TCR_Public/011005.mbx        T R O U B L E D   C O M P A N Y   R E P O R T E R

            Friday, October 5, 2001, Vol. 5, No. 195


AES CORP: Fitch Maintains BB+ Rating & Says Outlook Negative
A.G. SIMPSON: Seeks Protection under CCAA & Chapter 11
A.G. SIMPSON: Chapter 11 Case Summary
ACME METALS: Seeks Thirteenth Extension of Plan-Filing Period
ALADDIN GAMING: S&P Drops Ratings to D After Bankruptcy Filing

AMERICAN RESTAURANT: S&P Rates Proposed $165M Senior Notes at B
AT HOME: S&P Drops Ratings to D Following Chapter 11 Filing
BRIDGE INFO: Wants Exclusive Period Further Extended to Dec. 30
BUCK-A-DAY CO.: ART International Agrees to Debt-to-Equity Swap
CHESAPEAKE CORP: Commences Restructuring Program to Cut Overhead

CITY MORTGAGE: State of Alaska Files Involuntary Petition
COGNIGEN NETWORKS: Commences Major 3-Part Stock Restructuring
COMDISCO INC: Equity Panel Taps Water Tower As Financial Advisor
COMMSCOPE: Market Pressures & Hefty Debts Prompt S&P Downgrades
COMMUNITY HEALTH: Acquisition Activities Spur S&P Low-B Ratings

CONSECO: Fitch Takes Hard Look after $475M 3Q Charge Warning
EDISON: Lawsuit Settlement Prompts Fitch to Revise Rating Watch
EXODUS COMMS: Gets Okay to Maintain Prepetition Bank Accounts
FEDERAL-MOGUL: S&P Drops Ratings to D After Chapter 11 Filing
FEDERAL-MOGUL: Court Grants Use of $450MM In Interim Financing

FOUNTAIN VIEW: Gets Okay to Use Cash to Pay Employee Obligations
FOUNTAIN VIEW: Chapter 11 Case Summary
FRUIT OF THE LOOM: Seeks 2nd Extension of Solicitation Period
INTERIORS: Completes Sale of Stylecraft for $26.5M to Cut Debts
J. CREW CORP: S&P Airs Concern About Weakening Credit Protection

JUNIPER GENERATION: Fitch Bullish About Restructuring of Pacts
LAIDLAW INC: Court Allows Debtor to Assume AIG Insurance Deals
MARINER POST-ACUTE: Court Okays Settlement Agreement with CIT
MATTHEWS STUDIO: Court Okays Proposed Settlement With Creditors
METROMEDIA FIBER: Remains On Negative Despite $611MM Financing

MOONEY AIRCRAFT: Engages First Equity Dev't as Financial Advisor
NEXTEL INT'L: Cash Depletion Rate Compels S&P to Junk Ratings  
NOVO NETWORKS: Units File Reorg. Plan and Disclosure Statement
PACIFIC GAS: Expresses Commitment to Fulfill All Valid Claims
PENTACON: S&P Cuts Ratings After Missing Payment On $100M Notes

PHARMACEUTICAL FORMULATIONS: Red Ink Continues to Flow in FY2001
PHAR-MOR INC: Closes 65 Stores as Part of Reorganization Scheme
RAMPART SECURITIES: E&Y Replaces PwC as Interim Receiver
RELIANCE INSURANCE: Commonwealth Court Enters Liquidation Order
STATION CASINOS: S&P Affirms Low-B Ratings On Lower EBITDA

SWISSAIR: SR Technics Will Continue Business Operations
TEMPLE-INLAND: S&P Places Ratings on CreditWatch Negative
TRITON NETWORK: Liquidation Plan to Be Decided on October 29
US OFFICE: Files Joint Liquidating Chapter 11 Plan in Del.
UPRIGHT INC: Co-Exclusive Plan-Filing Period Extended to Jan. 31

WAVVE TELECOMMS: Closes Chapter 11 Asset Sale to Discharge Debts
WHEELING-PITTSBURGH: CWVEC Moves to Compel Decision On Coal Pact
WINSTAR COMMS: Court Extends Exclusive Period to Dec. 13
WOLF CAMERA: TM Capital's Employment as Investment Banker Denied

               The Men, The Money, The Impact


AES CORP: Fitch Maintains BB+ Rating & Says Outlook Negative
Fitch has affirmed the ratings of AES Corp.'s senior unsecured
debt at 'BB+' but changed the Rating Outlook from Stable to
Negative, following Fitch's annual credit review.

The ratings of the remarketable or redeemable securities (ROARs)
and corporate revolving facility were also affirmed at 'BB+',
senior subordinated notes at 'BB', convertible junior debentures
and term convertible preferred securities (TECONs) at 'B+', all
with Negative Rating Outlook.

The Rating Outlooks of IPALCO Enterprises and Indianapolis Power
and Light Company are also changed from Stable to Negative.

The ratings are based on AES' substantial upstream cash flow in
the form of dividend income from a diverse list of projects and
subsidiaries. AES has broad diversification of its holdings in
the electric power and distribution sector.

Parent cash flow is derived from a mix of distribution and
integrated utilities as well as power generation and the
portfolio of contractual, tariff, and merchant businesses is not
overly dependent on any one technology, fuel type, or currency.
Parent cash flows are also supported by the ownership of
valuable assets and businesses, totaling around $31 billion at
year end 2000.

The change in the Rating Outlook to Negative reflects the
increase over the past two years in AES' parent leverage in the
form of recourse debt plus non-recourse loans enhanced by
collateral of parent company stock.

Also, AES has increased its investment concentration in
countries in which non-recourse financing and currency hedges
are not readily available. Together, these trends represent a
gradual departure from AES' traditional financial strategy that
limited parent company risk exposure in the past.

In 2000 and 2001 AES made significant acquisitions in South and
Central America, and the portion of parent cash flows derived
from the region has increased to over 38% in 2000 from 8% in
1999. Going forward, Latin America will continue to be a key
region for the company and is projected to contribute over 30%
of the company's parent cash inflows. The increased Latin
American concentration offsets some of the benefits of its
portfolio diversification.

On Sept. 26, 2001, AES reduced its earnings guidance for the
year 2001 based on three factors: lower Brazilian currency
valuation; reduced near-term earnings expectation in the United
Kingdom, and the absence of additional earnings from expected
new business acquisitions that did not occur.

