TCR_Public/010912.mbx        T R O U B L E D   C O M P A N Y   R E P O R T E R

        Wednesday, September 12, 2001, Vol. 5, No. 178


360NETWORKS: Panel Balks At Unjustified Scope of Retention Plan
ABRAXAS PETROLEUM: Grey Wolf Shares Tendered to Unit's Offer
ADVANTICA: FRD Inks Pact To Sell FRI-M Interests to Lyon's
ALARIS MEDICAL: Plan to Refinance Facility Prompts S&P Action
ALPNET INC: Nasdaq Panel Denies Appeal & Delists Common Stock

AMERICAN TISSUE: Chapter 11 Filing Excludes American Pad & Paper
AMES DEPT: Court Extends Time for Schedules Filing To November 3
ASIA ELECTRONICS: Shareholders Approve Plan of Dissolution
BE INC: Enters Agreement to Sell Assets to Palm Inc.
COMDISCO: GECC Seeks to Prohibit Debtors' Use of Cash Collateral

COMDISCO INC: Equity Panel Taps BIL as Lead Bankruptcy Counsel
CRAZY SHIRTS: Will File For Chapter 11 Relief and Sell Assets
DRUG EMPORIUM: Court Approves Reorganization Plan
E.SPIRE COMMS: Court Extends Lease Decision Deadline to Jan. 16
FINOVA GROUP: Bank Agent Wants Out of Claim Objection Protocol

FRONTIER PACIFIC: S&P Assigns its R Financial Strength Rating
GLENEX INDUSTRIES: Mercury Partners Bids to Take Over
GLENEX INDUSTRIES: Quest Ventures Acquires 1.8M Shares from RBC
HYNIX SEMICON: Equity-for-Debt Swap Spurs S&P Downgrades
ICG COMMS: J. Walsh Says a 30-60 Application Delay is Reasonable

KMART CORP: Will Focus Restructuring On Supply Chain Facility
LAIDLAW INC: Court Fixes December 26 Bar Date
LOEWS CINEPLEX: Seeks Extension of Removal Deadline to Jan. 14
MALIBU ENTERTAINMENT: Amends Credit Agreement with Foothill
MCCRORY CORP: Case Summary & 29 Largest Unsecured Creditors

NETRAIL: Sells Major Assets to Cogent Communications for $11.7MM
NQL INC: Delisting Imminent After Scrapping Reverse Stock Split
OPTI INC: Opts to Undertake Voluntary Liquidation & Dissolution
PACIFIC GAS: Seeks Blanket Authority to Amend & Assume PPAs
PAYLESS CASHWAYS: Hilco, Ozer & Nassi Commence Liquidation Sales

PILLOWTEX CORP: Self-Insured Workers' Compensation Continues
PSINET CONSULTING: Case Summary & 7 Largest Unsecured Creditors
PSINET INC: CIBER to Acquire Metamor, Subject to Court Approval
PSINET INC: Seeks Okay For Expedited Lease Rejection Procedures
PURINA MILLS: Stockholders Vote For Merger with Land O' Lakes

SCHWINN/GT: Pacific Cycle Acquires Bicycle Assets for $86MM
STAR TELECOMMS: Committee Secures Right to File a Plan
SUN HEALTHCARE: Signs-Up Gazes As Counsel for Avoidance Actions
USG CORP: U.S. Trustee Balks at Chilmark's Engagement Terms
WHEELING-PITTSBURGH: Interstate Gas Wants Admin Claim Priority


360NETWORKS: Panel Balks At Unjustified Scope of Retention Plan
The Official Committee of Unsecured Creditors charges that
360networks inc. fails to demonstrate any sound business
justification for each of the components of its proposed bonus
and retention plan.  Norman N. Kinel, Esq., at Sidley Austin
Brown & Wood, relates that the Committee finds the notes
incredibly rich and over-broad:

   a) given the Debtors' assertion that it is unlikely that
      unsecured creditors will receive any distribution in these
      cases and secured creditors will receive only cents on the
      dollar, and

   b) when compared to other retention and severance plans
      approved in other chapter 11 cases.

Mr. Kinel reminds Judge Gropper that the Debtors have repeatedly
claimed there will be no recovery to unsecured creditors in
these cases.  And yet despite these dire predictions and only
$75,000,000 of potentially free cash in the United States, Mr.
Kinel notes, the Debtors have proposed perhaps one of the
richest and deepest retention and severance programs in
bankruptcy history.

Also, the Committee points out that most of the components of
the bonus and retention plan are completely unjustified.  In
fact, Mr. Kinel says, some are even highly offensive.

According to Mr. Kinel, the most unconscionable element of the
Bonus and Retention Plan is the so-called "Value Creation Pool"
that provides for the distribution of additional money, at
senior management's sole discretion, to any of the Covered
Employees and is linked to the "aggregated value of
consideration distribute to creditors".

In other words, Mr. Kinel says, senior management may reward
themselves and anyone else, in their sole discretion, with a
percentage of the amount that is received for their assets and
those of their non-debtor affiliates, irrespective of whether
any value was in fact created.

The Committee believes that senior management and their
employees should not be entitled to what amounts to a "success
bonus" considering the Debtors' grim predictions that unsecured
creditors will not receive a distribution in these cases.

There's also no justification for providing the Debtors' senior
management with authority to hand out millions of dollars to
employees as they see fit, the Committee adds.

Mr. Kinel tells Judge Gropper that senior management has
unfettered discretion to distribute up to $4,000,000
(discretionary fund) to its employees in Tiers II-V.  Given the
Debtors' projection that it intends to exit bankruptcy in nine
months, Mr. Kinel notes, $4,000,000 is an extraordinary large
sum to allow senior management to allocate without any controls
or checks.  The Committee suggests that this component be
completely eliminated or, at least reduce the amount and grant
them oversight in how the monies from the Discretionary Fund are
to be used.

The total dollar amounts allocated to the Pay-to-Stay and
Severance components should also be reduced, the Committee
proposes.  Mr. Kinel explains that the $15,100,000 is far too
expensive given the economic realities of these cases.  "Many of
the Debtors' employees may not need coaxing to remain in the
Debtors' employ," Mr. Kinel says.  Besides, Mr. Kinel adds, the
Debtors did not produce any evidence to support their claim that
their employees may be lured away by their competitors.  This
contention certainly lacks credibility, Mr. Kinel notes.

The Committee suggests that the Pay-to-Stay should at least be
reduced by $198,750 while the severance component should also be
reduced to reflect more reasonable economic terms.

Thus, the Committee requests Judge Gropper to deny the Debtors'

                        Debtors Respond

The Debtors contend that the Committee:

  (a) failed to seriously challenge the Debtors' business
      judgment to the Debtors' retention proposal;

  (b) offered no constructive alternative; and

  (c) made clear the Committee's true motive is not to obtain
      modifications of the program, but to punish management
      because the Debtors (along with the entire
      telecommunications industry) experienced severe financial
      losses in the past (and because the Debtors had the
      audacity to suggest that the Committee's professional fees
      are out of control).

Alan J. Lipkin, Esq., at Willkie Farr & Gallagher, in New York,
tells Judge Gropper that the Debtors' motion should be granted
because the Debtors' business judgment for implementing the
retention program is amply justified.

According to Mr. Lipkin, the Committee was properly consulted,
the undisputed facts regarding the situation of the Debtors'
employees support the Debtors' business judgment, and the
Committee's descriptions of the Debtors' proposal and its
justifications are severely flawed.

Mr. Lipkin claims that the Committee's challenges to the
proposed retention and severance program are unfounded.  Mr.
Lipkin says the Debtors do not understand why the Committee
would challenge potential payments to the Debtors' management
for value creation that would result in distributions to
creditors in these cases in the $400,000,000 to $800,000,000

The Debtors also dismiss the Committee's demand for an oversight
in how the money in the Discretionary Fund is used.  "The notion
that the Committee is best positioned to make such decisions is
pure fantasy," Mr. Lipkin notes.

The Committee also misunderstands that the retention program
should be based on overall results achieved by management, not
on recoveries for unsecured creditors, Mr. Lipkin adds.  
According to Mr. Lipkin, the Committee fails to distinguish
between alleged management shortcomings of the past and
preserving and maximizing values in the future.  

While the Debtors are sympathetic to the pre-petition losses
suffered by unsecured creditors, Mr. Lipkin argues, the losses
do not prevent the Debtors from implementing an employee
retention program based on what will be accomplished in the

Mr. Lipkin also informs Judge Gropper that the Committee's few
legitimate concerns already were addressed by the Debtors'
clarification of the retention program.  These clarifications to
the Motion were made regarding severance obligations:

  (a) the potential payments to Tier II employees were reduced
      from 6 months' salary to 4 months' salary;

  (b) the severance plan was clarified to confirm that severance
      payments to project employees would be made from the
      Discretionary Fund rather than from free cash; and

  (c) upon termination, employees will receive severance
      payments, but will be ineligible for future payments for
      pay-to-stay amounts and the severance payments will be
      credited against any future awards from the Discretionary
      Fund or the Value Creation Pool.

Accordingly, the Debtors request that the Committee Objection be
overruled and the Debtors' motion be granted. (360 Bankruptcy
News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-

ABRAXAS PETROLEUM: Grey Wolf Shares Tendered to Unit's Offer
Abraxas Petroleum Corporation (AMEX:ABP) and its wholly-owned
subsidiary, Abraxas Acquisition Corporation, announced that
approximately 5.1 million common shares of Grey Wolf Exploration
Inc. (TSE:GWX) have been tendered to AcquisitionCo's offer in
exchange for shares of Abraxas common stock, all of which have
been taken up.

The shares tendered represent 76% of the Grey Wolf shares not
previously owned by Abraxas and its wholly-owned Canadian
subsidiary, Canadian Abraxas Petroleum Limited.  Abraxas and
Canaxas now own 87% of the common shares of Grey Wolf.

AcquisitionCo also announced that the exchange offer has been
extended until 5:00 pm, Calgary time, Monday, September 17,
2001, unless further extended or withdrawn.  Other terms and
conditions of the exchange offer remain unchanged.  

AcquisitionCo intends to effect a subsequent transaction to
acquire the remaining Grey Wolf shares that are not tendered  
pursuant to the offer.

Abraxas Petroleum Corporation is a San Antonio-based crude oil
and natural gas exploitation and production company that also
processes natural gas. The Company operates in Texas, Wyoming
and western Canada.

Grey Wolf Exploration Inc. is a junior crude oil and natural gas
company which focuses its efforts on exploring for, developing,
acquiring, and producing crude oil and natural gas in western
Canada and the Northwest Territories.

Natural gas in central and northern Alberta accounts for over
90% of Grey Wolf Exploration's reserves and production.

Meanwhile, the Company is said to be working aggressively to
both restructure its debt to bring interest costs down and
improve its balance sheet as well as continue to reduce
operating costs. All of which augurs well for Abraxas' future.

The Company has also completed asset sales. These combined with
the tender for Grey Wolf are another step in the restructuring
of the Company's balance sheet that will improve liquidity and
earnings going forward and allow Abraxas to continue to
improve its cost structure while focusing on its portfolio of
drilling projects in its core areas.

ADVANTICA: FRD Inks Pact To Sell FRI-M Interests to Lyon's
On August 10, 2001, FRD Acquisition Co., which as previously
reported is the subject of a case under Chapter 11 of the United
States Bankruptcy Code, and is a wholly owned subsidiary of
Advantica Restaurant Group, Inc., entered into a letter of
intent with Lyon's of California, Inc. with respect to the
purchase and sale of all the outstanding capital stock of FRI-M
Corporation, which operates, through its subsidiaries, the
Coco's and Carrows restaurant chains.

Pursuant to the terms of the letter of intent, during a
designated period of time currently set to expire on September
19, 2001, subject to extension by the parties:

   (1) Lyon's will be permitted to complete a due diligence
       review of FRI-M and the Coco's and Carrows operations,

   (2) the parties will work diligently toward the negotiation
       and execution of a definitive stock purchase agreement.

If the parties fail to execute a definitive agreement within the
designated time period and any extension period thereafter, the
letter of intent will terminate. In the event the parties enter
into a definitive agreement, the terms of the definitive
agreement shall be subject to higher and better offers and the
approval of the United States Bankruptcy Court for the District
of Delaware.

No assurance can be given, however, that the parties will
successfully negotiate a definitive agreement or that a sale
will be authorized and approved by the Bankruptcy Court or
completed on a timely basis or in the manner described herein,
due to the numerous conditions that remain and the contingencies
that exist with respect to the above referenced prospective

Subject to the terms and conditions of the letter of intent,
Lyon's has offered to purchase the stock of FRI-M for a cash
payment of $49.5 million and the issuance of a $10 million
senior subordinated note of FRI-M (due seven years from the date
of issuance and bearing a rate of interest of ten percent (10%)
per annum) in addition to assuming $9 million in long-term and
current capital lease obligations and $16.4 million of negative
working capital, subject to adjustment as set forth therein.

The letter of intent originally restricted FRD's ability to
solicit competing offers, but such restriction no longer

                           *  *  *
Advantica's credit facility with its lenders provides to the
Company (excluding FRD) a working capital and letter of credit
facility of up to $200 million - the Advantica Credit Facility.

