Ms. Jones states that the Debtor's case
is likely to be large and complex and will require financial and
restructuring advisor with a national reputation and extensive
experience in bankruptcy and corporate matters.

Specifically, Houlihan Lokey will:

(1) Advise the Debtor generally as to available financing and
     capital restructuring alternatives, including
     recommendations of specific courses of action.

(2) Assist the Debtor with development of various operating and
     financial models associated with a range of strategic

(3) Assist the Debtor with the development, negotiation and
     implementation of restructuring plan, including
     participation as an advisor to the Debtor in negotiations
     with creditors and other parties involved in restructuring;

(4) Assist the Debtor with the design of any debt and equity
     securities or other consideration to be issued in
     connection with the restructuring plan;

(5) Assist the Debtor in raising capital;

(6) Advise the Debtor as to potential mergers and acquisitions,
     and the sale or other disposition of any of the Debtor's
     assets or businesses;

(7) Assist the Debtor in communications and negotiations with
     its constituents, including creditors, employees, vendors,
     shareholders and other parties-in0interest in connection
     with any restructuring plan;

(8) Render such other financial advisory and investment banking
     services as may be mutually agreed upon by Houlihan Lokey
     and the Debtor.

Ms. Jones also discloses that the Debtor has engaged the firm as
restructuring advisors and investment bankers pre-petition,
working particularly in these activities:

(1) constructing a region-by-region financial model for
     analyzing operational performance, negotiating with
     noteholders and discussions with providers of capital;

(2) assisted in negotiating and structuring the terms of the
     proposed exchange offer;

(3) advised the Debtor on operational and financial issues
     regarding the assignment for the benefit of creditors for
     the Debtor's BlueStar subsidiary;

(4) participated in bi-weekly board meetings to discuss various
     operational, financial and strategic issued with the
     Debtor's Board of Directors.

Ms. Jones discloses that under the Retention Agreement, Houlihan
Lokey shall be paid a monthly flat fee of $175,000 plus a
success fee.  The Debtor believes that the agreement is entirely
reasonable and reflect current market conditions as the
compensation arrangement is a commonplace in the investment
banking community for deals of similar size and complexity.  Ms.
Jones also reveals that under the pre-petition agreement,
$1,232,000 was paid by the Debtor to the firm for services
rendered plus $41,605.59 for out-of-pocket expenses associated.

Alan D. Fragen, a director of Houlihan Lokey, contends that
Houlihan Lokey nor any of its director, officer, consultant or
other professional does not represent any interest any interest
adverse to the Debtor and its estate in matters in which the
firm is to be engaged in.  He further adds that Houlihan Lokey
is a disinterested person in these cases.  Mr. Fragen reveals
that the firm conducted a nationwide conflict check and
determined that they performed services to six potential
parties-in-interest in matters unrelated to the Debtor. (Covad
Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

GENESIS HEALTH: Stipulations for WI Facilities Transition Okayed
The State of Wisconsin's notification to Madison Associates
Limited Partnership that a license to operate the Belmont Center
had been granted brought to an end the dispute between Colonial
Madison (the lessor of the Belmont Center in Madison, Wisconsin)
and The Multicare Companies, Inc. over the rejection of the
Lease Agreement.

A Stipulation and Order was subsequently agreed to by Multicare,
Colonial Madison and the Landlord of another Facility - the
Columbus Facility in Columbus, Wisconsin (Columbus Leasehold,
Inc.) for the transition of both the Belmont Center and the
Columbus Facility. The Stipulation and Order has received the
blessing of the Court.

Prior to that, Colonial Madison had filed an objection to
Multicare's motion for rejection of the Lease Agreement and
later a Supplemental Objection. Colonial Madison also commenced
Adversary Proceeding No. A-01-4291 by filing a Verified
Complaint for Injunctive and Other Relief and concurrently a
Motion for Temporary Restraining Order and for Preliminary
injunction (the "TRO Motion" and collectively with the Verified
Complaint, the "TRO Pleadings").

The Court conducted a hearing on the Rejection Pleadings and the
TRO Motion. At the conclusion of the Hearing on the Rejection
Pleadings, the Court orally granted the Debtors' request to
reject the Colonial Madison Lease (the "TRO"), reserving the
issue as to what effect that rejection would have on
administrative rent relating to the Belmont Center.

At the conclusion of the Hearing on the TRO Motion, the Court
granted the TRO Motion and scheduled a Show Cause Hearing.

Before the Hearing was conducted, the notification by the State
of Wisconsin arrived.

In order to obviate the need for the Show Cause Hearing or
further prosecution of the Adversary Proceeding and to a
consensual transition of the management and operations of the
Belmont Center, the Debtors and Colonial Madison have reached an

The parties - (i) the Multicare Debtors including (a) Health
Resources of Karmenta and Madison, Inc. as successor in interest
to Health Resources of Madison, Inc., (b) Health Resources of
Columbus, Inc. (ii) Colonial Madison, and (iii) Columbus
Leasehold, Inc. stipulate and agree on the adjournment of the
Show Cause Hearing and the transition of the Belmont Center and
the Columbus Facility in accordance with the terms stipulated.

(A) Transition of the Belmont Center

     (1) Management and operations of the Belmont Center will be
         transitioned from the Debtors to Colonial Madison, its
         licensed subsidiary and the independent operator
         identified by Colonial Madison in an "as-is" physical
         condition on the Transition Date);

     (2) The Debtors will pay to Colonial Madison all known and
         liquidated obligations under the Colonial Madison Lease
         (not otherwise waived pursuant to this Stipulation),
         including, but not limited to, rent and pro-rated taxes
         in the amount of $ 159,162.71 (to the extent not
         previously paid), accruing on or after the Petition
         Date and through and including the Transition Date,
         provided, however, that all obligations under the
         Colonial Madison Lease (not otherwise waived pursuant
         to this Stipulation) accruing on or after the Petition
         Date and through and including the Transition Date
         which are unknown or unliquidated as of the Transition
         Date will be paid by the Debtors within 10 days after
         such amounts become known or liquidated, as the case
         may be;

     (3) the Debtors will provide notice to the State of
         Wisconsin authorities of the proposed Transition and
         the Transition Date;

     (4) the Debtors will provide notice to the Medicare fiscal
         intermediary of the proposed Transition and the
         Transition Date and that on the Transition Date,
         Medicare payments in the form of electronic funds
         transfers to Debtors should be halted and subsequent
         Medicare payments should be sent by hardcopy check to
         the facility address;

     (5) to the extent permitted under applicable law and to the
         extent the Debtors have any rights remaining in their
         provider agreement after the Transition Date (which the
         Debtors assert they have none), pending approval of the
         Medicare change of ownership application, the Debtors
         agree to not take any action with respect to Colonial
         Madison's, its licensed subsidiary's and the
         independent operator identified by Colonial Madison's
         billing and payment, under the Medicare provider number
         used by the Debtors prior to the Transition Date, for
         services rendered to Medicare beneficiaries at the
         Belmont Center on or after the Transition Date;

     (6) the agreement with the United States to the limitation
         on successor liability under the Medicare provider
         agreement, is approved, and the consideration for the
         such stipulation in the amount of $5,000.00 will be
         paid by Colonial Madison; and

     (7) If the Transition has occurred on or by the Transition
         Date, the Rescheduled Show Cause Hearing, the TRO
         Pleadings and the Adversary Proceeding will each be
         dismissed, provided, however, that regardless of
         whether this Stipulation is approved, the Debtors agree
         that the Debtors will take no action with respect to
         the operations of the Belmont Center that is or would
         otherwise be proscribed by the TRO: (i) from the date
         of this Stipulation through and including the         
         Transition Date, and (ii) if the Transition fails to
         occur on the Transition Date as a result of a breach of
         this Stipulation by the Debtors, from the Transition
         Date through and including the Rescheduled Show Cause

     (8) In the event the Transition fails to occur on the
         Transition Date because of Colonial Madison's breach of
         the Stipulation, Colonial Madison will cooperate with
         the Debtors to effectuate an orderly closure of the
         Belmont Center subject to and in accordance with
         applicable law. If the Transition fails to occur on the
         Transition Date for reasons unrelated to the breach of
         this Stipulation by either party, each of the parties
         reserves its respective rights to take any action it
         deems necessary or appropriate.

(B) Transition of the Columbus Facility

     The parties agree that management and operations of the
     Columbus, Wisconsin facility will be transitioned from the
     Debtors to Columbus Leasehold, its licensed subsidiary and
     the independent operator identified by Columbus Leasehold
     on terms that are substantially similar to those for the
     Belmont Center except that the Transition Date is different
     and the Debtors will pay to Columbus Leasehold the amount
     of $74,376.78 on the Columbus Transition Date. Also, the
     terms about the TRO Pleadings do not apply to the Columbus

             Stipulations to Resolve CMS Claims

The United States on behalf of the Centers for Medicare and
Medicaid Services (CMS) of the United States Department of
Health and Human Services (HHS) contends that Debtors may not
assign any provider agreement without assuming it and curing
defaults under such agreement under 11 U.S.C. section 365. the
United States contends further that Medicare law holds the New
Operator, if it accepts assignment of a provider agreement,
responsible for the debts of the former provider who assigned
the agreement See United States v. Vernon Home Health, Inc. 21
F.3d 693, 696 (5th Cir. 1994).

The Parties wish to resolve the treatment of CMS' claims with
respect to the Facility's provider agreement, to the extent
necessary to enable the Debtors to transfer the Facility to the
New Operator, for the purposes of avoiding any further drain of
the estate's resources resulting from continued ownership or
operation of the Facility and minimizing disruption to patients
and residents of the Facility, by promoting transfer over

Accordingly, the parties enter into a separate stipulation and
agreement with respect to the Belmont Center and the Columbus
Facility individually. Each of the stipulations provides for
Cure Payment of $5,000 for any defaults under the Facility's
provider agreement assigned to the New Operator.

With respect to the Belmont Center, Landlord will make the Cure
Payment pursuant to the stipulation and agreement by and among
(i) Multicare including Health Resources of Karamenta & Madison,
Inc. and Health Resources of Madison, Inc. d/b/a Belmont Nursing
& Rehabilitation Center, (ii) the Unites States on behalf of the
Centers for Medicare and Medicaid Services (CMS) of the United
States Department of Health and Human Services (HHS), and (iii)
Colonial Madison Associates, L.P., an Illinois Limited
Partnership (the Landlord) and Belmont Care Center, L.L.C., a
Delaware Limited Liability Company, for itself and on behalf of
its affiliates, subsidiaries and related entities (the New
Lessee or the New Operator).

In the case of the Columbus Center, Debtors will make the Cure
Payment pursuant to the stipulation and agreement by and among
(i) Multicare including Health Resources of Columbus, Inc. and
First Healthcare Corp. dba Hillhaven West, Inc. d/b/a Columbus
Care Center, (ii) the Unites States on behalf of the Centers for
Medicare and Medicaid Services (CMS) of the United States
Department of Health and Human Services (HHS), and (iii)
Columbus Leasehold, Inc., (the Landlord), an Illinois
corporation and Care Center, L.L.C., a Delaware Limited
Liability Company, for itself and on behalf of its affiliates,
subsidiaries and related entities (the New Lessee or the New
Operator). (Genesis/Multicare Bankruptcy News, Issue No. 12;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

GENTEK: Fitch Lowers Senior Secured Debt Ratings to BB- From BB
Fitch has lowered GenTek's senior secured debt rating to `BB-'
from `BB' and lowered the company's senior subordinated debt
rating to `B-' from `B+'.

The senior secured debt rating of `BB-' applies to the company's
$800 million senior secured bank facility and the senior
subordinated debt rating of `B-' applies to the company's $200
million of outstanding senior subordinated notes due 2009. The
Rating Outlook is Negative.