These announcements have a greater impact on reported earnings
than on expected dividend flows and related credit measures.
Indeed, near term dividends to service parent recourse debt are
essentially unchanged.

AES' liquidity needs for the next 6 to 12 months are covered by
a combination of dividend inflows, committed bank facilities
maturing in 2003, and subsidiary external financings or
refundings that are reasonably likely to be accomplished.

Potentially troubling for the credit outlook, however, is the
impact of lower corporate equity prices on the company's access
to common equity markets to fund its projected future growth,
combined with the management's plans to continue an aggressive
acquisition program. Fitch will continue to review AES corporate
sources and uses of funds and parent liquidity.

AES subsidiaries' non recourse debts at June 30, 2001 amounted
to $13.06 billion, of which $1.041 billion are equity-linked
loans collateralized with AES shares. For year end 2001, AES
expects to have $6.495 billion in recourse debt, including $1.1
billion in third party credit enhancements and $1.228 billion of
term and trust convertible preferred securities (TECONs and

AES has a strong incentive to pay off or refinance $691 million
of the equity-linked loans in 2001. As a result, the company's
leverage and interest expenses are likely to increase and parent
interest coverage ratios to decline. According to Fitch
estimates, AES' year-end 2001 Adjusted Recourse Debt (including
$1.041 billion of equity-linked loans and third party credit
enhancements) to Total Adjusted Capital ratio is projected to be
59%, Adjusted Recourse Debt to Parent EBITDA ratio 7.3 times and
Parent EBITDA to Interest expenses ratio 2.5x, compared to year-
end 2000's 54%, 6.2x and 2.8x, respectively.

The AES Corp, founded in 1981, is the world's largest global
power company. It generates and distributes electricity and is
also a retail marketer of heat and electricity. AES owns or has
an interest in 173 plants totally over 59,000 MW in 27
countries. AES also distributes electricity in 9 countries
through 19 distribution businesses.

In addition to having assets in excess of $35 billion, the
company has numerous projects in construction or late stages of

A.G. SIMPSON: Seeks Protection under CCAA & Chapter 11
Toronto-based A.G. Simpson Co. Limited, a privately held
manufacturer of stamped metal automotive parts and its parent,
A.G. Simpson Automotive Inc. (AGS Automotive) with eight
facilities in Canada and the United States, initiated a court-
supervised restructuring of their finances and business

AGS Automotive and Simpson Co have sought and received an Order
of the Ontario Superior Court of Justice today under the
Companies' Creditors Arrangement Act (CCAA). AGS Automotive's
U.S. subsidiaries have filed voluntary petitions for
reorganization under Chapter 11 of the U.S. Bankruptcy
Code in the United States Bankruptcy Court for the Eastern
District of Michigan Southern Division.

Mr. Robert A. Simpson, President and CEO of AGS Automotive,
said, "This is the most responsible way in which to address our
challenges, protect the interests of our stakeholders and move
the company towards a stronger financial and operating platform.
It will enable us to continue operating our business while
negotiating a restructuring plan with our stakeholders. Our
goal is to preserve the company as a going concern with more
focused operations and products that will generate positive
financial results to the benefit of all stakeholders."

"We have the money to operate during the restructuring process.
Subject to the operational measures we are announcing today, it
will be business as usual for our customers during this period.
Suppliers will be paid for the goods and services provided
following today's proceedings. Our employees will continue to
receive their wages and benefits. Our customers will continue to
receive timely delivery of products.

"Today's action is attributable to the problems affecting the
automotive industry, demand trends that have affected the market
for the company's products, and the resulting decline in our
financial position. Like other parts suppliers who have
initiated restructurings of their own, our results have been
eroded by such industry-wide factors as the decline in
automotive sales, the increased market share enjoyed by foreign
manufacturers, lower prices being paid to suppliers, the
consolidation of industry supply chains and a decline in the use
of the chrome and steel bumper assemblies from which the company
derives most of its revenue."

As part of the restructuring process, and in order to
rationalize uneconomic operations, the Company also announced
the need to sell certain facilities that are simply not viable
from an economic perspective. The company is seeking purchasers
for each of the Windsor, Ontario; Oakville, Ontario; and
Sterling Heights, Michigan facilities. If this sale process
proves unsuccessful by the end of the restructuring period,
these facilities will have to be closed.

Mr. Simpson said, "We regret the need to sell these three
facilities as part of our restructuring. We are assuring
employees that these decisions are not a reflection on them but
are attributable to circumstances greater than any one
individual or facility. We are also telling them that we will do
everything possible to ensure they are the first to hear of news
affecting their future and that we will treat them as fairly as
possible under the circumstances."

Mr. Simpson continued, "While we will do everything we can to
maximize the recovery to our stakeholders and to quickly
implement a restructuring, it is impossible to predict details
of the plan that will be tabled for their approval. The outcome
of the process we have initiated [Tues]day will be determined
through the negotiations to be held in the days and weeks

A.G. Simpson Automotive is approximately the sixth largest
automotive parts manufacturer in Canada and one of the top 100
in North America.

A.G. SIMPSON: Chapter 11 Case Summary
Debtor: A.G. Simpson (Tennessee) Inc.
        Baker Donelson Bearman & Caldwell
        1700 Nashville City Center
        511 Union Street
        Nashville, TN 37219

Chapter 11 Petition Date: October 2, 2001

Court: Eastern District of Michigan (Detroit)

Bankruptcy Case No.: 01-59003

Judge: Steven W. Rhodes

Debtor's Counsel: Joseph M. Fischer, Esq.
                  Carson Fischer, PLC
                  300 E. Maple Road, 3rd Floor
                  Birmingham, MI 48009

ACME METALS: Seeks Thirteenth Extension of Plan-Filing Period
Acme Metals Inc. disclosed that it is seeking court approval for
a thirteenth extension of its exclusive period to file a
reorganization plan and obtain plan votes, according to Dow

Objections are due on October 15.  

The court hasn't scheduled a hearing to consider the company's
request. The extension would give the Riverdale, Illinois-based
company until November 14 to file a plan.  If it meets that
deadline, third parties would further be prevented from filing
competing plans through January 14, while the company solicits
acceptances of its plan.

Acme Metals' exclusive period to file a plan expired on Monday,
October 1, 2001.  Because the company filed its motion on
September 28, prior to the expiration, Acme Metals automatically
preserves exclusivity through the hearing.

