TCR_Public/011004.mbx        T R O U B L E D   C O M P A N Y   R E P O R T E R

          Thursday, October 4, 2001, Vol. 5, No. 194


AMERICA WEST: Begins Axing Jobs As Part of Cost-Cutting Efforts
AT HOME: Case Summary & 30 Largest Unsecured Creditors
BAC SYNTHETIC: Fitch Junks $25 Million Class E Notes
BETHLEHEM STEEL: Receives Commitments for New $750MM Facility
BRIDGE INFO: Unexpired Lease Decision Period Extended to Feb. 12

BROCKER TECHNOLOGY: Violates Nasdaq Listing Requirements
BUHRMANN N.V.: S&P Cuts Ratings to BB- on Lower EBITDA Coverage
COMDISCO: Equity Panel Seeks Approval of Trading Wall Procedures
EDISON: Says Settlement with CPUC Will Restore Financial Health
EISBERG FINANCE: Fitch Downgrades $63.75MM Class C Notes to B

EXODUS COMMUNICATIONS: Selling Louisiana Assets to TekInsight
FEDERAL-MOGUL: Frank E. Macher Takes Helm As New Chairman & CEO
FEDERAL-MOGUL: Fitch Drops Ratings to D After Chapter 11 Filing
FOUNTAIN VIEW: Files for Chapter 11 Protection in Los Angeles
GENESIS HEALTH: Emerges From Bankruptcy After Completion of Plan

GRAND ADVENTURES: Begins Liquidation of UK Unit & Layoffs in US
ICG COMMS: Rejects MCI Worldcom Pact & Inks New Deal with TTI
IMPERIAL SUGAR: Commences Distribution of New Common Stock
INTERNATIONAL TOTAL: Ex-CEO Calls For Meeting to Oust Board
INTIRA CORPORATION: Creditors' Meeting Slated For October 9

JERRY'S FAMOUS DELI: Fails to Meet Nasdaq Public Float Minimum
LBP INC: Initial Liquidating Distribution Will Start on Oct. 15
LAIDLAW INC: Seeks Court Approval of Key Employee Programs
LOEWEN: Seeks Approval to Pay Exit Financing Due Diligence Fees
LOOK COMMS: Secures CCAA Protection Until November 30

MJK CLEARING: Court Clears Sale of $10B Assets to SWS Securities
MCLEODUSA: Scraps National Network to Focus on Core Businesses
MEDIA GENERAL: S&P Rates Long-Term Credit & Unsecured Debt BB+
NATIONAL RECORD MART: Creditors' Meeting Set for October 4
NIAGARA MOHAWK: Reaches Agreement to Sell Energy Marketing Unit

NOVO NETWORKS: Seeks to Extend Lease Decision Period to Dec. 31
OWENS CORNING: Gets Okay to Assume Amended SAP America Contract
PACIFIC GAS: Files Appeal Statement of TURN Accounting Decision
PILLOWTEX CORP: Court Approves Claims Settlement Protocol
PLANET HOLLYWOOD: Closing Six U.S. Restaurants

PRECISION AUTO CARE: Negotiates for Extensions of Senior Debt
PSINET INC: Gets Approval of Settlement with TNS Re Escrow Fund
RITE AID: Completes Refinancing, Reducing Debt By $2.9BB In Q2
SWISSAIR: Resumes Flight Operations Today
TERRA INDUSTRIES: S&P Rates Proposed $200M Senior Notes at BB-

THERMADYNE HOLDINGS: Bank Group Agrees to Forbear Until Oct. 31
TOWER RECORDS: Completes Amendment to Bank Credit Agreement
UNIFORET: CCAA Protection Extended Until November 12
VLASIC FOODS: Confirmation Hearing Scheduled for Oct. 31
XEROX: Flextronics Buying Office Manufacturing Assets for $220MM

* Cleary Gottlieb's One Liberty Plaza Offices Temporarily Moved


AMERICA WEST: Begins Axing Jobs As Part of Cost-Cutting Efforts
America West Airlines (NYSE: AWA) began the process of reducing
its workforce by approximately 2,000 positions as part of cost-
cutting measures resulting from the terrorist attacks of
September 11 and the ensuing sharp drop in demand for air

"These actions are particularly distressing after the employees
of America West have worked tirelessly to rebuild our airline
over the past year and, particularly, following recent tragic
events," said W. Douglas Parker, chairman, president and chief
executive officer.  "As America West becomes a stronger airline,
we hope to be in a position to bring many of these employees

America West announced on September 17 that it would reduce its
flight schedule by about 20 percent and eliminate about 2,000
positions through a combination of attrition, deferred hiring
and reductions in force.  Shortly afterward, the company offered
employees the opportunity to volunteer for early retirement,
unpaid leaves of absence and job sharing in an attempt to
minimize the number of involuntary reductions.  The company
expects more than half of the eliminated positions to be handled
through voluntary reductions. Furlough notifications have begun
and will continue across all work groups over the next two

"This is a painful process for all of us, and we commend those
employees who stepped forward to volunteer for leaves of absence
to assist America West in our cost reduction efforts," added

In further cost reduction efforts, Parker has asked the
company's board of directors to forego all his compensation
through the end of this year. Additionally, America West's four
executive vice presidents have volunteered to cut their pay by
25 percent and each member of the board of directors will
forego compensation through the end of the year.

AT HOME: Case Summary & 30 Largest Unsecured Creditors
Lead Debtor: At Home Corporation, a Delaware Corporation
             dba Excite@Home
             450 Broadway Street
             Redwood City, CA 94063

Debtor Affiliates Filing Separate Chapter 11 Petition:

             Classified 2000, Inc.
             DataInsight, Inc.
             Full Force Systems, Inc.
             iMall, Inc.
             Join Systems, Inc.
             Kendara, Inc.
             MatchLogic, Inc.
             Narrative Communications Corporation
             Netbot, Inc.
             The McKinley Group, Inc.
             Webshots Corporation
    International Inc.
             iMall Consulting, Inc.
             iMall Services, Inc.
             R&R Advertising, Inc.
             Cabot Richards & Reed
             Internet Yellow Pages
             Internet Merchandising, Inc.
             Pure Payments, Inc.
             Physicomp Corporation
             Chautauqua Publishing Group LLC
             Pogo Acquisition Corporation
             At Home Holdings Corporation
             MAC Corporation
             At Home L.P.
             At Home Network, Inc.
             Excite@Home Canada, Inc.
             Excite SARL

Chapter 11 Petition Date: September 28, 2001

Court: Northern District of California

At Home Corporation Case No.: 01-32495 through 01-32525

Judge: Thomas E. Calson

Debtor's Counsel: Suzanna Uhland, Esq.
                  Robert J. White, Esq.
                  Victoria A. Graff, Esq.
                  Austin K. Barron, Esq.
                  O'Melvenny & Myers, LLP
                  990 Marsh Road
                  Menlo Park, CA 94025-2600
                  Tel: 213-430-6000
                  Fax: 213-430-6407

Debtor's 30 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
State Bank & Trust Co.      Bonds                 $505,937,500
Joey B. Edralin
Of California
633 West 5th Street
12th Floor
Los Angeles, CA 90071
Tel: 213-362-7330
Fax: 213-362-7301

State Bank & Trust Co.      Bonds                 $437,573,126
Joey B. Edralin
Of California
633 West 5th Street
12th Floor
Los Angeles, CA 90071
Tel: 213-362-7330
Fax: 213-362-7301

Leonardo LP                 Lender                $50,000,000
Angelo Gordon & Co, LP
245 Park Avenue, 26th Floor
New York, NY 10167

Cisco Systems Capital       Equipment Lessor/     $50,785,513
Kathy Murphy                Financier
4 Venture Street Suite 100
Irvine, CA
Tel: 949-788-5145
Fax: 949-789-5005

Sun Micro Systems           Equipment Lessor/     $30,811,761
Finance                     Financier
Jennifer Lewis
1400 Computer Drive
Westborough, MA 01581
Tel: 508-836-2406
Fax: 508-836-2432                 Customer Debt         $9,737,920
W. Thomas Gimple, CEO
555 Anton Blvd., 12th Floor
Costa Mesa, CA 92626
Tel: 714-327-5400
Fax: 714-327-5570

IBM Corporation Financial   Equipment Lessor/     $9,514,575
Bruce Gordon                Financier
IBM (Fleet) Leasing
2929 N. Central Avenue
Phoenix, AZ 85012

EMC Leasing                 Equipment Lessor/     $7,122,584
Randy Coste                 Financier
4140 Dublin Blvd.
Suite 400
Dublin, CA 94568
Tel: 925-560-7917
Fax: 925-560-7810

Heller Financial,           Equipment Lessor/     $5,818,035
Incorporated                Financier
David Ketchum
71 Stevenson Street
Suite 200
San Francisco, CA 94105
Tel: 415-356-1326
Fax: 415-356-1335

Merrimak Leasing            Equipment Lessor/     $5,685,180
Bill Marseilles             Financier
60 Galli Drive, Suite T
Novato, CA 94949
Tel: 415-884-4646 * 234
Fax: 415-884-5644

GATX                        Equipment Lessor/     $5,481,276
Chris Rhoes                 Financier
Four Ambarcadero Center
Suite 2200
San Francisco, CA 94110
Tel: 415-955-3300
Fax: 415-955-3416

ORIX USA Corporation        Equipment Lessor/     $5,198,069
Steven L. Eny               Financier
1177 Avenue of the Americas
10th Floor
New York, NY 10036
Tel: 212-739-1600
Fax: 212-739-1701

Information Technology      Lender                $5,050,000
Business Department
Ryosuki Tsuji
Hisato Kawakubo Kawakubo
ITOCHI Corporation 5-1
Kita-Aoyama 2-chome Minato-ku
Tokyo 107-8077
Tel: +81-3-3497-3216
Fax: +81-3-3497-4181

De Lage Financial Services  Equipment Lessor/     $3,927,933
Steve Grosso                Financier
1111 Old Eagle School Road
Wayne, PA 19087-1453
Tel: 610-386-5000
Fax: 610-385-5840

Transamerica Equipment      Equipment Lessor/     $3,604,392
Financial Service           Financier
John Burke
4975 Preston Park Boulevard
Suite 320
Plano, TX 75093
Tel: 972-458-5810
Fax: 972-458-5972

CitiCapital                 Equipment Lessor/     $2,785,184
Sanford Weill               Financier
PO Box 6229
Carol Stream, IL 60197-6229
Phone: 212-559-1000
Fax: 212-816-8913

Silicon Graphics            Equipment Lessor/     $2,658,597
Financial Services          Financier
Jan Soules
1600 Ampitheathre Parkway
MS 128, Mountain View, CA 94043
Tel: 650-933-8306
Fax: 650-933-0425

Fleet Business Credit       Equipment Lease/      $2,379,301
Corporation                 Financier
Michael F. Dougan
Main Stop: MA DE 1030Z:
One Federal Street,
7th Floor
Boston, MA 02110
Tel: 617-346-0704
Fax: 917-346-4903

Pullman Bank and            Equipment Lessor/     $1,848,079
Trust Company               Financier
Frank Altrui
1000 East 111th Street
Chicago, IL 60628
Tel: 813-637-2505
Fax: 708-445-3165

Extreme Networks Credit     Equipment Lessor/     $1,380,894
Corporation                 Financier
Richard Salhany
3585 Monroe Street
Santa Clara, CA 95051
Tel: 408-579-3178

Insight Communications      Trade Debt            $1,340,710
810 7th Avenue
New York, NY 10019
Tel: 917-286-2300
Fax: 917-286-2301

Pacific Shores Center       Real Estate Lessor    $1,116,705
Mr. Jay Paul, Managing
350 California Street
Suite 1905
San Francisco, CA 94104
Tel: 415-263-7400
Fax: 650-556-3650

Oliver Allen Leasing        Equipment Lessor/     $1,040,204
Ellen Udoff                 Financier
801 Larkspur Landing
Larkspur, CA 94939
Tel: 415-925-4708
Fax: 415-461-4675

Leo Burnett                 Commercial Debt       $972,133
Brad Brinegar, CEO
35 West Wacker Drive
Chicago, IL 60601
Tel: 312-220-5959
Fax: 312-220-3299

Open Wave                   Commercial Debt,      $811,942
Steven Peters, General      Software License
Counsel                     & Maintenance
1400 Seaport Boulevard
Redwood City, CA 94063
Tel: 650-480-800
Fax: 650-480-4315

Sigma                       Software Provider     $698,318
Peter McCormick, VP Ops.
55 York Street, Suite 1100
Toronto, Ontario M5J 1R7
Tel: 416-365-3959
Fax: 416-365-9227

Predictive Systems          Consulting            $694,945
Andrew Zimmerman, CEO
417 Fifth Avenue
New York, NY 10019
Tel: 212-659-3400
Fax: 212-659-3499

Key Equipment Finance       Equipment Lessor/     $640,407
David Bower                 Financier
1000 South McCaslin Road
Superior, CO 80027
Tel: 720-304-1138
Fax: 720-304-148

Adelphia                    Trade Creditor/MSO    $633,585
John J. Rigas, CEO
One North Main Street
Coudersport, PA 16915
Tel: 814-274-9830
Fax: 814-274-8631

MTV                         Commercial Vendor     $600,000
Tom Freston, CEO
1515 Broadway
New York, NY 10036
Tel: 212-258-8000
Fax: 212-258-7782

BAC SYNTHETIC: Fitch Junks $25 Million Class E Notes
Fitch has downgraded two classes of notes issued by BAC
Synthetic CLO 2000-1 Limited, a synthetic cash flow CDO
established by Bank of America to provide credit protection on a
$10 billion portfolio of investment grade, corporate debt

No rating action has been taken or is contemplated at this time
for the class A, class B notes and class C notes, which are
rated `AAA', `A+' and `BBB' respectively. Based on the current
risk profile of the reference portfolio, the class A, class B
and class C notes continue to maintain credit enhancement levels
consistent with the assigned ratings.

The securities have been downgraded and removed from Rating
Watch Negative:

   * $100,000,000 class D notes from 'BB' to 'BB-';

   * $25,000,000 class E notes from `B' to `CCC'.

Fitch's rating action reflects higher than expected defaults in
the underlying assets. This has resulted in higher than expected
credit protection payments under the credit default swap
agreement with Bank of America CLO Corporation II, and a
diminished level of credit enhancement for the class D and E

BETHLEHEM STEEL: Receives Commitments for New $750MM Facility
In response to inquiries about Bethlehem Steel's previously
announced intentions to complete certain asset sales and a new
credit facility in the third quarter 2001, Bethlehem said that
it has made progress in both areas.

With respect to the planned asset sales, Bethlehem announced
that it has sold the South Buffalo Railway, a Bethlehem
subsidiary railroad to Genesee & Wyoming, Inc. for $33.5 million
in cash and $3.3 million in assumed liabilities.

This sale, along with the completion of the sale of Bethlehem's
5% interest in Mineracoes Brasileiras Reunidas (MBR) announced
last week, a transaction valued at about $25 million, is an
important component of rebuilding Bethlehem's financial
flexibility in the near-term.

South Buffalo is a switching and terminal railroad located in
Lackawanna, N.Y.  It provides rail service to Bethlehem Steel's
Galvanized Products Division, Ford Motor Company, Republic
Technologies and others. South Buffalo interchanges with the
Norfolk Southern, CSX, Canadian National, Canadian Pacific, and
Buffalo & Pittsburgh railroads.  Currently, it employs about 80
people.  South Buffalo is one of nine shortline railroads owned
by Bethlehem Steel.

With respect to its planned financing, Bethlehem said it has
obtained essentially all of the necessary commitments for a new
$750 million credit facility.  It has also obtained the
necessary consents to amend its 10-3/8% Senior Notes in
accordance with the consent solicitation dated September 10,
2001.  The consent solicitation payment is conditioned upon
closing the new credit facility and Bethlehem is extending this
condition until October 31, 2001.

Bethlehem also said that it is continuing to pursue certain
other required consents.