The original senior secured credit facility agreement contains
various restrictions and covenants, including financial tests as
measured by total debt-to-EBITDA (less than 5.0 times) and
EBITDA-to-interest (greater than 2.5x).

The company's senior secured credit facility was amended Aug. 9,
2001. Prior to the amendment, secured creditors had security in
common stock (equity). Under the current temporary amendment,
secured creditors will receive security in substantially all
assets of GenTek.

Fitch has increased the notching between the secured debt and
the subordinated debt from two notches to three notches to
reflect the increased security and weaker overall credit
profile. Under the temporary amendment, financial covenants have
been relaxed through Dec. 31, 2002. If GenTek is able to improve
credit statistics to the levels mentioned above before Dec. 31,
2002, the terms of the credit agreement will revert to the
original terms.

The current ratings reflect the cyclical slowdown in the
automobile and manufacturing sector, as well as the significant
reduction in capital spending seen in the telecommunications

The ratings also reflect the benefits of diversification, the
remaining existence of some favorable secular trends in the auto
business and the fact that GenTek will be able to adjust its
cost structure to a level appropriate for the current lower
growth environment.

The Negative Rating Outlook reflects near-term risks that the
current financial performance may not represent the worst that
the company will face in the coming quarters.

Leverage, as measured by total debt-to-EBITDA, is expected to
remain above 5.0x through 2001 and into at least the first half
of 2002 on a trailing 12-month basis. Capital spending is
expected to remain substantially above maintenance capital
expenditure levels in 2001 and 2002, although some flexibility
to lower capital expenditures to maintenance levels exists in
2002. As a result of lower earnings and higher capital
expenditures, free cash flow available for debt reduction will
be modest until 2003.

GenTek has made 12 acquisitions since the beginning of 1999,
including (1) Krone AG, a producer of telecommunications
connectivity equipment, (2) the Digital Communications Group of
Prestolite Wire Corporation, a manufacturer of copper and fiber-
optic cable for telecom applications, (3) Noma Industries, a
manufacturer of wire and cable harnesses and (4) Defiance Inc.,
a producer of bearings principally for automobile camshaft

These debt-financed acquisitions have resulted in an improved
product offering of automotive engine components through the
combination of complementary product lines and have established
a telecommunications voice/data cabling products and services

GEOGRAPHICS INC: Fails to Meet Revolver's Financial Covenants
Geographics Inc.'s net sales decreased 7.4% to $8,524,185 in the
quarter ended June 30, 2001 from $9,204,674 in the quarter ended
June 30, 2000.

The decrease was attributable to the general decline in sales in
the office products industry, coupled with the conversion of the
Company's ready-to-assemble plastic storage and filing cabinet
business to a direct import representation basis.

The Company made higher accruals for sales returns and
allowances ($1,495,073 or 14.9% of gross sales for the quarter
ended June 30, 2001 compared to $1,233,699
or 11.8% of gross sales for the quarter ended June 30, 2000).

Gross margin as a percentage of gross sales decreased to 14.8%
in the quarter ended June 30, 2001, from 25.9% in the same
period in fiscal 2000. The lower gross margin is primarily
attributable to the increase in accruals for returns and
allowances, higher cost of sales and higher freight and shipping

Fiscal 2002 margins are roughly comparable to the margins
recorded for the entire fiscal year 2001. As a result of the
rapid growth of the Company's specialty papers group, the
introduction of the plastic file cabinet and storage group, the
opening of its Waukesha, Wisconsin distribution facility and the
closing of four warehouse locations, the Company has required,
and continues to require, substantial external working capital.

During the quarter ended June 30, 2001, operating losses totaled
$(429,957), however, the Company experienced positive operating
cash flows of $385,787.

The Company's net loss for the quarter ended June 30, 2001, was
$(661,510), as compared to a net income of $334,213 for the same
quarter of 2000.

The Company's only available source of working capital consists
of borrowings available under its revolving credit facility,
which expires on September 30, 2001. The revolving credit
facility permits borrowings of up to $9.5 million subject to a
borrowing base limitation of 75% of the value of the Company's
eligible accounts receivable and 50% of the value of its
qualified inventories.

Borrowings under the facility bear interest at LIBOR plus 2.5%
and are secured by substantially all of the Company's assets.
Borrowings under this facility were $7,931,861 at June 30, 2001.
Under the terms of the facility, the Company is required to
comply with a number of financial covenants relating to, among
other things, the maintenance of minimum net worth, earnings,
debt-to-equity ratios and cash flow coverage ratios.

As of June 30, 2001 the Company was not in compliance with
certain financial covenants as required by the revolving credit
facility. The Company has not yet requested waivers for the
violations as of June 30, 2001.

The Company anticipates waivers will be obtained in the near
term, however while in default of the covenants, U.S. Bank has
rights and remedies available under the credit agreement, up to
an including requiring the loan to be immediately due and
payable in full.

The Company is in discussions with U.S. Bank for an additional
mortgage loan. There can be no assurance that U.S. Bank will
grant waivers and/or agree to the additional mortgage loan or
that the Company will be able to refinance or replace its
revolving credit facility on acceptable terms when and as

The report of the Company's auditors dated June 28, 2001
relating to the Company's Consolidated Financial Statements for
the fiscal year ended March 31, 2001 states that the Company's
fiscal year 2001 net loss, working capital deficiency and
accumulated deficit at March 31, 2001, raise substantial doubt
about the Company's ability to continue as a going concern.

HARNISCHFEGER: Court Okays Motion Re Initial Payment Dates
To avoid confusion about the timing of the Initial Payment Date,
and to minimize the burden of unnecessary claims on the
Reorganizing Harnischfeger Industries, Inc., the Debtors sought
and obtained an order from the Court with provisions regarding
Initial Payment Date and the Treatment of Claims that arise
after May 19, 2001.

(1) The Reorganizing Debtors will have the discretion to cause
     the Initial Payment Date to occur earlier than 30 days
     after the Effective Date

     The Reorganizing Debtors advised industry analysts at an
     informational meeting in June, 2001 that a distribution to
     unsecured creditors of the Reorganizing Debtors was
     anticipated to be made by the end of July, 2001.

     Because the Debtors did not expect material change in the
     HII Claims and because the Adjusted Claims against the Note
     Group Debtors are already low enough to avoid a holdback
     that could affect such claims, no creditor will be harmed
     by an earlier Initial Payment Date. In fact, many creditors
     would likely desire an Initial Payment Date as soon as

(2) New HII is authorized to declare that the Initial Payment
     Date for the Note Group Debtors will occur on a date that
     differs from the Initial Payment Date for New HII

     The Debtors believe this relief is appropriate in order not
     to delay distributions of New HII common stock pending
     possible review by SEC of the Form T-3, which is relevant
     only to the Note Group Debtors.

     As previously reported, the Plan places the 58 Debtors into
     four categories: (i) HII; (ii) Note Group Debtors; (iii)
     Stock Group Debtors and (iv) Liquidating Debtors. The Note
     Group Debtors generally consist of most but not all of Joy,
     P&H and their respective operating subsidiaries. The Stock
     Group Debtors consist of certain non-operating direct and
     indirect subsidiaries of HII, Joy and P&H. HII, the Note
     Group Debtors and the Stock Group Debtors are also referred
     to as the "Reorganizing Debtors." The Liquidating Debtors
     are Beloit and its direct and indirect subsidiaries.

     Creditors of HII will receive new common stock in New HII.
     Creditors of the Note Group Debtors will receive notes
     issued by New HII under an Indenture. In order to qualify
     this Indenture under the Trust Indenture Act of 1939, as
     amended, New HII, as issuer, must file a Form T-3
     immediately following the Effective Date. The Form T-3 will
     affect the HII Senior Notes but not stock in New HII, and
     is necessary for the HII Senior Notes but not stock in New

     The Securities and Exchange Commission may elect to review
     the Form T-3, which could take 20 or more days. If the SEC
     chooses not to review the Form T-3, New HII will seek to
     accelerate the period of time for making the Form T-3

     Because the Indenture will not be qualified under the Trust
     indenture Act of 1939, as amended, until either the SEC
     completes its review of the Form T-3 or grants acceleration
     of its effectiveness, absent the relief, the process of
     qualifying the Indenture could delay distribution of HII
     Senior Notes.

(3) Creditors holding claims that arise after May 19, 2001 do
     not have to file claims

     Under section 1l41(d)(l)(A) of the Bankruptcy Code, a
     debtor receives a discharge "...from any debt that arose
     before the date of such confirmation..." Under the Plan, an
     Administrative Claim is defined as a claim that arises
     between the Petition Date and the Confirmation Date.
     Because the Reorganizing Debtors are not discharged of
     claims that arise on and after May 19, 2001, such claims do
     not need to be filed.

Judge Walsh makes it clear that the Court's order will not
impact subsequent Payment Dates. (Harnischfeger Bankruptcy News,
Issue No. 47; Bankruptcy Creditors' Service, Inc., 609/392-0900)

HEAFNER TIRE: Thinning Liquidity Spurs Moody's Downgrades
Moody's Investors Service lowered the debt ratings of Heafner
Tire Group based on weak financial flexibility to handle a less
certain market for replacement tires in the near future.

    * Senior implied rating to B3 from B2;

    * $180 million secured revolving credit facility to B2 from

    * $150 million 10% senior unsecured notes due 2008 to Caa2
      from B3;

    * Senior unsecured issuer rating to Caa2 from Caa1.

The rating outlook is negative while approximately $350.0
million of debt securities is affected.

The rating agency stated that the ratings reflect Heafner's

    (i) very high leverage and low operating profit margins;

   (ii) the expectation that fixed charge coverage will remain
        thin, and sensitive to pressure from top-line volatility
        due to the high fixed cost component of Heafner's
        distribution business model;

  (iii) limited availability under the asset-based revolving
        credit facility to finance operating losses if

   (iv) and the potential for increased volatility in demand for
        tire replacement market during the near term resulting
        from after-effects of the Bridgestone / Firestone
        recalls during 2000 and 2001.

The ratings are supported by Heafner's size and geographic
diversity; an additional capital contribution of preferred stock
earlier this year; the recent sale of its retail division, the
ongoing integration of its various distribution platforms, and
cost-reduction efforts which should improve overall productivity
and profit margins; and by used vehicle trends which favor the
market for replacement tires over the long term, Moody's said.

The rating outlook is negative.

Heafner recently amended covenants and slightly reduced total
availability under its secured revolving credit facility. The
rating agency believes that available liquidity is thin but
sufficient to cover normal operating needs. Ratings could fall
further if Heafner experiences revenue or margin shortfalls due
to market factors or its own integration process.

Heafner Tire Group is among the largest wholesale tire
distributors in the U.S., headquartered in Huntersville, North

IDEFENSE: Files Chapter 11 Petition in E.D. Virginia
iDefense, Inc. filed for voluntary Chapter 11 protection with
the U.S. Bankruptcy Court in the Eastern District of Virginia
(Alexandria), listing total assets and liabilities between $1
and $10 million each.