Acme Metals filed for chapter 11 bankruptcy protection in
September 1998. The company's petition listed assets of $813
million and liabilities of $541 million. (ABI World, October 3,

ALADDIN GAMING: S&P Drops Ratings to D After Bankruptcy Filing
Standard & Poor's lowered Aladdin Gaming Holdings LLC's (Gaming
Holdings) corporate credit rating to 'D' from triple-'C'-minus
and its senior unsecured debt rating to 'D' from double-'C'.

The rating on the senior discount notes issued by Gaming
Holdings and Aladdin Capital Corp. was also lowered to 'D' from

The rating action follows Aladdin Gaming LLC's Sept. 28, 2001,
filing for protection under Chapter 11 of the U.S. Bankruptcy
Code. Gaming Holdings owns 100% of the outstanding common
membership interests and 100% of the Series A preferred
interests of Aladdin Gaming LLC, which operates the Aladdin
Resort and Casino.

AMERICAN RESTAURANT: S&P Rates Proposed $165M Senior Notes at B
Standard & Poor's assigned its single-'B' rating to American
Restaurant Group Inc.'s proposed $165 million senior secured
notes due in 2006 to be issued under Rule 144A. The proceeds
will be used to refinance the company's $150 million senior
secured notes due in 2003 and for general corporate purposes.
A single-'B' corporate credit rating was also assigned to the

The outlook is negative.

The ratings reflect American Restaurant Group's relatively small
size in the highly competitive restaurant industry, weak cash
flow protection measures, and a significant debt burden. These
factors are somewhat mitigated by the company's improved
operating performance.

Los Altos, California-based American Restaurant Group operates
105 Stuart Anderson's Black Angus and Stuart Anderson's Cattle
Company steakhouses that compete in the casual dining sector of
the restaurant industry.

American Restaurant Group's operating performance has improved
since 1999. Same-store sales rose 11.4% in 2000 and were
essentially flat in the first half of 2001. The unadjusted
EBITDA margin increased to 11.0% in 2000 from 9.4% in 1999.
Still, the margin narrowed in the first half of 2001 to 12.8%
from 13.0% in the same period the year before due to weak sales
growth and higher beef, labor, and utility costs. Although Black
Angus's operating performance has somewhat improved, it remains
a small player in the casual dining sector.

The chain is easily dwarfed by larger players, including Outback
Steakhouse, Olive Garden, and Red Lobster. In addition, the
company could be challenged by its lack of geographic diversity.
With 90% of its store base in the West, American Restaurant
Group's operating performance is vulnerable to a decline in that
region's economy. The company's relatively small size and highly
leveraged balance sheet also limit its access to capital.

Leverage is high, with total debt to EBITDA above 5.0 times.
Cash flow protection measures are thin, with EBITDA covering
interest only about 1.4x. Some financial flexibility exists
through a $15 million credit facility.

                    Outlook: Negative

The outlook reflects the expectation that American Restaurant
Group could be challenged by the current economic environment
and its participation in the competitive restaurant industry
given its small size. Ratings could be lowered if credit
protection measures weaken.

AT HOME: S&P Drops Ratings to D Following Chapter 11 Filing
Standard & Poor's lowered its ratings on Excite@Home to 'D'
following the company's announcement on September 28, 2001, that
it filed for relief under Chapter 11 of the U.S. Bankruptcy Code
in San Francisco.

The company had more than $1.1 billion of debt at the time of
its filing. Redwood City, Calif.-based Excite@Home provides
broadband Internet services, including broadband Internet
connectivity, content, and targeted advertising services.

The company has agreed to sell essentially all of its broadband
Internet-access business assets and related services to AT&T
Corp. for $307 million in cash. The asset sale is subject to the
emergence of higher offers and closing conditions, including
Bankruptcy Court approval. The Chapter 11 filing will enable
Excite@Home to maintain operation of its high-speed cable
Internet-access services and other related services during the
sale-approval process.

Ratngs Lowered                                   TO   FROM

Excite@Home Corp. Corporate

  credit rating                                   D    CCC
  Subordinated notes                              D    CC

BRIDGE INFO: Wants Exclusive Period Further Extended to Dec. 30
David M. Unseth, Esq., at Bryan Cave LLP, in St. Louis,
Missouri, reports that the Debtors have taken steps to stabilize
their businesses and lay the foundation for successful Chapter
11 proceedings.  Bridge Information Systems, Inc. have had to
deal with several complex matters, Mr. Unseth says, including
the sale of substantially all of the Debtors' assets.  

Furthermore, according to Mr. Unseth, the Debtors' ability to
complete their formulation of a plan has been severely hampered
as a result of the September 11 attack on the World Trade
Center, which destroyed the Debtors' WTC offices and caused
damage to the Debtors' corporate headquarters in the World
Financial Center.

The case law is clear that the Exclusive Period should be
extended if extraneous factors make this period of time
insufficient, Mr. Unseth reminds Judge McDonald.  In this case,
Mr. Unseth tells the Court that the Debtors need an extension of
the Exclusive Periods in order to formulate a comprehensive
strategy and liquidation process upon which the Debtors can
formulate a plan.  

In developing their strategy, the Debtors intend to sell their
business, Mr. Unseth relates.  Until the Debtors have completed
substantial portions of this process, no one will be capable of
proposing a Chapter 11 plan that offers the best outcome for all
creditors and parties-in-interest in these Chapter 11 cases, Mr.
Unseth contends.

The complex size and nature of the Debtors' businesses, coupled
with the anticipated large number of claims, compels the Debtors
to complete further examination of its asset values and compile
additional information before a feasible plan can be formulated
and communicated to the creditors for their acceptance, Mr.
Unseth argues further.  

Mr. Unseth assures the Court that the Debtors are properly
motivated, are progressing diligently toward formulating a plan
and are committed to moving these Chapter 11 cases forward very

For these reasons, the Debtors request that the Court enter an

(A) Extending the Exclusive Period through and including
    October 31, 2001, without prejudice to the Debtors' right
    to seek further extension of such period; and

(B) Extending the Acceptance Period through and including
    December 30, 2001, without prejudice to the Debtors' right
    to seek further extension of such period. (Bridge Bankruptcy     
    News, Issue No. 17; Bankruptcy Creditors' Service, Inc.,  

BUCK-A-DAY CO.: ART International Agrees to Debt-to-Equity Swap
ART International, Inc. (OTCBB:AGPF) announced that, the
Company's Board of Directors, in its capacity as the sole
shareholder of The Buck-A-Day Company, Inc., has approved a
resolution of the Board of Buck authorizing holders of Security
Agreements issued by Buck, to convert debt obligations of
approximately CDN$710,000 owed by Buck into 7,100,00 common
shares of Buck.