BRIDGE INFO: Unexpired Lease Decision Period Extended to Feb. 12
Market Front Associates, LP is Bridge Information Systems,
Inc.'s landlord with respect to a lease of non-residential real
property for the premises in One Front Street, San Francisco,

Peter D. Kerth, Esq., at Gallop, Johnson & Neuman, L.C., in St.
Louis, Missouri, tells the Court that the Debtors owe Market
Street $21,650.22 for post-petition rent and related charges,
exclusive of interest, attorneys' fees and costs.

Market Street does not object to the Debtors' proposed extension
of their lease decision period, Mr. Kerth says, provided:

   (i) the post-petition defaults for the premises is
       immediately paid to Market Street, and

  (ii) all future rents and related charges are paid in
       accordance with the terms of the lease.

Accordingly, Market Street asks the Court to enter an order:

     (i) compelling the Debtors to pay immediately to Market
         Street the post-petition defaults, and to pay interest,
         attorneys' fees and costs, in an amount to be
         determined, and

    (ii) compelling the Debtors to pay all future rents and
         related charges in accordance with the terms of the

                          *     *     *

Persuaded that the relief requested is appropriate to assist the
reorganization of the Debtors' businesses, Judge McDonald
extends the period within which the Debtors must move to assume
or reject the Unexpired Leases through and including February
12, 2002. (Bridge Bankruptcy News, Issue No. 17; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

BROCKER TECHNOLOGY: Violates Nasdaq Listing Requirements
Brocker Technology Group Ltd. (Nasdaq: BTGL) (TSE: BKI) -- -- announced that the Staff of the
Nasdaq Stock Market has notified the Corporation that it does
not currently comply with the net tangible assets/shareholders'
equity/market capitalization/total assets and total revenue
requirement for continued listing on the Nasdaq National Market
as specified in Market Place Rules 4450(a)(3) and 4450(b)(1).

This is in addition to the Staff's previous determination that
the market value of the Corporation publicly held common shares
had fallen below the Nasdaq National Market continued listing
requirements, which gives rise to the Staff's determination to
delist the Corporation's common shares from the Nasdaq National

The Staff's determination is to be reviewed by an Independent
Panel in accordance with the procedures provided by the Nasdaq
Stock Market rules.

The delisting will be stayed until the Independent Panel makes
its determination on these matters. The Corporation cannot
predict the outcome of the review process and, accordingly,
there is no assurance that the Corporation's listing on the
Nasdaq Stock Market will be continued.

The Corporation's listing on the Toronto Stock Exchange is not
affected by the Nasdaq Stock Market action.

Brocker Technology Group is a communications company focused on
improving information flows by delivering innovation and market
leadership in telecommunication services, e-commerce strategies
and information management technologies.

Brocker subsidiary, Datec also provides a broad range of IT and
communications solutions to companies across the South Pacific.

BUHRMANN N.V.: S&P Cuts Ratings to BB- on Lower EBITDA Coverage
Following a profit warning by Netherlands-based office products
supplier Buhrmann N.V., Standard & Poor's lowered its long-term
corporate credit ratings and senior secured ratings on Buhrmann
to double-'B'-minus from double-'B' and its subordinated debt
ratings on the group to single-'B' from single-'B'-plus.

Ratings remain on CreditWatch, where they were placed with
negative implications on Aug. 3, 2001.

The ratings downgrade and continued placement of ratings on
CreditWatch reflect Buhrmann's further deterioration in its
already weak debt protection measures following its third profit
warning. EBITDA to net interest coverage was 2.6 times for the
first half of 2001, compared with 3.0x for the corresponding
period in 2000.

In the six months ended June 30, 2001, the group's operating
profits fell by 15% to EUR257 million ($237 million) from
EUR301 million.

The persistent downturn in the U.S. economy was exacerbated by
the terrorist attacks on Sept. 11, 2001, and any hope of an
early recovery of Buhrmann's U.S. business, which accounts for
about half of the group's total operating profits, is therefore

Furthermore, a shift of Buhrmann's customers towards lower-
margin products, and pricing pressure in paper merchanting
owing to lower advertising spend also contributed to the group's
decline in profits.

Standard & Poor's estimates that any further meaningful
deterioration of the group's profitability could trigger a bank
covenant violation over the next six months.

The ratings will be increasingly driven by the group's weak
financial position, but continue to be supported by its
extensive distribution structure and diversified geographical

Standard & Poor's will be holding discussions with Buhrmann's
management in the near term to review the group's strategies for
halting the significant decline in profitability, and continues
to closely monitor whether Buhrmann is in compliance with its
bank covenants.

COMDISCO: Equity Panel Seeks Approval of Trading Wall Procedures
David F. Heroy, Esq., at Bell, Boyd & Lloyd, in Chicago,
Illinois, explains that a Securities Trading Committee Member
has a fiduciary duty to maximize returns for its clients through
the buying and selling of securities.  But as a result of
membership on the Equity Committee, Mr. Heroy says, such members
and their affiliates also owe a fiduciary duty to other equity
holders not to divulge any confidential or "inside" information
regarding Comdisco, Inc.

Thus, Mr. Heroy notes, if a Securities Trading Committee Member
is barred from trading the Securities during the pendency of
these cases because of its duties to other equity holders, it
may risk the loss of a beneficial investment opportunity for its

On the other hand, Mr. Heroy relates, if a Securities Trading
Committee Member resigns from the Equity Committee, its
company's interests may be compromised by virtue of taking a
less active role in the reorganization process.

To solve this dilemma, the Equity Committee proposes that the
Trading Wall procedures to be employed by a Securities Trading
Committee Member, if it wishes to trade in Securities, should
include the following information blocking procedures:

   (i) the Securities Trading Committee Member shall cause all
       its Committee Personnel to execute a letter acknowledging
       that they may receive nonpublic information and that they
       are aware of the Order and the Trading Wall procedures
       which are in effect with respect to the Securities;

  (ii) Committee Personnel will not share non-public Committee
       information with any other employees of such Securities
       Trading Committee Member, except employees of such
       Securities Trading Committee Member that have a need to
       know such information;

(iii) Committee Personnel will keep non-public information
       generated from Committee activities in files inaccessible
       to other employees;

  (iv) Committee Personnel will receive no information regarding
       Securities Trading Committee Member's trades in
       Securities in advance of such trades, except that
       Committee Personnel may receive the usual and customary
       internal and public reports showing the Securities
       Trading Committee Member's purchases and sales and the
       amount and class of claims and securities owned by such
       Securities Trading Committee Member, including the
       Securities; and

   (v) to the extent applicable, the Securities Trading
       Committee Member's compliance department personnel shall
       review from time to time the Trading Wall procedures
       employed by the Securities Trading Committee Member as
       necessary to insure compliance with the Order and shall
       keep and maintain records of their review.

Mr. Heroy notes that one of the Equity Committee Members is the
Pontikes' Family Trusts.  The Committee's requested relief
includes treatment of the Pontikes' Family Trusts as a
Securities Trading Committee Member for all purposes of the
relief requested.

The Committee further proposes that any Securities Trading
Committee Member's Committee Personnel or other personnel may
sell any securities to comply with a client's redemption
directions.  Accordingly, the Committee requests the Court to
rule that any such sale will not violate such Securities Trading
Committee Member's fiduciary duties as a Committee member.

Thus the Committee member will not subject its interests or
claims to possible disallowance, subordination, or other adverse
treatment for reason of its trading in the Securities during the
pendency of the Bankruptcy Cases.

Mr. Heroy tells Judge Barliant that the Trading Wall procedures
outlined is identical to that proposed by the Official Committee
of Unsecured Creditors and approved by this Court.  So there is
no reason why the Court should not also approve the relief
requested, Mr. Heroy implies.

By this motion, the Equity Committee requests that the Court
enter an order:

  (i) approving the Trading Wall procedures set forth;

(ii) determining that any Committee member, acting in any
      capacity, that engages in securities trading as a regular
      part of its business will not violate its fiduciary duties
      as a Committee member, and, accordingly, will not subject
      its interests or claims to possible disallowance,
      subordination, or other adverse treatment by trading in
      the Securities during the pendency of the Bankruptcy
      Cases, provided that, such Committee member follows the
      procedures set forth herein to insulate its trading
      activities from its Committee related activities.
      (Comdisco Bankruptcy News, Issue No. 8; Bankruptcy
      Creditors' Service, Inc., 609/392-0900)

EDISON: Says Settlement with CPUC Will Restore Financial Health
Southern California Edison today announced the settlement of its
Filed Rate Doctrine lawsuit with the California Public Utilities
Commission that will enable SCE to develop a plan to pay off its
creditors and prevent another utility bankruptcy in California.

The settlement, filed Tuesday in U.S. District Court, was
crafted in response to the lawsuit Edison filed nearly a year
ago based on the fact that state regulators were preventing
Edison from collecting sufficient retail rates to pay for the
actual cost of power it was purchasing last year on behalf of
its customers.

The following statement was issued by Edison International
Chairman, President and CEO John E. Bryson.

"Throughout the entire energy crisis, Edison has had just one
goal: to become creditworthy again so that the State of
California could get out of the electricity-buying business and
Edison employees could get back to what they do best -- provide
safe, secure power to Edison customers.

"[Tues]day's federal court settlement agreement between Edison
and the California Public Utilities Commission is a workable way
for Edison to become creditworthy, to remove the state from the
power business, and to allow Edison to return to its core
mission of delivering reliable electricity service.

"Particularly at this time of national crisis and a fragile
California economy, it is vital to avoid the great uncertainty
of potential bankruptcy and lawsuits. By guaranteeing rate
stability and making Edison creditworthy, this federal court
settlement is in the best interest of California consumers."

An Edison International (NYSE: EIX) company, Southern California
Edison is one of the nation's largest electric utilities,
serving a population of more than 11 million via 4.3 million
customer accounts in a 50,000-square-mile service area within
central, coastal and Southern California. For more information
on the California electricity crisis, see

EISBERG FINANCE: Fitch Downgrades $63.75MM Class C Notes to B
Fitch has downgraded one class of notes issued by Eisberg
Finance Ltd., a synthetic cash flow CDO established by UBS AG,
London Branch to provide credit protection on a $2.5 billion
portfolio of investment grade, corporate debt obligations.

No rating action has been taken or is contemplated at this time
for the class A and class B notes which are rated `AAA' and `A'
respectively, and no further action has been taken on the class
D notes which were downgraded on March 21, 2001 to `CCC' from

Based on the current risk profile of the reference portfolio,
the class A, class B and class D notes continue to maintain
credit enhancement levels consistent with the assigned ratings.

The following securities have been downgraded and removes from
Rating Watch Negative:

    * $63,750,000 class C notes from 'BB' to 'B'.

Fitch's rating action reflects the deterioration in credit
quality of several of the underlying assets. This has resulted
in higher than expected credit protection payments under the
credit default swap agreement with UBS, and a diminished level
of credit enhancement for the class C notes.

EXODUS COMMUNICATIONS: Selling Louisiana Assets to TekInsight
------------------------------------------------------------- Inc. (Nasdaq:TEKS)(Nasdaq:TEKSP)(Nasdaq:TEKSW), a
leading provider of government transformation services,
announced they have signed a letter of intent with Exodus
Communications(R) to acquire its professional services business
in the state of Louisiana.

Exodus(R) provides network support and other technology services
to several state agencies within Louisiana.

Under the terms of the agreement and subject to bankruptcy court
approval, TekInsight will acquire Exodus' current contracts and
employees for an undisclosed amount.

"We are committed to providing superior service and a seamless
transition for both customers and employees within Louisiana. We
are excited about the dynamic business that is created by this
agreement and feel that this is a very positive development for
Exodus' employees, customers and the state," said Steve Ross,
TekInsight's chief executive officer.

"This acquisition will also help TekInsight further expand our
National Technology Support Center, located in Baton Rouge, and
support Governor Foster's efforts to make Louisiana an
attractive place for the technology industry."

TekInsight helps governments transform by using innovative
technology and management techniques to increase efficiency in
government operations and improve access to government
functions. The company's comprehensive Government Transformation
Methodology includes consulting, infrastructure planning and
deployment, application development, legacy integration and

TekInsight's ePluribus(TM) Software Suite is comprised of custom
and modular e-government applications that enable governments to
process tax and violation payments, licenses, parks & recreation
management, deeds and more online and in real-time.

TekInsight's ProductivIT(TM) suite of Internet-based
applications is a completely customizable IT support enhancement
tool designed to aid in the diagnosis and resolution of hardware
and software application issues in any size environment.

TekInsight competes in the government technology space shared
with companies such as National Information Consortium Inc.
(Nasdaq:EGOV) and Maximus (NYSE:MMS). For additional information
on TekInsight, visit

FEDERAL-MOGUL: Frank E. Macher Takes Helm As New Chairman & CEO
The Board of Directors of Federal-Mogul Corporation (NYSE: FMO)
has elected Frank E. Macher as chairman and chief executive
officer, adding the responsibilities of chairman to his previous
role as chief executive officer, effective October 1, 2001.
Macher, 60, replaces Robert S. (Steve) Miller Jr., who had been
serving as non-executive chairman and who will remain on
Federal-Mogul's board of directors.

The board's action accelerates a leadership succession plan at
Federal-Mogul that was announced at the time of Macher's
appointment on January 11, 2001. The acceleration resulted from
the recent appointment of Miller as chairman and chief executive
officer of Bethlehem Steel Corporation, effective September 24,

Chip McClure remains as Federal-Mogul's president and chief
operating officer, a position he has held since January 11,

Macher has more than 35 years of automotive industry
experience. He served as president and chief executive officer
of the former ITT Automotive, a $6 billion global automotive
supplier, from July 1997 to January 1999. Before joining ITT,
Macher served 30 years at Ford Motor Co. in a variety of
progressively responsible positions in management,
manufacturing, engineering and quality. His last position at
Ford was vice president and general manager of the Automotive
Components Division, the predecessor to the current Visteon

While at Ford, Macher served as general manager of the Plastic
and Trim Products Division, the Electronics Division and the
Electrical and Electronics Division. His other roles included
vice president of northern Pacific Operations, based in Tokyo,
Japan, and general manufacturing manager and plant manager at
several Michigan facilities. He began his Ford career in 1966 as
a manufacturing development engineer.

Headquartered in Southfield, Michigan, Federal-Mogul is an
automotive parts manufacturer providing innovative solutions and
systems to global customers in the automotive, small engine,
heavy-duty and industrial markets.  The company was founded in
1899.  Visit http://www.federal-mogul.comfor more information.

FEDERAL-MOGUL: Fitch Drops Ratings to D After Chapter 11 Filing
Fitch downgrades both the senior unsecured debt and the secured
bank debt of Federal Mogul Corporation to D from CCC and B-,
respectively. Federal Mogul Corporation voluntarily filed for
financial restructuring under Chapter 11 of the U.S. Bankruptcy
Code Monday.

In addition, its subsidiaries in the U.K. have filed jointly for
similar proceedings. Most recently, Federal Mogul Corporation
had $1.9 billion in secured bank debt outstanding in addition to
$2.1 billion of unsecured debt.

The 'D' ratings reflects the great uncertainty as to the timely
proceedings of yesterday's filings and also the potential
liabilities related to asbestos claims as the proceedings move
forward and its effect on ultimate recovery value for all
classes of debtholders.

The company has stated that it has obtained up to $675 million
in a new loan through debtor-in-possession financing.

Federal-Mogul Corp., headquartered in Southfield, MI, is a
global producer and distributor of a broad range of components
for automobiles and light trucks, heavy-duty trucks, farm and
construction vehicles and industrial products. The company's
major products and systems focus on engines, sealing and
braking, which it sells to OE producers as well as to
replacement markets.

FOUNTAIN VIEW: Files for Chapter 11 Protection in Los Angeles
Citing its inability to get a plaintiffs' lawyer to remove a
lien on its bank accounts, Fountain View, Inc., a leading
operator of 49 long-term care facilities with approximately
5,000 patients and about 6,000 employees in California and
Texas, filed for protection under Chapter 11 of the U.S.
Bankruptcy Code to ensure continuation of patient care.