The Company has reportedly arranged for debtor-in-possession
financing from E-Capital Investments, PLC. (New Generation
Research, August 28, 2001)

IDEFENSE INC.: Case Summary & Largest Unsecured Creditors
Debtor: iDEFENSE, Inc.
        3925 Fair Ridge Drive
        Fourth Floor, North Lobby
        Fairfax, VA 22033
        fdba inFrastructure Defense, Inc.
        fdba ID Acquisition Corporation

Chapter 11 Petition Date: August 24, 2001

Court: Eastern District of Virginia (Alexandria)

Bankruptcy Case No.: 01-80985-RGM

Judge: Robert G. Mayer

Debtor's Counsel: Brian F. Kenney, Esq.
                  Miles & Stockbridge, P.C.
                  1751 Pinnacle Drive, Suite 500
                  McLean, VA 22102
                  Tel: (703) 610-8664
                  Fax: (703) 610-8670

Estimated Assets: $1 million to $10 million

Total Debts: $1 million to $10 million

Debtor's Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Blue Vector                   Convertible Note       $1,437,819
Wayne Segal                   
1441 Broadway, Suite 2302
New York 10018

Tallan, Inc./CMGI Solution    Trade Debt               $852,980
Peter Bourdon
Dept. 190 PO Box 150437
Hartford, CT 06115-50473

PSINet                        Trade Debt               $754,785
510 Huntmar Park Drive
Herndon, VA 20170

Joe Firmage Infrastructure    Convertible Note         $500,000
and Environmental Private     
Howard Smith

Equity Fund III, L.P.         Note Payable             $400,000
9500 Sears Tower
223 S. Wacker Drive
Chicago, IL

Stephen Hargrave              Convertible Note         $392,555
47 Lamb's Conduit St.
London WC1N 3NG

Peter Earle                   Convertible Note         $392,555
Prince Consort House
27 Albert Embankment
London, SE17T

McGuire, Woods, Battle        legal advice             $347,130
& Boothe                      in the normal
Tom O'Grady                   course of business
1750 Tysons Blvd.
Suite 1800
McLean, VA 22102-3915

Micron Gov't Computer         Trade debt               $262,236
Tony Colangelo
625 Straford Road
Meridian, ID 83642

Ocshner, Neal                 Contractrual             $237,208

Ocshner, Neal                 Deferred Salary           $61,792
                              and Bonus

Winstar                       Trade Debt              $210,212

Andrew Neil                   Note Payable            $200,000

Meldrum, Andy                 Contractual             $145,109

Meldrum, Andy                 Trade Debt               $92,342

Jerry Miller                  Note Payable            $153,334

Campbell, Kurt                Contractual             $125,000

Campbell, Kurt                Trade Debt               $15,000

Private Equity Fund III       Note Payable            $100,000

Kforce                        Trade Debt               $71,804

Digex                         Contract Settlement      $70,993

Fieldstone                    Trade Debt               $50,000

IMPERIAL SUGAR: Court Declares Plan Effective
Imperial Sugar Company today announced that its Second Amended
and Restated Joint Plan of Reorganization, confirmed by the U.S.
Bankruptcy Court on August 7, 2001, has become effective.

In accordance with the Plan, the Company's former common stock
(OTC BB:IPRL) is canceled. Former shareholders in the Company
will receive approximately 0.0062 shares of common stock in the
reorganized company for each share previously held. Issuance of
shares to former shareholders is expected to occur in September.

Additionally, former shareholders will receive warrants to
acquire common stock in the reorganized company, which will
expire in seven years, on the basis of 0.0343 warrants for each
share of common stock previously held.

Issuance of the warrants and the setting of their exercise price
are expected to take place within six months of the effective
date when a determination is made of the maximum number of
shares of new common stock to be issued to those creditors who
will receive new common stock in settlement of their claims. The
Company plans to have the new common stock and warrants listed
on a national securities exchange as soon as practicable.

In conjunction with the emergence, the Company completed its
previously announced $256.1 million senior secured credit
facility led by Harris Trust and Savings Bank, as Administrative
and Collateral Agent and its $110 million accounts receivable
securitization facility with GE Capital.

"With the reorganization completed, all of us at Imperial Sugar
are looking forward to turning our full attention back to
enhancing the profitability of our core business segments - the
processing, selling and marketing of refined sugar, where we are
a leader in industrial, private label and consumer branded
products, and in the growing foodservice industry, in which we
are the share leaders in a number of important product
categories," stated James C. Kempner, President and CEO of

Mr. Kempner went on to say, "I want to once again thank our
employees, customers and suppliers, including the growers who
supply sugarbeets to our Holly, Spreckels and Michigan
factories, and the cane sugar millers who supply raw sugar to
our Imperial, Colonial and Savannah refineries. Without their
support this reorganization would not have been possible."

Imperial Sugar Company is the largest processor and marketer of
refined sugar in the United States and a major distributor to
the foodservice market. The Company markets its products
nationally under the Imperial(TM), Dixie Crystals(TM),
Spreckels(TM), Pioneer(TM), Holly(TM), Diamond Crystal(TM) and
Wholesome Sweeteners(TM) brands. Additional information about
Imperial Sugar may be found on its web site at

INFU-TECH INC: Files for Bankruptcy Protection in New Jersey
Infu-Tech, Inc.(a Delaware Corporation) (INFU.OB.), a provider
of infusion therapy and medical products, announced today that
its principal operating subsidiary, Infu-Tech, Inc. (a New
Jersey Corporation) filed for chapter 11 bankruptcy protection
in U.S. Bankruptcy Court, Newark, NJ on August 22, 2001.

The company made this decision as a result of Heller Healthcare
Finance, Inc.'s call of its Revolving Credit note, which
resulted in the inability of the company to use its cash
receipts to maintain operations.

The Bankruptcy Court has approved the company's initial request
to use cash receipts to maintain its operations.

Infu-Tech, Inc. provides specialty pharmaceuticals, infusion
therapy (i.e., administration of nutrients, antibiotics and
other medications either intravenously or through feeding
tubes), and other medical products to patients in their homes,
nursing homes and subacute care facilities.

In March 2000, the Company formed a subsidiary,,
Inc. through which it intends to provide health management
applications through wireless devices such as cellular phones,
PDA's and pagers. These applications may include medication
reminders, targeted news, and prescription refills for people
with chronic diseases.

Smartmeds will pursue contracts with managed care organizations,
clinical research organizations and other healthcare providers., Inc. may generate revenue from advertising,
subscriber fees, wireless fees and increased Infu-Tech sales of
specialty pharmaceuticals. The Company launched the website in April 2000.

KOMAG INCORPORATED: Chapter 11 Case Summary
Debtor: Komag, Incorporated
        fka HMT Technology Corp.
        1710 Automation Pkwy.
        San Jose, CA 95131-1873

Type of Business: Producer of media for disk drives

Chapter 11 Petition Date: August 24,2001

Court: Northern District of California (San Jose)

Bankruptcy Case No.: 01-54143

Judge: James R. Grube

LERNOUT & HAUSPIE: Strikes License Agreement with Active Voice
Active Voice, Inc., a leader in providing unified messaging and
computer telephony software solutions, has entered into a
license agreement with Lernout & Hauspie Speech Products USA,
Inc., a leader in advanced speech and language solutions.  

Under the terms of the agreement, Active Voice will use L&H(TM)
RealSpeak(TM) as the text-to-speech (TTS) component of
PhoneSoft(TM) Unified Messaging, PhoneSoft E-mail Reader, and
the PhoneSoft Telephony Software Development Kit for the Lotus
Notes/Domino information management environment.

"L&H RealSpeak fits in perfectly with Active Voice's unified
messaging strategy," states Ken Myer, Active Voice executive
vice president of sales and marketing.  "PhoneSoft Unified
Messaging gives users the ability to access and manage all of
their messages -- e-mail, voice and fax -- from the Lotus Notes
Inbox, through a touchtone telephone, or over the Internet.  

PhoneSoft users can now listen to Lotus Notes e-mail messages
read aloud by a human sounding voice, representing a
breakthrough in terms of voice quality and intelligibility.  
This state-of-the-art technology makes it easier and more
efficient to access messages at anytime, from anywhere, using
the tool of choice."

"We are excited to partner with Active Voice and offer L&H
RealSpeak with the PhoneSoft product family," remarks Pam
Ravesi, senior director of product management for L&H.  "Both
companies provide innovative, award-winning technologies that
make it easy to do business from anywhere in the world. L&H's
technical leadership and strong brands, combined with Active
Voice's extensive business and channel development expertise,
represent a powerful relationship in the enterprise business
market." (L&H/Dictaphone Bankruptcy News, Issue No. 10;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

LERNOUT & HAUSPIE: Files Chapter 11 Plan in Delaware
Lernout & Hauspie Speech Products NV and Dictaphone Corp. filed
their chapter 11 plan of reorganization with the U.S. Bankruptcy
Court in Wilmington, Delaware, this week.  

The Plan crafts a roadmap that, if followed, allows Dictaphone
to escape as a deleveraged, reorganized and rehabilitated
company, from all of L&H's fraud-related problems.  The Plan
trims some $400,000,000 from Dictaphone's balance sheet and
distributes $150,000,000 of reorganized enterprise value four
ways among Dictaphone creditors:

   9% to Dictaphone's Unsecured Creditors;
  65% to L&H's Bank Lenders on account of a
      guarantee executed in the refinancing
      of Dictaphone's pre-acquisition bank debt;
   8% to L&H Entities from which Dictaphone borrowed money; and
  18% to holders of Dictaphone's bonds.

Bruce R. Zirinsky, Esq., at Cadwalader, Wickersham & Taft and
David Friedman, Esq., at Kasowitz, Benson, Friedman & Torres,
representing the Dictaphone Noteholders, indicate that their
clients are generally supportive of the Plan, but caution that
nothing's final until all the ink is dry.

The Debtors disclose for the first time that the Company's
revenues were grossly overstated during the last three fiscal
years -- by about $362 million.  Actual L&H Group sales
approximated $458 million.  The Debtors suggest that while a
full-blown audit and restatement of KPMG's financial reports
would be nice, the company can't afford that.  In short, the
accounting manipulations were significant, and while greater
precision could be obtained, the cost outweighs the benefit.

The Debtors will head to Bankruptcy Court on Sept. 25 asking
Judge Wizmur to put her stamp of approval on a 193-page
Disclosure Statement that, the Company says, answers every
question to which a creditor might want an answer.  Once the
Disclosure Statement is approved, the Plan will be transmitted
to creditors for voting.  A confirmation hearing should follow
before the end of the year.

L&H will, in essence, liquidate over the next two years under
the supervision of the Belgian Court.  The Plan will breathe
life into a litigation trust that will pursue the Debtors'
causes of action against third-parties and recoveries, if any,
to the Debtors' creditors.

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

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

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

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

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

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

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

With about 44 Loehmann's stores in 17 states, Loehmann's
Holdings sells designer and brand-name women's and men's apparel
and accessories at discount prices. Tough competition combined
with marketing mistakes and overexpansion forced Loehmann's into
Chapter 11 bankruptcy protection in 1999. It emerged in October
2000 with fewer stores and a conservative growth plan.

LOEWEN GROUP: Asks Court to Deny Kenny Letherer's $1.7MM Claim
R. Kenny Letherer, former principal shareholder in RKL Supply,
Inc., a Michigan corporation acquired by The Loewen Group, Inc.
in 1996, asserts a $1,700,000 administrative expense claim under
a $2,000,000 promissory note executed by the Debtors in favor of
Letherer pursuant to the purchase.

The Debtors purchased the assets of RKL, which owned four
cemeteries in Michigan, from Letherer pursuant to a Share
Purchase Agreement. At the time of acquisition, the Debtors
could not lawfully own cemetery property in Michigan, as per
Section 1812 of the Michigan Mortuary Sciences Act because they
already owned a funeral home in the State. Therefore, the same
day that the Letherer Agreement was executed, Debtors conveyed
the four parcels of land it acquired from Letherer to Alger
Group, LLC, pursuant to an Asset Purchase Agreement.

Letherer charges that the Debtors' conveyance to Alger of the
properties to be secured by a mortgage in favor of him violated
the terms of the Letherer Agreement, which prohibited an
assignment of the Agreement without the consent of both parties.

Moreover, the required mortgage documents were never executed,
Letherer tells the Court, despite repeated requests from him. At
the time of these transfers, November 8, 1996, Craig Bush was
the officer of the Debtors with responsibility for completing
the mortgage documents required under the Letherer Agreement.
Craig Bush is now a principal with Alger Group, LLC.