The Company was in compliance with the terms of the Advantica
Credit Facility at June 27, 2001; however, certain of the
financial covenants become more restrictive as of and for the
period ended December 26, 2001.

The Company's ability to comply with such covenants will depend
on (a) FRD completing the sale of Coco's and Carrows prior to
December 26, 2001 and receiving sufficient cash proceeds to
substantially repay Denny's, Inc.'s $56.1 million receivable and
$11.4 million deposit securing outstanding letters of credit
under the Coco's/Carrows Credit Facility, and (b) meeting or
exceeding current operating projections, particularly as it
relates to gains and cash proceeds from restaurant

If the Company is unable to meet such covenants, the Company
would be required to seek an amendment or negotiate other
arrangements with its lenders. Although no assurances can be
given, the Company believes it would be able to negotiate the
required arrangements on commercially reasonable terms or
otherwise, if needed.

As of June 27, 2001 and December 27, 2000, the Company had
working capital deficits, excluding net liabilities of
discontinued operations, of $145.8 million and $170.6 million,
respectively. The Company is able to operate with a
substantial working capital deficit because:

    (1) restaurant operations are conducted primarily on a cash
        (and cash equivalent) basis with a low level of
        accounts receivable,

    (2) rapid turnover allows a limited investment in
        inventories and

    (3) accounts payable for food, beverages, and supplies
        usually become due after the receipt of cash from
        related sales.

ALARIS MEDICAL: Plan to Refinance Facility Prompts S&P Action
Standard & Poor's placed its ratings on ALARIS Medical Inc. and
its operating company, ALARIS Medical Systems Inc., on
CreditWatch with positive implications.

    Ratings Placed on CreditWatch with Positive Implications

   ALARIS Medical Systems Inc.

     Corporate credit rating               B
     Subordinated debt                     CCC+
     Bank loan                             B

   ALARIS Medical Inc.

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

The CreditWatch listing follows the announcement by ALARIS that
the company is planning to refinance its operating company's
existing bank facility with approximately $150 million of senior
secured notes due 2006 and enter into a $20 million revolving
credit facility.

The positive implications of the CreditWatch incorporate the
possibility that the ratings could be raised if the refinancing
is completed. If completed as described, the note offering would
not only relieve ALARIS from onerous bank loan service
requirements and financial covenants during the next few years
but would also permit the company to retire its convertible
subordinated debentures maturing January 2002 and to make
distributions from ALARIS Medical Systems to ALARIS in order to
make cash interest payments on its senior discount notes
beginning in 2004.

San Diego, Calif.-based ALARIS manufactures products such as:

Intravenous pumps to control the flow of solutions, drugs, and
nutritionals into patients' circulatory systems;
Related accessories; and Patient-monitoring devices.

ALPNET INC: Nasdaq Panel Denies Appeal & Delists Common Stock
ALPNET, Inc., a leading provider of multilingual information
management solutions to Global 1000 companies, announced that
the Company's appeal for continued listing on the Nasdaq
SmallCap Market has been denied, and that its common stock was
delisted from the Nasdaq SmallCap Market effective with the
opening of business today, due to the Company's inability to
meet the minimum bid price requirements.

The Company has determined that its stock is immediately
eligible to trade on the OTC Bulletin Board(R) (OTCBB).

The OTCBB is a regulated quotation service that displays real-
time quotes, last-sale prices, and volume information in over-
the-counter (OTC) securities. An OTC equity security generally
is any equity that is not listed or traded on Nasdaq(R) or a
national securities exchange. OTCBB provides access to over
3,600 securities and includes more than 330 participating market

ALPNET is one of the largest, publicly owned, dedicated
providers of complete multilingual information management
solutions, with a worldwide network of offices and resources. A
pioneer in its industry, ALPNET helps corporations deploy into
international markets faster and more efficiently, through
intelligent use and reuse of multilingual informational assets.

ALPNET offers an extensive range of services, based on
innovative, proven technologies, including strategic
InfoCycle(TM) consulting, as well as Web, software and document
localization and publishing, in all business languages and

For additional information about ALPNET, visit its Web site at

AMERICAN TISSUE: Chapter 11 Filing Excludes American Pad & Paper
American Pad & Paper LLC and American Forms clarifies they are
not part of the Chapter 11 petition filed by American Tissue
Inc.  Although the companies are affiliated with American Tissue
Inc. through common ownership, their capital structure and
financing arrangements are separate and distinct.

American Pad & Paper LLC, is a leading manufacturer and marketer
of paper-based office products in North America. Product
offerings include writing pads, filing supplies, retail
envelopes, computer forms and copy paper. The key operating
divisions of the Company are AMPAD and American Forms.
Additional information is available on the Company's Website at

AMES DEPT: Court Extends Time for Schedules Filing To November 3
Pursuant to 11 U.S.C. Sec. 521(1) and Rule 1007 of the Federal
Rules of Bankruptcy Procedure, Ames Department Stores, Inc. is
required to file comprehensive (i) schedules of assets and
liabilities, (ii) schedules of current income and expenditures,
(iii) schedules of executory contracts and unexpired leases, and
(iv) statements of financial affairs within fifteen days after
the Commencement Date.

Thus, through a Motion, the Debtors request that the Court
extend the 15-day deadline for filing those Schedules and
Statements up to and including November 3, 2001, without
prejudice to the Debtors' ability to request additional time
should it become necessary.

David S. Lissy, Esq., Ames' Senior Vice President and General
Counsel, relates that the amount of work necessary to complete
the Schedules, and the demands upon the Debtors' employees to
assist in efforts to stabilize post-petition operations, makes
it impossible to properly and accurately complete the Schedules
within 15 days.  While the Debtors are mobilizing their
employees to work diligently and expeditiously on the
preparation of the Schedules, Mr. Lissy states that resources
are strained.  

At present, the Debtors anticipate they will require at least 60
additional days to complete the Schedules.  Mr. Lissy reminds
the Court about the size of the Debtors' cases, the amount of
information that must be assembled and compiled, the locations
of such information, and the significant amount of employee time
that must be devoted to the task of completing the Schedules.

Finding a extension entirely appropriate (and routine in other
mega-cases), Judge Gerber orders that the time in which the
Debtors must file their Schedules and Statements is extended for
an additional 60 days, up to and including November 3, 2001,
without prejudice to the Debtors' right to seek further
extensions. (AMES Bankruptcy News, Issue No. 3; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

ASIA ELECTRONICS: Shareholders Approve Plan of Dissolution
Asia Electronics Holding Co., Inc. or the company (OTCBB:
AEHCF), following approval by its board of directors, announced
that the shareholders had approved the liquidation of the
company pursuant to a plan of dissolution at a special meeting
of shareholders held at Treasure Isle Hotel, Road Town,
Tortola, British Virgin Islands on September 10, 2001.

The company filed articles of dissolution and the plan of
dissolution on September 10, 2001. The company expects to begin
making liquidating distributions to its shareholders as soon as
practicable thereafter.

The company's board of directors had previously approved
resolutions proposing the liquidation and setting the record
date as of July 26, 2001. The company then circulated a proxy
statement describing the company, current developments and the
board's reasons for the proposed liquidation to the shareholders
on or about August 6, 2001.

Due to recent developments including, but not limited to, the
refusal by the company's Chinese joint venture partner to comply
with the company's joint venture agreements to provide financial
and accounting information on the company's Chinese joint
ventures, and the failure by the company to obtain sufficient
support from national, provincial and local governmental
authorities including courts within China and other diplomatic
efforts, the board believed that, after carefully reviewing the
company's strategic alternatives, liquidation and dissolution of
the company was in the best interests of the shareholders and
the most likely way to preserve shareholder value.

At the special meeting of shareholders held on September 10,
2001, the shareholders approved the liquidation pursuant to the
plan of dissolution. The principal purpose of the plan of
dissolution is to preserve shareholder value by liquidating the
company's assets and distributing the net proceeds of the
liquidation to the company's shareholders.

Lee M. Jacob, Chairman of the company, stated: Our board of
directors believed that, after carefully reviewing the company's
strategic alternatives, liquidation and dissolution is in the
best interests of our shareholders and the most likely way to
preserve shareholder value.

BE INC: Enters Agreement to Sell Assets to Palm Inc.
Be Incorporated (Nasdaq:BEOS), the creator of the BeIA and BeOS
operating systems, has received notification from the Nasdaq
Stock Market, Inc. that it has failed to maintain the minimum
bid price of at least $1.00 over 30 consecutive trading days and
has not regained compliance during the 90 days provided under
the Nasdaq Marketplace Rules. The minimum bid price requirements
are set forth in Nasdaq Marketplace Rules 4450(a)(5) and 4310

The notice of non-compliance subjects Be to delisting from the
Nasdaq National Market. Be, however, plans to request a hearing
before a Nasdaq Listing Qualifications Panel to review the
Staff's determination. During such review process, Be's
securities will continue to be listed on the Nasdaq National

Be recently announced it has entered into a definitive agreement
to sell its intellectual property and technology assets to Palm,
Inc. (Nasdaq:PALM). The purchase price is $11 million, to be
paid in common stock of Palm, which Be currently intends to
liquidate as soon as reasonably practicable following the
closing of the transaction.

Be's board of directors has approved the transaction, and the
winding-up of Be's operating business following the closing. The
closing of the transaction and the winding-up are subject to the
approval of Be's stockholders, and the satisfaction of other
customary closing conditions. The transaction is expected to
close in the fourth calendar quarter of 2001.

Founded in 1990, Be Inc. creates software solutions that enable
rich media and Web experiences on personal computers and
Internet appliances. Be's headquarters are in Menlo Park,
California. It is publicly traded on the Nasdaq National Market
under the symbol BEOS. Be can be found on the Web at

COMDISCO: GECC Seeks to Prohibit Debtors' Use of Cash Collateral
General Electric Capital Corporation is a secured lender
to Comdisco Inc, with a security interest in certain Master
Lease, Lease Schedules, Equipment and the rental and other
payments due thereunder, and in the proceeds.

Thus, by its motion, GECC seeks to prohibit the Debtor from
using GECC's cash collateral and for adequate protection of the
GECC cash collateral.

Alexander Terras, Esq., at Quarles & Brady LLC, in Chicago,
discloses that the Debtor entered into a Master Equipment Lease
with CMGI, Inc. and NaviNet, Inc. (which later changed its name
to NaviPath, Inc.) in August 1999.  Then, on or about June 2000,
the Debtor entered into a Security Agreement (Chattel Mortgage
and Assignment of Lease) with GECC.

Under the Security Agreement, the Debtor assigned to GECC a
security interest in the Master Equipment Lease, certain
Equipment, Equipment Lease Schedules, and all rent and other
payments due thereunder, and the proceeds thereof.  The security
interests granted under the Security Agreement were perfected by
the filing of a UCC-1 Financing Statement on June 6, 2000.  As a
result, GECC has a perfected, non-avoidable security interest in
the Master Lease.

Each of the Equipment Lease Schedules provides for the payment
of periodic rental payments from CMGI and Navipath to the

      Equipment Lease Schedule #       Amount of Monthly Payment
      --------------------------       -------------------------
      Equipment Lease Schedule No. 11               $32,900.70
      Equipment Lease Schedule No. 16                12,238.38
      Equipment Lease Schedule No. 18                57,259.33
      Equipment Lease Schedule No. 19                36,832.65
      Equipment Lease Schedule No. 23                29,723.55
                             TOTAL LEASE PAYMENTS  $168,954.61

According to Mr. Terras, the payments due under each of the
Equipment Lease Schedules constitutes the cash collateral of
GECC under section 363(a) of the Bankruptcy Code.

Mr. Terras emphasizes that GECC has not consented to the use of
its cash collateral.  And since the Debtors have not obtained
court approval for the use of GECC's cash collateral, Mr. Terras
argues, the Debtors should be prohibited from using GECC's cash

GECC asks Judge Barliant to permit GECC to retain and apply the
lease payments paid to it by the Co-Lessees.  In the
alternative, GECC requests the Court to direct the Debtors to
segregate and separately account for any and all proceeds of the
five equipment lease schedules, whether received pre-petition or

Without adequate protection, GECC asks the Court to prohibit the
Debtors' use of the GECC cash collateral.  As adequate
protection, GECC wants Judge Barliant to require the Debtors to
provide monthly payments in the same amounts under the five
equipment lease schedules. (Comdisco Bankruptcy News, Issue No.
5; Bankruptcy Creditors' Service, Inc., 609/392-0900)    

COMDISCO INC: Equity Panel Taps BIL as Lead Bankruptcy Counsel
The Official Committee of Equity Security Holders of Comdisco
Inc. (NYSE: CDO), appointed by the office of the United States
Trustee on September 6, 2001, announced that, subject to
Bankruptcy Court approval, it has retained the New York law firm
of Berlack, Israels & Liberman LLP as its lead bankruptcy
counsel and the Chicago based Water Tower Capital, LLC as its
financial advisor.

The Committee consists of five of Comdisco's largest

Edward Weisfelner of Berlack, Israels & Liberman LLP stated "we,
together with John Stark of Water Tower Capital LLC, have been
charged by the Committee with the task of attempting to maximize
the financial return to the Company's shareholders from these
Chapter 11 reorganization proceedings.