Robert Snukal, chief executive officer of the Burbank, CA-based
company, said Fountain View officials have been attempting to
negotiate a settlement with attorneys for plaintiffs who, in
April of this year, were awarded a $6.1 million judgment against
the Company. He said when company officials learned that the
plaintiffs' attorneys had attached the company's bank accounts,
Fountain View's lawyers contacted them in an attempt to get the
attachment removed.

"When they refused, we had no choice but to take action to
protect the assets of the company to ensure we had the necessary
resources to continue to provide care to our patients and honor
our obligations to our employees," he said. "The company
disputes the judgment in its entirety and intends to appeal."

Mr. Snukal said that the company has sufficient cash to fund
ongoing operations. He stressed that under Chapter 11 daily
operations will continue as usual.

"Patients will receive the same quality care as before the
filing. Employees will continue to be paid. Vendors will be paid
currently for goods and services provided after the date of the
filing," he said.

"Under Chapter 11, Fountain View will have the necessary time to
develop and implement a plan to restructure its debt," Mr.
Snukal said.

"We are extremely optimistic about the future of this company.
While we would have preferred to have been able to avoid the
filing, we are confident that it is now in the best interest of
all of the company's constituents to work out a plan which will
ensure that Fountain View emerges from this process as a strong
and viable company," he stated.

Mr. Snukal continued, "We provide quality care for a lot of
people in need. We are very proud of the service we are
providing and look forward to continuing to do so for many years
to come."

The Company filed its voluntary petition for Chapter 11
reorganization in the U.S. Bankruptcy Court in the Central
District of California, Los Angeles Division. Klee, Tuchin,
Bogdanoff & Stern, LLP of Los Angeles, is Fountain View's
bankruptcy counsel.

Fountain View is a leading operator of long-term care facilities
and a leading provider of a full continuum of post-acute care
services, with a strategic emphasis on sub-acute specialty
medical care. The Company operates a network of facilities in
California and Texas, including 43 skilled nursing and six
assisted living facilities. In addition to long-term care, the
Company provides a variety of high-quality ancillary services
such as physical, occupational and speech therapy and pharmacy

GENESIS HEALTH: Emerges From Bankruptcy After Completion of Plan
Genesis Health Ventures, Inc. has emerged from chapter 11
protection following the completion of its plan of
reorganization and merger with the Multicare Companies, Inc.

In conjunction with emergence, Genesis also announced that it
has secured a $515 million senior secured credit facility led by
First Union, Goldman Sachs and GE Capital that will fund
obligations under the plan of reorganization as well as ongoing
corporate financing needs.

"We are emerging as a stronger and re-energized Company, ready
to take on the big challenges of meeting this nation's
healthcare needs for an aging population," said Michael R.
Walker, founder, chairman and CEO of Genesis.

With the exception of certain secured debt, the plan of
reorganization cancels both companies' pre-petition debt plus
preferred and common stock. The plan provides for Genesis and
Multicare bank lenders to receive a combination of cash, new
debt, new convertible preferred stock, and approximately 93% of
the new common stock of Genesis.

Unsecured creditors such as vendors and subordinated bondholders
will get approximately 7% of the new common stock and warrants
to purchase additional shares of new common stock. Pre-petition
preferred and common shareholders will not receive a
distribution under the plan.

The company has applied to have the new common stock listed on
the Nasdaq National Market.

Genesis and Multicare voluntarily filed for chapter 11
protection on June 22, 2000 after drastic cuts in Medicare
reimbursement and continued underpayment by most State funded
Medicaid systems resulted in an inability to continue to meet
debt obligations under the companies' existing capital

Genesis Health Ventures provides eldercare in the eastern US
through a network of Genesis ElderCare skilled nursing and
assisted living facilities plus long term care support services
nationwide including pharmacy, medical equipment and supplies,
rehabilitation, group purchasing, consulting and facility

GRAND ADVENTURES: Begins Liquidation of UK Unit & Layoffs in US
Grand Adventures Tour & Travel Publishing Corporation (OTC
Bulletin Board: GATT) announced the closing and liquidation of
its UK subsidiary Lawson Interline Travel Ltd. (Lawson). This
closure was brought about after the company was unable to renew
required operating licenses that fell due at end of September.

The closing of the Lawson operation was directly impacted by the
terrorist events that occurred September 11. Prior to the
attacks on the World Trade Center, the company was about to
close a private placement offering that would have provided the
necessary capital to permit the UK operation to obtain the
renewal of its license.

The subsequent uncertainty in the capital markets as well as the
significant disruption to the air traffic system foreclosed any
opportunity the company may have had to raise the required

The company's US operations have also been substantially damaged
by the attacks on September 11. Since that date, new bookings
have dropped by over 70%, and the company has experienced
significant cancellations of future bookings. Furthermore, its
chances for a quick recovery have been limited by the fact that
approximately 20% of the market for the company's services,
airline employees, have been or soon will be laid off.

The timing of this business disruption was also extremely
damaging to GATT because the September and October period is a
peak travel time for airline employees. Revenues generated
during this period are generally used to fund operations over
the November and December period when the company has
historically experienced slow sales.

In response to this situation the company has drastically cut
back on staff and expenses. In the US, 45 employees have been
laid off while the closing of the UK operation cost over 46
employees their jobs. The remaining 30 employees in Austin are
focused on servicing the travel needs of passengers with
existing reservations while also handling any new booking

Finally, the company has suspended payments to all debt holders
and subsequently is in default on many of obligations.
Additionally, no payments to trade creditors for past services
are being made until further notice. Payments for future
services are being made where appropriate. Additionally, the
company has also suspended the publication of the print edition
of Interline Adventures magazine.

ICG COMMS: Rejects MCI Worldcom Pact & Inks New Deal with TTI
As part of ICG Communications, Inc.'s normal business
operations, the ICG Communications, Inc., has provided long
distance and local telecommunications services to customers for
the past several years.

Specifically, the Debtors purchase long distance and local
service connections from MCI WorldCom Network Services, Inc.,
f/k/a WorldCom Network Services, Inc., and, in turn, sell such
services to certain third parties.

The long distance business has yielded approximately $500,000 in
monthly revenue for the Debtors in the past. However, due to
losses resulting from long-distance fraud (including over $5
million this year) and problems with various billing systems,
the Debtors have determined that the long distance business is
no longer a profitable enterprise.

Accordingly, as part of the Debtors' restructuring efforts, to
maximize the value of these estates and streamline operations,
the Debtors have decided to exit such business.

Toward that end, the Debtors have negotiated an agreement with
TTI National, Inc., an affiliate of MCI WorldCom Network
Services, Inc., f/k/a WorldCom Network Services, Inc., subject
to Judge Walsh's approval, whereby the Debtors will (i) reject
the agreement for long distance service with MCI WorldCom, (ii)
assume and assign the long distance portion of customer
contracts to MCI WorldCom, and (iii) assume, as amended, the
agreement with MCI WorldCom for local service.

In consideration for the assignment of the customer contracts,
as discussed more fully below, MCI WorldCom has agreed to waive
substantial claims it alleges are owed in connection with the
rejection of the long distance service agreement and the
assumption of the local service contract, and pay the Debtors a
royalty on fees collected on account of the customer contracts.

Moreover, MCI WorldCom has agreed to amend the local service
contract to provide more beneficial terms for the Debtors.

The Debtors assure Judge Walsh that they anticipate that
regulatory approval for the Asset Purchase Agreement, although a
condition to the closing of the Asset Purchase Agreement, is
expected to be obtained easily and in due course.

                   Long Distance Agreement

On or about August 16, 1999, Debtor ICG Telecom Group, Inc.,
entered into a contract with MCI WorldCom, under which MCI
WorldCom provides Telecom with long distance telecommunications
services . In accordance with the Long Distance Agreement,
Telecom pays MCI WorldCom for monthly charges based on specified
rates for actual customer usage.

In addition, under the Long Distance Agreement, when Telecom
fails to maintain certain customer usage levels, it is required
to pay MCI WorldCom the difference between mandatory minimum and
actual customer usage levels. The Debtors estimate that Telecom
could owe up to $11 million on account of such underutilization
charges to date.

The Debtors have determined in their business judgment that the
long distance business is no longer profitable, and, therefore,
request this Court's authority to reject the Long Distance
Agreement. As part of the proposed Asset Purchase Agreement, MCI
WorldCom has agreed to waive any and all claims owed by Telecom
in connection with the rejection of the Long Distance Agreement,
totaling up to $24 million.

                 Customer Service Agreements

The Debtors currently provide approximately 5400 customers long
distance and local telecommunications services pursuant to a
Master Telecommunications Services Agreement, the Debtors have
determined that the long distance business is no longer
profitable, and desire to exit such business. Accordingly, the
Debtors, with the assistance of their financial advisors,
analyzed various potential strategic transactions with respect
to the Debtors' long distance customer base.

The Debtors' financial advisors determined that the estimated
market value of the long distance portion of the Debtors'
customer base is approximately $2.5 million.

As part of the proposed Asset Purchase Agreement, in
consideration for the purchase of the long distance portion of
the Customer Contracts, MCI WorldCom shall waive:

        (i) approximately $4.5 million in prepetition and post
            petition claims it filed against Telecom;

       (ii) any damage claim in connection with the rejection of
            the Long Distance Agreement, and

      (iii) any underutilization charges owed in connection with
            the assumption of the Local Service Agreement, and
            to pay Telecom a ten percent royalty on any fees
            collected on account of the Customer Contracts,
            which the Debtors estimate equals a net present
            value of approximately $2.2 million.

The Debtors estimate that the consideration offered by MCI
WorldCom with respect to the Customer Contracts is certainly in
excess of the market value for such agreements.

In its business judgment, the Debtors have determined that MCI
WorldCom's offer with respect to the Customer Contracts provides
a substantial benefit to the Debtors and estates. Accordingly,
the Debtors respectfully request Judge Walsh's authority to
assume the Customer Contracts, and, in accordance with the terms
of the proposed Asset Purchase Agreement, assign the long
distance portion of the Customer Contracts to MCI WorldCom.

                  Local Service Agreement

On or about September 1, 1998, Telecom entered into a contract
with MCI WorldCom, under which MCI WorldCom provides Telecom
with dedicated digital, interexchange, local access and
ancillary services. In accordance with the Local Service
Agreement, Telecom pays MCI WorldCom monthly charges based on
certain specified rates for actual customer usage.

In addition, like the Long Distance Agreement, when Telecom
fails to maintain certain customer usage levels, it is required
to pay the difference between the mandatory minimum and actual
customer usage levels on a monthly basis. The Debtors estimate
that Telecom owes over $1.7 million on account of such
underutilization charges.

The Debtors have determined in their business judgment that the
services provided by MCI WorldCom under the Local Service
Agreement are critical to the Debtors' continued ability to
service highly profitable customers. In addition, to transition
such customers to a different local service provider or carrier
would involve significant expenditures.

Accordingly, the Debtors request Judge Walsh to authorize them
to assume the Local Service Agreement, as amended.

Specifically, MCI WorldCom has agreed, pursuant to the Asset
Purchase Agreement, to amend the Local Service Agreement to
provide for the removal of any future underutilization charges.
Moreover, as part of the Asset Purchase Agreement, MCI WorldCom
has agreed to waive any claim based on prepetition or
postpetition underutilization charges owed in connection with
the Local Service Agreement, which the Debtors estimate total
approximately $1.7 million.

If a debtor's business judgment is shown to have been reasonably
exercised, a court should approve the assumption or rejection of
an unexpired lease or executory contract. In applying the
"business judgment" standard, courts show great deference to the
debtor's decision to reject.

The Debtors clearly satisfy the business judgment standard with
respect to the proposed Asset Purchase Agreement. By rejecting
the Long Distance Agreement, pursuant to the proposed Asset
Purchase Agreement, the Debtors will be able to exit an
unprofitable business without incurring any rejection damage

Moreover, under the Asset Purchase Agreement, the Debtors will
receive consideration well in excess of the market value of
their long distance customer base.

Finally, under the Asset Purchase Agreement, the Debtors will be
able to assume, as amended, the Local Service Agreement, which
is integral to the Debtors continued ability to service highly
profitable customers, without incurring any underutilization

                       Claim Settlement

Settlements and compromises are "a normal part of the process of
reorganization" and are strongly favored over litigation.
Federal courts have repeatedly stated that:

"[P]ublic policy strongly favors pre-trial settlements in all
types of litigation because such cases, depending on their
complexity, "can occupy a court's docket for years on end,
depleting the resources of parties and taxpayers while rendering
meaningful relief increasingly elusive" . . . . Second,
litigation costs are particularly burdensome on a bankrupt
estate given the financial instability of the estate. A
settlement should be approved unless it "falls below the lowest
point in the range of reasonableness."

For all of the reasons described above, the Debtors submit that
the settlement of the claims described above is highly favorable
to the Debtors and their estates. MCI WorldCom has agreed to
waive substantial damage claims, and, in addition, pay Telecom
royalties on future revenues from the Customer Contracts.
Indeed, the Debtors negotiated the best terms and conditions
they could with respect to the Asset Purchase Agreement.

                Sale Pursuant to Section 363(b)(1)

In addition, because the proposed Asset Purchase Agreement is in
the best interests of the Debtors, their estates, creditors and
other parties in interest, entering into the Asset Purchase
Agreement represents a reasonable business judgment on the part
of the Debtors and thus is appropriate under section 363(b)(1).
Section 363(f) is drafted in the disjunctive. Thus, satisfaction
of any of the requirements enumerated therein will suffice to
warrant the Debtors' sale of the free and clear of all liens,
claims, encumbrances.

Each lien, claim or encumbrance attached to the long distance
portion of the Customer Contracts satisfies at least one of the
five conditions of section 363(f), and the Debtors submit that
any such lien, claim or encumbrance will be adequately protected
by attachment to the net proceeds of the proposed sale, subject
to any claims and defenses the Debtors may possess with respect

Accordingly, the Debtors request that the long distance portion
of the Customer Contracts be transferred to MCI WorldCom, free
and clear of all liens, claims and encumbrances, with such
liens, claims and encumbrances to attach to the proceeds of the
sale of such property.

           The Sale Should Be Free of Any Transfer Tax

Section 1146(c) of the Bankruptcy Code provides: "The issuance,
transfer, or exchange of a security, or the making or delivery
of an instrument of transfer under a plan confirmed under
section 1129 of this title, may not be taxed under any law
imposing a stamp tax or similar tax." 11 U.S.C.  1146(c).

Where, as with this proposed sale of surplus real estate, an
asset sale outside of a plan is "necessary to the consummation
of a plan," such sale is within the exemption from taxation
provided under section 1146(c).

Proceeds of the sale of the long distance portion of the
Customer Contracts will be utilized to position the Debtors for
emergence from chapter 11. Thus the section 1146(c) exemption is
appropriate and should be granted here, the Debtors tell Judge
Walsh. (ICG Communications Bankruptcy News, Issue No. 10;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

IMPERIAL SUGAR: Commences Distribution of New Common Stock
Imperial Sugar Company (OTC:IPSU) announced the distribution of
shares of its new common stock to shareholders of record on
August 29, 2001.

The Company's Second Amended and Restated Joint Plan of
Reorganization, confirmed by the U.S. Bankruptcy Court, became
effective on August 29, 2001. Under the Plan, the Company's
former common stock (OTC BB:IPRLQ) was canceled.

On September 26, 2001, the Company distributed to its
shareholders of record on August 29, 2001 approximately 0.0062
shares of common stock in the reorganized company for each share
previously held. These new shares of common stock began trading
on the OTC under the symbol "IPSU", September 27, 2001.

Under the Plan, the Company's shareholders of record on August
29, 2001 also will receive warrants to purchase shares of new
common stock. The Company will issue these warrants on the basis
of 0.0343 warrants for each share of common stock held of record
on August 29, 2001.

The Company expects to issue the warrants and set their exercise
price within the next five months when a determination is made
of the maximum number of shares of new common stock to be issued
to creditors in settlement of their claims made during the
bankruptcy proceedings.