The holders of said Security Agreements include senior
management of Buck, Ed LaBuick, CEO, and Dennis LaBuick,
President, as the co-founders of Buck.

In addition, Dennis Labuick was a Director of ART. Upon
conversion, the holders of the Security Agreements held by the
LaBuick Group also received a Series "A" Warrant for the
purchase of up to 1,500,000 additional shares of Buck at
CDN$0.10 per share, which warrant expires 30 days following the
conversion described herein. As a result of the foregoing, the
LaBuick Group are the largest shareholders of the outstanding
common stock of Buck.

The Board of Directors of ART also approved a Buck resolution to
allow 1483516 Ontario Limited, a Canadian (Non U.S. Person)
holder of Security Agreements representing approximately
US$$450,000 of debt obligations owed by Buck to 1483516, to
convert such Security Agreements to 3,000,000 shares of Buck
common stock, together with Series "B" Warrants to purchase an
additional 3,000,000 shares US$$0.15 per share. The Series "B"
Warrants expire 30 days following the conversion of such
Security Agreements to common stock and warrants as described

Upon completion of said conversions, ART's 100% ownership in
Buck will be reduced to approximately 15% of the voting shares
of Buck. Buck intends to file a registration statement with U.S.
Securities and Exchange Commission to become a public company in
the United States.

Finally, Buck has granted unto ART a Series C Warrant to
purchase up to 800,000 common shares of Buck at CDN$0.10 per
share, exercisable for a period of 120 days after the exercise
by the LaBuick Group of its conversion rights.

The foregoing ART resolutions have been approved in writing by a
substantial majority of the shareholders of ART.

As reported in ART's May 30, 2001, 10Q:

   "Buck has experienced liquidity problems since the end of the
first quarter, due to the Company's inability to raise
additional operating capital of CDN$1,000,000. At May 31, 2001,
the division had negative working capital of CDN$1,226,732.
Without the continuing support of its secured and unsecured
creditors, the Buck-A-Day Company would likely be forced to seek
creditor protection.

   "In this regard, the debenture holders related to the
CDN$710,000 loan were threatening to exercise their security
rights if the Company failed to raise the aforementioned
CDN$1,000,000, which includes the right to appoint a receiver
manager. Subsequent to end of the second quarter, management of
Buck has secured an agreement with a third party, subject to the
company's shareholders' approval in a special meeting, to invest
directly into the Buck subsidiary."

CHESAPEAKE CORP: Commences Restructuring Program to Cut Overhead
Chesapeake Corporation (NYSE:CSK) announced a restructuring
program consistent with the Company's intention to reduce
corporate overhead and rationalize its manufacturing network
after undertaking a series of acquisitions in Europe over the
past two years.

Chesapeake's Chairman, President and Chief Executive Officer
Thomas H. Johnson explained, "These actions are consistent with
our intention to reduce costs while we continue to optimize our
manufacturing network. The savings from our planned
restructuring will significantly enhance the competitiveness and
productivity of Chesapeake's operations."

The restructuring actions will result in a non-recurring, after-
tax charge of approximately $4.8 million (approximately $.32 per
diluted share) in the third quarter of 2001 and an additional,
not yet determined, charge in the fourth quarter of 2001.

The restructuring program is comprised of the following:

     -- In the third quarter, 2001, an after-tax charge of
approximately $3.4 million will be recognized for costs
associated with a salaried staff reduction of approximately 50
positions at corporate headquarters in Richmond, Virginia,
achieved primarily through a voluntary separation program. The
voluntary separation program benefits will be funded by surplus
assets of the Company's U.S. defined benefit salaried pension
plan. Approximately 80 percent of the staff reductions are
expected to be complete by the end of 2001, with the remainder
to be completed during the first quarter of 2002. Costs of
approximately $1.4 million after taxes will also be recognized
in the third quarter, 2001, for the consolidation of corporate
office sites in Richmond and the reduction of the carrying value
of a corporate aircraft that is expected be sold in the fourth
quarter of 2001. The salaried staff reduction is expected to
generate annualized pretax savings of $5-6 million
(approximately $.20-.25 per diluted share).

     -- In the fourth quarter, 2001, Chesapeake expects to
record additional restructuring charges. The Company is
considering proposals to reduce the manufacturing capacity of
two carton factories in Scotland and is consulting with employee
representatives in relation to these proposals.

Additional capacity reductions in the Company's plants are also
under consideration. The Company will record a restructuring
provision during the fourth quarter for costs associated with
workforce and capacity reductions after employee representatives
have been consulted. Savings related to these actions will be
announced in the fourth quarter of this year.

The Company also expects to complete the sale of its Thatcham,
England factory in the fourth quarter. The Thatcham factory was
closed at the end of 2000 as part of a restructuring provision
recorded in the fourth quarter, 2000.

Johnson said, "It is essential for us to find the best way to
balance capacity and make the most efficient use of available
assets, while ensuring customer service is maintained at the
highest levels. These actions are important steps towards these

Chesapeake Corporation, headquartered in Richmond, Va., is a
global leader in specialty packaging. Chesapeake is a leading
European folding carton, leaflet and label supplier and a leader
in plastics packaging for niche markets. Chesapeake has over 50
locations in North America, Europe, Africa and Asia.
Chesapeake's website is

As of July 1, the company's current assets were valued at $274.5
million as opposed to current liabilities of $345.4 million.

CITY MORTGAGE: State of Alaska Files Involuntary Petition
The State of Alaska is suing Anchorage businessman James
Crawford and his embattled City Mortgage Corp., accusing them of
mishandling escrow funds and mortgage payments, and defrauding
home buyers with a bad vacation offer, according to the
Anchorage Daily News.  

On Friday, the state-owned Alaska Housing Finance Corp. and two
housing industry companies filed an involuntary bankruptcy
petition against City Mortgage, saying they are owed about
$48,950.  The petition asks a bankruptcy judge to force City
Mortgage into chapter 11 bankruptcy reorganization.  