The Equity Committee received a comprehensive briefing from
Comdisco and its counsel during its organizational meeting and
we look forward to the continued cooperation of the Company and
the professionals that they have retained in assisting us in our
concerted efforts to protect the rights of Comdisco's

CRAZY SHIRTS: Will File For Chapter 11 Relief and Sell Assets
Big Dog Holdings Inc. (Nasdaq:BDOG) --  
-- a developer, marketer and retailer of branded, lifestyle
consumer products, announced that it has signed a definitive
agreement to purchase the assets of Crazy Shirts Inc., a
privately held casual sportswear manufacturer and retailer, for
approximately $10 million.

Crazy Shirts will voluntarily file for relief under Chapter 11
of the Bankruptcy Law. Big Dogs will purchase the assets through
the bankruptcy court process. The transaction is expected to
close within 60 days and is subject to bankruptcy court

Based in Honolulu, Hawaii, Crazy Shirts is a vertically
integrated specialty retailer of souvenir T-shirts, knit tops
and accessories serving the high-end tourist market. Crazy
Shirts designs, manufactures and markets its products under the
CRAZY SHIRTS(R) brand name.

Crazy Shirts' products are sold via the Company's 44 retail
stores in high-profile tourist locations in the United States
and Guam. Two-thirds of the stores are in Hawaii. Crazy Shirts
also sells its products to wholesale accounts, such as Duty Free
Shops, and through its Internet site at and a mail order catalog.

In the year ended February 25, 2001, Crazy Shirts had sales of
$47.7 million and a net loss resulting in subsequent cash flow

Commenting on the announcement, Andrew Feshbach, Chief Executive
Officer of Big Dogs, said: "We are pleased about the acquisition
of Crazy Shirts, but at the same time recognize the significant
amount of work required to turn this distressed business around.
In the face of a drop off in Japanese tourism in Hawaii,
competitive pressures and other factors, the sales of the
company have been declining for a number of years.

"However, we believe in the Crazy Shirts brand and think Big
Dogs is uniquely positioned to achieve this turn-around. Both
companies are vertically integrated manufacturers and retailers
of casual sportswear with a focus on graphics, especially
graphic T-shirts. Both target the tourist market, in a
complementary fashion, with Crazy Shirts focused more on the
high-end market and Big Dogs oriented toward the middle market."

Randy Yeager, President and Co-Chairman of Crazy Shirts, said:
"We are delighted with the sale to Big Dogs. To partner with a
fellow manufacturer and retailer who understands our business
will make for a smooth transition and a much better company
going forward." He added, "This affords us numerous
opportunities to benefit from Big Dogs' capabilities and its
strengths. For example, we will be able to leverage off of Big
Dogs' outstanding graphics and sourcing capabilities to create
superior value and quality across Crazy Shirts' product

Big Dog Holdings Inc. develops, markets and retails a branded,
lifestyle collection of unique, high-quality, popular-priced
consumer products, including activewear, casual sportswear,
accessories and gifts. The Big Dog brand image is one of
quality, fun and a sense of humor. The BIG DOGS brand is
designed to appeal to people of all ages and demographics,
particularly baby boomers and their kids, big and tall
customers, and pet owners.

In addition to its approximately 200 retail stores, Big Dogs
markets its products through its catalog, better wholesale
accounts and Internet sales.

DRUG EMPORIUM: Court Approves Reorganization Plan
The United States Bankruptcy Court in Youngstown, Ohio approved
the Chapter 11 Plan of Reorganization of Drug Emporium, Inc.  

The Plan provides for the sale of 100% of reorganized Drug
Emporium's capital stock to Snyder's Drug Stores, Inc. for a
cash purchase price of $21,000,000 plus the assumption of
certain liabilities. Under the Plan, no distribution will be
made to Drug Emporium's current shareholders, and all existing
Drug Emporium shares will be canceled.

The Plan will go into effect upon the completion of the
documentation required by the Plan and the closing of a $160
million revolving loan facility and a $40 million term loan
facility for which Snyder's and Drug Emporium have received

The loan facilities will be utilized to fund cash costs of
exiting Chapter 11 as well as to fund the working capital needs
of both Drug Emporium and Snyder's going forward.  ]

In addition, a major supplier of pharmaceutical goods to both
companies has agreed to provide $40 million in credit
enhancements to the new loan facilities as well as enter into a
long-term supply agreement with the new combined company.  
Snyder's will operate Drug Emporium as a separate wholly-owned

E.SPIRE COMMS: Court Extends Lease Decision Deadline to Jan. 16
The US Bankruptcy Court for the District of Delaware approved
the Debtors' motion to extend the deadline to assume or reject
lease of nonresidential real property by an additional 120 days
through and including January 16, 2002.  

In addition, the Court also orders the Debtors to timely perform
all their obligations under the leases.

The Court also approved the Debtors motion to extend the time
within which the Debtors must file notice of removal and set the
new deadline through and including January 16, 2002.

FINOVA GROUP: Bank Agent Wants Out of Claim Objection Protocol
Christopher S. Sontchi, Esq., at Ashby & Geddes, in Wilmington,
Delaware, reminds the Court that the Chase Manhattan Bank and
The FINOVA Group, Inc., have a dispute of several million
dollars.  The Bank is the Administrative Agent under a certain
Credit Agreement dated March 1995.  Their dispute concerns the
exact amount owed to the Agent under the Credit Agreement, the
Bankruptcy Code and the Third Amended and Restated Joint Plan of

Mr. Sontchi tells Judge Walsh that prior to the Confirmation
Hearing, the Debtors and the Administrative Agent engaged in
numerous discussions and negotiations.  However, they were all
unsuccessful to resolve the disputed claims.

According to Mr. Sontchi, the Administrative Agent plans to seek
a speedy resolution of the disputed portion of its Claim against
FNV Capital.  Thus, the Administrative Agent contends that the
Debtors' Motion should be denied to the extent that it purports
to preclude, impede or limit their rights under the Stipulation
or Bankruptcy Code to pursue a quick resolution of its disputed

Mr. Sontchi claims that participation in the proposed uniform
claims objection procedure will prejudice the Administrative
Agent because:

  (1) The Administrative Agent will file a request for allowance
      of the disputed claim and, under the Bankruptcy Rules,
      that request will be heard by this Court before the
      proposed deadline for filing objections.

  (2) There is no reason to subject the Administrative Agent to
      a period of negotiation with the Debtors as the parties
      have already engaged in such course of alternative dispute
      resolution to no avail.

  (3) The Administrative Agent will suffer economic injury due
      to loss of use of the sums owed to the Administrative
      Agent while the dispute remains extant.

Thus, the Administrative Agent requests that the Court excuse
them from the uniform procedures proposed in the Motion.

Pharmacists, Veterinarians and Optometrists

Philip Trainer, Jr., Esq., at Ashby & Geddes, explains that
certain pharmacists, veterinarians and optometrists object to
the Uniform Procedures Motion because they believe it is
inconsistent with the proper adjudication of their Abstention

The pharmacists, veterinarians and optometrists also contend
that Uniform Procedures Motion is inconsistent with their other
rights expressly preserved by the Confirmation Order.

Mr. Trainer explains the pharmacists, veterinarians and
optometrists also want a clarification on the effect of the
Uniform Procedures Motion on their Abstention Motion,
considering that both motions are scheduled for hearing on the
same day.

According to Mr. Trainer, the Uniform Procedures Motion could be
interpreted as seeking relief that might:

   (i) supplant any other possible means of liquidating those
       claims of the pharmacists, veterinarians and optometrists
       that are the subject of the Abstention Motion;

  (ii) completely disallow the claims prior to the determination
       of the Abstention Motion; or

(iii) preclude the pharmacists, veterinarians and optometrists
       from further asserting their rights as preserved by the
       Confirmation Order.
(Finova Bankruptcy News, Issue No. 14; Bankruptcy Creditors'
Service, Inc., 609/392-0900)  

FRONTIER PACIFIC: S&P Assigns its R Financial Strength Rating
Standard & Poor's assigned its 'R' financial strength rating to
Frontier Pacific Insurance Co.

Standard & Poor's took this rating action after California
Insurance Commissioner Harry W. Low conserved the company
because it is insolvent. Frontier Pacific, which is domiciled in
California, is headquartered in San Diego and is a wholly owned
subsidiary of Frontier Insurance Co., a New York-domiciled

The California Department of Insurance relied on a recent
financial examination report of the company to obtain a
conservation order from the Superior Court of San Diego. The
examination confirmed the company is insolvent by more than $5
million. The company is owed significant amounts
from its insolvent parent.

Frontier Pacific conducted the majority of its business in
California but also did business in many other states. The
company wrote private passenger auto liability, auto physical
damage, licensing, surety, and bail bonds.

Frontier Pacific also wrote a few workers' compensation

An insurer rated 'R' is under regulatory supervision owing to
its financial condition. During the pendency of the regulatory
supervision, the regulators may have the power to favor one
class of obligations over others or pay some obligations and not
others. The rating does not apply to insurers subject
only to nonfinancial actions such as market conduct violations.

GLENEX INDUSTRIES: Mercury Partners Bids to Take Over
Mercury Partners & Company Inc. (OTC Bulletin Board: MYPIF;
CDNX: MYP.U), a financial services company engaged in merchant
banking and private equity activities, intends to offer to
purchase for cash 49% of the outstanding common shares of Glenex
Industries Inc. (CDNX: GXI) at $0.30 per share.

The offer represents a 36% premium over the last available
trading price of Glenex before the shares of the Company were
halted by the CDNX on July 23, 2001.

Since Glenex's divestiture of its operations and assets of its
major divisions and subsidiaries in 1999, the scope of business
operations has greatly diminished.  As a result, in July 2000,
the CDNX designated the Company as an inactive issuer as Glenex
failed to meet the exchange listing maintenance requirements.  

The CDNX subsequently halted trading in the shares of the
Company on July 23, 2001 pending a listing review.  On the
same day the board of Glenex announced it recommended to its
shareholders that the Company be voluntarily placed into

A takeover bid circular containing the details of the offer will
be mailed to all registered holders of Glenex common shares as
soon as practicable. The Mercury offer will be subject to
various conditions, including the following:

   (i) not less than 49% of the issued common shares of Glenex
       having been deposited in acceptance of the offer and
       having not been withdrawn prior to the expiry of the

  (ii) the board of Glenex postponing the Company's annual and
       extraordinary general meeting until ten business days
       after the expiry of Mercury's offer; and

(iii) Mercury being entitled to vote the common shares taken up
under the offer at Glenex's postponed shareholders meeting.

Mercury Partners & Company is a publicly traded financial
services company engaged in merchant banking and private equity
activities with operations in Canada and the United States.  
Mercury's investment objective is to acquire influential
ownership in companies and through direct involvement bring
about the change required to realize their potential value.   
For further information about Mercury, visit

GLENEX INDUSTRIES: Quest Ventures Acquires 1.8M Shares from RBC
Glenex Industries Inc. has been informed that Quest Ventures
Ltd. has a binding agreement to acquire 1,870,000 shares of the
Company (19.9% of the issued and outstanding share capital) from
The Royal Bank of Canada (Bahamas) Ltd.

Closing of the transaction is scheduled for September 28, 2001.
The purchase price for the shares includes a premium over the
apparent net liquidation value of Glenex, which Quest has
estimated at between $0.40 and $0.45.

Quest is a private merchant bank based in Vancouver, British
Columbia that is owned and managed by A. Murray Sinclair and
Brian E. Bayley. Quest provides a range of services varying in
nature from conventional asset backed lending to more venture
oriented equity investments and, in certain instances,
catalystic investments.

Historically, Quest has focused on tangibly based industries
including real estate, manufacturing, oil & gas and other
natural resources. Over the past 3 1/2 years Quest has arranged
and/or funded collateralized bridge loans totaling over CDN$225

Mr. Barry Phillpots has resigned from Glenex's Board of
Directors and been replaced by Mr. Murray Sinclair, a principal
of Quest. Mr. Robert Boyle and Mr. Jan-Willem Gritters remain as
directors. Coincident with the closing of the purchase  
transaction, Mr. Gritters will resign from Glenex's Board of
Directors and be replaced by Mr. Brian Bayley, a principal of

Glenex has also been informed that the Purchased Shares intend
to vote against the resolution at the shareholders meeting
September 28, 2001 whereby Glenex would be liquidated. The Board
of Directors intends to make an application with the Canadian
Venture Exchange (CDNX) to have Glenex's shares reinstated for
trading as soon as possible.

Given the time and expense required to effect such liquidation
and given that the apparent net liquidation value of Glenex is
between $0.40 and $0.45 depending on market and other
conditions, and given Quest's willingness to

   (a) pay a premium to such liquidation value and

   (b) to have the shares reinstated for trading, the Board of
       Directors believes that it has successfully discharged
       its fiduciary responsibilities to enhance and maximize
       shareholder value.

HYNIX SEMICON: Equity-for-Debt Swap Spurs S&P Downgrades
Standard & Poor's lowered its long-term ratings on Korean-based
Hynix Semiconductor Inc. (Hynix) and its subsidiary Hynix
Semiconductor Manufacturing America Inc. (HSMA) to double-'C'
from triple-'C'-plus. The ratings remain on CreditWatch, where
they were placed with negative implications on Aug. 21, 2001.