Letherer tells the Court he was not advised of the assignment
and would not have consented without the execution of an
assumption of the Letherer promissory note obligations by Alger,
and the issuance of a new mortgage by Alger in favor of
Letherer, securing that obligation.

Accordingly, post-petition, Letherer filed an action in the
Circuit Court for the County of Saginaw, Michigan against Alger
Group, LLC, and Craig Bush, individually, on July 7, 1999,
seeking recovery of the $1,700,000.00 which is still owed under
the promissory note executed by the Debtors, and which the
Debtors apparently attempted to assign to Alger. Letherer also
sought to impose an equitable lien on the properties based on
the mortgage obligation contained in the Letherer Agreement.

On or about October 31, 2000, the Michigan Circuit Court for the
County of Saginaw, Michigan, granted summary judgment in favor
of Letherer against Alger in the amount of $1.7 million, and
further granted an equitable lien on the properties in the
amount of $1.7 million plus interest.

On or about February 15, 2001, Letherer received an order of
foreclosure on the properties, and on April 23, 2001, the
Debtors were ordered to escrow income from the sale of plots at
the cemeteries for the benefit of Letherer.

Before the State Court judgment was obtained, Loewen, Alger, and
Bush entered into a settlement agreement which provided, inter
alia, for Loewen to indemnify/Alger and Bush with respect to the
Letherer claims in the State Court Action. The Indemnification
Agreement was approved as an order of the Court on March 23,

By a motion filed on or about May 1, 2001, Debtors seek to
reject various agreements with Alger Group, LLC, which if
approved, would halt all sales at the cemeteries and prevent
Letherer from receiving the escrowed income as contemplated by
the Court's April 23, 2001 Order.

Letherer asserts he is entitled to an administrative claim in
the amount of $1,700,000.00, the amount of the State Court
Judgment against Alger, plus interest and attorneys fees.
Letherer asserts administrative priority for the claim under 11
U.S.C. section 503(b)(1)(A), and entitled to first priority
under 11 U.S.C. section 507(a)(1) on the bases that,

      -- the Debtors asserted that the indemnification of Bush
         and Alger for the Letherer State Court Action was
         necessary to reach the settlement with the parties.

      -- the assumption of the liability was proposed by the
         Debtors to enhance the value of Debtors' interests in
         certain properties and was deemed to be in the best
         interests of the estate.

      -- the fact that the assumption of liability and agreement
         to indemnify may now produce a loss to the estate does        
         not relieve Debtors of their obligation to indemnify
         Alger and Rush for the $1.7 million equitable lien, and
         to pay that amount to Letherer.

Letherer argues that a post-petition claimant need not prove a
tangible benefit to the estate to qualify a claim for
administrative priority but the claimant need only show that the
claim was incurred as a cost and expense of preserving the

                    Objection of Debtors

The Debtors note that the Claim Amount represents the amount of
a Michigan state court judgment Letherer obtained against a
third party, Alger Group, L.L.C., for which the Debtors
allegedly are obligated to indemnify Alger under a settlement
agreement previously approved by the Court and Letherer, without
citing any relevant authority or precedent, tries to convert his
claim against this third party into an administrative expense
claim against the Debtors' estates.

For several reasons, the Motion is groundless and should be
denied, the Debtors' attorneys at Morris, Nichols, Arsht &
Tunnell tell Judge Walsh.

First, Letherer has failed to satisfy either of the two prongs
under the prevailing standard in the Court for administrative
expense liability. Specifically, Letherer has failed to
demonstrate either that his claim arose out of a postpetition
transaction with the Debtors or that he has provided any benefit
whatsoever to the Debtors' estates.

Second, Letherer is neither a party to the Settlement Agreement
nor a third-party beneficiary under that agreement. Third, under
the terms of the Settlement Agreement, the Debtors in fact are
not liable for indemnifying Alger for the State Court Judgment.
Finally, in connection with prosecuting the state court action
in which he obtained the State Court Judgment, Letherer
willfully violated the automatic stay imposed by section 362 of
the Bankruptcy Code.

Morris, Nichols, Arsht & Tunnel argue that Letherer bears a
heavy burden in attempting to impose administrative expense
liability on the Debtors' estates because under section 503(b)
of the Bankruptcy Code, a claim may be allowed as an
administrative expense only if it involves "the actual,
necessary costs and expenses of perserving the estate.

It is well-settled in the Bankruptcy Court in Delaware and in
the Third Circuit, Morris, Nichols goes on, that, in order for a
claim to be allowed as an administrative expense, the claimant
"must demonstrate that the claimed expense (i) arose out of a
postpetition transaction with the debtor-in-possession and (ii)
directly and substantially benefitted the estate.

Letherer, the attorneys at Morris, Nichols say, has simply
failed to carry his burden to establish entitlement to an
administrative expense as a matter of law.

Accordingly, the Debtors ask the Court to deny Letherer's

In addition, the Debtors request that the Court, in accordance
with applicable precedent, direct Letherer to move the Michigan
Court or the Bankruptcy Court to vacate the Michigan Court order
and direct the impounded funds to be turned over to the Debtors,
in light of continuing violation of the automatic stay under the
Michigan Court Order caused by Letherer. (Loewen Bankruptcy
News, Issue No. 45; Bankruptcy Creditors' Service, Inc.,

LTV CORP: U.S. Trustee Appeals Court's Secrecy Order
Donald Robiner, the United States Trustee, promptly appeals from
Judge Bodoh's order directing that the record concerning the
Joint Motion to disband the The LTV Corporation Equity Committee
be held under the Court's seal.  

The U.S. Trustee says that Judge Bodoh erred as a matter of law
by ordering an in camera hearing and sealing the record without
proper notice to parties and without complying with proper

The US Trustee further elects to have the matter heard by the
United States District Court for the Northern District of Ohio
rather than the Bankruptcy Appellate Panel.

The U.S. Trustee also asks Judge Bodoh to stay his Order for the
secret hearing, saying he has a high likelihood of success on
the merits of his appeal as Judge Bodoh did not balance the
competing rights of the various interested parties in making his

Further, Judge Bodoh granted the in camera motion before the
date set for objections to it by the Committees' own notice.  He
did not hear the concerns of the Trustee, the SEC, the Official
Committee of Equity Holders, and the individual equity holders
about a secret trial, nor hold any hearing at all.

There is no evidence in the record that the harm posed by
dissemination would be substantial and serious.  The various
allegations of "confidential commercial information" do not
wi5hstand the slightest scrutiny.  There is no standard set
forth by which information can be determined to be confidential.  
The documents or analyses are not identified by general nature,
date of creation, person involved preparing the document or
otherwise.  What occurred was that the Committees sought and
obtained carte blanche authority to select unilaterally whatever
documents they desire to be embraced within the term
"confidential commercial information".  

There are absolutely no safeguards in place to assure that the
Committees are properly engaging in the function of self-
selection of documents.  The entire process operates to exclude
and prejudice all parties in interest in this case because they
are denied the chance to contest the designation of a document
as containing confidential commercial information.

In the case at bar, Judge Bodoh is said to have ordered "a
completely secret trial, with secret evidence, under
circumstances that deny the various parties in interest proper
notice, an opportunity to review the allegedly confidential
information, and the ability to conduct whatever discovery may
be needed to determine whether the information is property  
material and entitled to some protection.  This is the
antithesis of narrowly drawn and precise restrictions mandated
by the applicable law in general and the binding precedent of
this Circuit in particular." (LTV Bankruptcy News, Issue No. 13;
Bankruptcy Creditors' Service, Inc., 609/392-00900)

METROMEDIA: Moody's Junks Ratings for Lack of Funding Commitment
Moody's Investors Service has lowered the long-term debt ratings
of Metromedia Fiber Network, Inc. (MFN).

   * $650 million of 10% senior notes due 2008 to Caa3 from Caa1

   * $750 million of 10% senior notes due 2009 to Caa3 from Caa1

   * Euros 250 million of 10% senior notes due 2009 to Caa3 from

   * Senior implied rating to Caa2 from B3

   * Senior unsecured issuer rating to Caa3 from Caa1.

MFN's ratings were placed on review for possible downgrade on
June 21, 2001 and all ratings remain on review for possible
further downgrade while there is approximately $1.6 billion of
debt securities that are affected.

The downgrade reflects Moody's heightened concern that, after
months of protracted financing negotiations with vendors, banks
and associated companies, the company has to date obtained no
unconditional funding commitment and is in default under the
indentures governing it's 10% senior notes, Moody's said.

Reportedly, the company has delayed payment to some creditors in
an effort to conserve cash. Some of its creditors have filed
liens against the company's property, instituted legal
proceedings, and threatened to file involuntary bankruptcy
petitions against the company.

The rating agency is concerned that the company will likely
still need to raise additional funding. The review will also
consider the company's ability to fund its present business
model through the attainment of positive free cash flow.

Metromedia Fiber Network is based in White Plains, New York.

NETWORK COMMERCE: Nasdaq Delists Shares Due to Lower Bid Price
Network Commerce Inc. (Nasdaq:NWKC), the technology
infrastructure and online business services company, expected
its common stock to begin trading on the OTC Bulletin Board on
Aug. 29, 2001.

The company's common stock was delisted from the Nasdaq National
Market when the market opened on Aug. 29, 2001. The Nasdaq
delisting occurred because the company did not meet the minimum
bid price requirement of one dollar per share for continued
listing set forth in Marketplace Rule 4450(a)(5). The company
would continue to trade as a publicly traded company under the
new trading symbol "NWKC.OB."

"We remain focused and undeterred on our turnaround," said
Dwayne Walker, chairman and chief executive officer. "We
continue to make significant progress toward financial health
and profitability."

Network Commerce has restructured its online business services,
which include domain registrations and hosting-- commerce--
and marketing services -  

In doing so, its current focus is on growth in revenues and
customers, reduction of expenses and liabilities, as well as
pushing towards profitability and positive cash flows.

Established in 1994, Network Commerce Inc. (Nasdaq:NWKC) is the
technology infrastructure and services company. Network Commerce
provides a comprehensive technology and online business services
platform that includes domain registration, hosting, commerce,
and online marketing services. Network Commerce is headquartered
in Seattle, WA.

More information is available at

NOVO NETWORKS: Initiates Reverse Stock Split to Shun Delisting
Novo Networks, Inc. (Nasdaq:NVNW) announced that the Company's
Board of Directors and a majority of the holders of outstanding
voting stock have approved a 1-for-7 reverse stock split of the
Company's common stock.

The reverse split will affect stockholders of record on
September 4, 2001 and will become effective 20 days after the
Company mails an information statement to its stockholders,
which the Company anticipates will occur on or around September
10, 2001. The reverse stock split will reduce the number of
shares of common stock presently issued and outstanding on a
fully diluted basis from approximately 54.0 million to
approximately 7.5 million.

The action is being taken in response to a July 11, 2001
notification to the Company from the Nasdaq Stock Market that
the Company's securities fail to meet the $1.00 minimum bid
price requirement for continued listing under the Nasdaq Stock
Market rules.

The Company has a 90-day grace period, until October 9, 2001, to
regain compliance. Additionally, trading in the Company's common
stock has been suspended since the July 30, 2001 bankruptcy
filings of the Company's operating subsidiaries.

Nasdaq has requested additional information from the Company
regarding the bankruptcy filings and the Company's proposed
business plans and their impact on the Company's securities. The
Company is currently in the process of responding to Nasdaq's

OWENS CORNING: Reliant Wants Decision on Entex Gas Contract
Reliant Energy Entex files a motion to compel Owens Corning
to assume or reject their executory contract with Entex.

Entex had previously entered into a 5-year gas sales contract on
July 1993 with Neste/Wright Asphalt Products Company
(Neste/Wright), which was eventually purchased by the Debtors.