The rights to receive warrants held by shareholders of record on
August 29, 2001 began trading on the OTC under the symbol
"IPRLZ", September 27, 2001.

Transactions in the Company's common stock on the OTC under the
symbol "IPRLQ" after August 29, 2001 and before September 27,
2001 represent the right to receive shares of the Company's new
common stock and warrants to acquire shares of the Company's new
common stock. Beginning on September 27, 2001, transactions in
shares of its new common stock occur on the OTC under the symbol
"IPSU" and transactions in the rights to receive warrants occur
on the OTC under the symbol "IPRLZ".

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

INTERNATIONAL TOTAL: Ex-CEO Calls For Meeting to Oust Board
In a showdown over the control of International Total Services,
a global provider of airline service and security personnel,
former CEO Robert A. Weitzel notified the company that he was
calling for a shareholder's meeting to replace the board of

The new board will include the former head of the Federal Bureau
of Investigation in Cleveland.

Weitzel, whose family controls approximately 52 percent of the
company, cited the inability of the company's management to
operate the business profitably during an international crisis
that affects the security of travelers throughout the world. He
said it was one of the factors causing his action.

ITS management filed for bankruptcy in New York City two days
after the terrorist attack on the World Trade Center.

ITS had served Continental Airlines in preboarding passenger
screening at Cleveland Hopkins International Airport until May
31, when it lost the contract. Weitzel said ITS lost the
contract because the airlines said the company did not
understand its security needs.

"The bankruptcy filing was a move to prevent me from regaining
control of ITS," Weitzel said. "But to do it at a time when the
security at the nation's airports is under such focus is an
insult to loyal airline clients who need all the support they
can get."

The notification asking for a shareholder meeting came as a two-
year voting trust giving the board control of the company
expired on September 30. In the letter to the company, Weitzel
stated his intention to replace the three existing members with
William D. Branon, formerly FBI agent-in-change in Cleveland,
Edward R. Towns, the former mayor of Chagrin Falls and himself.

Weitzel, who is a founder of ITS, which was established here in
1978, retired from the company in September of 1999 after
appointing John O'Brien, Jeffery Schwartz and Jeffery Eakin to
the board and giving them the authority to run the company
through the voting trust terms.

The board named Mark Thompson, a real estate lawyer, to replace
Weitzel as CEO of ITS which, at the time, had revenues of $240
million annually and served more than 300 locations worldwide
with 15,000 employees. "Annual revenues have dropped to less
than $160 million and the stock is at 10 cents a share," said

"The board rushed the company into bankruptcy before the voting
trust expired despite the fact that there was financing
available and potential investors out there."

Motions are pending to transfer the bankruptcy case to
Cleveland. It is Weitzel's intent to regain control of the
company and rescue it from bankruptcy. Weitzel filed a $25-
million lawsuit in Cuyahoga County Common Pleas Court on
September 24 against the trustees charging a breach of fiduciary

The company then countered with a suit alleging Weitzel's
actions forced the company into bankruptcy. Weitzel denies all

INTIRA CORPORATION: Creditors' Meeting Slated For October 9
Creditors of Intira Corporation will meet on September 9, 2001
at 1:00 P.M., in Room 2112, U.S. Court House, Wilmington,
Delaware, pursuant to Section 341 of the Bankruptcy Code.  A
representative of the company will be there at the meeting for
the purpose of being examined under oath.

Attendance by creditors at the meeting is welcomed, but not

Intira Corporation, a pioneer and industry leader in
netsourcing, the outsourcing of information technology and
network infrastructure used to support Internet or private
network-based applications, filed for chapter 11 protection on
July 30, 2001 in Delaware.

Laura Davis Jones, Esq., at Pachulski Stang Ziehl Young & Jones
P.C. represents the Debtors in their restructuring effort.  When
the company filed for protection from its creditors, it listed
$112,970,000 in assets and $152,700,000 in debt.

JERRY'S FAMOUS DELI: Fails to Meet Nasdaq Public Float Minimum
Jerry's Famous Deli Inc. (Nasdaq:DELI) announced that it had
received a letter from the Nasdaq Stock Market Inc. on October
1, 2001, advising the company that its stock would be delisted
from the Nasdaq SmallCap Market at the opening of business on
October 10, 2001, for failure to meet public float requirements
and failure to have a sufficient number of independent directors
to serve on the audit committee.

As was anticipated and disclosed in Offer to Purchase related to
the recent tender offer, as a result of the tender offer the
company no longer meets the public float requirement for
continued listing pursuant to the Nasdaq Marketplace Rules.

In addition, in anticipation of delisting for delisting pursuant
to the float requirement, the company had not solicited a new
board member to add to the audit committee as required by the

Following the delisting of the company's common stock from the
Nasdaq SmallCap Market, the company may remain eligible for
trading on the Nasdaq OTC Bulletin Board (OTCBB). However, no
assurance can be given that the company will remain eligible to
trade on the OTCBB or that market makers will quote the
company's stock on the OTCBB.

In order to remain eligible for trading on the OTCBB, the
company will be required to maintain the registration of its
common stock under the Securities Exchange Act of 1934, and to
file the quarterly, annual and other reports required under that
act on a timely basis.

The company's board of directors has not determined if or when
the company will stop reporting and deregister the company's
common stock under the act, thereby making the common stock
ineligible for trading on the OTCBB.

The company cannot assure that, even if it remains eligible for
trading on the OTCBB, there will be an active market for its
common stock. Because of the substantial reduction in the number
of shares in the hands of public holders of the common stock as
a result of the tender offer, the company anticipates that
future trading in the common stock will be substantially

As described in the Offer to Purchase related to the tender
offer, the company may at some time in the future complete a
merger in which all shareholders except the control shareholders
would receive cash for their common stock. Since the control
shareholders now own more than 90 percent of the outstanding
common stock, such a merger could be completed at any time
without a vote of the public shareholders.

To the company's knowledge, no decision has been definitively
made at this time by the control shareholders about whether or
when to complete such a merger transaction.

LBP INC: Initial Liquidating Distribution Will Start on Oct. 15
LBP, Inc. (OTC Bulletin Board: LBPI) announced that, consistent
with an order of the Delaware Chancery Court, the Company will
make its initial liquidating distribution in the amount of $5.10
per share to holders of record of the Company's Common Stock on
October 15, 2001. The payment will be made on or about October
25, 2001.

The Company will close its stock transfer books as of the record
date, and trading of the Company's Common Stock will cease as of
the close of business on the record date.

Future liquidating distributions, currently estimated at $.70 to
$.85 per share in the aggregate, will be made to holders of the
Company's Common Stock as of the October 15, 2001 record date in
accordance with Delaware law. The right to receive future
distributions will be non-transferable. At this time, the
Company is unable to predict with certainty the amount and
timing of such distributions.

Notices published in compliance with the Delaware liquidation
procedures resulted in one contingent claim for a reserve
relating to an existing indemnification obligation undertaken by
the Company in connection with the sale of its business in June
1998. Because the claimant did not assert any loss and because
the Company believes that the contingency is extremely remote,
the Company will, unless an agreement is reached with the
claimant, request the Chancery Court to determine the
appropriate amount and duration of the reserve.

As of September 30, 2001, the Company had cash and liquid short
term investments, (primarily US Government money market funds)
aggregating approximately $29.75 million. The initial
liquidating distribution will be approximately $25.5 million.

                         *  *  *

On January 11, 2001 the Board of Directors adopted the Company's
Plan of Complete Liquidation, Dissolution and Termination of
Existence, which was approved by the stockholders of the Company
at the Company's annual stockholder' meeting on May 16, 2001.

On June 29, 2001, the Company filed a Certificate of Dissolution
in the Office of the Secretary of State of the State of

The Company has liquidated all its non-cash  assets.  Pursuant
to the Plan, after payment of all claims, obligations and
expenses owing to the Company's creditors, cash distributions
of cash on hand will be made to holders of the Company's Common
Stock on a pro rata basis.

LAIDLAW INC: Seeks Court Approval of Key Employee Programs
Laidlaw Inc. asks the Court for an order:

    (a) approving a key employee retention plan;

    (b) authorizing them to assume:

         (i) a supplemental executive retirement plan, and

        (ii) a severance plan; and

    (c) authorizing them to make certain interim payments under
        certain consulting and non-competition agreements.

According to Joseph M. Witalec, Esq., at Jones, Day, Reavis &
Pogue, in Columbus, Ohio, one of the keys to the Debtors'
successful restructuring is the retention of their current
employees.  Mr. Witalec tells Judge Kaplan that the Debtors have
3 specific programs in place that are designed to retain and
motivate their key employees.

                     The Retention Program

Before the Debtors filed for bankruptcy, Mr. Witalec relates,
they implemented Phase I of the Retention Program, which
provided for the payment of retention bonuses while the Debtors
sought to restructure their operations and financial
obligations.  Phase I expired in Spring 2001.

Now, Mr. Witalec says, the Debtors wish to execute Phase II of
the Retention Program, which aims to retain key employees of the
Debtors through both the conclusion of the Laidlaw companies'
restructuring efforts and the potential movement of the Laidlaw
companies' headquarters.

Under Phase II, 38 designated employees are classified into 1 of
2 "tiers" based on an employee's job responsibilities and
importance to the Debtors' operations.

An employee's Retention Incentive Bonus is based upon:

    (a) a percentage of the employee's monthly salary as
        determined by the employee's tier classification (the
        "Participation Rate") and

    (b) the length of service of the employee with the Debtors
        after the start of Phase II (the "Service Time").

Tier I employees have a Participation Rate of 50%, while Tier 2
employees have a 25% Participation Rate.

Upon the commencement of Phase II, all employees are credited
with an initial Service Time of 3 months, and an additional
month is added for each month of employment with the Debtors
after the commencement of Phase II.  Service Time is capped for
all employees at 12 months, including the initial 3-month award.

The Retention Incentive Bonus is calculated by multiplying the
Participation Rate and the Service Time by the employee's
monthly salary.

Each eligible employee still working for the Debtors will
receive the Retention Incentive Bonus on the later of:

  (a) confirmation of a plan of reorganization in these cases or

  (b) the relocation of the Debtors' corporate headquarters.

If the Debtors do not have a confirmed plan of reorganization in
place by June 1, 2002, eligible employees will receive 25% of
the Retention Incentive Bonus at that time, with the balance
being paid on the later of the plan confirmation or the
relocation of corporate headquarters.

The Debtors estimate that Phase II of the Retention Program will
cover 38 employees at a total cost of $1,100,000, Mr. Witalec

           The Supplemental Executive Retirement Plan

According to Mr. Witalec, the Supplemental Executive Retirement
Plan consists of 2 separate programs -- one for United States
employees and another for employees in Canada.  Mr. Witalec
reports that as of April 1, 2001, the Canadian Retirement Plan
covered 13 active employees, 9 former employees and 1 pensioner,
while the U.S. Retirement Plan covered 46 active and 17 former

Under the Retirement Plan, Mr. Witalec tells Judge Kaplan, a
covered employee receives an annual benefit amount equal to 1%
of Final Average Earnings below %150,000 in the applicable
country's currency and 1.5% of Final Average Earnings in excess
of $150,000 in the applicable country's currency times the years
of service with the Laidlaw companies.

                     The Severance Plan

The Severance Plan provides severance benefits to all covered
employees who are terminated due to a release or a reduction in
workforce, Mr. Witalec relates.

The Severance Benefits consist of:

  (a) severance that is paid for a period at the Debtors'
      discretion either as a lump sum or in installments on the
      normal payroll cycle, based on the years of service, age
      and base salary of the terminated employee;

  (b) certain health, dental or life insurance benefits for the
      lesser of:

       (i) the Severance Period or

      (ii) until the procurement of alternative employment; and

  (c) outplacement assistance.

The aggregate amount of Severance Benefits available to
employees on the Petition Date totaled approximately $2.5
million, Mr. Witalec reports.  Because many employees who are
covered by the Severance Plan will continue to work for the
Debtors, the Debtors believe that total payments under the
Severance Plan will be far less than $2.5 million.

                 The Scott's Agreements

The Scott's Agreements consist of 3 consulting and non-
competition agreements dated November 1987 between Scott's
Hospitality Inc. and:

    (a) Benson Orenstein,

    (b) Richard A. Hunter, and

    (c) Charles King.

Under the Scott's Agreements, Mr. Orenstein, Mr. Hunter and Mr.
King agreed to provide consulting services to Scott's
Hospitality Inc. upon their retirement and to refrain from
competing with Scott's Hospitality Inc. for the remainder of
their lives.  They are compensated for their services on a
monthly basis:

        Professional              Monthly Fee
        ------------              -----------
        Benson Orenstein          CD$18,196.92 ($11,885.68)
        Richard Hunter            CD$ 5,282.32 ($ 3,786.02)
        Charles King              CD$ 1,435.61 ($   932.57)

Mr. Witalec tells Judge Kaplan that Laidlaw, Inc., one of the
Debtors, assumed the obligations under the Scott's Agreements as
part of its pre-petition purchase of Scott's Hospitality, Inc.
The Debtors believe that their employees' confidence in the
willingness of the Debtors to honor their obligations is
essential to maintaining the morale of the Debtors' current
employees and retaining their services, Mr. Witalec says.

The Debtors only seek authority to make certain interim payments
under the Scott's Agreements through the Effective Date, Mr.
Witalec adds, and do not seek to assume the Scott's Agreements
at this time, or authority to make any payments after the
Effective Date.

The approval of the Retention Program and the assumption of the
Supplemental Executive Retirement Plan and the Severance Plan
will accomplish a sound business purpose and aid the Debtors'
reorganization, Mr. Witalec contends.  Without an adequate
retention program in place, Mr. Witalec cautions, the Debtors'
competitors and prospective employers in other industries would
quickly target the Debtors' most qualified employees and offer
them new career opportunities.

The Debtors simply cannot afford to lose their key employees at
this time, Mr. Witalec tells Judge Kaplan.  It would be
difficult, costly and time-consuming for the Debtors to attract
qualified replacements, Mr. Witalec says, and the employee
search process would divert the Debtors' attention and resources
from the reorganization process.  The loss of key employees
could also lead to further employee attrition, Mr. Witalec

The loss of key employees, Mr. Witalec asserts, will make it
extremely difficult for the Debtors to complete their
reorganization on their current accelerated timetable.  Any
resulting delay in completing the reorganization process, Mr.
Witalec warns, would:

  (a) undermine the Debtors' substantial work to date to
      expedite the completion of these cases,

  (b) frustrate the goals and expectations of the Debtors' key
      stakeholders, and

  (c) threaten the implementation of the comprehensive
      settlement agreement among the Debtors, the Bank Group and
      the Noteholders' Committee regarding the Debtors'
      financial restructuring. (Laidlaw Bankruptcy News, Issue
      No. 7; Bankruptcy Creditors' Service, Inc., 609/392-0900)

LOEWEN: Seeks Approval to Pay Exit Financing Due Diligence Fees
Confirmation of The Loewen Group, Inc.'s Fourth Amended Plan of
Reorganization is conditioned upon the receipt of a commitment
for the Proposed Exit Financing Facility in a form satisfactory
to the Debtors, and the effectiveness of the Plan is conditioned
upon the execution and delivery of the documents effectuating
the facility.

The Proposed Exit Financing Facility is currently anticipated to
consist of a secured revolving credit facility in the amount of
up to $75 million that would include a $25 million letter of
credit sub-facility.

Working towards the goal of confirmation and effectiveness of
the Plan, the Debtors contemplate filing a term sheet regarding
the Proposed Exit Financing Facility no later than October 26,

Correspondingly, the Debtors envisage the need for prompt
negotiations, significant due diligence and other tasks. In this
regard, the Debtors have discussed the potential provision of
exit financing with number of banks and other financial
institutions. Based on these discussions, the Debtors have
identified CIT as the most promising candidate to provide the
Proposed Exit Financing Facility.