The downgrades reflect an increased likelihood that a financial
assistance package under discussion by Hynix's creditors will
include a debt-[to]-equity swap. Should the possible support
package include a debt-for-equity swap, or any other terms
detrimental to some classes of creditors, the issuer credit
ratings on Hynix and HSMA will be lowered to 'SD' (selective

          Ratings Lowered, On CreditWatch Negative

     Hynix Semiconductor Inc.

       Corp credit rating                                 CC

     Hynix Semiconductor Manufacturing America Inc.
       Corp credit rating                                 CC
       Senior secured debt                                CC

ICG COMMS: J. Walsh Says a 30-60 Application Delay is Reasonable
The Committee of ICG Communications, Inc. and the U. S. Trustee
announced to Judge Walsh that they had privately resolved
several issues regarding the committee's proposed fees for HLHZ
as financial advisor, but that the U. S. Trustee still took the
position that HLHZ's fee was excessive, and that the retention
should not have a nunc pro tunc effective date of December 1,

Judge Walsh promptly ruled that the fee was not excessive, but
reserved his decision on the issue of the nunc pro tunc
effective date.

Judge Peter Walsh rules that the Committee's Application is
approved in part and denied in part.  Likewise Judge Walsh
grants the U. S. Trustee's objection in part and denies it in
part.  In practice, however, Judge Walsh effectively grants the
relief requested by the Committee subject only to limitations
commonly found in other similar engagements, but does place two
important limits on the engagement.

Judge Walsh finds that HLHZ holds no interest materially adverse
to the interests of the Debtor or their estates, their
creditors, or equity interest holders, and that HLHZ is a
"disinterested person" within the meaning of the Bankruptcy
Code, and that the firm's employment is necessary and
appropriate.  He further approves employment nunc pro tunc to
January 1, 2001, granting the U. S. Trustee's objection on this
point in part.

The only question to be decided by Judge Walsh, then, was
whether the difficulties in negotiations constituted the
"extraordinary circumstances" required to support a nunc pro
tunc approval of the application.  

After the Petition Date of November 14, 2000, the Committee was
formed and advised HLHZ that the Committee wished to retain HLHZ
as their financial advisors.  The engagement, from the
Committee's and HLHZ's viewpoints, took effect December 1, and
HLHZ immediately began "substantial and continuous efforts" on
behalf of the Committee.  Judge Walsh cited HLHZ's
uncontroverted testimony that the four-month delay in presenting
the application was the result of lengthy negotiations about the
fees charged by HLHZ.

Deciding that each case was to be decided according to its own
facts, Judge Walsh holds that this situation warrants some
equitable relief to HLHZ.  Judge Walsh's own experience was that
it is common for there to be a 30 to 60 day delay between the
engagement and the filing of an application while negotiations
over employment terms proceed.

Judge Walsh says in his key ruling that "[t]o require an
immediate application filing could adversely impact that
negotiating process, particularly where, as here, the
committee's effective role early in the case called for
immediate professional assistance."  Nevertheless, Judge Walsh
does not want to lower the "bar" to allow some lesser
showing of cause" for nunc pro tunc appointments.  Consequently,
to avoid sending the "wrong message to professionals", he limits
the nunc pro tunc effect to January 1, 2001, rather than
December 1, 2001.

Judge Walsh also approves the fees and the indemnification
provision in the engagement letter, but directs that the
Debtors' indemnification excludes any claim based on HLHZ's
postpetition services unless the postpetition services and
indemnification are presented to and approved by Judge Walsh.  

The Debtor is further forbidden to provide any indemnification
for any claim which is judicially determined, such determination
having become final, to have resulted from HLHZ's gross
negligence or willful misconduct.

Judge Walsh further orders that if HLHZ at any time prior to
confirmation of a chapter 11 plan believes itself entitled to
payment of any amounts by the Debtors on account of
indemnification or reimbursement, HLHZ must file a separate
application for such payment subject to Judge Walsh's review.  

Judge Walsh also orders that the limitation on HLHZ's aggregate
indemnification obligation is eliminated. (ICG Communications
Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service,
Inc., 609/392-0900)  

KMART CORP: Will Focus Restructuring On Supply Chain Facility
Kmart Corporation (NYSE: KM) will restructure certain aspects of
its overall operations.

The focus of this restructuring program will be on the supply
chain infrastructure, including the reconfiguration of Kmart's
distribution center network and implementation of new operating
software across its supply chain.

"Reconfiguration of the distribution center network entails the
replacement of two aging distribution centers with two state-of-
the-art facilities, which will improve productivity and the flow
of goods to nearly half of our stores," said Chuck Conaway,
Chairman and CEO of Kmart Corporation.

"Implementation of the program will begin in this month. In
addition, the distribution of slower-moving goods will be
centralized to one newly-designated center to improve efficiency
across all other centers and facilitate the expansion of our
BlueLight Always campaign."

New operating software will be implemented across Kmart's supply
chain beginning this quarter. Completion of the implementation
is expected by the end of the second quarter of 2002.

In conjunction with these actions, Kmart expects to record
special charges totaling approximately $195 million ($124
million, after taxes) over the next three quarters.
Approximately $130 million of the charges relate to the
impairment of supply chain software and hardware that will no
longer be utilized and to accelerate depreciation on assets that
will continue to be used until their replacement.

Approximately $65 million of the charges relate to costs to exit
the outdated distribution centers. Cash outlays related to the
supply chain strategy will be approximately $45 million.

Approximately $150 million of the charge will be recognized in
the third quarter of 2001. As certain components of the
Company's supply chain software will continue to be utilized
until replaced, depreciation will be accelerated to reflect the
revised useful lives and these assets will be fully-amortized by
mid-2002. The expected incremental depreciation aggregates $15
million in the fourth quarter 2001, and $30 million in 2002.

Kmart Corporation is a near-$40 billion company that serves
America with more than 2,100 Kmart and Kmart Supercenter retail
outlets and through its e-commerce shopping site

LAIDLAW INC: Court Fixes December 26 Bar Date
Judge Kaplan authorized Laidlaw Inc., through their claims
agent, to serve the Bar Date Notice to all entities holding
actual or potential pre-petition claims of any kind as soon as

Judge Kaplan also emphasized that the service of the bar date
notice should be no later than 15 days after the Canadian Court
enters an order recognizing this Order in the Canadian Cases
being applicable to and binding on all creditors of the Canadian

According to Judge Kaplan, the Debtors shall fix the General Bar
Date, as a date that is no fewer than 60 days after the Service
Date.  The General Bar Date applies to all entities, other than
governmental units, holding claims against the Debtors that
arose prior to the Petition Date.

Judge Kaplan ruled that any governmental unit holding an actual
or potential pre-petition claim against a Debtor must file a
proof of claim by December 26, 2001.  The Government Bar Date
applies to all governmental units holding claims against the
Debtors that arose prior to the Petition Date, including
governmental units holding claims against a Debtor for unpaid

Any entity holding a Rejection Damage Claim shall be required to
file a proof of claim by the Rejection Bar Date, which is the
later of:

  (a) the General Bar Date, and

  (b) 30 days after the date of the applicable Rejection Order.

The Court ruled that the Debtors shall retain the right to:

  (a) dispute any filed claim listed in the Schedules as to
      nature, liability or otherwise; and

  (b) subsequently designate any claim as disputed, contingent
      or unliquidated; provided, however, that if a Debtor
      amends its Schedules to reduce the undisputed,
      non-contingent and liquidated amount or to change the
      nature of a claim against the Debtor, the affected
      claimant is required to file a proof of claim or amend any
      previously filed proof of claim in respect of the amended
      scheduled claim.

The Amended Schedule Bar Date shall be the later of:

  (a) the General Bar Date or the Government Bar Date, as
      applicable; and

  (b) 30 days after the date that notice of applicable amendment
      to the Schedules is served on the claimant. (Laidlaw
      Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
      Service, Inc., 609/392-0900)  

LOEWS CINEPLEX: Seeks Extension of Removal Deadline to Jan. 14
Loews Cineplex Entertainment Corporation files a motion
requesting the entry of an order extending the Removal Period by
approximately 120 days, from September 15, 2001 to January 14,

The Debtors submit that the relief requested is in the best
interests of the Debtors, their estates and their creditors as
the extension sought will afford the Debtors the additional time
needed to make informed decisions concerning removal of each
Prepetition Action, ensuring that the Debtors do not forfeit
valuable rights.  

Loews contends that the requested extension of the time period
during which the Prepetition Actions may be removed will not
prejudice the rights of any other parties.

MALIBU ENTERTAINMENT: Amends Credit Agreement with Foothill
Malibu Entertainment Worldwide, Inc. (OTC Bulletin Board: MBEW)
amended its existing credit agreement with Foothill Capital
Corporation in connection with the sale of such loan by Foothill
to Old Hill Partners, Inc.

In connection with such sale, Old Hill entered into a new $3.5
million loan agreement with Malibu to partially fund the
development of one or more of Malibu's flagship SpeedZoner
parks.  In addition, Malibu announced the repurchase of all of
Malibu's Series BB preferred stock and six million shares of
Malibu common stock held by one of its stockholders.

Pursuant to the terms of the amended credit agreement, Malibu
has an option to extend the maturity date beyond the current
maturity of

August 21, 2003 for an additional year upon the payment of a fee
of 1% of the then outstanding amount under the credit agreement.  
The current outstanding balance of the loan is $12.7 million.  
In addition, the amortization schedule of such loan has been
modified to release Malibu from its obligation to make monthly
principal payments of $40,000, make a principal payment of
$1.62 million by December 31, 2001, and make further pre-
payments upon the sale of certain properties.  

In connection with the amendment to the credit agreement, Malibu
granted Old Hill a warrant to purchase up to 7 1/2% of the
Company's Series CC Preferred Stock.  Malibu's new $3.5 million
loan with Old Hill would also mature on August 21, 2003, and is
subject to a similar right of extension as the amended credit

Malibu has not selected or acquired a site for a new SpeedZone.  
Even with Malibu's new development loan, Malibu does not have
sufficient funds for the development of a new SpeedZone.  Malibu
intends to continue its strategy to sell certain assets and to
pursue alternative sources of capital to generate additional
funds for SpeedZone development and working capital.  

There can be no assurance that Malibu will be successful in
selling such assets or acquiring alternative sources of capital
or the timing or amount of proceeds raised from such
transactions or whether such proceeds would be sufficient
to fund future development.

"We are very excited about overcoming the first obstacle to
developing our next generation SpeedZone.  We believe that this
is a very significant first step but it is only the first of
many steps that we will need to take in order to implement our
growth and development strategy," said Rich Beckert, Malibu's
Chief Executive Officer.

Pursuant to Malibu's amended credit agreement, Malibu is
required to identify ways to reduce Malibu's operating expenses
including the potential cost savings associated with terminating
the registration of its stock under the federal securities laws.  

There can be no assurance as to the findings of the
investigation and if or when the Company's Board would approve
Malibu's deregistration or how such deregistration would be

Terminating this registration would have an adverse effect on
the liquidity of the stock since Malibu's stock would no longer
be eligible for trading in public markets.

To facilitate the above transactions, Malibu's largest
shareholder assigned to Malibu its option to purchase all of the
shares of Malibu's Series BB Preferred (with a liquidation
preference of $39.3 million) and six million shares of common
stock from another stockholder.  

Malibu exercised such option, repurchased these shares and
cancelled the shares.  Pursuant to the option agreement, the
seller of the shares has required that the terms of the purchase
remain confidential.

Immediately following the transactions described above, the debt
and equity portions of Malibu's Balance Sheet would appear as
described below:

Notes Payable (Current and Long Term)             $14.75 Million

Preferred Stock

Series AA (held by an affiliate of the

(largest shareholder)                              $17.2 Million

Series CC (held by the largest shareholder)        $57.8 Million

Series CC (new warrants issued)                    Equal to 7.5%
                                                   of the Class

Common Stock

     Largest Shareholder                                  76.9%

     All Others                                           23.1%

The holders of Series AA and Series CC Preferred Stock possess
the right to convert to common stock.  If the holders of that
stock exercised their rights, it would result in material and
substantial dilution of the percentage of ownership of the
common stock held by all other shareholders.

Headquartered in Dallas, Texas, Malibu Entertainment Worldwide,
Inc. is a leader in the location-based entertainment industry,
operating 17 parks in 7 states under the SpeedZone, Malibu Grand
Prix and Mountasia brands, primarily clustered in Texas,
California and Georgia.

MCCRORY CORP: Case Summary & 29 Largest Unsecured Creditors
Lead Debtor: McCrory Corporation  
             1700 Broadway, Suite 1403  
             New York, NY 10019

Debtor affiliates filing separate chapter 11 petitions:

             T.G. & Y. Stores Co.
             J.J. Newberry Stores Co.
             Mack Realty Holding Company
             Customized Integrated Systems For Logistics, Inc.
             HGG Acquisition GC Murphy Co.
             Dollar Zone, Inc. (a Delaware corporation)
             Dollar Zone, Inc. (a New Mexico corporation)
             McCrory Stores Corporation
             Kress-New Providence, Inc.

Type of Business: The company operates about 175 discount
                  variety stores under the names Dollar Zone,
                  McCrory, G. C. Murphy, J. J. Newberry, and
                  T.G.& Y. Most of McCrory's stores are located
                  in the northeastern US; it also has stores in
                  Arizona, California, New Mexico, Oregon,
                  Texas, and Washington.