The contract underwent numerous revisions the latest of which
extended the term until July 15, 2002 and an amendment wherein
Entex agreed to sell 8,000 MMBtu to the Debtors for the period
October 1, 2000 to December 31, 2000 at a reduced rate.

John D. Demmy, Esq., at Stevens & Lee, P.C., in Wilmington,
Delaware states that the price of the gas sold under the
contract is significantly below the market price.  The contract
price for gas sold during the period October 2000 to April 2001
is $297,722.52 while the market price for the equivalent gas
during the period is $455,834.65, giving the Debtors post-
petition savings amounting to $158,112.13.  Entex could have
sold the gas it was required to provide to the Debtors for the
higher market price.  The amount of Entex's pre-petition claim
against the debtors is $49,524.12.

Mr. Demmy states that Entex will be prejudiced if the Court does
not require the Debtor to promptly assume or reject the contract
as it is not able to sell the gas under contract on the open
market at higher prices and is also not receiving payment on a
debt that was due on October 2000.  Mr. Demmy stresses that the
Court should require the Debtors to assume because it is clear
that the Debtors will assume it because of their actions.  

Mr. Demmy contends that it is a generally recognized principle
that a Debtor may not reject an executory contract but maintain
its benefits, and in this case, the Debtors want to maintain
benefits of below market rate gas but avoid the burden of paying
its pre-petition obligations.  

Mr. Demmy adds that the Debtors have already realized post-
petition savings under the contract that is nearly four times
its pre-petition obligation.

                   The Debtors Object

The Debtors object to the motion of Entex for an order
compelling the Debtors to make a decision whether to assume or
reject the contract.

J. Kate Stickles at Saul Ewing, LLP in Wilmington, Delaware
contends that that compelling the Debtors to assume or reject
lease is premature at this stage as the Debtors have clearly not
been afforded reasonable time to decide whether to assume or
reject the lease agreements.  Ms. Stickles adds a premature
rejection of leases may be detrimental to the Debtors' estate,
to the creditors and to the Debtors ability to reorganize.  

While the Debtors have commenced a review of their energy supply
contracts, Ms. Stickles claims such a review is still incomplete
and any such decision must be made as part of a comprehensive
strategy to ensure that the Debtors future energy needs are met
in the most economically beneficial manner. (Owens Corning
Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   

PACIFIC GAS: Agrees with ISO to Lift Stay to Pursue Arbitration
Pacific Gas and Electric Company and ISO stipulate and agree
that the automatic stay should be lifted in order that the
parties may proceed with an arbitration proceeding between them,
Case No. 71-198-00711-00, pending before the American
Arbitration Association (AAA) as at petition date.

The Pending Arbitration was initiated by PG&E pursuant to
applicable ISO Tariff provisions. PG&E contends that during the
period April 1998 to April 1999, the ISO improperly and without
legal authority imposed onto it charges of $14,172,337.08 for
transactions occurring  on Transmission Facilities including the
California-Oregon Transmission Project (COTP), the transmission
facilities of the Sacramento Municipal Utility District (SMUD)
and the transmission facilities of the Western Area Power
Administration (WAPA).

The disputed charges were for "Ancillary Services" and other
associated charges related to transactions on the Transmission
Facilities. Ancillary Services comprise four discrete
operational products - Regulation, Spinning Reserve, Non-
Spinning Reserve and Replacement - that are required to maintain
the reliability of the ISO Controlled Grid.

Through the Arbitration, PG&E seeks reimbursement from the ISO
of the $14,172,337.08 in charges plus interest and a
determination that the ISO lacked any legal right to impose the
charges on PG&E.

PG&E also seeks a determination that the ISO lacks jurisdiction
over the Transmission Facilities.

On the other hand, the ISO contends that it had the right to
impose on PG&E the $14,172,337.08 as the cost of the services.
The ISO asserts that PG&E has existing contracts with COTP
participants, SMUD and WAPA that require PG&E to provide
services to such parties including scheduling, data supply to
ISO to enable ISO to discharge its obligations under the ISO
Tariff and assisting the parties to meet reliability criteria of
the ISO and the Western Systems Coordinating Council by
acquiring sufficient Ancillary Services.

The ISO also seeks to recover and obtain the right to collect
for Ancillary Services and other charges that accrued after
April 1999 and which continue to accrue.

In November 2000, the ISO estimated these additional charges to
be $10,357,212.53 plus interest for the period May 1, 1999
through August 31, 2000 and through March 2001, estimated to be
in excess of $37,000,000.00 continuing to accrue unabated.

The parties desire to resolve all claims and counter-claims and
believe that the Pending Arbitration presents the appropriate
procedure for timely adjudication of the issues between the
parties. The relief contemplated by this stipulation will
include the Pending Arbitration and the prosecution to
conclusion of any subsequent appeals. (Pacific Gas Bankruptcy
News, Issue No. 12; Bankruptcy Creditors' Service, Inc.,

PILLOWTEX CORP: Court Compels Debtor to Surrender N.C. Facility
Judge Robinson grants ARK CLO's motion for relief from stay but
denies the request to compel Pillowtex Corporation to decide
whether it will assume or reject the lease, citing it is already
rendered moot.

Effective upon the date of the entry of this order, the Court
ordered the Debtors to immediately surrender their yarn
production facility located in Newton, North Carolina to ARK.

ARK is now authorized to pursue its non-bankruptcy rights,
provided that: ARK shall deposit in a separate trust account
maintained by Moore & Van Allen, PLLC, 100 North Tyron Street,
47th Floor, Charlotte, North Carolina 28202, counsel to ARK, the
first $836,976.33 of proceeds, net of ARK's foreclosure costs
and expenses (including attorneys' fees and sales expenses)
received from the sale of any of the Newton Facility assets,
until such time as Debtors' asserted claims against ARK relating
to ARK's receipt of post-petition payments are:

    (a) adjudicated by a final, non-appealable order,

    (b) resolved pursuant to a court-approved settlement,

    (c) abandoned pursuant to written notice by the Debtors, or

    (d) otherwise time barred as a matter of law.

According to Judge Robinson, Debtors and ARK reserve all rights
and defenses as to the nature and character of that certain
Lease Agreement dated September 18, 1995 and related documents,
as well as to the nature, character and treatment of certain
post-petition payments.  Specifically, Judge Robinson explains,
the parties reserve the rights and defenses as to:

    (i) whether the agreement is a financing transaction rather
        than a true lease,

   (ii) whether ARK has an administrative claim for unpaid lease

  (iii) whether ARK was entitled to adequate protection; and

   (iv) whether certain post-petition payments made by the
        Debtors to ARK pursuant to the Agreement must be
        returned to the estate.

The parties agreed to allow ARK to use the Pillowtex name
(without compensation) in promotional materials prepared in
connection with the sale of the Newton Facility assets in order
to identify Pillowtex as the former user of the equipment.  They
also agreed that the Debtors should remove these inventory items
from the Newton Facility site as soon as practicable:

    1) 55-gallon drum of light ballasts containing PCBs near new
       dye house;

    2) 55-gallon drums of waste oils near new dye house;

    3) 55-gallon drums containing lubricants near new dye house;

    4) 55-gallon drum of used paint thinner, containers of
       paint, thinner, and "cutzit" located in carpenters shed;

    5) boxes of fluorescent light bulbs containing mercury near
       new dye house;

    6) 55-gallon drums of gear oils and lubricants/parts wash
       station in technicians shop;

    7) 55-gallon drums of fungicide and anti-corrosion chemicals
       in chill water sumps; and

    8) containers and tubes of engine oil, grease, and cutting
       oils in the supply room. (Pillowtex Bankruptcy News,
       Issue No. 12; Bankruptcy Creditors' Service, Inc.,

PSINET INC: Period to Decide on Real Property Leases Extended
Judge Gerber granted the PSINet, Inc.'s Motion for an extension
of the Company's time within which to decide whether to assume,
assume and assign, or reject unexpired non-residential real
property leases through and including January 27, 2002, provided
that with respect to the lease with Mony Life Insurance Company
(Landlord), the period will be extended through and including
September 30, 2001. (PSINet Bankruptcy News, Issue No. 7;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

RBX CORP: Emergence from Chapter 11 Protection Successful
RBX Corporation, and its subsidiaries, leading manufacturers of
closed cell rubber and plastic foam, rubber compounds, and other
polymer based products today announced that it has exited from
Chapter 11 bankruptcy protection concurrent with a new financing
package which went into effect August 27, 2001.

Completion of the exit financing was the final step required to
put into place a restructuring plan, which was confirmed by the
court on July 12.

Under the terms of the new loan agreement with Congress
Financial Corporation, a division of First Union Corporation,
RBX has access to a $35,000,000 revolving credit facility as
well as an additional $10,000,000 term loan earmarked for
capital expansion and modernization.

Timothy J. Bernlohr, RBX's Executive Vice President said, "We
are absolutely delighted to be headed back to normalized
operating conditions just over seven months from seeking
protection. With our focused business plan, streamlined
operations, and a far healthier balance sheet and capital
structure we are focused squarely upon providing excellent
service to our customers and expanding our effectiveness and
presence as the industry's leader."

As a result of the reorganization, the company eliminated in
excess of $200,000,000 in long-term debt.

Bernlohr continued, "Our ability to strengthen existing
profitable businesses as well as seek out and select new markets
and applications with adequate financial resources provides RBX
the flexibility required in a continually evolving marketplace."

RBX is North America's premier manufacturer of closed cell foam
and custom mixed rubber compounds. Based in Roanoke, Virginia,
the company has approximately 1,500 employees nationwide. For
more information about RBX Corporation, please visit our website

STAGE STORES: Reorganized Debtor Applies for Listing on Nasdaq
Stage Stores Inc. (OTC:STGSV) announced that the National
Association of Securities Dealers has assigned the trading
symbol "STGSV" to the newly issued common stock of the
reorganized company for its initial trading as an over-the-
counter (OTC) equity security.

The Company also announced that it will apply to Nasdaq to list
the newly issued stock on the Nasdaq National Market. In
addition, the Company reported that it would file the
appropriate documents with the Securities and Exchange
Commission to register the newly issued common stock under the
Exchange Act.

Upon the effective date of the registration, Stage will become
an Exchange Act reporting company. The Company hopes to have the
Nasdaq listing and the Exchange Act registration effective
within ninety days.

On Aug. 24, 2001, Stage announced that it had completed the
steps necessary to go effective with its Plan of Reorganization
and had emerged from bankruptcy on that date.

Stage Stores Inc. brings nationally recognized brand name
apparel, accessories, cosmetics and footwear for the entire
family to small towns and communities throughout the south
central United States. The Company currently operates a total of
342 stores under the Stage, Bealls and Palais Royal names.

URANIUM RESOURCES: William Witter Discloses 7.7% Equity Stake
William D. Witter, Inc. and William D Witter, an investment
advisor, beneficially own 3,750,000 shares of the common stock
of Uranium Resources Inc., representing 7.7% of the outstanding
common stock of the Company.  Mr. Witter holds sole voting and
dispositive powers over the stock held.

                             *  *  *

The company uses the in situ leach process, in which groundwater
is pumped into a permeable orebody to dissolve uranium contained
in the ore. Production at Uranium Resources' two main properties
-- the Rosita and Kingsville Dome properties in South Texas,
which are capable of producing more than a 1.5 million pounds of
uranium a year -- are on hold until the price of uranium
surpasses the cost of production. Uranium Resources owns
additional exploration and development properties in Texas and
New Mexico. Investor Rudolf Mueller (The Winchester Group) owns
23% of Uranium Resources.