Crawford said he was disappointed by the court actions but that
he and the company would cooperate with the state and probably
fight the bankruptcy court petition. (ABI World, October 2,

COGNIGEN NETWORKS: Commences Major 3-Part Stock Restructuring
Cognigen Networks. Inc. (OTC Bulletin Board: CGNT), a dominant
Internet-enabled marketer and carrier of telecommunications
services with a worldwide presence, announced a major three-part
restructuring of its corporate stock.

These changes to the company's corporate architecture include
implementation of a shareholder mandated 1 for 8 reverse stock-
split, the voluntary surrender and cancellation of 75% of the
company's option overhang, and the repurchase of 25% of the
issued and outstanding shares of its common stock.

Cognigen's Chairman and CEO, Darrell H. Hughes, outlined details
of the actions taken by the Board of Directors on this date,
"Our company has taken some very thoughtful and considered steps
aimed at increasing the investment value for our shareholders,
making the company more attractive to new investors, and
positioning Cognigen for eventual listing with a major stock
exchange. These moves will not only enhance the value of our
equity in the near term, they will assure orderly and measured
growth over a longer term. All of the steps in this
comprehensive process were made possible through the unselfish
cooperation of a large majority of our shareholders.

"Seventy-five percent of the 32 million options we had
outstanding as of yesterday, have now been voluntarily
surrendered and canceled. There are no promises, agreements or
arrangements of any kind to reinstate or reissue these options
in the future. No consideration was given or offered for this
action on the part of the affected option holders. As a result
of the reverse stock split, which was approved on March 15,
2001, by our shareholders, we have numerically reduced on a 1
for 8 ratio the number of shares of common stock issued and

"This could result in a higher price per share when the public
market takes into account the effect of the option surrender and
stock repurchase on shareholder equity when measured by the
greatly reduced number of fully diluted shares. October 15,
2001, is the date the reverse stock split becomes effective. Our
board believes that by joining the reverse stock split, the
option surrender, and stock repurchase our investors and market
makers will discern the true value of our stock as well as the
enormous potential Cognigen offers. Certainly, our continued
solid and sustained improvement in all performance categories
over the past eight quarters alone supports that conclusion.

"The Board today also approved a definitive Letter of Agreement
between Cognigen and the Anderson Family Trust to repurchase
21.7 million pre-reverse stock-split shares of Cognigen common
stock owned by the trust. Those shares amount to slightly over
25% of Cognigen's issued and outstanding stock. This transaction
requires no cash payment, no secured debt commitment, and only a
contingent obligation to pay future earned direct and override

"This trio of measures is a potent package of structural changes
that sets the course for profitability and the stability of our
shares, and will make it possible for Cognigen to undertake two
essential processes. First, we will be able to more easily
attract new investment, and to consider a new public offering of
our stock. Second, we will be in a position to pursue an
application for listing on the American Stock Exchange."

Seattle based Cognigen Networks, Inc., offers a wide range of
telecommunications services and related products via its Web
site at

Cognigen's robust marketing engine is fueled by distribution
channels that harness a dominant Internet presence and a corps
of over 135,000 independent agents and several affiliate groups,
each with their own customized Web site.

This provides Cognigen with both agent initiated sales that are
then fulfilled via the Internet as well as those generated
directly off its main Web site. Cognigen resells the services of
industry leaders such as AT&T Wireless, Qwest, WorldCom, Sprint,
Verizon, Global Crossing, and DISH Network. The company also
operates a wholly owned subsidiary, Cognigen Switching
Technologies (CST), based in San Luis Obispo, CA.

CST is an FCC licensed international and interstate facilities
based carrier and reseller. Cognigen has sold, on behalf of its
vendors and for its own account, services and products to
approximately 550,000 customer accounts worldwide.

                            *   *   *

Cognigen has funded its operations primarily from stock
subscriptions received and operations.  At June 30, 2001, the
Company had cash and cash equivalents of $296,947 and negative
working capital of $405,115.  At June 30, 2001, the Company had
a note payable in the amount of $301,499 that currently is in
default and capital leases of $11,832 which will have to be paid
during the next 12 months.  Cash generated from operations was
not sufficient to meet the Company's working capital
requirements for the fiscal year ended June 30, 2001, and may
not be sufficient to meet its working capital requirements for
the foreseeable future.  

COMDISCO INC: Equity Panel Taps Water Tower As Financial Advisor
The Official Committee of Equity Security Holders of Comdisco,
Inc., asks Judge Barliant to approve its employment of Water
Tower Capital, LLC as financial advisor.

According to Steven E. Greenbaum, Esq., at Berlack, Israels &
Liberman, Water Tower will conduct such financial review and
analysis of the Debtors in order to advise the Equity Committee
in the course of these Chapter 11 cases, including:

  (1) assist in the evaluation of the Debtors' assets;

  (2) assist the Equity Committee in preparing and presenting
      testimony as required by the Court;

  (3) attend court proceedings and meetings with the Equity
      Committee, Debtors, creditor constituencies, attorneys and
      other interested parties;

  (4) provide advice with respect to the development and
      approval of any plan of reorganization filed by the
      Debtors or any other party in interest and any and all
      other necessary and appropriate matters;

  (5) provide advice with respect to potential business plans
      for the Debtors and with respect to the business
      operations of the Debtors;

  (6) provide advice with respect to potential sales of the
      Debtors' assets; and

  (7) provide such further and other services as reasonably may
      be requested by the Equity Committee.

The Equity Committee proposes that Water Tower be compensated
for its services at the rate of $150,000 per month for the first
2 months of this engagement.  Thereafter, Mr. Greenbaum says,
Water Tower will be paid $125,000 per month.  According to Mr.
Greenbaum, payment of initial monthly fee will be prorated based
on the commencement of services and shall be payable by the
Company when the Consulting Agreement is executed and approved
by the Court.

After the first month, Mr. Greenbaum explains, Water Tower shall
be compensated at the applicable monthly rate in accordance with
the Consulting Agreement.

Water Tower will also be entitled to a success fee based upon a
percentage of the distribution, if any, received by equity
holders pursuant to any transaction, Mr. Greenbaum adds.