Chapter 11 Petition Date: September 10, 2001

Court: District of Delaware

Bankruptcy Case No.: 01-10365

Debtors' Counsel: Laura Davis Jones, Esq.
                  Pachulski, Stang, Ziehl, Young & Jones P.C.
                  919 North Market Street, 16th Floor
                  P.O. Box 8705
                  Wilmington, DE 19899-8705
                  T: 302-652-4100
                  F: 302-652-4400  

Estimated Assets: $50,000 - $100,000

Estimated Debts: $1-50 Million

Consolidated List of Debtors' 29 Largest Unsecured Creditors:

Entity                        Nature of Claim     Claim Amount
------                        ---------------     ------------
Internal Revenue Service      Payroll taxes       $2,478,103
Attn: Special Procedures Unit
409 Silverside Road
Wilmington, DE 19801
T: (800) 829-1040
F: (800) 829-0409

Vision Concepts Co., Ltd.     Trade                 $840,307
9th Floor, Benson Tower
74 Hung To Road
Kwun Tong, Hong Kong
T: 011 852 2301 2301
F: 011 852 2301 3960

Taiwan Fa Yu Ent.             Trade                 $514,538
No. 1 Alley 19, Lane 315
Hsin Shu Road
Hsin Chaung
Taipei Hslen, Taiwan
T: 011 886 2 2202 1188
F: 011 886 2 2205 0700

Longmax Assoc., Inc.          Trade                 $509,479
11 F No. 306, Sec. 6th
Minchuan East Road
Taipei, taiwan
T: 011 886 2 2632 6001
F: 011 886 2632 0407

USA Detergents Inc.           Trade                 $471,920
PO Box 643024
Pittsburgh, PA 15264-3024
T: (732) 828-1800
F: (201) 248-1594

Asia Global                   Trade                 $372,701
3/F Kaiser, Phase 3
Hik Yuen Street
Hunghom, Kowloon, HK
T: 011 852 2364 4305
F: 011 852 2764 1374

Sharp Power Ent.              Trade                 $356,192
No. 7 Kuang Hwa Street
Hsinohu, Taiwan

Top Powell                    Trade                 $328,346
4/F No. 66
Chang An W Road
Taipei, Taiwan
T: 011 886 2 2556 2628
F: 011 886 2 2555 4749

Reo-Tree Int'l                Trade                 $299,915
11th Floor, No. 102-- Lane 280
Ming - Chuan E. Road Sec. 6
Taipei, Taiwan
T: 011 886 2 2633 3555
F: 011 886 2 2633 3552

United Trading                Trade                 $298,006
Unit A 15/F
Tung Lee Commercial Bldg.
91-97 Jervois Street
Hong Kong
T: 011 852 2542 2035
F: 011 852 2815 3427

Pennsylvania Dept. of Revenue Sales Tax             $296,809
Dept. 280414
Harisburg, PA
(800) 892-9816

Absolute Crafts Co., Ltd.     Trade                 $290,379
Rm. 406, Blk A3
Teacher Apartment
Ling Xiu
Shishi, China
T: 011 86 595 859 8321
F: 011 86 595 859 8420

A & C Company                 Trade                 $246,468

Manley Toys, Ltd.             Trade                 $245,242

Kiwe Industrial LDT           Trade                 $224,412

Evergreen America Corp.       Trade                 $193,722

Oriental Eagle Co. Ltd.       Trade                 $176,643

Playmore, Inc.                Trade                 $176,251

New Concepts, Ltd.            Trade                 $160,827

PA Dept. of Labor & Industry  Trade                 $158,489

Firmode Int'l.                Trade                 $152,120

Redevelopment Authority of    Trade                 $150,000
the City of York

Glory Moon                    Trade                 $144,653

Shing Fat Industrial Co.      Trade                 $141,209

Summer Metal Products Mfg.    Trade                 $139,856

Wondertreats, Inc.            Trade                 $136,139

Sum Shing Hing Mfg. Co., Ltd. Trade                 $126,148

Chau's Electrical Co., Ltd.   Trade                 $125,585

Book Margins, Inc.            Trade                 $124,122

NETRAIL: Sells Major Assets to Cogent Communications for $11.7MM
Cogent Communications Group, Inc. announced that it had
purchased for $11.7 million the major assets of Tier-1 Internet
service provider NetRail in bankruptcy. NetRail will operate as
a wholly-owned subsidiary of Cogent Communications.

As a result of this purchase, Cogent will continue to serve the
majority of NetRail's customers. Over the next several months
NetRail's service will be integrated with Cogent's national
backbone and facilities.

Cogent, headquartered in Washington, DC, is a privately held
high speed Internet service provider providing end-to-end
optical connectivity to the Internet for businesses. NetRail,
headquartered in Atlanta, is a provider of Internet access
service in eight U.S. cities.

Dave Schaeffer, chief executive officer of Cogent, said, "The
acquisition of the NetRail service will allow Cogent to
integrate into the nation's largest Internet protocol backbone
operating at 80 Gigabits per second a traditional Tier 1
Internet service provider. The combination of Tier 1 status and
Cogent's high speed network will improve Cogent's ability to
offer cost-effective Ethernet Internet access to small- and
medium-size businesses in major metropolitan markets."

Cogent Communications is a next generation optical ISP focused
on delivering ultra-high speed Internet access and transport
services to businesses in the multi-tenant marketplace and to
service providers located in major metropolitan areas throughout
the United States. Cogent's facilities-based, all-optical end-
to-end IP network enables non-oversubscribed 100 Mbps and 1000
Mbps connectivity for radically low, unmetered pricing levels.
Cogent's signature service offered to commercial end-users --
100 Mbps for $1,000 per month -- offers 100 times the observed
bandwidth of a T-1 connection at two-thirds of the cost. The
Cogent Solution makes ultra-high speed Internet access an
affordable reality for small and medium-sized businesses, as
well as large enterprises and service providers.

Cogent's network consists of a dedicated nationwide multiple OC-
192 fiber backbone, multiple intra-city OC-48 fiber rings, and
optically-interfaced high-speed routers. Cogent has been
recognized as the first IP+Optical Cisco Powered Network (CPN).
Cogent Communications is a privately held company headquartered
at 1015 31st Street, NW, Washington, D.C. 20007. more
information, visit  For general  
inquiries, Cogent Communications can be reached at (202) 295-
4200 or via email at .

NQL INC: Delisting Imminent After Scrapping Reverse Stock Split
NQL Inc. (Nasdaq: NQLI) announced that it has informed Nasdaq
that it has decided not to proceed with a reverse stock split in
an attempt to meet the $1.00 minimum bid price requirement for
continued listing on the Nasdaq National Market.

The Company's Board determined that the benefits of continued
listing on the Nasdaq National Market were outweighed by the
expenses attendant to attempting a reverse stock split. As a
result of this decision, the Company anticipates being delisted
from the Nasdaq National Market within the next forty-eight
hours. The Company expects that its stock will be traded on the
over the counter bulletin board following its delisting from the
Nasdaq National Market.

NQL, through its DCi division, provides professional services
including Internet and intranet consulting, network design,
installation and maintenance as well as onsite support for
customers located primarily in the northeastern U.S. NQL's DCi
division also provides management and consulting services,
information technology services and products to vertical markets
such as financial institutions, "Big 5" accounting firms, major
healthcare providers, pharmaceutical companies and educational

NQL's software division develops and deploys intelligent
software solutions based on its patent-pending Network Query
Language(TM) core technology, providing enterprises with an
alternative to chaotic, ad hoc information architectures. NQL
provides its scalable, augmentative software solutions to
partner systems integrators, Fortune companies, Internet
marketplaces, software vendors and Internet-based service

The Company is currently in the process of seeking a purchaser
for its software division. For more information, please see the
company's prospectus on file with the SEC or visit the company's
web site at

Network Query Language and all names of NQL Inc.'s other
services or products are trademarks of NQL Inc. in the U.S. and
certain other countries. All other trademarks are the property
of their respective owners.

OPTI INC: Opts to Undertake Voluntary Liquidation & Dissolution
OPTi Inc. (NasdaqNM: OPTI) announced that its Board of Directors
has unanimously voted to voluntarily liquidate and dissolve the
Company. Subject to shareholder approval of a plan of complete
liquidation and dissolution adopted by the Board, the Company
plans to sell its assets, including inventory, property and
equipment, discharge its liabilities, transfer its patents and
other intellectual property to a liquidating trust and
distribute the net proceeds and beneficial interests in the
trust to shareholders.

The shareholders will vote on the plan of liquidation and
dissolution at OPTi's annual meeting scheduled for November 12,
2001. If the shareholders approve the plan, OPTi will
immediately wind up its ongoing business activities and take
steps to completely liquidate and dissolve the Company as soon
as practicable.

OPTi believes most of its assets to be readily disposable. As of
June 30, 2001, the Company's assets included approximately
$31 million in cash and approximately 2,000,000 shares of common
stock in Tripath Technology Inc., a publicly-traded company
(NasdaqNM: TRPH).

If OPTi's shareholders vote to approve the plan of liquidation
and dissolution, the Company will establish a contingency
reserve to meet known and contingent liabilities and make an
initial liquidating distribution to shareholders of unreserved
cash and its Tripath Technology stock or proceeds from the sale
of the Tripath stock.

The Company currently hopes to complete this initial liquidating
distribution by the end of 2001.

Upon shareholder approval, the Company will also proceed to sell
all of its readily disposable assets. OPTi currently expects to
transfer its patents together with any remaining unsold assets
to a liquidating trust that will be established to ascertain and
realize the value of the OPTi patents and to dispose of any
unsold assets for the benefit of OPTi shareholders.

OPTi has received an estimate that potential legal claims for
the infringement of OPTi's patented technology by third parties
could have little or significant value. Accordingly, there can
be no assurance that the liquidating trust will be able to
realize significant, or any, value on the OPTi patents.

The Company hopes to be able to make a final liquidating
distribution that will include a pro rata beneficial interest in
the liquidating trust to its shareholders in early 2002 in
conjunction with the final dissolution of OPTi.

The liquidating trust will survive for up to three additional
years, during which time the trust will distribute any
additional proceeds realized on the patents and from the
disposal of other assets to the beneficiaries of
the trust.

The Company expects that its common stock will continue to trade
on the Nasdaq National Market as long as the Company continues
to meet Nasdaq's listing maintenance standards. If the common
stock is delisted from Nasdaq, trading, if any, would thereafter
be conducted on the over-the-counter market in the so-called
pink sheets or on the Electronic Bulletin Board of the National
Association of Securities Dealers, Inc.

The Company noted that only persons who hold OPTi shares at the
time of each liquidating distribution will receive the initial,
final and other liquidating distributions, if any, including the
distribution of pro rata beneficial interests in the liquidating
trust. If the shareholders approve the plan of liquidation and
dissolution, the dates of each liquidating distribution will
be announced by OPTi as they are determined by OPTi's Board of

Further details of the plan of liquidation and dissolution will
be provided in the proxy statement for the Company's annual
meeting which the Company plans to file with the Securities and
Exchange Commission later this month. The Company noted that if
the SEC chooses to review the proxy filing, the annual meeting
and the timing of the plan of liquidation and dissolution,
including the various liquidating distributions, could be
delayed by up to several months.

In reaching its decision that voluntary dissolution is in the
best interest of the Company and its shareholders, the Board of
Directors considered a number of factors including the Company's
current and future strategic and market opportunities and
business prospects, prevailing economic conditions and previous
unsuccessful efforts to sell or merge the Company on more
favorable price terms than would be indicated by a liquidation.

Since its incorporation in California in 1989, OPTi has
conducted business as an independent supplier of semiconductor
products that provide core logic functions or universal serial
bus controller functions for a personal computer or embedded
product within a semiconductor device. From inception through
1995, OPTi's principal business was its core logic products for
desktop personal computers and the Company employed as many as
235 employees over the years.

However, in time, the Company faced increasingly tight
competition from companies with substantially greater financial,
technical, distribution and marketing resources. During February
1999, OPTi completely ceased further development of core logic
products, even though it continued to ship such products to

As sales revenues from its products continued to decline, OPTi's
Board and management took steps to minimize costs of operations
while they investigated various strategic opportunities and
engaged in discussions regarding merger and asset sale
transactions with potential business partners and investment

After reviewing OPTi's business prospects and potential
opportunities, the Board came to the conclusion that the
voluntary liquidation and dissolution of the Company and the
establishment of a liquidating trust to pursue infringement
claims related to OPTi's patents would have the highest
probability of returning the greatest value to its shareholders.

OPTi Inc. is an independent supplier of semiconductors and is
headquartered in Milpitas, California. OPTi's stock is traded on
the National Market System under NASDAQ symbol OPTi.

PACIFIC GAS: Seeks Blanket Authority to Amend & Assume PPAs
After signing five-year agreements and sought and obtained the
Court's authority to assume approximately 130 of its 332 Power
Purchase Agreements with qualifying facilities (QFs) based on
the Lynch Decision by the CPUC, which ensures that the utility
and its customers receive a reliable supply of electricity at an
average energy price of 5.37 cents per kilowatt-hour, Pacific
Gas and Electric Company seeks in this motion a blanket
authority to assume the remaining PPAs with QFs that PG&E has
such long-term energy contracts with.