In addition, in October 2000, the Company finalized an agreement
with Texas regulatory authorities and the Company's bonding
company that provided the Company access to up to $2.2 million
in additional funding. Approximately $1,527,000 has been
released to the Company through June 30, 2001 to perform
restoration at the Company's Kingsville Dome and Rosita mine
sites in South Texas. The term of the restoration agreement runs
through the end of 2001.

Assuming that the Company is able to continue funding its
restoration of the Kingsville Dome and Rosita mine sites through
extensions to its agreement with Texas regulatory authorities
and the Company's bonding company, the Company estimates it will
have the funds to remain operating into approximately mid to
late 2002.

Additional funds will be required for the Company to continue
operating after that date. The Company's current agreement with
the Texas regulatory authorities and its bonding company extends
through 2001. The Company cannot guarantee that it will be able
to extend such agreement beyond 2001, or that any extension of
the agreement that is negotiated will contain the same terms and

The Company would require additional capital resources to fund
the development of its undeveloped properties. There is no
assurance the Company will be successful in raising such capital
or that uranium prices will recover to levels which would enable
the Company to operate profitably. These factors raise
substantial doubt concerning the ability of the Company to
continue as a going concern.

U.S. WIRELESS: Files for Chapter 11 Protection in Delaware
U.S. Wireless Corporation (Nasdaq: USWCE; Frankfurt: USP), and
its subsidiaries filed voluntary petitions pursuant to Chapter
11 of the federal bankruptcy law. The filings were made with the
U.S. Bankruptcy Court for the District of Delaware.

U.S. Wireless Corporation is a provider of location and traffic
information and the developer of the RadioCamera(TM) location
pattern matching technology.

The RadioCamera(TM) technology pinpoints the location of
cellular callers to enable the delivery of mobile services,
including life saving emergency 911 caller location, live
traffic and traveler information, navigation assistance,
localized directory assistance, and vehicle and asset tracking.

U.S. WIRELESS: Case Summary & 10 Largest Unsecured Creditors
Lead Debtor: U.S. Wireless Corporation
             2303 Camino Ramon
             Suite 200
             San Ramon, CA 94583
             fka American Toys, Inc.

Debtor affiliates filing separate chapter 11 petitions:

             Wireless Location Services, Inc.
             Wireless Location Technologies, Inc.

Type of Business: Research and development of wireless location
                  technologies, and design and implementation of
                  wireless location networks using proprietary
                  "location pattern matching" technology.

Chapter 11 Petition Date: August 29, 2001

Court: District of Delaware

Bankruptcy Case Nos.: 01-10262 through 01-10264

Debtors' Counsel: David M. Fournier, Esq.
                  Pepper Hamilton LLP
                  1201 Market Street, Suite. #1600
                  Wilmington, DE 19801
                  Tel: 302 777-6500
                  Fax : 302-656-8865

Total Assets: $17,688,708

Total Debts: $22,239,832

Debtor's Largest Unsecured Creditors:

Entity                        Nature Of Claim       Claim Amount
------                        ---------------       ------------
Hewlett Packard Company       Equipment and         $2,939,764
Elen Friedman                 Consulting
101 California, 39th Floor     Services Provider
San Francisco, CA 94111        
Tel: (415) 398-4700
Fax: (415) 421-7879

Mati Wax                      Judgment Creditor     $2,775,000
Robert Polllack
44 Montgomery St., Suite 1660
San Francisco, CA
Tel: (415) 291-8320

Wireless Facilities, Inc.     Consultants           $1,230,324
David Cheng
4810 Eastgate Mall
San Diego, CA 92121
Tel: (858) 228-2146
Fax: (858) 228-2026

Wireless Technology, Inc.     Manufacturing         $1,200,000
MK Lee                        Service
154-17 Samsung-Dorig,
Seoul, Korea 135-090
Tel: (822) 3450-7359
Fax: (822) 3450-7361

American Tower Corporation    Site Lease            $1,080,800
Steve Story
501 Cananl Blvd., Suite E
Pt. Richmond, CA 94804
Tel: (510) 236-3700
Fax: (925) 355-1496

KMW Products                  Manufacturing          $130,970

Lehman Brothers               Financial Advisory      $90,994

Watco LLC                     Consulting Services     $90,214

Sprint                        Network Data            $71,503

Latham & Watkins              Legal Services          $65,609

VENCOR INC: Initiates Claims Objection Process
Vencor, Inc. submits that each of the Claims subject to the
Omnibus Objection is not based on valid or enforceable
obligations of any of the Debtors. Therefore, the Debtors object
to these claims and ask the Court to enter an order, pursuant to
Bankruptcy Code Section 502(b) and Bankruptcy Rule 3007
disallowing in full or reducing the claims.

Specifically, the Debtors object to:

(A)  24 Duplicate Claims that are duplicative of other claims,      
      19 of which are unliquidated and the other 5 are as

      Claim #          Claimant               Amount
      -------          --------               ------
      8747       Ek, Ruth: Palmer, Pam,      More than
                 Dianne Kartchner &          $ 482,992.01
                 David Ek
      5973       Sarah Brayton               $ 338,570
                 Nursing Center
      8893       Simmons, Hazel:             $5,000,000
                 Lela Killingsworth -
                 Admin. Of the Estate

      8562       State of California         $4,533,755.69

      7328       Taylor, Janet A.            $2,000,000
                 Estate of, By Joan
                 McDowel, Personal Rep.

(B)  6 Amended Claims that have been amended and superseded by
      other claims filed by the same respective Claimants, three
      of which are unliquidated and the other three are as

      Claim #          Claimant               Amount
      -------          --------               ------
      8223       c/o Gary W. Osborne, Esq.    $5,000,000
                 7150 Granite Circle
                 Toledo, OH 43617

      8803       Dunn, John E.                $  250,000

      4571       Dillard, James By            $   50,000
                 Emma, The Wife of the

(C)  3 Fully Resolved Litigation Claims that should be
      disallowed in full and expunged because the underlying
      allegations have been previously resolved by a Court of
      competent jurisdiction by dismissal, or judgment in
      Debtors' favor or by arbitration:

      Claim #          Claimant               Amount
      -------          --------               ------
      4618        Dahir, Sharir H.            $300,000,000
      4997        Peterson, Margaret Louis    $     50,000
      5028        Steadfast Ins.              Unliquidated
                  Company ("Zurich")

(D)  14 Settled and Paid Claims that have been settled and paid
      either by the Debtors and/or through their insurance
      companies including 5 claims each of an unliquidated
      amount and large-dollar claims as follows:

      Claim #          Claimant               Amount
      -------          --------               ------
      6874        Atkinson, Raymond:          $   1,000,000
                  Stephen Atkinson,
                  Personal Rep of the
                  Estate of Raymond

      8684        Cravens, Lisa J.            $    1,000,000

      8526        Mulliniks, Cora             $    1,000,000

      7726        United States Govt.         $1,017,337,643

      7740        US of America Et Al.        $  290,967,775
                  Dept. of Justice

(E)  48 Invalid claims that the Debtors have determined are
      invalid because they do not have any valid and outstanding
      obligations to the claimants, including 17 claims each of
      an unliquidated amount and large-dollar claims as follows:

      Claim #          Claimant               Amount
      -------          --------               ------
      5562         Dept. of Social and        $2,286,110
                   Health Services

      4699         Lunsford, W. Bruce         $3,604,987

      5817         National Union Fire        $1,710,035,28
                   Co. of Pittsburgh Et Al.

      5446         United Pacific             $1,880,000
                   Insurance Company

(F)  54 Improper Party Litigation Claims related to underlying
      proceedings in which none of the Debtors should have been
      named as parties, including 21 claims each of or including
      an unliquidated amount and large-dollar claims as follows:

      Claim #          Claimant               Amount
      -------          --------               ------
      5751          Brackett, Lola            $4,000,000

      8518          Cooper, Norman            $1,000,000

      3585          Estate of                 $2,000,000
                    Janet A. Taylor

      5809          Falkner, Harriet          $2,000,000

      6707          Franklin, Pamela          $1,815,000

      4850          Gable, Barda Ann          $2,900,000

      5092          Massel, Rose              $1,000,000

      6287          Rutherford, Cecil:        $5,000,000
                    Judy R. Collins

      5941          Severson, Betty           $10,000,000

      8514          Smith, Delarett           $1,000,000

      7522          Treadway, Charlie         $2,000,000

      7521          Treadway, Charlie         $2,000,000
                    Keith Treadway

(G)  One Common Equity Securities Fraud Claim (No. 4376) of an
      unliquidated amount filed by Brody, Jules and Joyce T
      Crawford, who should be enjoined from pursuing any such
      claim, the Debtors assert, because the Plan provides that
      the holders of these claims will receive no distribution
      under the Plan;

(H)  3 Common Equity Interest Claims totalling $34,775.00 that
      the Debtors submit should be disallowed in full and
      expunged because based on review, the Debtors have
      determined that they do not have any valid and outstanding
      obligations to any of the Claimants;

(I)  14 Qui Tam Claims that have been resolved including one
      unliquidated claim and large-dollar claims as follows:

      Claim #          Claimant               Amount
      -------          --------               ------
      5501          Behavioral Healthcare     $1,000,000

      5636          Charles L. Abrahams,      $500,000,000
                    Esquire on Behalf of

      5917          Levin, Middlebrooks,      $100,000,000
                    Thomas, Mitchell,
                    Green Echsner Et Al.

      5919          Mark A. Kleiman, Esq.     $315,000,000

      5921          On behalf of Relators     $840,000,000

      5938          On behalf of Relators     $7,500,000

      5915          Shamberg, Johnson &       $100,000,000

(Vencor Bankruptcy News, Issue No. 32; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

VLASIC FOODS: Treatment of Claims Under The First Amended Plan
Vlasic Foods International, Inc. summarizes how it will classify
and treat claims pursuant to the terms of its First Amended Plan
of Distribution filed with the U.S. Bankruptcy Court in

Claim or Interest       Unimpaired           Treatment
-----------------       ----------   ---------------------------

Administrative Claims     n/a        Paid in cash in full.
                                     Professional fees paid when
                                     allowed by Court.

Priority Tax Claims       n/a        Paid in cash in full.


Class 1 - Other         Unimpaired   Paid in cash in full.
Priority Claims

Subclasses 2A, 2B,      Unimpaired   Each holder will either:
2C, etc. -- Secured                  (a) receive deferred cash
Claims                                   payments totaling at
                                          least the allowed
                                          amount of such Secured
                                          Claim, of a value, as
                                          of the Effective Date,
                                          of at least the value
                                          of such holder's
                                          interest in such

                                      (b) upon abandonment by a
                                          Debtor, receive the
                                          subject Collateral,

                                      (c) receive payments or
                                          liens amounting to the
                                          indubitable equivalent
                                          of the value of such
                                          holder's interest in
                                          the respective  
                                          Debtors' interest in
                                          such Collateral,

                                      (d) be Reinstated, or

                                      (e) receive such other
                                          treatment as the
                                          respective Debtor and
                                          such holder shall have
                                          agreed upon in

                                      To the extent that the
                                      value of any Collateral
                                      securing a Secured Claim
                                      exceeds the amount of the
                                      Secured Claim, its holder
                                      shall receive interest,
                                      fees, costs, and charges
                                      payable under the
                                      Bankruptcy Code.

Class 3 -               Impaired     Holders of Intercompany
Intercompany Claims                  Claims shall receive no

Class 4 -               Impaired     Each holder will receive
Convenience Claims                   Cash equal to __________
                                     of its Allowed Claim.

Class 5 - General       Impaired     Each holder will receive
Unsecured Claims                     its Pro Rata share of
(other than                          membership interests in VFI
Convenience Claims                   LLC and may receive an
and Intercompany                     of redemption from the LLC
Claims                               Manager pursuant to the
                                     Redemption Program.