Mr. Greenbaum explains the Success Fee will be based upon the
Distribution Value, the average trading price of the Company's
stock or other securities or the average market value of other
assets received by the equity holders, measured during the first
30 days after the effective date of any Plan confirmed in these
cases (or a distribution made to equity holders pursuant to any
other transaction).  The Success Fee will be calculated as:

   Distribution Value           Percentage of Distribution Value
                                The Firm is Entitled to
   ------------------           --------------------------------
(1) less than $150,000,000           none
(2) $150,000,000 - $225,000,000      0.5 %
(3) $226,000,000 - $300,000,000      1.0 %, in addition to any
                                             Success Fee for a
                                             Distribution Value
                                             calculated in (2)

(4) $301,000,000 - $450,000,000      1.5 %, in addition to any
                                             Success Fee for a
                                             Distribution Value
                                             calculated in (3)

(5) $451 million or above            1.75%, in addition to any
                                             Success Fee for a
                                             Distribution Value
                                             calculated in (4)

In addition, Mr. Greenbaum says, Water Tower will seek
reimbursement for reasonable and necessary expenses incurred in
connection with case.

Christopher S. Field, a principal of Water Tower, guarantees
that the professionals employed by Water Tower have extensive
experience in performing such services for companies, equity
holders, and other interested parties in many other Chapter 11

Mr. Field tells the Court that he owns approximately 200 shares
of the Debtors' common stock.  In addition, Mr. Field says,
Water Tower may have provided financial advisory services to
creditors, security holder and professional advisors of the
Debtors in matters unrelated to the Debtors' cases.  
Nevertheless, Mr. Field assures the Court, Water Tower and its
principals are "disinterested persons" and do not represent or
hold any interest adverse to the Debtors or their estates.

F. John Stark III, a principal of Water Tower, is connected with
PPM America, Inc., which serves on the Debtors' Official
Unsecured Creditors' Committee.  If adverse interests are
discovered upon access to PPM's records, Mr. Field promises to
disclose such representation to the Court in a supplementary
affidavit. (Comdisco Bankruptcy News, Issue No. 8; Bankruptcy
Creditors' Service, Inc., 609/392-0900)    

COMMSCOPE: Market Pressures & Hefty Debts Prompt S&P Downgrades
Standard & Poor's lowered its corporate credit rating on
CommScope Inc. to double-'B' from triple-'B'-minus and its
convertible subordinated note ratings to single-'B'-plus from
double-'B'-plus. At the same time Standard & Poor's withdrew its
existing triple-B'-minus bank loan rating and assigned a double-
'B'-plus bank loan rating to the company's proposed $360 million
senior secured credit facility. Ratings are removed from
CreditWatch where they were placed on July 24, 2001.

The ratings outlook is stable.

The ratings action is based on a more leveraged financial
profile and challenges associated with operating the new Fiber
Optic Cable business in an environment with uncertain demand.
CommScope is acquiring Lucent Technologies Inc.'s Fiber Optic
Cable business in a joint venture partnership with Furukawa
Electric Co. Ltd. of Japan. in a largely debt-financed

Ratings reflect CommScope's leading market position as a
manufacturer of coaxial cable for the cable television industry,
well-established customer relationships, and the company's
potentially enhanced business position arising from the
acquisition. These factors are offset by financial and
operational risks associated with operating the sizable acquired
operations and by challenging near-term industry conditions.

In addition, credit measures weakened due to the company's
higher debt burden that is exacerbated by sales and
profitability pressures from lagging demand in the cable
television and telecommunications markets.

Although the structure of the acquisition provides the joint
venture with its own funding sources and should not require
further financial support from CommScope, ratings incorporate
CommScope's considerable economic interest in ensuring the
success of the fiber optic cable joint venture.

Hickory, N.C.-based CommScope is the long-standing industry
leader in the coaxial cable market, with twice the market share
of its closest competitor, Amphenol Corp. The acquisition
bolsters CommScope's fiber optic cable product offering and
broadens served markets in the telecommunications industry.

Moreover, deployment of hybrid fiber coaxial (HFC) products in
the cable television infrastructure by multiple system operators
(MSOs) should benefit CommScope, whose product profile is well
positioned for this technology transition. Still, Standard &
Poor's believes managing the acquired Lucent operations will be
a challenge for CommScope, requiring considerable management
time and attention.

The fiber optic cable market is characterized by uncertain
demand conditions, strong entrenched competitors, substantial
technology and capital needs, as well as customers with
deteriorating financial profiles. These concerns are compounded
by the cost structure of the Lucent operations, which will
likely require further rationalization. In addition, the joint
venture operational structure with Furukawa, with which
CommScope has had a limited working relationship, is unproven.

Standard & Poor's expects operating margins for 2001 to remain
in the company's historical 17%-20% range, as management's
aggressive cost-reduction efforts should somewhat offset weaker
sales. Pro forma for the transaction, debt is likely to be more
than 3.5 times EBITDA for the 12 months ended June 2001. Near-
to intermediate-term EBITDA interest coverage is expected to be
slightly more than 3x.

CommScope's operations are likely to generate modest free
operating cash flow, due to slowing demand and completion of its
three-year capital plan. Debt is expected to comprise 50% of
capital upon the close of the financing associated with the
transaction. Almost full availability of its $50 million
revolving credit facility after the transaction offers adequate
financial flexibility.

Standard & Poor's assigned a double-'B'-plus rating to the
credit facility, one notch above the corporate credit rating,
recognizing the enhanced prospects for full recovery. Under
Standard & Poor's simulated default scenario, and giving some
modest consideration to the recent purchase of the Lucent fiber
optic cable business, there is a high degree of confidence that
the enterprise value of CommScope is likely to retain sufficient
value to fully cover the bank loan.

The $360 million bank loan consists of a $225 million 3 3/4-year
senior secured term loan A, a $225 million 4 3/4-year senior
secured Term loan B and a $50 million 3 3/4-year senior secured
revolving credit facility. The bank loan is secured by all
tangible and intangible assets of CommScope Inc. and includes
equity interest in its joint venture with Furukawa. There are
restrictive covenants that prohibit further investments in the
joint venture beyond $10 million.

                       Outlook: Stable

Standard & Poor's expects profitability measures will improve
over the intermediate term and that management will maintain an
appropriate financial profile for the current rating.

COMMUNITY HEALTH: Acquisition Activities Spur S&P Low-B Ratings
Standard & Poor's assigned its single-'B'-plus corporate credit
and secured bank loan ratings to Community Health Systems Inc.
At the same time, Standard & Poor's assigned its single-'B'-
minus rating to Community Health Systems' offering of $250
million subordinated convertible debt due 2008. The outlook is

The speculative-grade ratings on Brentwood, Tennessee-based
Community Health Systems reflect the company's diversified
portfolio of nonurban hospitals as well as its aggressive
acquisition activity.