Accordingly, the Debtors seek the Court's authority, pursuant to
section 363 of the Bankruptcy Code, 11 U.S.C. section 101-1330,
and Rule 6004 of the Bankruptcy Rules for (1) entry into a
letter of intent and addendum and (2) payment of a deposit and
certain expenses in connection with the Proposed Exit Financing
Facility with The CIT Group/Business Credit, Inc.

By a letter of intent dated August 6, 2001 CIT confirmed its
interest in providing the Proposed Exit Financing Facility on
the general terms described therein, subject to further

The parties also have negotiated an addendum to the Letter of
Intent that further details the parties' agreement with respect
to the Debtors' reimbursement of CIT's costs and expenses.

Under the Letter of Intent and Addendum, the Debtors will agree
to pay CIT upon demand all out-of-pocket costs and expenses that
CIT incurs in connection with the Proposed Exit Financing
Facility and CIT's due diligence with respect thereto,
including, but no limited to, all reasonable legal,
environmental and other consultant and appraisal costs, fees and
disbursements incurred by CIT in connection with the
preparation, negotiation, execution and closing of the Proposed
Exit Financing Facility.

As security for this payment obligation, the Letter of Intent
required that the Debtors immediately pay to CIT a "good faith
deposit" of $200,000, which the Debtors already have done.

Under the terms of the Letter of Intent and Addendum, the
Deposit, less any out-of-pocket costs and expenses incurred by
CIT in evaluating the Proposed Exit Financing Facility, will be
returned to the Debtors if CIT is unable to offer the Debtors an
exit financing facility.

If the Proposed Exit Financing Facility is consummated, CIT will
credit the unused portion of the Deposit against a loan facility
fee, which the parties currently anticipate will be $1,125,000,
which will be due at the closing of the Proposed Exit Financing
Facility. In all other instances, the Deposit will be retained
by CIT as a fee for its consideration of the Proposed Exit
Financing Facility.

Under the terms of the Letter of Intent and Addendum, CIT will
be permitted to charge the Deposit against all costs and
expenses that the Debtors agree to pay pursuant to the Letter of
Intent and Addendum. Moreover, if the unused balance of the
Deposit is reduced to $50,000 or less, the Debtors will be
required, within three business days of receipt of a notice from
CIT in this regard, to make a payment to CIT that will replenish
the Deposit to an amount of not less than $200,000. Upon demand,
CIT is required to provide the Debtors an accounting of the
costs and expenses incurred by CIT and charged to the Deposit.

The Letter of Intent and Addendum contemplate that the Debtors
will seek, at the hearing to be held in these cases on September
28, 2001, an order of the Court that, among other things, (a)
authorizes the Debtors to execute and perform under the Letter
of Intent and Addendum and (b) provides that the Debtors'
payment obligations thereunder constitute administrative
expenses under section 503(b) of the Bankruptcy Code.

Prior to entering into a firm commitment to provide the Proposed
Exit Financing Facility, CIT will incur costs and expenses in
connection with, among other things, undertaking due diligence
with respect to the Proposed Exit Financing Facility. After the
commitment is entered into, CIT will incur costs and expenses in
connection with, among other things, documenting and negotiating
the final terms of the Proposed Exit Financing Facility.

The Debtors have filed this Motion at the request of CIT to
obtain express authority to, among other things, enter into the
Letter of Intent and reimburse CIT for its costs and expenses
incurred in connection with the Proposed Exit Financing

The Debtors represent that the relief requested is necessary to
permit a continuation and timely completion of the process of
conducting due diligence and negotiating the terms of a
commitment for the Proposed Exit Financing Facility as required
by the Plan.

The terms of the Letter of Intent and Addendum, including the
provisions for the payment of the Deposit and reimbursement of
CIT's costs and expenses, the Debtors submit, are reasonable in
relation to other commercial lending transactions under similar
circumstances. The Debtors tell Judge Walsh that prospective
lenders frequently require nonrefundable up-front fees and
charges to reimburse them for due diligence, document
preparation and related activities but that is not the case
here. Moreover, CIT's exit financing proposal is the most
favorable proposal received by the Debtors.

Accordingly, the Debtors request the entry of an order, pursuant
to section 363 of the Bankruptcy Code and Bankruptcy Rule 6004
authorizing the Debtors to (a) execute and perform under the
Letter of Intent and Addendum and (b) pay the Deposit and other
costs and expenses incurred by CIT thereunder. (Loewen
Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

LOOK COMMS: Secures CCAA Protection Until November 30
Look Communications Inc. sought and obtained an order from the
Ontario Superior Court of Justice extending its period of
operating under the Companies' Creditors Arrangement Act (CCAA)
until November 30, 2001.

The Company is continuing to discuss long-term financing with
potential investors and its objective is to present a draft plan
of arrangement as well as the proposed claims process for Court
approval within the extension period. Such a plan would include
details of how the Company will deal with its current debt and
will outline its financing plans for the future.

Look also announces that it has entered into term sheets for a
mortgage and a short-term loan from private investors for an
aggregate amount of $2.5 million. The short-term loan is from
existing equity investors in Look and, as such, was approved by
the Court as a related party transaction.

The Court exempted Look, subject to the right of any interested
party to apply to the Court on a timely basis for further review
of the transaction, from those portions of Ontario Securities
Commission Rule 61-501 that would otherwise have required the
Company to obtain approval of this transaction from all
unrelated shareholders and to obtain a formal valuation.

The proceeds of both transactions will be used to finance
ongoing operations while the Company continues to operate under
the CCAA. Both transactions are expected to close within 15
days. Such closing dates are appropriate in the circumstances
given Look's financial situation and the use of proceeds.

Look is deeply grateful to its customers for their exceptional
loyalty and encouragement, and its dedicated employees are
making every effort to maintain high service levels. The Company
also acknowledges the support of its suppliers and shareholders
during this period.

There can be no assurance that Look will successfully conclude
current negotiations with new investors or reach agreement with
creditors and trade suppliers under a plan of arrangement.

Look Communications (CDNX: LKC) is a leading wireless broadband
carrier, delivering a full spectrum of communications services
including digital television distribution, high-speed and dial-
up Internet access and Web-related services. Through its
advanced MDS technology (Multipoint Distribution System) Look
provides superior digital entertainment services to homes across
Quebec and Ontario.

Look's Internet service has established itself as one of
Canada's largest independent service providers offering both
high speed and dial-up Internet access, in addition to other
Web-based applications, to consumers and businesses throughout
Canada. For more information on Look, visit the company's Web
site at

MJK CLEARING: Court Clears Sale of $10B Assets to SWS Securities
The Securities Investor Protection Corporation (SIPC), which
maintains a special reserve fund authorized by Congress to help
investors at bankrupt brokerages, announced that the U.S.
Bankruptcy Court in Minneapolis has approved a deal under which
175,000 investors at the financially troubled firm MJK Clearing,
a subsidiary of Minneapolis-based Stockwalk Group, Inc. (Nasdaq:
STOK), will be transferred to SWS Securities, Inc., a Dallas-
based financial services company with assets of nearly $4

The transfer arrangement was worked out by SIPC and court-
appointed trustee James P. Stephenson of the Minneapolis law
firm Faegre & Benson. "We expect most customers to be able to
access their accounts this week, many as early as Wednesday,"
Stephenson said. "Generally, individual customers with accounts
up to $2 million dollars would have access to 100 percent of
their accounts. A small number of large account holders will be
able to access only a percentage of their account balances
pending disposition of other assets of MJK Clearing."

Stephenson said customers should call their regular broker for
more information. Information about the MJK Clearing Case will
be available at SIPC's Web site at
Customers should not contact the U.S. Bankruptcy Court, which
has no further information about MJK Clearing.

The liquidation case is the largest ever handled by SIPC in its
more than 30 year history. The largest previous brokerage
shutdown handled by SIPC involved the firm Adler, Coleman
Clearing Corp., headquartered in New York City, which had 65,000
customers and failed in February 1995.

"MJK was found to be out of compliance with federal rules
requiring the maintenance of minimum capital levels," said SIPC
General Counsel Stephen Harbeck. "SIPC is working closely with
regulatory authorities to ensure that customers of MJK Clearing
can obtain access to their accounts as soon as possible."

Based in Minneapolis, Minn., Stockwalk Group, Inc. is the parent
company of MJK Clearing, Inc., which provides comprehensive
clearing and brokerage services to correspondents across the
country, and, Inc., an online trading company (AOL
keyword: Stockwalk); and Stockwalk Group, Inc. common stock
trades on the Nasdaq Stock Market under the symbol STOK.

MJK Clearing, Inc., is the parent company of Miller Johnson
Steichen Kinnard, Inc., a full-service brokerage firm of
approximately 400 investment executives in eight states. Miller
Johnson Steichen Kinnard is a member of the Chicago Stock
Exchange. Stephenson also noted that Miller Johnson Steichen
Kinnard, Inc., is being sold by the trustee to the Stockwalk
Group, Inc., under a separate agreement approved Tuesday by the
Bankruptcy Court.

                         About SIPC

>From its creation by Congress in 1970 through December 2000,
SIPC advanced $391 million in order to make possible the
recovery of $3.8 billion in assets for an estimated 443,000
investors. SIPC estimates that more than 99 percent of eligible
investors have been made whole in the failed brokerage firm
cases that it has handled to date.

SIPC either acts as trustee or works with an independent court-
appointed trustee in a missing asset case to recover funds. The
statute that created SIPC rules provides that customers of a
failed brokerage firm receive all non- negotiable securities
that are already registered in their names or in the process of
being registered. At the same time, funds from the SIPC reserve
are available to satisfy the remaining claims of each customer
up to a maximum of $500,000. This figure includes a maximum of
$100,000 on claims for cash.

Recovered funds are used to pay investors whose claims exceed
SIPC's protection limit of $500,000. SIPC often draws down its
reserve to aid investors. Recovered funds also are used to
replenish SIPC's reserve in the event that the reserve is tapped
in the early stages of a liquidation proceeding.

SIPC is an important part of the overall system of investor
protection in the United States. While a number of federal,
self-regulatory and state securities agencies deal with cases of
investment fraud, SIPC's focus is both different and narrow:
Restoring funds to investors with assets in the hands of
bankrupt and otherwise financially troubled brokerage firms. The
Securities Investor Protection Corporation was not chartered by
Congress to combat fraud.

MCLEODUSA: Scraps National Network to Focus on Core Businesses
McLeodUSA Incorporated (Nasdaq: MCLD), the nation's largest
independent competitive local exchange carrier, announced that
it has taken a number of actions to position the company for
future success.

The company has revised its corporate strategy to focus on its
25-state footprint, where it sells voice and data services to
small and medium size business and residential customers. As a
result, the company has abandoned its plans for a national
network and will de-emphasize certain wholesale services. This
new strategy is designed to focus the company's resources and
provide a strong foundation for profitable growth in its core
CLEC and directory publishing businesses.

"Given the current economic environment, McLeodUSA has redefined
its strategy to focus on our core strengths," said Steve Gray,
President and Chief Executive Officer. "Our strategy will
emphasize continued expansion in our 25-state footprint where we
expect to capitalize on our proven ability to increase our
market share."

In support of the company's new strategy, McLeodUSA plans to
take the following actions:

1.  Abandon the development of the national network and place
    the associated assets for sale. Sell other non-core assets
    and excess inventory. These actions are expected to generate
    $400 to $450 million in cash in 2002, up from prior
    estimates of $150 to $200 million.

2.  Reduce employment by approximately 15% and execute plans to
    consolidate 11 facilities into 3 over the next twelve
    months, resulting in annual savings of approximately $105

3.  Scale back capital expenditures from prior plan of $400
    million to $350 million in 2002, focused on market growth
    within the 25-state footprint, primarily augments and new
    customer requirements.

4.  Take a one-time, non-cash charge in the third quarter of
    approximately $2.9 billion, including write-downs of
    goodwill and other long-lived assets ($2.5 billion), write-
    off of inventory and construction work-in-process from
    discontinued operations ($200 million), restructuring
    reserves for the reduction in force ($13 million), and
    facilities consolidations ($150 million). The company will
    also take a charge to operating income of approximately $35
    million in the third quarter associated with balance sheet
    adjustments to various accounts such as prepaid expenses,
    receivables and bad debt reserves.

Chris Davis, Chief Operating and Financial Officer, added, "We
have spent the past seven weeks evaluating the key operational
and financial aspects of the business. The company's rapid
growth over the past several years resulted in an overly broad
market focus, operating inefficiencies, and inadequate business
processes to allow the company to continue to effectively scale.
We are taking decisive actions to address these issues."

These actions include:

1.  Evaluated the company's strengths and available capital in
    order to focus its strategic direction;

2.  Reviewed the company's business units for profitability and
    synergy with the newly focused strategic plan;

3.  Completed an organizational assessment to identify
    redundancies and operational inefficiencies;

4.  Assessed all positions in the company in order to properly
    staff to support the revised corporate strategy;

5.  Established five cross-functional teams to strengthen
    processes and drive improvements.

Ms. Davis added, "We have established detailed plans and a new
organization structure for the future. The five process teams
have been tasked to drive significant improvements in sales
efficiencies, provisioning and customer installation, billing
and revenue assurance, cash management and business forecasting
and planning. The company clearly faces challenges in this
environment, but we are convinced we now have the right strategy
to capitalize on the McLeodUSA sound operating model."

          Agreement with Forstmann Little & Co.

On September 30, 2001, McLeodUSA and Forstmann Little completed
the previously announced preferred stock exchange, which
eliminated cash dividend payments, saving the company $175
million over the next five years. In consideration for
elimination of the dividend, the conversion price was reduced
from $12.17 to $6.10.

Forstmann Little, a very strong supporter of McLeodUSA, was
prepared to proceed with the previously announced $100 million
common stock purchase, at a price in line with the current
market environment. Given the significant recent change in the
equity markets and the company's decision to place non-core
assets for sale, McLeodUSA and Forstmann Little mutually agreed
not to proceed with the common stock transaction at this time.

Forstmann Little will continue to make the $100 million
available to the company, if needed, with pricing and terms to
be negotiated based on market conditions at that time.

                Revised Financial Forecast

While the accounting closing for third quarter 2001 is not yet
complete, the company expects that as a result of the actions
described above, third quarter EBITDA will be well below current
consensus estimates. For full year 2001, the company now expects
revenues of approximately $1.8 billion and EBITDA (excluding the
one-time non-cash charge for balance sheet adjustments) of
approximately $130 million. For 2002, the company expects
revenues, (adjusted for the company's focused strategy and the
sale of non-core assets) to be approximately $1.8 billion with
EBITDA of approximately $250-275 million.

                   Fully Funded Status

Based on the significant cost reductions, expected asset and
inventory sales and the elimination of cash dividends on the
preferred stock, along with the $550 million that remains
available to the company under its bank credit facility, the
company believes its revised business plan is fully funded. It
now expects to have cash and liquidity of approximately $400
million at year-end 2002.

McLeodUSA provides integrated communications services, including
local services, in 25 Midwest, Southwest, Northwest and Rocky
Mountain states. The company also provides data and voice
services in all 50 states.

McLeodUSA is a facilities-based telecommunications provider
with, as of June 30, 2001, 383 ATM switches, 49 voice switches,
372 collocations, 512 DSLAMs, nearly 31,000 route miles of fiber
optic network and 10,600 employees. The company's fiber optic
network is capable of transmitting integrated next-generation
data, Internet, video and voice services, reaching 800 cities
and approximately 90% of the U.S. population. In the next 12
months, McLeodUSA plans to distribute 35 million telephone
directories in 26 states, serving a population of 59 million.
McLeodUSA is a Nasdaq-100 company traded under the symbol MCLD.
Visit the company's web site at

MEDIA GENERAL: S&P Rates Long-Term Credit & Unsecured Debt BB+
Standard & Poor's revised its outlook on Media General Inc. to
stable from positive. At the same time, Standard & Poor's
affirmed its double-'B'-plus long-term corporate credit and
senior unsecured debt ratings on Media General.

The outlook change is based on the reduced likelihood of Media
General's financial profile strengthening in the intermediate
term to a level supportive of a higher rating. This reflects the
continued economic weakness and its impact on an already soft
advertising revenue climate.