Class 6 -               Impaired     Holders of Subordinated
Subordinated Claims                  Claims shall receive no

Class 7 - Interests     Impaired     Interests shall be
                                     and the Interest holders
                                     shall not receive or retain
                                     any property on account of
                                     their Class 7 Interests.

1. Disputed Claims will be paid only if and after they become
    Allowed Claims.  The LLC Manager will maintain a reserve for
    Disputed Claims.

2. Unless specifically provided in the Plan, no creditor will
    be entitled to Post-petition Interest on its Claim.

The Debtors also advise interested parties that this chart is
only a description and is qualified in its entirety by the plan.
They urge interested parties to read the plan in full to
determine the treatment of the claims. (Vlasic Foods Bankruptcy
News, Issue No. 10; Bankruptcy Creditors' Service, Inc.,

W.R. GRACE: Hires Holme Roberts As Special Environmental Counsel
W. R. Grace & Co. asks Judge Farnan to approve their employment
of Holme Roberts & Owen LLP as "special environmental counsel",
nunc pro tunc to the Petition Date, to represent the Debtors in
certain environmental litigation and environmental agency

HRO's proposed representation of the Debtors will include
responding to and managing currently pending environmental
litigation matters in both federal and state courts, as well as
mediation and negotiation with state and federal environmental
agencies, such as the Environmental Protection Agency, the
Department of Justice, and certain state environmental
protection agencies.

Additionally, HRO's representation of the Debtors may include
responding to environmental matters associated with requests for
information, orders and notices of violation relating to alleged
statutory cleanup obligations, environmental investigation,
response, reclamation and remediation under a variety of federal
environmental statutes and their state counterparts, including,
but not limited to, the Comprehensive Environmental Response
Compensation and Liability Act, the Resource Recovery and
Conservation Act, the Clean Water Act, and the Safe Drinking
Water Act.  

HRO's continued representation of the Debtors in these matters
will be necessary for the Debtors during the course of these
Chapter 11 cases.

The Debtors currently seek to retain HRO, subject to the
oversight and orders of Judge Farnan, to advise and represent
them, as needed, with regard to:

       (a) SDWA Sec. 1431 Administrative Order concerning
           alleged groundwater contamination in and around the
           East Poplar Oil Field within the Fort Peck Indian
           Reservation in Roosevelt County, Montana, and appeal
           of that administrative order to the Court of Appeals
           for the Tenth Circuit;

       (b) CERCLA investigation and removal action concerning
           the former W. R. Grace vermiculite mine, mill,
           expanding plant, and associated facilities, as well
           as surrounding locations in the vicinity of Libby,
           Montana, including responding to EPA requests for
           information under CERCLA concerning these facilities;

       (c) Alleged CERCLA liability associated with the former
           Casmalia Disposal Site in Santa Barbara County,

       (d) CERCLA 104(e) litigation concerning the EPA's demand
           for access to and request for penalties for the
           alleged denial of access to Kootenai Development
           Company's property in and near Libby, Montana, for
           the purpose of disposing of wastes and performing
           other response activities thereon, captioned as
           "United States of America v. W. R. Grace & Company
           and Kootenai Development Corporation, in the United
           States District Court for the District of Montana,
           Missoula division, filed September 14, 2000;

       (e) Texas state court lawsuit wherein Samson is seeking
           indemnification and declaratory relief against
           certain of the Debtors for potential liabilities at
           the Casmalia site and from other recovery litigation,
           captioned as "Samson Investment Company and Samson
           Hydrocarbons Company v. W. R. Grace & Co., - Conn.
           and Grace Energy Corporation, in the District Court,
           95th Judicial District, Dallas County, Texas, filed
           January 30, 2001;

       (f) CERCLA 104(e) matters arising from EPA's request for
           information concerning certain of the Debtors'
           facilities in Libby, Montana, as well as certain of
           the Debtor's current and former expanding plants,
           together with responses to document requests
           concerning attic insulation litigation;

       (g) Negotiation and investigation relating to obtaining a
           release of certain of the Debtors from reclamation
           and lease bonds filed with state and federal land
           management agencies on coal mines in Colorado sold to

       (h) EPA lawsuit brought against certain of the Debtors in
           the United States District Court for the District of
           Montana concerning remedial activities conducted by
           the EPA in and around Libby, Montana, captioned as
           "United States of America v. W. R. Grace & Co.-Conn.
           and Kootenai Development Corporation", in the United
           States District Court for the District of Montana,
           Missoula Division, filed March 30, 2001;

       (i) Third-party state court action against certain of the
           Debtors arising from Grace Petroleum Corporation's
           operation of an oil field in California from
           approximately 1977 to 1983, captioned as "United
           States of America v. W. R. Grace & Co.-Conn. and
           Kootenai Development Corporation", in the United
           States District Court for the District of Montana,
           Missoula Division, filed April 12, 2000;

       (j) Ongoing requests for information propounded to the
           EPA and other federal agencies under the Freedom of
           Information Act concerning certain of the Debtors'
           general state and federal actions, certain actions at
           or near Libby, Montana, and related to W. R. Grace's
           current and former expanding plants; and

       (k) EPA Region V and the Minnesota Pollution Control
           Agency's investigation and possible remediation of W.
           R Grace's former vermiculite expanding plant in
           Minneapolis, Minnesota.

The Debtors propose to compensate HRO on an hourly basis at its
customary hourly rates for services rendered, plus reimbursement
of actual, necessary expenses incurred by HRO.  The primary
partners, associates and paralegals of HRO who will be handling
these matters and their current standard hourly rates are:

                 Attorney/Paralegal               Hourly Rate
                 ------------------               -----------
                 Kenneth W. Lund                     $300
                 Colin Harris                        $250
                 Lisa Schuh                          $250
                 Katheryn Coggon                     $225
                 Brent Tracy                         $210
                 Carla Latuda                        $ 90
                 Joan Sherman                        $110

The Debtors expect that HRO's role in these cases will be that
of environmental counsel with respect to the matters
specifically named in the application.  Such representation will
require the services of partners, associates and paralegals.  

Accordingly, the Debtors tell Judge Farnan that the staffing and
hourly rates are reasonable and should be approved.  However,
these hourly rates are subject to periodic adjustments to
reflect economic and other conditions.  Other attorneys or
paralegals may from time to time serve the Debtors in the
matters for which HRO's retention is sought.

Kenneth W. Lund, a member of HRO, swears to Judge Farnan that
HRO is disinterested, and does not hold or represent any
interest adverse to the Debtors or their estates on the matters
for which his approval is sought.  He discloses that HRO has
received regular compensation periodically from the Debtors for
services rendered and expenses incurred by HRO through February,

During March 2001, HRO rendered additional services and incurred
additional expenses for which it has not received payment and/or
reimbursement and for which it has a prepetition claim in the
amount of $306,623.75.  None of the fees paid to HRO represent
payments for legal services in connection with the preparation
and filing of these chapter 11 cases.

In matters unrelated to these cases, HRO has in the past
represented, currently represents, and is likely in the future
to represent, certain of the Debtors' and their affiliates'
significant current vendors, unsecured creditors, lenders,  
letter of credit issuers, equity holders, underwriters,
indenture trustees, lessors and customers, together with certain
co-defendants and other parties to litigation with the Debtors,
as well as certain attorneys, accountants, and financial
advisors for these entities.  

HRO has reviewed its files and has determined that it has or
does represent in certain unrelated matters entities with
current interests in these estates, such as:

       Amerada Hess Corporation, a dormant client with no
ongoing representation;

       Amoco Oil Company, related to Amoco Pipeline Company and
Amoco Corporation.  HRO represents Amoco Pipeline and Amoco
Corporation in various tax litigation matters, all of which are
matters unrelated to the Debtors;

       ATOFINA Chemicals, Inc.  HRO has represented ATOFINA
Chemicals, Inc., in the past in various matters, but has no
ongoing representation;

       Cameo Corporation, a dormant client with no ongoing

       Cargill AT, Kiev, Ukraine; Cargill Enterprises, Inc.;
Cargill Incorporated.  Cargill AT and Cargill Enterprises are
both dormant clients with no ongoing representation;

       Bank of Boston.  Bank of Boston was a former client of
HRO, but the firm has no ongoing representation;

       Bank One Corporation.  HRO represents Bank One in ongoing
corporate transactional and litigation matters that are
unrelated to the Debtors;

       Climax Molybdenum, Inc.  HRO represents Climax Molybdenum
Company in certain tax-related matters, none of which are
related to the Debtors;

       DuPont Dow Elastomers Col; E. I. DuPont deNemours & Co.  
HRO represents E. I. DuPont deNemours & Company in litigation
involving wrongful death claims, none of which is related to the

       ExxonMobil Global Services Co.  HRO represents ExxonMobil
Corporation in connection with a proposed transfer of real
property located in Colorado, which is unrelated to the Debtors;

       Huntsman Corp; Huntsman Petrochemical Corp; Huntsman
Chemical Co.  HRO has represented and currently represents
Huntsman Corp and Huntsman Chemical Co. in various litigation
matters, none of which are related to the Debtors;

       Lafarge Corp; Lafarge Inc.  HRO represents Lafarge, Inc.,
in a variety of employment law matters, none of which are
related to the Debtors; and

       Union Carbide Corp.; Umetco Minerals Corporation; USX
Corporation.  HRO represents Union Carbide Corp.; Umetco
Minerals Corporation, and USC Corporation in a variety of
environmental compliance and CERCLA compliance matters, none of
which involve the Debtors.

Mr. Lund also discloses that HRO represents or has represented
significant customers of the Debtors, such as Amerada Hess
Corporation, American Roofing Supply, Inc., ATOFINA Chemicals,
E.I. DuPont deNemours & Co., ExxonMobil, Lafarge, Murphy Oil
Corporation, Sinclair Oil Corporation, and Union Carbide
Corporation, in matters unrelated to the Debtors.  HRO has
represented Ronald C. Cambre and Gail Cambre in connection with
personal real estate and employment matters.  

Mr. Lund further discloses that HRO has represented Union Oil
Company of California in the past in a variety of environmental
and environmental litigation matters, none of which are believed
to be related to the Debtors.  HRO is unable to complete a
conflicts search of potential plaintiffs in asbestos-related
litigation because the number of such potential plaintiffs is
prohibitively large.

Further, the Debtors may not be aware of all of the p potential
plaintiffs in various suits that have been brought against them,
and do not maintain a usable database of actual or potential co-
defendants with respect to ongoing asbestos-related litigation.

HRO represents Eagle-Picher Industries and Eagle-Picher
Technologies, Inc., in a variety of environmental law matters,
none of which involve the Debtors.  HRO also represents
Fresenius Medical Care, Inc., in various tax matters, none of
which are related to the Debtors.  HRO represents Union Pacific
Railroad Company in a variety of litigation matters, including
environmental litigation, employment, tax and corporate
transactional matters, none of which are related to the Debtors.

HRO formerly represented the Union Pacific Railroad Company in
matters relating to the Casmalia Superfund, but that
representation has ceased.  HRO represents Shell Oil Company and
Shell Chemical Company in various environmental litigation and
compliance matters, none of which involve the Debtors.

HRO represents Bank of America in a variety of matters,
including but not limited to lending, corporate transactional,
foreclosures, and debt matters, none of which are related to the
Debtors.  HRO also represents Citibank in a variety of matters,
including but not limited to lending and corporate transactional
matters, none of which are related to the Debtors.  HRO has
represented Chase Manhattan Bank and a variety of its
subsidiaries in the past, but has no current representation and
no matters which are related to the Debtors.