Furthermore, the rating incorporates the expectation that the
company completes its announced equity transaction, which is
likely to generate over $300 million in gross proceeds.

The company's $1 billion secured bank facility, which was
originated in 1999, is rated the same as the corporate credit
rating. The facility is secured by all capital stock of the
subsidiaries of Community Health Systems. While secured lenders
may experience a modest advantage over unsecured lenders,
Standard & Poor's confidence of full recovery is not sufficient
to warrant notching up the rating.

The facility is comprised of a revolving credit facility with
$450 million available, expiring in 2004; $12 million tranche A
term loan due 2002; $120 million tranche B term loan due 2003;
$120 million tranche C term loan due 2004; and $312 million
tranche D term loan due 2005.

Community currently owns and operates 54 hospitals in 20 states
primarily in small, nonurban markets with stable or growing
population bases of between 20,000 and 100,000. The hospital
chain maintains strong positions, as 85% of its hospitals are
the sole or primary provider in the community. Community
maintains a disciplined acquisition approach focused on
physician recruitment, and service enhancement.

Nevertheless, Community is challenged to sustain improving
financial performance. While the company's execution of key
strategies such as adding new services and physician recruitment
has had good success, the company's predominately nonurban
concentration leaves it vulnerable to legislative and economic
changes within these markets.

Moreover, notwithstanding recent equity offerings, aggressive
acquisition activity is likely to cause leverage to remain
relatively high. In addition, significant bank debt is due over
the next few years. Funds from operations to lease-adjusted debt
in the 15%-20% range and return on capital of below 10% are
consistent with the rating category.

                        Outlook: Stable

The expected use of debt to fund acquisition activity and
significant refinancing issues over the next two years, are risk
factors that will continue to characterize the low speculative-
grade rating.

CONSECO: Fitch Takes Hard Look after $475M 3Q Charge Warning
Fitch has placed all ratings of Conseco, Inc. and its insurance
subsidiaries, as well as the ratings of Conseco Finance Corp.
(Conseco Finance), on Rating Watch Negative. The rating action
follows an announcement by Conseco that it will incur after-tax
charges of $475 million in the third quarter of 2001. Such
charges equate to approximately 9% of shareholders' equity as
reported at June 30, 2001, and fall outside of previous ratings

The $475 million charge has several components. The largest is a
$225 million write down in the value of interest-only (I/O)
securities at Conseco Finance, the majority of which is
delegated to further write-downs with the I/O related to the
company's manufactured housing loan portfolio.

The second largest component is a $125 million write down in the
investment portfolios of the insurance subsidiaries, mainly tied
to collateralized debt obligations (CDOs) and high yield
corporate bond holdings.

The insurance operations also incurred $40 million in charges in
the major medical line, which is being curtailed. The remaining
charges represented a $45 million write down in the value of the
Telecorp investment, and expected losses of $40 million for loan
guarantees made to directors and officer tied to a stock  
purchase program.

Management indicates the charges will have minimal near-term
cash flow implications, and would not cause Conseco or Conseco
Finance to breach any covenants on existing bank debt, nor take
the company off track to meet debt service payments through
year-end 2002.

Notwithstanding, Fitch will evaluate the cushion that remains in
the covenants of Conseco Finance's secured warehouse credit
facilities, which has been reduced as a result of the $225
million after-tax charge in third quarter of 2001. If Conseco
Finance violates any of its warehouse covenants, it will likely
be unable to access further financing, which would significantly
impede future cash flow generation.

While Conseco has been working diligently to restructure its
businesses, these new charges could indicate that problems
facing Conseco were more severe than management had initially
anticipated. Further, management's inability to arrive at loss
estimates that can be viewed as 'final' is of concern to Fitch
since it raises questions of additional charges which may
be required in the future.

Fitch plans to discuss these issues in detail with management to
better ascertain the risk that further charges in these areas
could be required, and to understand the sensitivity of cash
flows to any future deterioration in either operating
characteristics or the investment and loan portfolios.

The financial profile of Conseco Finance remains weak given its
undercapitalized balance sheet and the significance of secured
funding facilities and wholesale borrowings. The secured
facilities effectively encumber most of the company's asset base
at the present time.

Further, as long as Conseco Finance is viewed by its parent as a
source of cash, capital formation will be constrained. This
places pressure on Conseco Finance's ratings. The cash flow from
Conseco Finance to the parent has been higher than initially
anticipated, which has been a favorable development to date from
the Conseco, Inc. perspective.

The Rating Watch Negative applies to the following rating of
Conseco, Inc. and it subsidiaries:

     Senior Debt:
          --Conseco Inc., 'BB-'.
          --Conseco Financing Trust I-VII, `B'.

     Commercial Paper:
          --Conseco Inc., `B'.

     Long-Term Rating:
          --Conseco Finance Corp., 'B'.

     Short-Term Rating:
          --Conseco Finance Corp., `B'.

     Insurer Financial Strength:
          --Bankers Life & Casualty Company, 'BBB'.
          --Conseco Annuity Assurance Company, `BBB'.
          --Conseco Direct Life Insurance Company, `BBB'.
          --Conseco Health Insurance Company, `BBB'.
          --Conseco Life Insurance Company, `BBB'.
          --Conseco Life Insurance Company of New York, `BBB'.
          --Conseco Medical Insurance Company `BBB'.
          --Conseco Senior Health Insurance Company, `BBB'.
          --Conseco Variable Insurance Company, `BBB'.
          --Manhattan National Life Insurance Company, `BBB'.
          --Pioneer Life Insurance Company, `BBB'.

EDISON: Lawsuit Settlement Prompts Fitch to Revise Rating Watch
Following the Oct. 2, 2001 announcement that the California
Public Utilities Commission (PUC) reached a settlement resolving
Southern California Edison's (SCE's) Filed Rate Doctrine
lawsuit, Fitch has changed the Rating Watch of SCE and its
parent, Edison International (EIX), to Positive from Negative.