On June 13, 2001, the California Public Utilities Commission
(CPUC) issued the Lynch Decision, which allows QFs to notify
PG&E on or before July 15, 2001, of their intent to modify their
long-term contracts by

   (a) electing to received a fixed price of 5.37 cents per kWh,
       rather than the floating SRAC price for a five-year

   (b) demonstrating hardship and thereby becoming eligible to
       receive a modified SRAC payment for a one-year period; or

   (c) selling "excess power" to PG&E for 125% of the modified
       SRAC price.

Those PPAs that PG&E sought and obtained the Court's approval to
amend and assume pursuant to Section 363(b) and 365(b)(1) of the
Bankruptcy Code, and Rules 4001, 6004 and 9019 of the Bankruptcy
Rules after CPUC issued the Lynch Decision represent two-thirds
of the aggregate "nameplate capacity" of QFs. In this regard,
PG&E generally requested authorization to enter into amendments
to the PPAs to take advantage of the five-year pricing option
provided by the "price modification" amendment in the Lynch
Decision. PG&E also sought and obtained amendments providing

(a) the assumption was effective upon entry of a Court order
    approving the Agreement (provided that, in some instances,
    QFs are permitted to "exit" the Agreement for a short period
    of time, in the event that they are unable to obtain
    necessary approvals or financing),

(b) the agreement regarding the amount necessary to "cure" pre-
    petition defaults (subject to a reservation of rights in
    some instances) (the "Pre-Petition Payables"),

(c) the waiver of certain claims by the QFs, claims for payments
    in excess of the "contract rate" during the "pre-assumption"

(d) the deferral of payment of the Pre-Petition Payables until

     (i) the Effective Date of the Plan of Reorganization
         confirmed in this case (the "Calpine Model") or

    (ii) July 15, 2003, after which date, PG&E agrees to pay two
         percent of the principal amount of the Pre-Petition
         Payables, until paid in full, or Effective Date (the
         "GWF Model"), and

(e) the reservation of certain issues (interest rate on Pre-
    Petition Payables) until confirmation of the Plan.

The remaining contracts with QFs involve smaller companies,
which are less likely to hire counsel and initiate negotiation
on their own initiative. PG&E has thus taken proactive steps and
mailed form amendments to the QFs, informing the QFs of PG&E's
interest in amending and assuming the PPAs.

Although the initial Lynch Decision was to expire on July 14,
2001, on July 12, 2001, CPUC extended the deadline for the
"hardship" and "excess capacity" amendment provisions. A week
later, on July 19, 2001, Administrative Law Judge John S. Wong
issued a ruling that purported to extend the deadline for the
"price modification" amendment provision as well. If CPUC
expressly rules that the "price modification" amendment deadline
has been extended, then PG&E is prepared to enter into
amendments and assume the PPAs of any QFs that want to take
advantage of such procedures on terms no less favorable to PG&E
than those set forth in the GWF Model.

PG&E therefore brings this motion for blanket authority to
assume, with amendment, the PPAs of the remaining QFs on terms
not less favorable to PG&E than those that the Court has already
approved, subject to at least 48 hours advance notice to the
Official Committee of Unsecured Creditors and its counsel.

PG&E also seeks authority to pay immediately the Pre-Petition
Payables for the remaining QFs if the total payable is less than
$10,000 (with the QFs agree to waive any claims for pre-petition
and/or post-petition interest).

PG&E represents that the relief will comport with the business
judgment rule because it will allow PG&E to capture three key
beneficial features for the bankruptcy estate and the
reorganization process. First, the "price modification"
amendment, as authorized by the Lynch Decision, will help
eliminate potential volatility in power costs over the next five

Second, for those QFs with pre-petition payables of more than
$10,000, the amendment defers any payment of those payables for
at least two years and, in some circumstances, until the
Effective Date of PG&E's confirmed plan of reorganization.
Finally, although none of the remaining QFs have claimed that
they are due market rates for pre-assumption, post-petition
power purchases, the amendment prevents those QFs from ever
making such claims. All three features will significantly aid
PG&E in its efforts to successfully reorganize. Moreover, the
remaining QFs are numerous (over 200) and the PPAs involve
relatively small amounts of money.

The blanket authority would save the estate the significant time
and expense of having to move the Court on a seriatim basis.

              Judge Montali's Determination

At a hearing before Judge Montali, counsel made agreements to
modify the Motion. William J. Lafferty of the law firm Howard,
Rice, Nemerovski, Canady, Falk & Rabkin, appeared for PG&E.
Geoffrey T. Holtz of the law firm McCutchen, Doyle, Brown &
Enersen, LLP appeared for unsecured creditor Reliant Energy
Services, Inc. Aron Oliner of the law firm Buchalter, Nemer,
Fields & Younger appeared for unsecured creditor MBIA.

The Court authorizes PG&E to seek, by Notice rather than Motion,
pursuant to the authorized procedures, approval of:

(a) proposed Amendments to Power Purchase Agreements ("PPAs")
    between PG&E and Qualifying Facilities ("QFs"), pursuant to
    section 363 of the Bankruptcy Code or

(b) proposed Assumptions of PPAs by PG&E pursuant to section 365
    of the Code:

Pursuant to the Procedures:

(1) PG&E may file a Notice of Intention to Amend [and Assume, as
    applicable] Power Purchase Agreements with the Court and
    serve this upon counsel for the Official Committee of
    Unsecured Creditors, counsel to Reliant, counsel to MBIA,
    the Office of the United States Trustee, and the creditors
    and parties in interest requesting notice pursuant to the
    Court's Order.

(2) The Notice shall include, with regard to each QF whose PPA
    is being amended or assumed (i) the name of the QF, as well
    as the energy capacity and (if the PPA is being assumed) the
    amount of PG&E's pre-petition debt to the subject QF, and
    (ii) in general terms, the material provisions of the
    proposed Amendments and Assumptions.

(3) The Notice shall also provide that the proposed Amendments
    and Assumptions shall be approved by the Court without a
    hearing unless a party, within 10 days of the service of the
    Notice, files and serves upon counsel for PG&E and the
    Committee an objection to the proposed Amendments or
    Assumptions, along with any pleadings, declarations or other
    materials in support of such objection.

   (i) In the event that an objection to a proposed Amendment or
       Assumption is timely filed and served, counsel for PG&E
       shall promptly obtain a hearing date from the Court, to
       be held as promptly as the Court's calendar will permit,
       and shall notify all objecting parties and the Committee
       of the scheduled hearing date on the objection.

  (ii) In the event that no objection is timely filed and
       served, counsel for PG&E shall inform the Court of that
       fact by Declaration, and may request entry of an Order
       approving the proposed Amendments and Assumptions,
       without further notice or hearing.

The Court's Order expressly states that "any creditor or party
in interest wishing to receive a copy of any Notices [to Amend
or Assume PPAs, as defined in the Court's Order] must inform
counsel for PG&E of that fact in writing, and counsel for PG&E
shall thereafter serve copies of any proposed Notices on all
parties who have so requested." (Pacific Gas Bankruptcy News,
Issue No. 13; Bankruptcy Creditors' Service, Inc., 609/392-0900)    

PAYLESS CASHWAYS: Hilco, Ozer & Nassi Commence Liquidation Sales
Joint venture partners Hilco Merchant Resources, LLC, Ozer
Group, LLC and The Nassi Group have been appointed agents by the
US Bankruptcy Court in the Western District of Missouri to
liquidate the final inventory for Payless Cashways, Inc., the
Kansas City based building supply chain.

Payless established itself at the onset of the Great Depression
and found its way into the Fortune 500. A 1988 management-led
buyout led to a massive debt hangover. After a second attempt at
bankruptcy reorganization, Payless was unable to establish its
footing in a fiercely competitive marketplace.

"We and our joint venture partners are extremely pleased to have
been selected to lend our expertise in this situation," said
Mike Keefe, President and Chief Executive Officer, of Hilco
Merchant Resources, LLC, a subsidiary of Hilco Trading Co., Inc.
"Our group is the foremost specialist in helping retailers
realize value."

Hilco Merchant Resources is the foremost industry expert in the
liquidation of retail merchandise. Hilco a Chicago-based firm
with offices in Boston, Toronto and London is a broad-spectrum
financial resource with unparalleled asset knowledge and

Hilco is composed of the top people in the fields of inventory,
machinery, equipment and real estate appraisal services,
machinery & equipment auction services, real estate services,
merchant resources for the redeployment of inventory,
acquisition of receivables and junior secured debt financing.
This senior management team has an average of 20 years in their
respective business area and Hilco has done in excess of $15
Billion in transactions.

Based in Needham, Mass., The Ozer Group is one of the country's
leading retail consulting, business evaluation and asset
disposition firms. Ozer is quick, flexible and creative in
offering solutions to retailers of all sizes throughout North
America and Europe.

In addition to helping companies maximize realization for their
assets, Ozer manages human resources issues, real estate
relationships and other critical areas that are affected when
companies undergo change. Ozer's management and partners are
retailers who have managed thousands of stores and billions of
dollars in inventory. To learn more about The Ozer Group, visit

The Nassi Group LLC is based in Calabasas, CA. Founded in 1972,
The Nassi Group specializes in retail consulting, business
evaluation and asset disposition. The firm's most recent work
includes the liquidation of 150 Hills Stores for Ames and the
liquidation of 241 Builder's Square Stores. Other recent store
closings have been performed for Montgomery Ward, Levitz and
County Seat.

PILLOWTEX CORP: Self-Insured Workers' Compensation Continues
Prior to December 1997, some of the Pillowtex Corporation's
operated self-insured workers' compensation programs for their
employees located in the states of Alabama, Georgia, North
Carolina, South Carolina and Virginia.  The Debtors paid the
claims arising under those programs directly through a third-
party claims-adjusting company.

Because workers' compensation claims typically have a long
payout period, the Debtors face ongoing liability for the
outstanding Self-Insured Claims.

The Debtors sought and obtained authority to pay Self-Insured
Claims that became due and payable during a 90-day Transition
Period.  The Transition period terminated on February 14, 2001.

Eric D. Schwartz, Esq., at Morris, Nichols, Arsht & Tunnell, in
Wilmington, Delaware, explains that it is critical that the
Debtors' workers' compensation programs and payment of workers'
compensation benefits are not interrupted.  

The Debtors are required by various states' laws to maintain
workers' compensation coverage, with harsh penalties for

In addition, if the Debtors' employees or retirees cease to
receive workers' compensation benefits, it could irreparably
damage the Debtors' relationships with their employees.

According to Mr. Schwartz, the Debtors need additional time to
work with American International Group, Inc. (AIG) to put
certain procedures in place that will relieve the Debtors of the
cost and responsibility for administering claims.

Judge Robinson agreed with the Debtors that extending the
Transition Period and granting the Debtors authority to
compromise and pay Self-Insured Claims during the extended
period are in the best interests of the Debtors' creditors and

Thus, Judge Robinson extended the Transition Period for an
additional 45 days for Self-Insured Claims in states other than
North Carolina and for 180 days for Self-Insured Claims in North
Carolina.  During the extended Transition periods, the Debtors
are authorized, in their sole discretion:

    (a) to pay Self-Insured Claims, regardless of whether those
        claims are payable from a Surety Bond or through a state
        workers' compensation agency; and

    (b) to waive the protections granted by the automatic stay
        under section 362 of the Bankruptcy Code to the extent
        necessary to permit the Debtors to participate in
        mediation and arbitration proceedings involving the
        North Carolina Self-Insured Claims.

According to Judge Robinson, the automatic stay shall otherwise
remain in effect with respect to any lawsuits and court
proceedings involving the North Carolina Self-Insured Claims.

Judge Robinson further authorized the Debtors to pay Self-
Insured Claims covered by the Debtors' Loss Portfolio Transfer
policy with AIG unless and until the Debtors are able to arrange
for the Self-Insured States to receive reimbursement for
payments on those claims directly from AIG under the LPT Policy.
(Pillowtex Bankruptcy News, Issue No. 12; Bankruptcy Creditors'
Service, Inc., 609/392-0900)    

PSINET CONSULTING: Case Summary & 7 Largest Unsecured Creditors
Debtor: PSINet Consulting Solutions Holdings, Inc.  
        4400 Post Oak Parkway  
        Suite 1100  
        Houston, TX 77027

        aka Corestaff, Inc.  
        aka Metamor Worldwide, Inc.  
        aka PSINet Shelf IV Inc.  
        aka PSINet Consulting Solutions, Inc.  
        aka PSINet CS, Inc.