The ratings reflect Media General's significant debt levels and
prospects for continued growth through acquisition. In addition,
the company is subject to the impact of general economic
conditions on advertising revenues and the variability of
newsprint prices.

These factors are mitigated by Media General's strong market
positions, diversified mix of newspaper and television
operations, and historically healthy cash flow generation.

Richmond, Virginia-headquartered Media General is a
communications company with newspaper publishing, television
broadcasting, and interactive media operations located primarily
in the Southeast. Newspaper publishing, which accounts for about
70% of revenues and segment operating cash flow, includes 25
daily newspapers in Virginia, North Carolina, Florida, Alabama,
and South Carolina, as well as a 20% interest in the Denver

Television broadcasting consists of 26 network-affiliated
stations that reach more than 30% of the television households
in the Southeast and nearly 8% nationwide.

Media General's recent results have been hurt by the impact of
the weaker economy on advertising revenues and by higher average
newsprint prices. While the advertising revenue climate is
expected to remain soft in coming periods, this will be tempered
by Media General's cost control initiatives and by recent
declines in newsprint prices. Aided by healthy operating cash
flow margins in the mid 20s percentage area and manageable
capital expenditure and dividend requirements, the company has
historically generated meaningful levels of discretionary cash

With the sale of its cable operations in 1999, Media General had
no net debt at December 1999. Debt levels at June 2001 totaled
about $800 million and reflect two major acquisitions completed
in 2000. Debt to operating cash flow is in the high 3 times
area, and operating cash flow to interest is also in the high 3x

Standard & Poor's expects that Media General will continue to
actively seek acquisitions in the Southeast region. However, the
timing and magnitude of such transactions are uncertain. In the
interim, Media General is expected to use its discretionary cash
flow for debt reduction, rather than for additional share
repurchases, in order to build financial flexibility for
possible acquisitions. Further potential flexibility is provided
by investments and a diversified portfolio of discrete assets.

                        Outlook: Stable

Ratings stability reflects the expectation that Media General's
overall financial profile will not change significantly in the
intermediate term.

NATIONAL RECORD MART: Creditors' Meeting Set for October 4
The United States Trustee will convene a meeting of National
Record Mart Inc.'s Creditors to be held on October 4, 2001 at
10:00 a.m. in Suite 960 at 1001 Liberty Ave., in Pittsburgh,
Pennsylvania 15222.

US Trustee Joseph M. Fornari, Jr., invites all creditors to
attend.  This Official Meeting of Creditors offers the one
opportunity in a bankruptcy proceeding for creditors to question
a responsible office of National Record Mart Inc. under oath.

The last day for filing proofs of claim is set January 2, 2002.

National Record Mart, the oldest music retailer in the US,
consented to the entry of an Order For Relief under Chapter 11
of the Bankruptcy Code last August 15, 2001.

Earlier, the company's largest suppliers filed an involuntary
Chapter 7 petition last June 19, 2001 at the Western District of
Pennsylvania.  The law firms, Campbell & Levine, LLC, and
Morgan, Lewis & Bockius LLP, represent the Debtors.  As of June
30, 2001, National Record Mart posted $60,113,834 in assets and
$74,792,064 in debt.

NIAGARA MOHAWK: Reaches Agreement to Sell Energy Marketing Unit
Niagara Mohawk Holdings Inc. (NYSE: NMK) announced it has
reached an agreement to sell Niagara Mohawk Energy Marketing
Inc., the largest division of its unregulated subsidiary Niagara
Mohawk Energy, to Select Energy Inc., the competitive energy
marketing and services subsidiary of Northeast Utilities (NYSE:
NU). Financial terms of the sale were not disclosed.

Based in Syracuse, Niagara Mohawk Energy Marketing is engaged in
the wholesale and retail sales of natural gas and electricity in
the Northeastern U.S. and Canada. Select Energy provides
electricity, natural gas, and energy services to business and
institutional customers throughout the 11 northeastern states
from Maine to Maryland. Headquartered in Berlin, Ct., the
company currently has revenues exceeding $2.5 billion annually.
Niagara Mohawk Energy Marketing had revenues of $635 million in

"Through this transaction, Niagara Mohawk Energy Marketing will
be part of an organization with a similar strategic mission and
the resources and commitment necessary to continue to grow and
succeed," said Albert J. Budney, president of Niagara Mohawk
Holdings. "In addition, Niagara Mohawk Energy Marketing's
customers will benefit from the combined resources and expertise
of the two companies."

Budney noted that the divestiture of Niagara Mohawk Energy
Marketing is in keeping with Niagara Mohawk Holdings' plan to
merge with National Grid USA and remain focused on the regulated
energy transmission and distribution business. He said Niagara
Mohawk Holdings is continuing to pursue the sale of Niagara
Mohawk Energy's other operating divisions: Niagara Mohawk Energy
Services and Niagara Mohawk Distributed Power.

The sale of Niagara Mohawk Energy Marketing is subject to
approval of the Federal Energy Regulatory Commission and is
expected to close in late November. Select Energy intends to
maintain the Syracuse office upon consummation of the

Niagara Mohawk Holdings also is the parent company of Niagara
Mohawk Power Corp., a regulated electricity and natural gas
delivery company with the largest service territory in New York
state. Niagara Mohawk Power Corp. serves more than 1.5 million
electricity customers and more than 540,000 natural gas
customers across 24,000 square miles.

Select Energy, founded in 1997 at the start of electric utility
restructuring, provides retail and wholesale energy supply,
energy-related services, and facilities management and

Parent company Northeast Utilities operates New England's
largest energy delivery system, serving more than 1.7 million
electricity customers in Connecticut, Massachusetts and New
Hampshire and 187,000 natural gas customers in Connecticut. NU
is one of the largest competitive energy suppliers in New
England and is a major energy trader in the Northeast.

Navigant Consulting, Inc.'s (NYSE: NCI) Energy & Water business
unit managed the sale of Niagara Mohawk Energy Marketing and is
also managing the sales of Niagara Mohawk Energy Services and
Niagara Mohawk Distributed Power.

NOVO NETWORKS: Seeks to Extend Lease Decision Period to Dec. 31
Novo Networks International Services, Inc. wants the U.S.
Bankruptcy Court for the District of Delaware to extend its time
to decide whether to assume or reject unexpired leases of
nonresidential real property to December 31, 2001.

The company and its affiliate debtors have been evaluating their
core enterprise and formulating potential business plans under a
"stand alone" chapter 11 plan.  Novo Networks says that when
this process is concluded, the Debtors will have a much better
understanding of which leases are necessary to their continued

The company assures the Court that the lessors will not suffer
any harm as a result of the requested extension since the
Debtors will continue to comply with their post-petition
obligations under the leases.

Novo Networks, a developer of facilities-based broadband network
offering voice and data transport targeted to communications
carriers, ISPs, and large corporate and government clients,
filed for chapter 11 protection on July 30, 2001 in the District
of Delaware. Jeffrey M. Schlerf, Esq., at The Bayard Firm
represents the Debtors in their restructuring effort.

OWENS CORNING: Gets Okay to Assume Amended SAP America Contract
Owens Corning sought and obtained the Court's approval to assume
a modified version of a Software End-User License Agreement with
SAP America Incorporated.

According to Norman L. Pernick, Esq., at Saul Ewing LLP, in
Wilmington, Delaware, the Debtors entered into this Agreement in
September 1994.

Mr. Pernick discloses that this Agreement licenses to the Debtor
a certain software responsible for the integrated management of
almost all aspects of their businesses, ranging from sales,
inventory, payroll, and even plant maintenance.   Mr. Pernick
therefore concludes that, given the fundamental importance of
this software, assumption of the Agreement will accrue the most
benefits to the Debtors' estates.

However, Mr. Pernick says, modifications are necessary to aid
the Debtors' current restructuring efforts.  He presents the
modification agreed by both parties, which states:

12.1 Should Licensee, from time to time, sell or otherwise
      transfer the assets or equity ownership of any Licensee
      division, affiliate, or business unit, and as part of such
      transfer Licensee desires to provide transitional use to
      the purchaser of the Business Unit, including the use of
      software by the purchaser of such Business Unit, SAP shall
      evaluate on a case by case basis whether Licensee shall
      have the right to grant such transitional use rights to
      the purchaser of such Business Unit for a period of 6
      months after the completion of such transfer.

      If SAP consents, and such consent shall not be
      unreasonably withheld to grant the purchaser of such
      Business Unit transitional use rights for a period of 6
      months, SAP  shall require the purchaser to execute an
      acknowledgement agreement, to be agreed upon by the
      parties, whereby the purchaser will consent to the terms
      of  SAP's Agreement  with the Licensee. In no event shall
      Licensee grant a purchaser the transitional use rights
      without written consent of SAP.  If SAP consents to grant
      transitional use rights to the purchaser upon the
      termination of the 6-month period, SAP agrees that they
      will offer to license the software on current prices and
      terms and conditions in effect. Upon termination of the 6-
      month period, if the purchaser does not enter into a new
      License Agreement, then Licensee shall ensure that the
      purchaser of such Business Unit complies with the
      termination provisions of the License Agreement.

Aside from approving the modified Agreement, Judge Fitzgerald
ordered that:

(a) The Debtors shall pay the total cure amount of
    $6,332,835.30 within fourteen days of the date of approval
    of the motion.

(b) SAP shall be entitled to a general unsecured claim against
    the Debtor amounting to $287,604.34 for unpaid pre-petition
    consulting services. (Owens Corning Bankruptcy News, Issue
    No. 18; Bankruptcy Creditors' Service, Inc., 609/392-0900)

PACIFIC GAS: Files Appeal Statement of TURN Accounting Decision
Pacific Gas and Electric Company has filed its opening brief in
the United States District Court for the Northern District of
California in its appeal of the Bankruptcy Court's decision on
the TURN accounting order.

On March 27, 2001 the California Public Utilities Commission
(CPUC) issued a decision that required the company to restate
all its regulatory books and accounts retroactively back to
January 1, 1998.

On April 9, Pacific Gas and Electric Company filed an action in
Bankruptcy Court challenging the CPUC's implementation of the
order, under various provision of the Bankruptcy Code. On June
1, the Bankruptcy Court issued a decision denying PG&E's request
for preliminary injunction and dismissing the action.

In a June 25 filing, the company initiated its appeal to the
District Court.

PILLOWTEX CORP: Court Approves Claims Settlement Protocol
Judge Robinson granted Pillowtex Corporation's motion to settle
and pay claims and controversies, and thus:

      (a) approving the procedures under which the Debtors may,
          in their sole discretion, compromise and settle
          actions, whether arising before or after the filing of
          these cases, without further court approval; and

      (b) authorizing, in the Debtors' sole discretion, to make
          payments in satisfaction of any settlements of

Under the Settlement Procedures, the Debtors (in their sole
discretion) is authorized in connection with the settlement of
any action to agree to:

      (1) in the instance of an action against one or more of
          the Debtors,

          (a) if the action is covered by the Debtors' insurance
              policies, permit the party or parties to recover
              the settlement amount from available insurance

          (b) the allowance of a general unsecured claim against
              the applicable Debtor or Debtors,

          (c) make and authorized payment upon the parties'
              entry into the settlement or

          (d) a combination of the above;

      (2) in the instance of an action by one or more of the
          Debtors against a third party, accept one or more
          payments after the parties' entry into the settlement.
          (Pillowtex Bankruptcy News, Issue No. 14; Bankruptcy
          Creditors' Service, Inc., 609/392-0900)

PLANET HOLLYWOOD: Closing Six U.S. Restaurants
Planet Hollywood International announced that it closed six of
its U.S. restaurants in the past few weeks, the most dramatic
cuts in the restaurant chain's lineup since it shuttered nine
eateries in October 1999 when it filed for chapter 11 bankruptcy
protection, according to The Orlando Sentinel.

Robert Earl, Planet Hollywood founder and chairman, said on
Friday that he could not say if more of the remaining 12 U.S.
outlets will be shut down, but he predicted that the company is
close to the end of its current downsizing binge.

The most recent Planet Hollywood outlet to close was located on
Pennsylvania Avenue near the White House. A sharp drop in
visitors to the nation's capital in the wake of the Sept. 11
hijackings led to severe losses in restaurant business, a Planet
Hollywood representative said.  Outlets in San Diego, Atlanta
and Baltimore also were shuttered within days of the hijackings,
and outlets in Seattle and Nashville, Tenn., closed earlier in
September. (ABI World, October 2, 2001)

PRECISION AUTO CARE: Negotiates for Extensions of Senior Debt
Precision Auto Care, Inc. (Nasdaq: PACI) announced for the
fiscal year ending June 30, 2001, a loss of $18.9 million,
compared with a loss of $18.4 million, for the prior year.

For the quarter ending June 30, 2001, the Company incurred a
loss of $13.3 million, or $(1.67) per share, compared to a loss
of $14.2 million, or $(2.26) per share for comparable quarter in

Included in the fourth quarter loss are special charges of $10.9
million for impairment of goodwill.

The Company's CEO, Louis M. Brown, Jr. stated, "During the prior
fiscal year, the bottom line results were significantly impacted
by charges associated with the impairment of goodwill on certain
assets. However, the Company's restructuring efforts have
enabled the company to improve operating results during the
year. In FY02, the Company will continue to focus on strategies
that will improve the bottom line."

Robert Falconi, the Company CFO stated, "The Company has taken a
number of steps the past year to improve operating results
including the sale of non- performing assets, cost reductions
and the consolidation of certain business units. In FY02, we
will continue to look at ways we can improve operating results.
This might include selling other non-performing assets or
divisions. In addition, we are hopeful that the Company's car
wash division, Hydro-Spray, will continue to grow and grow
profitably along with the Company's core franchising business."

Although the Company has negotiated extensions of Senior Debt,
in the event that the Company is unable to accomplish its
strategic objectives or is otherwise unable to generate revenues
sufficient to cover operating expenses and pay other debt, the
Company would not be able to sustain operations at the current
level. This would require the Company to further reduce expenses
and liquidate certain assets.

Precision Auto Care, Inc. is the world's largest franchisor of
auto care centers, with over 500 operating centers as of June
30, 2001. The Company franchises and operates Precision Tune
Auto Care centers around the world.

PSINET INC: Gets Approval of Settlement with TNS Re Escrow Fund
PSINet, Inc. received the Court's approval of its Settlement
Agreement with TNS Holdings, Inc. releasing $4.5 million to the
TNS from a $10 million escrow amount and releasing the other
$5.5 million to the Debtors and resolving all claims arising
from a reduction in the purchase price and indemnification
amounts paid in relation to the transaction.

This was in connection to PSINet, Inc. prepetition sale of
PSINet Transaction Solutions, Inc. to TNS Holdings, Inc. for
approximately $285 million.

PSINet and the Purchaser reached agreement on a final adjustment
to the Purchase Price of approximately $3.8 million.

Pursuant to the cost-sharing provision, PSINet would indemnify
the Purchaser for the first $100,000 and 70% of any additional
amounts paid in settlement of such claim, subject to a cap of
$0.6 million.

Following a review of the basis underlying this claim, including
additional documentation submitted by the Purchaser evidencing
the Purchaser's payment in excess of $1.0 million in settlement
of such claim, the parties agreed to resolve the Peters claim in
the amount of $0.6 million. (PSINet Bankruptcy News, Issue No.
8; Bankruptcy Creditors' Service, Inc., 609/392-0900)

RITE AID: Completes Refinancing, Reducing Debt By $2.9BB In Q2
Rite Aid Corporation (NYSE, PCX: RAD) announced results for its
second quarter, ended September 1, 2001.

Sales for the 13-week quarter were $3.691 billion, up 7.3
percent from $3.439 billion reported in the prior year's second

Second quarter same store sales increased 8.9 percent versus the
prior year, reflecting prescription sales growth of 11.7 percent
and a 4.8 percent increase in front-end same store sales.
Prescription revenue accounted for 61.0 percent of total
drugstore sales and third party prescription sales
represented 92.0 percent of total pharmacy sales.