HRO represents The Pep Boys - Manny, Moe & Jack, in an
employment arbitration matter unrelated to the Debtors.  HRO has
in the past and may in the future represent Wendy's of Colorado
Springs, Inc., in certain employment matters unrelated to the

Mr. Lund advises generally that HRO represents hundreds of
additional clients, some of whom may be subject to asbestos-
related claims and may, theoretically, assert asbestos-related
claims against the Debtors or against whom the Debtors may have
asbestos-related claims.  Because of the broad sweep of asbestos
litigation, HRO is not necessarily aware of which of its clients
may have such potential claims unless there is an existing
matter on which the Debtors and an HRO client are adverse.  In
the event of any adversity between the Debtors and an HRO
client, HRO will not represent such client in matters having to
do with the Debtors' chapter 11 cases. (W.R. Grace Bankruptcy
News, Issue No. 11; Bankruptcy Creditors' Service, Inc.,

WARNACO GROUP: GECC Moves to Compel Lease Decision & Payments
The Warnaco Group, Inc. and General Electric Capital Corporation
(GE Capital) are parties to certain unexpired Master Lease
Agreement and Schedules.  Under these pre-petition agreements,
the Debtors leased certain Equipment from GE Capital:

      Date                    Lease
      ----                    -----
      December 22, 1994       Schedule No. 1
      December 30, 1994       Schedule No. 2
      February 1, 1995        Schedule No. 3
      March 24, 1995          Schedule No. 4
      May 23, 1995            Schedule No. 6
      June 30, 1995           Schedule No. 7
      July 6, 1995            Schedule No. 8
      July 6, 1995            Schedule No. 9
      July 6, 1995            Schedule No. 10
      October 30, 1996        Schedule No. 11
      October 21, 1997        Schedule No. 001
      October 21, 1997        Schedule No. 002
      December 23, 1997       Schedule No. 003
      December 30, 1998       Schedule No. A1
      December 30, 1998       Schedule No. A-2
      December 30, 1998       Schedule No. A-3
      December 31, 1999       Schedule No. B-1
      December 31, 1999       Schedule No. B-2

According to Robert M. Hirsh, Esq., at Pitney Hardin Kipp &
Szuch LLP, in New York, GE Capital has not received any post-
petition rental payments due under the Leases from the Debtors.  
While the Debtors are using GE Capital's equipment for
operations, Mr. Hirsh notes, the equipment continue to
depreciate in value.

By this motion, GE Capital asks Judge Bohanon for an order
compelling the Debtors to assume or reject the Leases within 30
days of the date of the hearing on this motion or such requisite
time that the Court deems proper.

In addition, GE Capital seeks a Court order compelling the
Debtors to make all past and future post-petition rental
payments under the Leases to GE Capital until the Leases are
rejected. (Warnaco Bankruptcy News, Issue No. 7; Bankruptcy
Creditors' Service, Inc., 609/392-0900)  

WASHINGTON GROUP: Raytheon Finds Comfort in Examiner's Report
A report issued by a court appointed examiner supports Raytheon
Company's (NYSE: RTN) position that Washington Group
International's (WGI) financial setbacks resulted from WGI
management's inability to manage a large and complex acquisition
that more than doubled its size.

"Washington Group and its advisers must take full responsibility
for WGI's capital structure and the way it chose to structure
the transaction," said Neal Minahan, senior vice president and
general counsel of Raytheon. "Raytheon is not at fault. It's
time for Washington Group to take responsibility for its own

The examiner's report states that this was a huge acquisition
for WGI. The combination of its new management team and the new
market segments in which WGI had little experience led to
dramatic errors, including the cancellation of necessary
liquidity, the inability to integrate multiple management
information and accounting systems, and the decision to abandon
the Sithe projects. Management's inexperience also led to an
inability to execute immediately post-closing, which worsened
the liquidity picture for 2001.

The examiner's report also confirms Raytheon's view that the
RE&C sale terms represented the result of exhaustive due
diligence by WGI and its advisers and hard and long negotiations
between sophisticated parties. WGI and its advisers were well
aware of the significant challenges and rewards that the RE&C
acquisition represented to WGI, but WGI simply failed to

WGI, its officers, directors and advisers, which included Credit
Suisse First Boston, Arthur Anderson, Bain & Company, and
Batchelder & Company, engaged in an extensive due diligence
process that extended from September 1999 to July 2000. As a
result of this process, WGI, its officers, directors and
advisers completely understood the financial statements and
financial condition of the engineering and construction business
it was purchasing, and indeed renegotiated more favorable terms
in the agreement as a result of that awareness.

Other factors responsible for WGI's business difficulties that
were not covered by the examiner's report include WGI's failure
to generate new business, control costs and effectively manage
its financial affairs.

With headquarters in Lexington, Mass., Raytheon Company is a
global technology leader in defense, government and commercial
electronics, and business and special mission aircraft.

WHEELING-PITTSBURGH: Moves to Pay Prepetition Sales Commissions
Scott N. Opincar and James M. Lawniczak of the Cleveland firm of
Calfee Halter & "Griswold LLP, on behalf of Wheeling-Pittsburgh
Steel Corporation, ask Judge Bodoh to authorize the payment by
Wheeling Corrugating, a division of WPSC, of $450,000 in accrued
but unpaid prepetition sales commissions to independent sales
agents of Corrugating.  

The Seller/Vendors to whom these commissions are owed continue
to represent Wheeling Corrugating by selling its products.

By this Motion the Debtors seek authority to pay the prepetition
claims of the Seller/Vendors with whom Wheeling Corrugating
continues to do business and whose services are essential to the
operation of Wheeling Corrugating's business.

Several of these Seller/Vendors have demanded that their
prepetition claims be paid promptly.  The Debtors believe that
there is a substantial risk that the Seller/Vendors may refuse
to continue to do business with, for and on behalf of the
Debtors if the Debtors fail to pay the prepetition claims of
those Seller/Vendors.  

In addition, many of the Seller/Vendors are smaller businesses
that may require payment of their prepetition claims in order to
maintain their own business operations, and therefore to
maintain their own abilities to provide sales services to the

The unavailability of the services provided by the
Seller/Vendors would cripple Wheeling Corrugating's operations
and cause severe injuries to Wheeling Corrugating's businesses
and the interests of the debtors' estates.  The Debtors are
therefore requesting discretionary authority to pay certain
prepetition trade claims of the Seller/Vendors that the Debtors,
in the exercise of their business judgment, determine are
essential to maintaining the going concern value of their
businesses, up to an aggregate amount of $450,000.

The Debtors represent to Judge Bodoh that they believe, in their
business judgment, that the benefits to their estates and
creditors from making such payments will exceed the cost of
making such payments.

The Debtors propose to pay the prepetition claims of
Seller/Vendors that agree to continue to sell for and on behalf
of the Debtors on ordinary and acceptable terms and conditions
that are at least as favorable to the Debtors as those that
prevailed prior to the Petition Date.  To implement the
authority requested by this Motion, the Debtors propose that
Judge Bodoh order that:

       (a) The Debtors are authorized, in their discretion, to
make payments to the Seller/Vendors on the conditions (i) that
all such claims be paid by check or by wire transfer of funds,
(ii) by accepting payment, the Seller/Vendors agree to maintain
or reinstate customary trade terms during the pendency of these
chapter 11 cases, and (iii) that the Debtors mail a copy of the
Order to each Seller/Vendor to which any payment permitted
hereunder is made;

       (b) The Debtors are authorized to make such payments to
the Seller/Vendors in 12 equal payments beginning the first of
the month following the Court's approval of this Motion; and

       (c) A Seller/Vendor's acceptance of the first of such
monthly payments is deemed to be acceptance of the terms of the
Order, and if the Seller/Vendor thereafter does not provide the
Debtors with customary trade terms during the pendency of these
Chapter 11 cases, then any payments of prepetition claims made
after the Petition Date may be deemed to be unauthorized
postpetition transfers and therefore recoverable by the Debtors.

However, the Debtors ask that Judge Bodoh order that his order
on this Motion not be construed to limit, or in any way affect,
the Debtors' ability to contest any amount claimed by a
Seller/Vendor on any grounds. (Wheeling-Pittsburgh Bankruptcy
News, Issue No. 10; Bankruptcy Creditors' Service, Inc.,

WINSTAR COMMS: MCI Urges Court to Withdraw Interim Utility Order
MCI Worldcom, Inc. asks Judge Joseph Farnan to withdraw the
Interim Utilities Order covering Winstar.  In addition, they ask
that the Court authorize MCI to demand adequate insurance
deposit or termination of services to Winstar.

MCI is a telecommunications service provider to businesses,
consumer and other carrier customers through their network of
fiber optic cables, digital microwave and fixed and
transportable satellite earth stations.  The Court has also
issued an Interim Utilities Order for MCI and other utilities to
continue rendering such services to Winstar Communications, Inc.
as MCI renders telecommunications services that are essential to
the Debtors' continued business operations.

MCI and the Debtors had previously entered into service
agreements for the Service Provider to provide
telecommunications services to the debtors.  

As a result of this service agreement, Debtors had several
accounts with MCI, which amounted to a total of $21,300,000 as
of the petition date.  Monthly consumption of the Debtors as of
the Petition Date currently average about $4,586,406 per month.

Kurt Wynne, Esq. at Reed Smith LP in Wilmington, Delaware,
argues that the Debtors are in a poor financial state.  He
discloses that the Debtors have a history of suffering recurring
net losses and negative cash flow, regardless of their revenues.  
In fact, for the fiscal year 2001 the Debtors generated
$759,300,000 in revenue but incurred net loss of $870,200,000.  

In addition, the Debtors operations consume more cash than they
generate.  For the first nine months of 2000, the Debtors
reported a negative cash flow of $641.5.  To compound the
problem, Mr. Wynne expresses concern over the Debtors' post-
petition financing that provides for a "roll up" of
$1,000,000,000 of pre-petition debt and liquidation of Debtors
assets upon any post-petition default by the Debtors.

To resolve this objection by MCI, the parties met and conferred
concerning the terms under which MCI will withdraw its motion
and continue to render services to Winstar.  Under the agreement
approved by Judge Farnan, Winstar agrees to:

   a) Make initial payment to MCI the sum of $2,750,027.67 for
      services consumed from petition date to May 13, 2001;

   b) Pay adequate assurance deposit on or before May 10, 2001
      amounting to $461,988.39

   c) Make Lease Payments on or before the first month of every
      month of $2,738,452.52

   d) Make bi-weekly payments amounting to $923,976.77 as future
      adequate assurance payment payable in advance every Monday
      of a two-week period

   e) Within 15 days after the conclusion of each two-week
      period, Service Provider shall compare amount of Debtors'
      actual usage with amount of bi-weekly payment.  If actual
      usage exceeds bi-weekly payment made, the Debtors shall
      pay the difference within 48 hours after receiving written
      notice for payment of difference.  If usage is less than
      bi-weekly payment, Debtors' next bi-weekly payment shall
      be reduced by the difference.

   f) The Debtors shall not consume telecommunications services
      greater than the bi-weekly payment, however, if the
      service consumed by the Debtors should exceed the bi-
      weekly payment, MCI may require the Debtors to make
      additional interim payment for the excess

In case of Debtors' failure to pay any portion of the payments
to the Service Providers, they shall have the right to do all or
any of the following:

   1) put debtors credit on hold without further notice

   2) suspend or terminate any or all of the services provided
      to the Debtors and/or terminate any or all of the

   3) suspend or terminate any or all of the Debtors' access to
      the Service Provider's networks without further notice

In addition, the said terms of the compromise agreement shall
expire automatically in the event of:

    i) any of the Debtors' default on its respective obligations
       under any debtor-in-possession financing facility

   ii) entry of an order approving any sale of all or
       substantially all of the Debtors' assets

  iii) entry of an order converting any of the Debtors' cases
       to Chapter 7 liquidation or a Chapter 11 trustee is

   iv) entry of an order dismissing Debtors' bankruptcy cases

Winstar Bankruptcy News, Issue No. 9; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


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

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

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
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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.

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