Chapter 11 Petition Date: September 10, 2001

Court: Southern District of New York (Manhattan)

Judge: Robert E. Gerber

Bankruptcy Case No.: 01-14916-reg

Debtor's Counsel: Eric R. Markus, Esq.
                  Wilmer, Cutler & Pickering  
                  2445 M Street, NW  
                  Washington, DC 20037  
                  Fax : 202-663-6363  


                  Robert N. H. Christmas, Esq.
                  Nixon Peabody LLP  
                  437 Madison Avenue  
                  New York, NY 10022  
                  (212) 940-3103  
                  Fax : (212) 940-3111  

Estimated Assets: More than $100 Million

Estimated Debts: More than $100 Million

List of Debtor's 7 Largest Unsecured Creditors:

Entity                        Nature of Claim     Claim Amount
------                        ---------------     ------------
Noteholders                   Bond Debt           227,000,000
Bank of New York
Attn: Irene Siegel, VP
Corporate Trust Administration
101 Barclay Street, 21 West
New York, NY 10286

G.E. Capital Corp.            Threatened           65,000,000
4 N. Park Drive, Suite 500    Litigation
Hunt Valley, MD 21030

Southwestern Bell             Trade Debt               89,054
P.O. Box 4706
Houston, TX 77210-4706

IOS Capital                   Trade Debt               38,035
P.O. Box 650016
Dallas, TX 75265-0016

Shannon, Martin, Finkelstein  Trade Debt                2,822
2400 Two Houston Ctr
909 Fannin Street
Houston, TX 77010

Kinkos                        Trade Debt                  417
5616 Westheimer Road
Houston, TX 77056-4002

Willowbook Liquors, Inc.      Trade Debt                  128
DBA Di Carlo Armanetti
6920 South Route 83
Willowbrook, IL 60514

PSINET INC: CIBER to Acquire Metamor, Subject to Court Approval
CIBER, Inc. (NYSE: CBR) has signed a definitive agreement to
acquire the $90 million revenue rate, public sector IT service
entities Metamor Industry Solutions, Inc., and its subsidiary,
Metamor Government Services, Inc., subject to requisite
bankruptcy court approval and other customary closing

Metamor's parent company, PSINet Inc. is in bankruptcy. It is
anticipated that PSINet Consulting Solutions Holdings, Inc., the
parent holding company of the entities being sold in this
transaction, will commence bankruptcy proceedings in September.
Neither of the entities being acquired in this transaction, nor
any other operating entities of PSINet Consulting Solutions
Holdings, Inc., are expected to be included in the parent's
bankruptcy proceeding.

"The root of this business was Cutler-Williams, Inc., one of the
earliest operators in the IT services industry. A federally
oriented acquisition (Dynamic Resources, Inc.) was added in
1998. Through two ownership transfers, first Cutler-Williams to
Corestaff in 1997 (later named Metamor), then to PSINet in 2000,
Ed Burns, the founder of this Public Sector Practice, kept
together a proud and quality group of employees, delivering
services to an array of state and local governmental clients,
and more recently to the U.S. government and a number of private
sector clients. Ed has done an exemplary job, particularly
throughout the recent tumultuous period," said Mac Slingerlend,
CIBER's President/CEO.

"At CIBER, we have a high regard for 'quality operators' in the
IT services sector. We are fortunate Ed and his team have chosen
to combine their talents with ours. They not only offer general
solutions to the public sector, but we believe their expertise
in several vertical-specific applications is a significant
competitive and sustainable advantage," Slingerlend concluded.

"CIBER already has a growing public sector practice. The
addition of the former Cutler-Williams and DRI business will be
very material. For example, at the Federal level we would now be
in the top 100 IT services vendors to the U.S. government. While
no such statistics exist on the state level, I estimate this
combination puts us in the top 12 or so IT services vendors to
all states of IT services, maybe higher," Slingerlend continued.

"We couldn't be more pleased then to join CIBER. Our management
team preferred to join CIBER several years ago, but wasn't able
to do so. CIBER is a quality operator in the IT services sector.         
We complement very well their offerings. CIBER was the only  
potential acquirer, of several we talked to, that our management
team universally wanted to support. We are already working
together on joint projects. We cannot wait to finish the legal
process and begin to deliver our services under the CIBER
banner," said Ed Burns, President/Public Sector Practice,
Metamor Industry Solutions.

Mr. Burns continued: "Our Public Sector Practice represents 800-
plus skilled associates in 13 branch offices, six of which are
in state capitals, and several other government installation
sites in the U.S. Our state work includes Illinois, Florida,
North Carolina, Georgia, California and Texas, among other
growing relationships. We offer unparalleled state and local
government expertise in Law & Justice, Health and Human
Services, and Transportation environments. In the federal
sector, our clients include the Departments of Defense,
Transportation and Health and Human Services, the U.S. Coast
Guard, the U.S. Army Reserve Command, and others. CIBER has a
very credible public sector client base; combining our efforts
creates more critical mass and even greater services and
experience for our clients."

Closing is expected in approximately 45 days. Terms were not

CIBER, Inc. is a leading international, e-business integrator,
providing IT services for Internet strategy and development,
complete life cycle system integration (from customer quotation
through cash collection), with superior value-priced services
for both private- and government-sector clients.

CIBER's services are offered on a project or strategic staffing
basis, in both custom and ERP package environments, and across
all technology platforms, operating systems and infrastructures.
Founded in 1974, the company's consultants now serve client
businesses from 35 CIBER, 15 DigiTerra, three Solution Partners
and four Enspherics offices in the U.S., Canada and Europe. With
offices in six countries, CIBER's 5,000 IT specialists
continuously build and upgrade our clients' systems to
"competitive advantage status."

PSINET INC: Seeks Okay For Expedited Lease Rejection Procedures
PSINet Inc. estimates that they are parties to over 1,000
unexpired leases and executory contracts. In connection with the
restructuring of their businesses, the Debtors anticipate that
they will receive no demonstrable economic benefit from a large
number of these executory contracts and unexpired leases.

Accordingly, in the coming months, the Debtors will likely seek
to reject hundreds of such executory contracts and unexpired
leases, including leases of real property, pursuant to section
365 of the Bankruptcy Code. Absent expedited procedures, the
Debtors will inevitably suffer delays and the resulting
administrative costs arising because of the potential gap in
time between the filing of the required rejection motion and the
Court's consideration. The amounts of such administrative costs
in the aggregate could be material.

With the aim to minimize the unnecessary administrative expense
obligations while also providing parties in interest with
adequate notice of contract and lease rejections and an
opportunity to object to such relief within a definitive time
period, the Debtors sought and obtained the Court's approval of
Expedited Procedures, as summarized below, for the rejection of
Debtors' executory contracts and unexpired leases (including
real property leases) and abandonment of the Debtor's personal
property at certain rejected lease locations.

            The Rejection/Abandonment Procedures

(A) Upon deciding to reject an executory contract or unexpired
    lease, the Debtors will promptly transmit a Rejection Letter
    to the contract counter-party or lessor, informing such
    Counterparty that:

    (1) as of the Effective Date, which may be the date of the
        Rejection Letter or another date, the Debtors will cease
        payment and/or performance under the contract or lease
        at issue;

    (2) as of the Effective Date, the Counterparty may cease
        payment and/or performance to the Debtors under the
        contract or lease, and can reclaim whatever personal
        property it has placed in Debtors' possession pursuant
        to the contract or lease;

    (3) the Counterparty is obligated to return any overpayment,
        security deposit, or other monies that the Debtor may
        have on account with the Counterparty; and

    (4) the Debtors will promptly thereafter seek authority from
        the Court to reject the contract or lease nunc pro tunc
        to the Effective Date.

(B) Periodically, the Debtors will file a Notice with the Court
    seeking authority to reject, pursuant to Section 365 of the
    Bankruptcy Code, executory contracts, unexpired leases and
    subleases and interests, as to which the Debtors have sent
    Rejection Letters, as identified on an exhibit to the

    The Debtors will serve the Notice by first class U.S. Mail
    upon the following parties advising such parties of the
    Debtors' intent to reject the specified executory contracts,
    leases, subleases or interests, as of the Effective Date, as
    well as the deadlines and procedures for filing objections
    to the Notice:

     (1) each Counterparty,
     (2) other interested parties,
     (3) counsel to the Committee,
     (4) the U.S. Trustee and
     (5) Service Parties pursuant to Rule 2002 of the Bankruptcy

(C) Should a party-in-interest object to the proposed rejection
    by the Debtors of a particular executory contract, unexpired
    lease or sublease, or interest, such party must file and
    serve a written objection so that such objection is filed
    with the Court and is actually received by the following
    parties (collectively, the "Notice Parties") no later than
    13 days after the date the Debtors mail the Notice of

     (a) counsel to the Debtor, Wilmer Cutler & Pickering, 520
         Madison Avenue, New York, New York 10022 Attn: Jorian
         Rose, Esq.;

     (b) counsel to the Committee, Wachtell, Lipton, Rosen &
         Katz, 51 West 52nd Street, New York, New York 10019,
         Attn: Barbara Kohl, Esq.; and

     (c) The United States Trustee, Office of the United States
         Trustee, 33 Whitehall Street, 21st Floor, New York, New
         York 10004, Attn: Wendy Rosenthal, Esq.

(D) If the Debtors have monies on account with such Counterparty
    pursuant to a pre- or post-Petition Date security deposit or
    other arrangement, or due to overpayment, then in any event
    such Counterparty must promptly return those monies to the
    Debtors, except to the extent that a Counterparty formally
    requests by motion (upon notice) and receives permission
    from the Court to retain a portion of those monies, or hold
    them in escrow, in which case the Counterparty must promptly
    return the remainder of such monies to the Debtors;

(E) Absent a timely filed objection, the rejection will become
    effective on the Effective Date without further notice,
    hearing or order of the Court;

(F) If an objection is properly and timely filed, and the
    Debtors and objectant are unable to resolve it consensually,
    the Debtors will promptly request that the Court schedule a
    hearing to consider the objection only with respect to the
    rejection of the executory contract, unexpired lease or
    sublease, or interest that is the subject of the objection.
    If such objection is overruled by the Court or withdrawn,
    the rejection will be deemed to have occurred on the
    Effective Date.

(G) With respect to any personal property of the Debtors located
    at any of the lease sites that the Debtors seek to reject,
    if the Debtors determine that such property is of
    inconsequential value, or that the costs of removing the
    property exceed the economic value of such property, the
    Debtors may seek to abandon such personal property pursuant
    to the following procedures:

    (1) The Debtors will only generally describe such personal
        property in the Notice, unless another party has a
        security interest in the property, in which case the
        Debtors will identify the property with a level of
        specificity reasonable in light of the value of the
        property and the cost of such identification, and serve
        the Notice on that party.

    (2) Absent an objection to the Debtors' proposed abandonment
        of a specific item of property, timely filed by a party-
        in-interest within the 13 day period, the property will
        be deemed abandoned pursuant to section 554 of the
        Bankruptcy Code, on an "as is, where is" basis, on the
        Effective Date on which the Debtors reject the
        underlying lease.

        However, with respect to equipment for which General
        Electric Capital Corporation ("GECC") claims a security
        interest, GECC will be entitled to request that the
        Debtors afford GECC an additional 5 day period within
        which to examine and reclaim such property.

        If GECC requests the extension prior to the expiration
        of the aforementioned 13 day period, the Debtors will
        make request of the landlord in question as to the
        propriety of such extension. If the landlord so agrees,
        GECC will be entitled to such additional 5 day period,
        so long as GECC agrees to pay the daily rent and related
        charges assessable by the landlord for such extended
        period, and the landlord and GECC acknowledge that the
        Debtors will incur no liability to the landlord for such
        extended five day period.

        If the Debtors do not seek to abandon an item of
        personal property pursuant to these procedures, the
        Debtors will remove such personal property by the later
        of (i) the Effective Date identified in the Rejection
        Letter they transmit to the lessor and (ii) the post-
        termination deadline for the removal of personal
        property, if such a deadline is specified in the
        relevant lease.

The Debtors believe that the Rejection/Abandonment Procedures
provide a fair and expedient manner for rejecting executory
contracts for the unexpired leases and subleases (and interests
therein) and corresponding abandonment of Debtors' personal
property at certain rejected lease sites in these chapter 11

The Debtors believe that it will be in the best interest of the
Debtors' estates to abandon certain personal property, on an
"as is, where is," basis, and on a "location by location"
determination in the Debtors' business judgment, in accordance
with Section 554(a) of the Bankruptcy Code because the costs of
removing personal property at certain of the rejected lease
sites will likely be greater than the value of such assets.

The Debtors believe that adoption of the Rejection/Abandonment
Procedures represents the sound exercise of their business
judgment and a fair balancing of the need of a lessor or
contract party for certainty with the Debtors' need to move
quickly and to cut off the needless accrual of administrative
rent and other charges. (PSINet Bankruptcy News, Issue No. 7;
Bankruptcy Creditors' Service, Inc., 609/392-0900)     

PURINA MILLS: Stockholders Vote For Merger with Land O' Lakes
Purina Mills, Inc. (Nasdaq: PMIL) announced that its
stockholders have approved Purina Mills proposed merger with a
subsidiary of Land O' Lakes.

The stockholders vote was conducted at a special meeting of
Purina Mills' stockholders held at Purina Mills' headquarters.

The merger received the favorable votes of approximately 67% of
the total shares outstanding, which exceeded the majority of
outstanding shares required to approve the transaction, and
represented in excess of 99% of the total votes cast in regard
to the merger proposal. Purina Mills anticipates that the merger
will close when Land O'Lakes financing arrangements are
finalized, which is expected by the end of September.

Purina Mills is America's leading producer and marketer of
animal nutrition products. Based in St. Louis, Missouri, the
company has 49 plants and approximately 2300 employees

Purina Mills is permitted under a perpetual, royalty-free
license agreement from Ralston Purina Company to use the
trademarks "Purina" and the nine-square Checkerboard logo.

Purina Mills is not affiliated with Ralston Purina Company,
which distributes Purina Dog Chow brand and Purina Cat Chow
brand pet foods.