Second quarter earnings before interest, taxes, depreciation and
amortization, LIFO charges, gains and losses from asset
disposals, and non-cash expenses (EBITDA) amounted to $120.8
million, up 33.2 percent from the prior year's second quarter
EBITDA of $90.7 million. A change in accounting for leases,
which was effective on June 27, 2001 in conjunction with the
company's refinancing, lowered second quarter EBITDA by $9.6
million; on a comparable basis EBITDA increased this year versus
last by $39.8 million or 49.1 percent. Excluding net non-
operating income related to legal settlements of $17.0 million
received in the second quarter of this year and $12.3 million
received in the second quarter of last year, EBITDA was $103.8
million or 2.8 percent of sales this year versus $78.4 million
or 2.3 percent of sales for the second quarter of the prior

"We are pleased with the continued improvement in sales and
EBITDA, especially in a very tough retail environment," said
Mary Sammons, Rite Aid president and chief operating officer.
"While our decisions to accelerate the roll out of reduced cash
prices to all of our pharmacies and to lease new photo
processing equipment in many of our stores reduced second
quarter gross margins, we expect these decisions to result in
higher sales in the coming quarters."

Interest expense for the second quarter was $102.4 million
versus $182.1 million in the prior year's second quarter.
Interest expense was comprised of $93.2 million cash interest on
indebtedness and capital lease obligations and non-cash interest
of $9.2 million.

Other non-cash expenses of $86.9 million this quarter consisted
of $21.9 million in losses on debt modifications related to the
refinancing completed on June 27; a $31.0 million loss to mark
to market $1.0 billion of interest rate swap contracts on
floating rate bank debt that was retired in the refinancing;
$26.7 million related to store closings and impairment charges;
$4.5 million for losses related to the company's investment in and $2.8 million of other non-cash expenses.

Net loss from continuing operations for the second quarter was
$179.3 million or a loss per share of $0.40 compared to a net
loss from continuing operations of $425.0 million or a loss per
share of $1.87 in the year ago period. The net loss from
continuing operations would have been $105.3 million or a loss
per share of $0.22 without non-cash expenses of $86.9 million,
net proceeds from legal settlements of $17.0 million, $5.6
million of non-recurring legal and accounting expenses and a
$1.6 million gain from asset sales.

During the quarter, the company relocated four stores and closed
37 stores. Stores in operation at the end of the quarter totaled

         Guidance for the Second Half of Fiscal 2002

The company expects sales of $7.7 billion to $8.0 billion for
the remainder of fiscal 2002 which ends March 2, 2002. Same
store sales are expected to improve 8.0 percent to 10.0 percent
versus the prior year.

EBITDA for the second half is expected to be $265.0 million to
$315.0 million, bringing full year EBITDA to $550.0 million to
$600.0 million. Excluding the effect of the change in accounting
for leases of approximately $40.0 million, full year EBITDA
would be expected to be $590.0 million to $640.0 million.

Interest expense for the second half is expected to total
approximately $180.0 million with cash interest expense expected
to be approximately $157.0 million and non-cash interest
expected to be approximately $23.0 million.

Depreciation and amortization, including goodwill amortization,
is expected to total approximately $171.0 million with
approximately $89.0 million expected in the third fiscal quarter
and $82.0 million expected in the fourth fiscal quarter.

The company does not expect to record federal income tax expense
or benefit for the remainder of fiscal 2002; state taxes of
approximately $2.5 million are expected to be recorded during
the balance of fiscal 2002.

Capital expenditures for the remainder of fiscal 2002 are
expected to total approximately $70.0 million bringing full year
capital expenditures to approximately $120.0 million.

Working capital is expected to be lower on a full year basis by
approximately $100.0 million. The company expects to generate
$125.0 million to $175.0 million of free cash flow for fiscal
2002. Free cash flow represents the excess of reported EBITDA
and working capital reductions over cash interest expenses,
capital expenditures and amounts paid with respect to closed

"Our biggest accomplishment in the second quarter was completing
our refinancing efforts, which reduced debt by $2.9 billion,
greatly improved our balance sheet and allowed us to provide
financial guidance for the first time," said Bob Miller, Rite
Aid chairman and chief executive officer. "With the sales and
operating initiatives we have in place, we expect to generate
a significant amount of free cash flow at the end of the fiscal
year. This will be another positive step in Rite Aid's

             Preliminary September Sales Results

Final September sales results will be reported on October 9,
2001. On a preliminary basis, same store sales for the four-week
period ended September 29, 2001 were up approximately 6.0
percent over the prior year period.  Pharmacy same store sales
were up approximately 9.7 percent, while front-end same store
sales were slightly positive.

While the September 11 tragedy had a negative impact on sales on
September 11 and the days following, same store sales started to
recover during the second half of the month with the last two
weeks up approximately 7.7 percent, including an increase in
pharmacy of approximately 11.2 percent and a front-end gain of
approximately 2.2 percent, compared to the same two-week period
last year.

SWISSAIR: Resumes Flight Operations Today
Swissair will resume its flight operations on Thursday, October
4, 2001. It is estimated that approximately half of the flights
scheduled to depart on Thursday will be operated.

The decision to immediately resume flight operations was taken
after the Swiss government made a credit available to Swissair
in the amount of maximum CHF450 million.

It is to be expected that only 50 percent of the scheduled
flights can be operated on the first day. Subsequently, the
number of flights operated shall be increased. It is Swissair's
goal to offer their passengers as complete a flight schedule as

TERRA INDUSTRIES: S&P Rates Proposed $200M Senior Notes at BB-
Standard & Poor's assigned its double-'B'-minus rating to Terra
Industries Inc.'s proposed $200 million senior secured notes due
2008, which will be sold under Rule 144A with registration
rights. Standard & Poor's also assigned its double-'B' bank loan
rating to Terra's $175 million senior secured revolving credit

At the same time, Standard & Poor's  affirmed its double-'B'-
minus corporate credit rating and its single-'B' senior
unsecured debt rating on the company.

The outlook is negative.

Proceeds from the note issuance and borrowings under the
revolver will be used to repay debt under the company's existing
secured credit facility and to repay the senior notes due 2003.

The revolving credit facility, available to certain subsidiaries
of Terra, is rated one notch higher than the corporate credit
rating. Drawings under the revolving credit facility will be
subject to a borrowing base of eligible accounts receivable and
inventory. The facility is secured by substantially all of the
company's current assets.

The bank loan rating anticipates that the collateral package
will retain value in the event of default and would be
sufficient to fully cover the bank facility in a liquidation.

In a simulated default scenario, Standard & Poor's assumes that
the revolving credit facility would be drawn up to the available
amount under the borrowing base calculation, and assumes a
depressed level of asset valuation. In addition, Standard &
Poor's stress scenario factored in costs associated with delays
in disposing of properties, and corporate bankruptcy in general.

The senior secured notes will be issued by Terra Capital Inc., a
wholly owned subsidiary of Terra, and will be guaranteed by
Terra and its other wholly owned domestic subsidiaries.
Borrowings are secured by substantially all fixed assets either
directly or through secured intercompany notes.

The senior secured notes are rated the same as the corporate
credit rating given the uncertainty of asset values under
Standard & Poor's postdefault simulation analysis. However,
Standard & Poor's notes that there is a possibility of nearly
full recovery under these conditions.

Credit quality reflects Terra's fair business position as a
commodity fertilizer producer, offset by high financial risk.
Terra is a leading North American producer of nitrogen
fertilizer and methanol. The company also has nitrogen
facilities in Europe. Good market shares are offset by
cyclicality in Terra's highly competitive commodity businesses
and a relatively narrow scope of operations.

In addition, these businesses are sensitive to volatility in raw
material costs (primarily natural gas).

In particular, the nitrogen fertilizer sector has below-average
business characteristics, including low barriers to competitive
entry, profitability that is highly dependent on fluctuating
natural gas costs, and inconsistent product demand due to
changing planting patterns. Still, a growing population, higher
incomes, and improved diets support long-term prospects.

The long-term prospects for methanol are uncertain due to the
possible phase-out in key markets of methyl tertiary butyl ether
(MTBE), a gasoline additive that is an important methanol end

Profitability and cash flows have been negatively impacted by
overcapacity in global nitrogen markets, exacerbated by the
lingering effects of reduced demand attributable to low Chinese
nitrogen imports, and higher natural gas and feedstock costs. In
the recent planting season, North American demand declined due
to poor weather conditions and low grain prices.

In response to natural gas cost spikes, the company has
periodically idled significant portions of its nitrogen

Debt levels are high due to acquisitions and an aggressive
capital spending program. Proceeds from the sale of the retail
distribution business in 1999 relieved some pressure from the
company's balance sheet. Operating margins are about 15% over
the last 12 months, though financial results benefited
significantly from favorable natural gas forward pricing
contracts. Funds from operations to total debt (FFO/TD) is more
than 20%, exceeding the 15%-20% range considered appropriate for
the ratings.

However, cash flow has been negatively impacted by a buildup in
inventory stemming from weaker-than-expected demand. The high
debt levels continue to strain financial flexibility, and the
significant upswing in pricing and profitability needed to
provide meaningful and sustainable improvements in cash flows is
not expected to occur in the near term. Still, lower gas costs
could support a measure of improvement.

The ratings incorporate expectations that a gradual recovery in
business conditions should result in cash flow generation that
is in excess of internal needs, leading to debt reduction and a
strengthening of credit protection measures. Profitability is
expected to improve as the company approaches the next seasonal
peak, and operating margins should average at least 15% during
the cycle. EBITDA interest coverage should average 2.0 times -
2.5x. Capital spending is expected to be curtailed. Ample
availability under the revolving credit facility and good cash
balances should be sufficient to fund seasonal borrowings and
minimal shortfall in free operating cash flow.

Standard & Poor's does not expect Terra to implement a
meaningful stock repurchase program, and ratings assume that any
significant change in Anglo American's equity holdings would be
accomplished in a manner that preserves credit quality.

                       Outlook: Negative

A further weakening in business conditions and deterioration in
the company's financial profile could lead to a ratings

THERMADYNE HOLDINGS: Bank Group Agrees to Forbear Until Oct. 31
Thermadyne Holdings Corporation (OTC BB: TDHC.OB) announced the
extension through October 31, 2001 of the forbearance agreement
with its bank lending group. The prior agreement expired
September 28, 2001.

The agreement calls for lenders to refrain from exercising any
rights or remedies relating to existing financial covenant and
other defaults, including Thermadyne's election to defer a
principal payment on the bank debt that was due September 30,

The Company said discussions are continuing with its bank group
and representatives of the bondholders. "We remain fully
committed to restructuring our balance sheet and reducing our
heavy debt load, so our Company can capitalize on its
substantial brand and operating strengths," explained Karl Wyss,
Chairman and Chief Executive Officer of Thermadyne.

Thermadyne, headquartered in St. Louis, is a multinational
manufacturer of cutting and welding products and accessories.

For more information, contact James Tate, senior vice president
and chief financial officer, Thermadyne Holdings Corporation at

TOWER RECORDS: Completes Amendment to Bank Credit Agreement
MTS, Incorporated, dba Tower Records, the world's largest
independent entertainment software retailer, announced that it
has substantially completed an amendment to its revolving credit
facility. The amendment provides significantly greater credit
availability for the company through April 2002. The company
expects completed execution of the amendment by the end of this

Prior to the amendment, credit available under the facility was
$195 million from October 1 through December 31, and $100
million thereafter. The amendment provides Tower with a credit
facility of $205 million through December 31 and $195 million
thereafter. These changes afford the retailer immediate and
strong buying leverage with its vendors throughout the holiday

Tower Records' Chief Financial Officer, DeVaughn Searson said,
"We believe this to be a vote of confidence from our banks,
which firmly demonstrates their support of Tower's business plan
and acknowledges the improvements we have made to date. Once the
amendment has been executed, we can move forward with the
anticipation that we have sufficient liquidity to meet all of
our financial obligations."

Having worked in conjunction with its bank group and the music
industry over the past nine months, the entertainment software
retailer has put into effect a comprehensive program, designed
to streamline operational efficiencies, address all under-
performing aspects of the company, improve profitability and
strengthen its financial position.

Michael Solomon, President and CEO for Tower Records said, "The
strategies we implemented have positioned us to meet the
challenges of a changing environment. However, nothing could
have prepared us for the catastrophic events of September 11 and
our thoughts and prayers are with all those who have been
affected. Despite everything we confront currently as a nation,
we continue to see consumer confidence in our segment of the
market, as well as customer and community loyalty to the Tower
brand. As always, we intend to serve our customers during this
time with a focus on customer service and selection."

Since 1960 Tower Records has been recognized and respected
throughout the world for its unique brand of retailing. Founded
in Sacramento CA, by current Chairman Russ Solomon, the
company's growth over four decades has made Tower Records a
household name.

Tower Records owns and operates 173 stores worldwide with 57
franchise operations in five countries. The company opened one
of the first Internet music stores on America Online in June
1995 and followed a year later with the launch of  The site was named "Best Music Commerce
site" by Forrester Research in Fall 2000.

The recent founding of Tower Records own exclusive and
independent record label "33rd Street Records" has enabled the
retailer to release popular and niche hit driven music, while
placing great emphasis on both marketing and artist development.

Tower Records' commitment to introducing its customers to the
latest trends in new product lines is paramount to the
organization's retail philosophy.  Tower forges ahead with the
development of exciting shopping environments, espousing diverse
product ranges, artist performance stages, personal electronics
departments, and digital centers.  Tower Records maintains its
commitment to providing the deepest selection of packaged
entertainment in the world, merchandised in stores that
celebrate the unique interests and needs of the local community.

UNIFORET: CCAA Protection Extended Until November 12
Uniforet Inc. and its subsidiaries, Uniforet Scierie-Pate Inc.
and Foresterie Port-Cartier Inc. (the Company) announced that
they have obtained from the Superior Court of Montreal an order
extending for an additional period of 45 days expiring on
November 12, 2001 the Court protection afforded to the Company
under the "Companies' Creditors Arrangement Act".

As already announced, the meeting of the class of US
Noteholders-creditors to vote on the amended plan of arrangement
is still temporarily suspended, following the institution of
proceedings, until settlement of the composition of that class
of creditors. On October 9, 2001, the Court will fix the hearing
dates for these proceedings.

The Company intends to keep on its current operations and its
customers are not affected by the Court order. Suppliers who
will provide goods and services necessary for the operations of
the Company will continue to be paid in the normal course of

Uniforet Inc. is an integrated forest products company which
manufactures softwood lumber and bleached chemi-thermomechanical
pulp. It carries on its business through its subsidiaries
located in Port-Cartier (pulp mill and sawmill) and in the
Peribonka area in Quebec (sawmill). Uniforet Inc.'s securities
are listed on The Toronto Stock Exchange under the trading
symbol UNF.A, for the Class A Subordinate Voting Shares, and
under the trading symbol UNF.DB, for the Convertible Debentures.

VLASIC FOODS: Confirmation Hearing Scheduled for Oct. 31
Vlasic Foods International, Inc. and its debtor-affiliates
present the Court with their Second Amended Joint Plan and a
Second Amended Disclosure Statement to resolve various
objections raised by parties in interest and to clarify various

(1) Creditors are directed to the Pinnacle Annex for
    information concerning Pinnacle and the Warrants to be
    issued under the Plan.  Among other things, the Pinnacle
    Annex describes Pinnacle's business, certain risks
    associated with Pinnacle's business activities, Pinnacle's
    dividend policy, Pinnacle's stockholders' equity, Pinnacle
    management's discussion and analysis of Pinnacle's financial
    condition and results of operations, Pinnacle's management,
    certain relationships and related transactions, the security
    ownership of Pinnacle's principal stockholders and
    management, Pinnacle's capital stock, the Warrants, certain
    federal tax consideration and Pinnacle's financial

(2) The hearing to consider the confirmation of the Plan will be
    on October 31, 2001 at 10:30 a.m. (Eastern time).