SCHWINN/GT: Pacific Cycle Acquires Bicycle Assets for $86MM
Pacific Cycle LLC announced that it has acquired the bicycle
assets of Schwinn/GT Corp. for $86 million.

The purchase was made at a U.S. District Court bankruptcy
auction in Denver, where Judge Sidney Brooks ruled in favor of
Pacific's bid.

"This is a landmark day for Pacific and for Schwinn/GT dealers,"
said Chris Hornung, Pacific Cycle's chief executive officer.
"The Schwinn name is an American icon. It is the brand that many
Americans grew up with and aspired to own. We feel that we offer
the best opportunity in a generation to restore vitality to the
Schwinn brand."

Hornung said the acquisition will mean an increase in sales to
Pacific of approximately 1 million bicycles annually.

Pacific plans to bring "new life" to Schwinn/GT, said Hornung.
"One of the biggest benefits of the brand is the strong dealer
network. While it's extremely unfortunate that the bankruptcy
process resulted in the dissolving of dealer agreements, it's
our intention to quickly restore the network of independent
Schwinn and GT dealers. We also plan to immediately establish
clear and open communication, and hope to begin meeting with a
group of dealers this week."

Hornung said that the company will immediately begin re-
establishing the flow of 2002 model year product of both Schwinn
and GT bicycles from Asia. Financial constraints prevented the
former company from receiving shipments since spring of this

Pacific will also begin working closely with existing Schwinn
dealers, both through focus groups and through the establishment
of a dealer advisory council to understand and serve their
needs. Specific programs will be unveiled later this month at
the Interbike convention in Las Vegas, the largest bicycle trade
show in the United States.

Anticipating dealer concern of possible expansion of Schwinn
distribution to mass merchandisers, Hornung said: "While we are
considering our options, the earliest we would introduce Schwinn
to mass retail would be fall 2002. We want to speak with dealers
to determine how we can best support them using our high-volume,
efficient business model.

"We are dedicated to maintaining the Schwinn dealer network,
brand essence and positioning, which is embodied in quality,
value and family recreation."

Hornung also said the company will continue to support the GT
brand while it evaluates a long-term strategy.

The acquisition of Schwinn/GT brings to a close a decade of
uncertainty in the brand's history. Schwinn entered Chapter 11
bankruptcy in 1992, and the Schwinn family sold the company to
Scott Sports Group in 1993. In 1997, Schwinn was sold to Questor
Partners. The company entered Chapter 11 again in July of this

According to industry sources, Americans purchase approximately
17 million bicycles each year and spend more than $2 billion on
bicycle purchases. In December 2000, Pacific Cycle LLC
successfully acquired the assets and trademark of Brunswick

Pacific Cycle LLC, the largest importer of quality bicycles in
America, designs, markets and imports a full range of bicycles
under the Pacific, Roadmaster, Mongoose and Mongoose Pro brand

STAR TELECOMMS: Committee Secures Right to File a Plan
The United States Bankruptcy Court for the District of Delaware
entered an order extending STAR Telecommunications, Inc.'s
exclusive period in which to file a plan of reorganization to
October 12, 2001.  

Judge Walrath also ordered a co-exclusivity period will exist
from October 12, 2001 through November 12, 2001, during which
time both STAR and the Creditors' Committee will have the right
to file.  

Either STAR and/or the Creditors' Committee, depending upon
whether either party or both parties file a plan in such period,
shall have until January 14, 2002 to solicit acceptances of any
such plan.

SUN HEALTHCARE: Signs-Up Gazes As Counsel for Avoidance Actions
Sun Healthcare Group, Inc. has determined that it is more cost
effective to prosecute all but certain of the largest of their
avoidance actions on a contingency fee basis. While Richards,
Layton & Finger has agreed to prosecute certain of the larger
avoidance actions at its ordinary hourly rate neither of the
Debtors' retained professionals -- RL&F and Weil, Gotshal &
Manges -- have agreed to prosecute the remaining avoidance
actions on a contingency basis.  

Accordingly, the Debtors need to retain Special Counsel with
respect to those remaining avoidance actions.

The Debtors have selected Gazes as special counsel to commence
and prosecute certain avoidance actions because they are
experienced practitioners in the filing of multiple avoidance
actions in large bankruptcy cases. Each of the Debtors desires
to employ Gazes because the Debtors believe that Gazes is well
qualified to act as special counsel to commence and prosecute
avoidance actions on the Debtors' behalf.

Accordingly, the Debtors submit an application for an order
pursuant to sections 327(a) and 329 of the United States
Bankruptcy Code, 11 U.S.C. sections 101-1330, as amended, and
Rules 2014 and 2016 of the Bankruptcy Rules authorizing the
employment and retention of Gazes & Associates LLP as special
counsel to the Debtors to commence and prosecute certain
avoidance actions. Specifically, the Debtors request entry of an
order authorizing each of them to employ and retain Gazes as
special counsel to commence and prosecute certain avoidance
actions during and, if appropriate, after their Chapter 11

Subject to the Court's approval, Gazes will be required to
represent the Debtors as special counsel to commence and
prosecute certain avoidance actions that are not commenced by
RL&F. The Debtors covenant to take appropriate steps to avoid
unnecessary and wasteful duplication of legal services among
Gazes and RL&F.

Moreover, the Debtors believe that as Gazes will perform its
services on a contingency basis, duplication of effort is of
less concern here than in other section 327(a) applications.

Gazes will seek compensation for legal services rendered in the
Sun cases on a contingency basis, at the rate of 33 1/3% of the
gross recoveries (inclusive of interest), plus expenses, on all
avoidance actions filed by it in Sun's chapter 11 cases.

The Debtors represent that such compensation is appropriate
based upon the professional time to be spent by Gazes, the
necessity of such services to the administration of the estate,
the reasonableness of the time within which the services are to
be performed in relation to the results achieved, and the
complexity, importance and nature of the problems, issues, or
tasks addressed in the Sun Healthcare cases.

Gazes intends to apply to the Court for allowance of
compensation for professional services rendered and
reimbursement of expenses incurred in the Sun Chapter 11 cases
in accordance with applicable provisions of the Bankruptcy Code,
the Bankruptcy Rules, the Local Rules and the orders of the

Denise L. Savage, an attorney associated with Gazes, represents
that neither Gazes nor any member or associate of the firm is
related or connected to any United States District Judge or
Bankruptcy Judge in the District of Delaware or to the United
States Trustee for such district or any employee in the office
of the U.S. Trustee. Ms. Savage declares that, to the best of
her knowledge, the members and associates of Gazes (i) do not
have any connection with the Debtors or their affiliates, their
creditors, or any other party in interest, or their respective
attorneys and accountants, (ii) are "disinterested persons" as
that term is defined in section 101(14) of the Bankruptcy Code
and (iii) do not hold any interest adverse to the estates. (Sun
Healthcare Bankruptcy News, Issue No. 22; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   

USG CORP: U.S. Trustee Balks at Chilmark's Engagement Terms
Patricia A. Staiano, the United States Trustee for Region III,
interposes an objection to USG Corporation's Application for an
Order Authorizing Employment and Retention of Chilmark Partners,
LLC as their Financial and Restructuring Advisors.

The UST objects to any provisions of the engagement agreement
that purport to cap or limit Chilmark's liability to the fees
received, as such provisions are inconsistent with prior
decisions of this Court, directing Judge Newsome to prior
decisions in In re United Cos. Fin. Corp., 241 B.R. 521 (Bankr.
D. Del. 1999) and In re Dailey International, Inc., No 99-1233
PJW (Bankr. D. Del July 1, 1999).

The UST notes that the Application reveals that Chilmark has an
affiliate -- Chilmark Fund -- that invests in distresses
companies.  However, the disclosures regarding the Chilmark Fund
are incomplete and are insufficient to permit a determination of
whether any past, present or contemplated future relationship
between the Chilmark Fund and the Debtors, and/or between
Chilmark and the Chilmark Fund, impairs the disinterestedness of
Chilmark. The UST requests that Chilmark be directed to

      - whether any of the principals or employees of Chilmark,
including but not limited to those principals or employees
involved in rendering services to the Debtors, are involved in
the management of the Chilmark Fund or otherwise in advising the
Chilmark Fund regarding potential investments,

      - whether the Chilmark Fund has had any contact with the
Debtors or has engaged in any analysis or other consideration of
a possible investment (through the purchase of assets, claims,
stock, debt or equity securities or otherwise) in any of the
Debtors or their affiliates,

      - the nature of information exchange between Chilmark and
the Chilmark Fund, and

      - whether Chilmark and the Chilmark Fund are able to
certify that the Chilmark Fund will make no such investment in
the Debtors or their assets, claims, stock, or securities.

The UST requests that these additional disclosures take place
prior to entry of any order approving Chilmark's retention and
that the UST and other interested parties have an opportunity to
respond. She also says that notwithstanding any contrary
statements in the engagement letter, the duties and obligations
of Chilmark in this engagement should be those imposed on
Chilmark by the Bankruptcy Code and applicable law and any Order
approving the engagement should so provide.

The UST also objects to the requested approval of a termination
fee unless such termination fee is subject to the Court's review
and approval. She states the she also reserves the right to
conduct discovery regarding the Application and reserves the
right to amend this Objection to assert such other grounds as
may become apparent upon further factual discovery.

The UST concludes by asking the Court to enter an order denying
the Application, or conditioning approval of the Application
upon its modification, and for any other relief at law and
equity as the Court deems proper. (USG Bankruptcy News, Issue
No. 7; Bankruptcy Creditors' Service, Inc., 609/392-0900)

WHEELING-PITTSBURGH: Interstate Gas Wants Admin Claim Priority
Interstate Gas Supply, Inc., represented by Guy R. Humpherey of
the Columbus Ohio firm of Chester Willcox & Saxbe LLP, tells
Judge Bodoh that Interstate has provided natural gas to
Wheeling-Pittsburgh Steel Corp., and the Debtors have failed to
pay $984,224.60 for natural gas provided by Interstate which the
Debtors removed from the Columbia Gas System and consumed on a
postpetition basis.  

Interstate asks that Judge Bodoh award it administrative status
for this claim, and has concurrently brought an adversary
proceeding to enforce this obligation against the Debtors.

Interstate tells Judge Bodoh that the cost of the gas is a
necessary cost and expense of preserving the estate that has
benefited all of the creditors of this estate, yet the Debtors
have refused to pay this expense.

  WPSC Says No Postpetition Supply, No Administrative Claim

WPSC admits it purchased natural gas from Interstate beginning
in 1997 and continuing through the fall of 2000.  On November
16, 2000, before the Petition Date, Interstate says it suspended
delivery of natural gas to WPSC.  

After WPSC filed its bankruptcy petition, Interstate refused to
honor its obligation under its contract to provide natural gas
to WPSC for the remainder of November and December 2000.  ICG's
claim of $984,224.60 as an administrative expense is based on
natural gas shipped by Interstate during October 2000 and by
November 15, 2000 - before the Petition Date.

To establish a claim for an administrative expense, the claimant
must provide that the debt

   (i) arose from a transaction with the debtor-in-possession as
       opposed to the preceding entity (or that the claimant
       otherwise provided consideration to the debtor-in-
       possession), and

  (ii) directly and substantially benefited the estate.  

There are therefore two major defects in Interstate's claim:
first, Interstate assumes that all of the natural gas in WPSC's
natural gas storage bank on November 16, 2000, represented
natural gas delivered by Interstate in October 2000 and during
the first half of November 2000.  

However, Interstate's president has acknowledged under oath that
Interstate is unable to determine if the gas remaining in WPSC
's gas bank was delivered by Interstate or by another supplier
of gas.  

Accordingly, Interstate cannot demonstrate that any of the gas
delivered by Interstate was in the WPSC gas bank on November 16,
2000, let alone that all of the gas remained in the gas bank.

Second, and more fundamentally, Interstate never provided gas to
the debtor-in-possession or had other business dealings with the
debtor-in-possession.  All of the natural gas delivered by
Interstate was delivered to the WPSC natural gas bank before the
Petition Date.

Interstate stopped supplying natural gas to WPSC before the
bankruptcy petition was filed.  Afterward, WPSC asked Interstate
to continue to supply it with natural gas, but Interstate

Interstate's claim for an administrative expense is based on its
assertion that WPSC consumed Interstate's natural gas
postpetition and that the gas was therefore a benefit to the
estate.  Interstate's facts are distinguished from case law it
cites in that it discontinued postpetition deliveries.  

Its argument regarding postpetition benefits has been rejected
by the Courts of Appeal for the Sixth and Seventh Circuits.
(Wheeling-Pittsburgh Bankruptcy News, Issue No. 10; Bankruptcy
Creditors' Service, Inc., 609/392-0900)  

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

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

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

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

October 16-17, 2001
   International Women's Insolvency and Restructuring
   Confederation (IWIRC)
      Annual Fall Conference
         Orlando World Center Marriott, Orlando, Florida
            Contact: 703-449-1316 or
October 28 - November 2, 2001
   IBA Business Law International Conference
   Including Insolvency and Creditors Rights Sessions
      Cancun, Mexico
         Contact: +44 (0) 20 7629 1206

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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available at your local bookstore or through Go to order any title today.  

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


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

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

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

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

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

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