(3) Convenience claims will receive a recovery of 28%;

(4) Contractual subordination provisions that may be applicable
    to certain holders of Class 2 and Class 5 claims are not
    altered or impaired under the Plan;

(5) The Debtors' payment of $324,000,000 to satisfy the Senior
    Credit Facility debt and an additional secured debt of
    $600,000 owned to certain members of the Dorrance Family is
    subject to repayment if the liens securing the debt are
    ultimately determined to be invalid.

(6) The Bank Group continues to assert claims against the
    Debtors for:

        (i) unpaid interest on principal;
       (ii) unpaid interest on interest; and
      (iii) unpaid expenses, indemnification costs, and legal
            fees, including contingent costs and expenses.

    The Bank Group further asserts that as of a recent date, the
    unpaid interest on principal and interest together total
    $2,343,000, while unpaid expenses reach $125,000.  The
    Bank Group contends that such amounts will continue to
    increase due to, among other things, certain threatened
    litigation actions, and that all of its claims are secured
    by liens upon the Debtors' assets.  The DF Participants also
    assert similar additional claims arising under the DF
    Participation Compensation Letter dated July 24, 2000.

    Based on its preliminary investigation, the Creditors'
    Committee advised the Debtors that it believes there are
    bases to dispute the claims asserted by the Bank Group and
    the DF Participants.  The Creditors' Committee anticipates
    that the LLC Manager will continue the investigation into
    the Bank Group's claims and the claims of the DF

(7) Substantive consolidation is included as one of the means
    for implementation of the Plan.  The Plan is predicated
    upon entry of an order substantively consolidating the
    Estates and the Chapter 11 Cases for purposes of all actions
    associated with confirmation and consummation of the Plan.
    Substantive consolidation is appropriate because, among
    other things:

    (a) the security interests asserted by the Bank Group
        pursuant to the Senior Credit Facility apply equally to
        each of the Debtors,

    (b) claims against VFI comprise approximately 99% of all the
        claims asserted against the Debtors,

    (c) assets of VFI comprise substantially all of the Debtors'
        assets available for distribution,

    (d) the recovery of creditors of VFI will not be materially
        diminished by the inclusion of claims asserted only
        against other Debtors, and

    (e) the administrative costs associated with the allocation
        of sales proceeds and certain liabilities between and
        among VFI and the other Debtors would likely exceed the
        benefits of non-consolidation.

        PricewaterhouseCoopers has conducted an analysis and has
        advised the Debtors have the substantive consolidation
        of the Chapter 11 Cases will not have a significant
        negative effect on distributions to creditors under the
        Plan.  The Creditors' Committee has not concluded an
        independent analysis of the effects of substantive

        On the Confirmation Date, or such other date as may be
        set by another order of the Bankruptcy Court, but
        subject to the occurrence of the Effective Date,

          (i) all Intercompany Claims will be eliminated,

         (ii) all assets and liabilities of the direct and
              indirect Debtor affiliates of VF Brands will be
              treated as if they were merged with the assets and
              liabilities of VF Brands,

        (iii) any obligation of a Debtor and all guarantees
              thereof by one or more of the other Debtors will
              be deemed to be one obligation of VF Brands, and

         (iv) each Claim filed or to be filed against any
              Debtor will be deemed filed only against VF
              Brands and will be deemed a single Claim against
              and a single obligation of VF Brands.

        On the Confirmation Date, and in accordance with the
        terms of the Plan and the consolidation of the assets
        and liabilities of the Debtors, all Claims based upon
        guarantees of collection, payment or performance made by
        the Debtors as to the obligations of another Debtor will
        be released and of no further force and effect.
        Notwithstanding any provision of the Plan or this
        Disclosure Statement to the contrary, the rights of
        parties-in-interest to contest claims of non-Debtor
        affiliates of the Debtors are preserved.

        Unless the Bankruptcy Court has approved the substantive
        consolidation of the Chapter 11 Cases by a prior order,
        the Plan will serve as, and will be deemed to be a
        motion for entry of an order substantively consolidating
        the Estates and the Chapter 11 Cases.  If no objection
        to substantive consolidation is timely filed and served
        by any holder of a Claim in a Class impaired by the Plan
        on or before the Voting Deadline or such other date as
        may be established by the Bankruptcy Court, an order
        approving substantive consolidation may be entered by
        the Bankruptcy Court.  If any such objections are timely
        filed and served, a hearing with respect to substantive
        consolidation and the objections thereto will be
        scheduled by the Bankruptcy Court, which hearing may,
        but is not required to, coincide the Confirmation

(8) The Administrative Agent of the Bank Group has advised the
    Debtors that:

      (i) the Bank Group has security interests in Intercompany
          claims and on subsidiary stock as well as guarantees
          from Debtors that are subsidiaries of VFI,

     (ii) the Agent has not been advised of the basis for
          substantive consolidation, and

    (iii) the Agent will oppose substantive consolidation if the
          effect is to eliminate the value of any Collateral or
          such subsidiary guarantee.

(9) Instead of just 90 days, the LLC Manager has 120 days after
    the Effective Date, wherein he/she may offer all holders of
    Class 5 Claims, whose Allowed Claims do not exceed an amount
    to be determined by the LLC Manager, a Cash payment equal to
    between 20% and 25% of each such holder's Allowed Claim.

(10) VFI LLC, the LLC Manager, and the Managing Board shall be
    fiduciaries with respect to the holders of Class 5 Claims.

(11) On the Effective Date, the Estates and the Debtors shall be
    deemed to have, and shall have, irrevocably assigned and
    transferred to VFI LLC all of their rights, title and
    interest in and to any and all property and assets of the
    Debtors, free and clear of all Liens, claims, encumbrances,
    and other interests other than Collateral that remains
    subject to any Class 2 Liens.

(12) No transfer of such interest shall be permitted to the
    extent the transfer would violate or require registration
    under any federal or state securities law.

(13) It is contemplated that the LLC Manager Reserve and the
    Managing Board Reserve shall be funded in the aggregate
    amount of not less than $5,000,000, and shall not be subject
    to any liens securing any Secured Claim.
(14) The VFI LLC Members' Agreements shall provide that the VFI
    LLC shall distribute the Distribution Proceeds to holders of
    LLC Membership Interests at such times as the Managing Board
    deems appropriate, but only after paying all outstanding
    administrative expenses of VFI, LLC, and reserving for:

     (i) the reasonably anticipated amount of any such
         administrative expenses that may be incurred
         thereafter, and

    (ii) any unpaid Allowed Secured Claims.

(15) The LLC Manager will also be empowered: in the event that
    the LLC Manager shall determine that compliance with any
    applicable securities law requirements is or will be unduly
    costly or impossible, the LLC Manager may, with the approval
    of the Managing Board, take any action necessary in order to
    comply with the requirements of the Securities Act, the
    Exchange Act, and/or the Investment Company Act of 1940, as
    amended, or to qualify for any applicable exemptions from
    such requirements.

(16) Following confirmation of the Plan, VFI LLC and the LLC
    Manager shall perform all acts necessary to accomplish
    termination of the Non-Union Pension Plan and the 401(k)

(17) The VFI LLC Members' Agreement shall set forth the duties
    and responsibilities of the Managing Board and shall in all
    respects govern the operation and management of VFI LLC, and
    shall be filed and served by the Creditors' Committee by not
    later than October 15, 2001.

(18) The LLC Manager shall make all distributions otherwise
    payable to each holder of a Debt Securities Claim to the
    Indenture Trustee, who shall make distributions in
    accordance with the provisions of the Plan and the
    respective governing indenture, including the turnover
    provisions thereof.

(19) The LLC Manager shall deposit or invest the funds in the
    Distribution Reserve in accordance with the provisions set
    forth in section 345 of the Bankruptcy Code.  The holders of
    Allowed Claims for which Distribution Reserve has been
    established shall receive a pro rata distribution of the
    interest actually earned on account of such holder's Allowed

(20) The Confirmation Order shall provide that the issuance and
    distribution of the LLC Membership Interests shall be exempt
    from registration requirements of the Securities Act and any
    similar state or local laws, pursuant to section 1145 of the
    Bankruptcy Code.

(21) The conditions set forth in the Plan can be waived in whole
    or in part by the Debtors, the Creditors' Committee, acting
    jointly, at any time without an order of the Bankruptcy
    Court, other than the condition set forth in Article IX.A.1
    the Plan, which may only be waived by Pinnacle.

(22) The Debtors, with the consent of the Creditors' Committee,
    reserve the right to modify the Plan either before or after
    Confirmation to the fullest extent permitted under section
    1127 of the Bankruptcy Code and Bankruptcy Rule 3019,
    including but not limited to, modifications necessary to
    obtain any no-action letters.

(23) Neither confirmation of the Plan nor the entry of the
    Confirmation Order shall expand or limit the original
    jurisdiction of the Bankruptcy Court as such jurisdiction
    exists as the Confirmation Date with respect to the Causes
    of Action, and neither event shall be deemed to constitute a
    consent to jurisdiction by any party-in-interest.

(24) As an inducement to and in recognition of the past and
    future efforts of the parties identified in this section K,
    in connection with the prosecution of the Debtors' Chapter
    11 Cases, the Plan provides certain protections related to
    the performance of services by such parties during the
    Chapter 11 Cases.  The Debtors believe that such limited
    protections have substantially aided the Debtors by inducing
    such parties to render services during the Chapter 11 Cases
    and thereby maximize the value of property to be distributed
    under the Plan to holders of Allowed Claims, and are
    consistent with settled law in the Third Circuit.

(25) All injunction or stays in effect of the Chapter 11 cases
    by virtue of Section 362 of the Bankruptcy Code shall
    terminate in accordance with Section 362(c) of the
    Bankruptcy Code.

                        *     *     *

Judge Walrath ruled that any and all objections to approval of
the Disclosure Statements, to the extent not previously
withdrawn, are overruled.

The Court approved the Debtors' Disclosure Statement.  Judge
Walrath also authorized the Debtors to make non-material changes
to the Disclosure Statements prior to distributing them to
impaired creditors, including modifications to reflect updated
financial information concerning Pinnacle and provided by

The Debtors will transmit copies of the Second Amended Plan and
Second Amended Disclosure Statement to creditors together with
customized ballots.  The Voting Deadline is October 24, 2001.
(Vlasic Foods Bankruptcy News, Issue No. 12; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

XEROX: Flextronics Buying Office Manufacturing Assets for $220MM
Taking another major step forward in its turnaround plan to
reduce costs, improve productivity and increase competitiveness,
Xerox Corporation (NYSE: XRX) announced a manufacturing
agreement with Flextronics (NASDAQ: FLEX), a $12 billion global
electronics manufacturing services (EMS) company.

The agreement includes payment to Xerox of approximately $220
million and assumption of certain liabilities for the sale of
inventory, property and equipment and a five-year contract for
Flextronics to manufacture certain Xerox office equipment and
components, at a modest premium over book value.

Xerox will sell to Flextronics office manufacturing operations
including manufacturing assets and inventory in Toronto;
Resende, Brazil; Aguascalientes, Mexico; and Penang, Malaysia.
The approximately 3,650 current Xerox employees in these
operations are expected to transfer to Flextronics.

"Our agreement with Flextronics will redefine our office
manufacturing strategy through significantly improved asset
utilization, greater supply chain flexibility and cost savings
as well as generating cash from the asset sales," said Anne M.
Mulcahy, Xerox president and chief executive officer.

The company also said that it will stop production by the end of
the second quarter 2002 at its printed circuit board factory in
El Segundo, Calif., and its customer replaceable unit plant in
Utica, N.Y. The operation in El Segundo currently employs 425;
Utica's employment is 265. When these plants close, Flextronics
will build the work into its global network of manufacturing

In addition, Xerox will begin consultations with European works
councils regarding the sale of its office manufacturing
operations in Venray, The Netherlands, and the transfer to
Flextronics of some production work currently performed at
Xerox's site in Mitcheldean, England.

As a result of these actions, Xerox expects to incur cash
restructuring charges that will approximately equal the premium
over book value from the asset sales.

Xerox and Flextronics expect that the first in a series of
closings on the asset sales will occur in the fourth quarter,
beginning a one-year transition period for Flextronics to assume
manufacturing of Xerox-designed office products and related

Flextronics will also begin the manufacturing of Xerox's
electronic parts and subsystems during the first half of 2002.
Xerox will continue to strengthen its manufacturing competencies
in high-end production printing and publishing equipment, toner
and imaging supplies through its remaining global manufacturing

In total, the agreement with Flextronics represents in excess of
$1 billion in annual manufacturing costs, approximately 50
percent of Xerox's overall manufacturing operations.

"This agreement exemplifies the type of business that we have
built Flextronics to handle and is further evidence that the
trend towards virtual manufacturing continues," said Michael E.
Marks, chairman and chief executive officer of Flextronics.
"This is also an opportunity to expand our customer base and
product portfolio through the acquisition of these sites in
addition to gaining valuable knowledge through the Xerox

"Our partnership with Flextronics ensures that all Xerox office
products and components will continue to be produced under the
high quality standards that customers rely on from Xerox," said
Ursula Burns, president, Xerox Worldwide Business Services. "At
the same time, Xerox will benefit from Flextronics' commitment
to significant annual productivity improvements, maximizing its
large-scale purchasing and technological efficiencies."

Today's announcement with Flextronics is the latest in a series
of Xerox turnaround-related actions that are restoring Xerox's
financial strength and positioning the company for a return of
profitability. For example, Xerox announced last month a
framework agreement with GE Capital's Vendor Financial Services
to become the primary equipment-financing provider for Xerox's
U.S. customers. The two companies also agreed to the principal
terms of a financing agreement under which Xerox will receive
from GE Capital approximately $1 billion secured by Xerox's
lease receivables in the United States.

Xerox's agreement with Flextronics is expected to close in
stages subject to the completion of global regulatory
requirements. Xerox will receive cash proceeds from the
agreement in phases as the companies close on the individual
worldwide asset sales.

Deutsche Banc Alex. Brown served as Xerox's advisor on this

Headquartered in Stamford, Conn., Xerox Corporation is a US$18.7
billion global enterprise with 85,000 employees serving
customers in 130 countries. Xerox makes the digital world work
better with an array of innovative document solutions, services
and systems -- including color and black-and-white digital
printers, multifunction devices and copiers -- designed for
offices and production-printing environments. Xerox Worldwide
Business Services, based in Webster, N.Y., is responsible for
all manufacturing operations, which currently employs 14,400
people. For further information,

Headquartered in Singapore, Flextronics is a world-class
Electronics Manufacturing Services (EMS) provider focused on
delivering operational services to branded technology companies.
With fiscal year 2001 revenues of USD$12 billion and
approximately 70,000 employees, Flextronics is a major global
operating company with design, engineering, manufacturing and
logistics operations in 27 countries and four continents.

This global presence allows for manufacturing excellence through
a network of facilities situated in key markets and geographies
that in turn provide its customers with the resources,
technology and capacity to optimize their operations.

Flextronics' ability to provide end-to-end operational services
that includes innovative product design, manufacturing, IT
expertise and logistics has established the company as a top-
tier EMS provider. For further information, visit

* Cleary Gottlieb's One Liberty Plaza Offices Temporarily Moved
Because of the close proximity of One Liberty Plaza to the World
Trade Center complex, Cleary, Gottlieb, Steen & Hamilton's
offices are temporarily unavailable.  For this interim period,
Lindsee P. Granfield, Esq., and her fellow lawyers ask that all
service of papers, mail, courier and hand deliveries be sent to
bankruptcy practitioners to the Firm's mid-town Manhattan
offices at:

             Cleary, Gottlieb, Steen & Hamilton
             Citicorp Center
             153 East 53rd St., 38th Floor
             New York, NY 10022-4611
             Telephone (212) 572-5353
             Fax (212) 572-5399

Voice mail may be left for Cleary Gottlieb lawyers at (212) 572-
5202.  For further information, see http://www.cgsh.comor


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

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

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

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


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

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Group, Inc., Washington, DC USA. Yvonne L. Metzler, Bernadette
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Copyright 2001.  All rights reserved.  ISSN: 1520-9474.

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