The settlement agreement provides price certainty for SCE
through at least 2003. That together with lower power supply
costs is expected to provide surplus revenue for the repayment
of unpaid SCE debt resulting from unrecovered power procurement

The amount of excess cash flow available to reduce SCE's unpaid
debt is still uncertain and will depend on the outcome of
several unresolved issues including: the allocation of the
California Department of Water Resources (DWR) power supply
costs to customers of SCE, Pacific Gas and Electric and San
Diego Gas and Electric; the reduction of DWR's projected costs
as a result of the lower forward price for gas and ancillary
power services; and, the DWR's ability to lock in the gas
component of its supply costs by hedging.

Also, since it is not clear what processes will be used to
consider and implement this settlement agreement at the Federal
court and PUC, Fitch will closely monitor the subsequent

If there is a favorable resolution of the factors still to be
resolved, we believe the settlement represents a workable
solution to SCE's excess power cost recovery issues and provides
a basis for a significant improvement in the company's credit
quality over time. Pending clarification of the legal issues and
the amount of excess revenues, however, it is too early to
determine if the settlement agreement will return SCE's ratings
to the investment grade category in the near-term.

Under the terms of the agreement, the PUC will maintain rates at
current levels through the end of 2003, unless SCE is able to
recover the debt related to unrecovered power procurement costs
before that time. In addition, the floor on rates may be
extended to enable debt repayment through 2004 and 2005, if

Potential cost savings resulting from securitization of debt,
recovery of funds from power suppliers via litigation/regulatory
process, and reductions to the DWR's revenue requirement would
be passed through to customers and could result in lower rates
to customers before 2003, without slowing SCE's debt repayment.

SCE will apply 100% of any recovery it receives from refund
proceedings at the FERC, along with any proceeds from litigation
by the state to recover alleged over-charges from energy
suppliers and marketers to debt reduction. The settlement
agreement allows SCE to use its cash on hand plus surplus
revenues to pay off $3 billion of debt, less a $300 million

Edison is precluded from paying common dividends until the
earlier of 2003 or the date on which the debt burden is fully
paid. In addition, the settlement holds out the possibility of a
future reduction in the ultimate burden to ratepayers through
securitization and potential recovery of funds through
litigation and/or proceedings before the Federal Energy
Regulatory Commission (FERC).

Rating Watch Positive applies to all of the current ratings
listed below for SCE and its parent, Edison International. The
current ratings reflect the defaults by SCE in some of its
outstanding obligations and the imminent possibility of an SCE
bankruptcy absent the implementation of the settlement

     Southern California Edison Ratings:
        --Senior secured debt `CCC';
        --Senior unsecured debt: series 5 7/8% `D';
        --Other senior unsecured debt `CC';
        --Preferred stock `C';
        --Subordinated debt `CCC';
        --Insured pollution control revenue bonds `AAA';
        --Commercial paper `DDD'.

     Edison International Ratings:
        --Senior unsecured `CC';
        --Trust preferred `C';
        --Commercial paper `D'.

EXODUS COMMS: Gets Okay to Maintain Prepetition Bank Accounts
Exodus Communications, Inc. sought and obtained an order
authorizing them to continue using their existing bank accounts
pending a hearing on the Debtors' "first-day" motions -- yet to
be filed with the Clerk's office -- in these chapter 11 cases.

Judge Robinson directs that the Bank Accounts shall be deemed to
be debtor-in-possession accounts, and that their maintenance and
continued use, in the same manner and with the same account
numbers, styles and document forms as those employed during the
pre-petition period.

Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP in
Wilmington, Delaware, tells the Court that prior to the
commencement of their chapter 11 cases, the Debtors maintained
in the ordinary course of business more than 14 bank accounts
located in various states through which Exodus managed cash
receipts and disbursements for the Debtors' entire corporate

The Debtors routinely deposit, withdraw and transfer funds to,
from and between such accounts by various methods including
check, wire transfer, automated clearing house transfer and
electronic funds transfer, and in addition, generate thousands
of checks per month from the Bank Accounts. The Debtors believe
that all of the Bank Accounts are in financially stable banking
institutions with FDIC or FSLIC insurance.

The United States Trustee for the District of Delaware has
established certain operating guidelines for debtors-in-
possession in order to supervise the administration of chapter
11 cases requiring chapter 11 debtors to:

    (a) close all existing bank accounts and open new debtor-in-
        possession bank accounts;

    (b) establish one debtor-in-possession account;

    (c) maintain a separate debtor-in-possession account for
        cash collateral; and

    (d) obtain checks for all debtor-in-possession accounts
        which bear the designation "Debtor-In-Possession," the
        bankruptcy case number and the type of account.

The Debtors believes that enforcing the U.S. Trustee's
requirements in these mega-cases would cause significant and
unnecessary disruption in the Debtors' businesses.

Mr. Chehi explains that the Bank Accounts are part of a
carefully constructed and highly-automated Cash Management
System that ensures the Debtors' ability to efficiently monitor
and control all of their cash receipts and disbursements. The
Cash Management System incorporates a substantially unified
collection and disbursement system for all of the debtor

Consequently, Mr. Chehi says, the Debtors fear that closing the
existing Bank Accounts and opening new accounts inevitably would
result in delays and impede the Debtors' ability to ensure as
smooth a transition into chapter 11 as possible and also would
jeopardize the Debtors' efforts to successfully reorganize in a
timely and efficient manner.  

Mr. Chehi maintains that it is essential that the Debtors be
permitted to continue to maintain their existing Bank Accounts
and open new accounts wherever they are needed. (Exodus
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

FEDERAL-MOGUL: S&P Drops Ratings to D After Chapter 11 Filing
Standard & Poor's lowered its ratings on Federal-Mogul Corp.
About $2.1 billion of public debt and $1.9 billion of bank debt
is affected.

The rating actions follow the company's announcement that it has
voluntarily filed for protection under Chapter 11 of the U.S.
Bankruptcy Code. In addition, Federal-Mogul's subsidiaries in
the United Kingdom have filed jointly for Chapter 11 and
Administration under the U.K. Insolvency Act of 1986. Federal-
Mogul stated that it filed Chapter 11 in to develop a plan to
resolve its asbestos liabilities.

In 2000, Federal-Mogul spent $351 million on asbestos payments,
and in the first half of 2001, the company spent $171 million on
asbestos payments. Several months ago, Federal-Mogul stated that
it was continuing to receive a high volume of new asbestos claim
filings, and that the recent bankruptcies of certain co-
defendant companies in asbestos litigation were contributing
to increased financial demands against Federal-Mogul.

Since January 1, 2000, 10 companies, involved in asbestos-
related litigation, have filed for bankruptcy protection.
Federal-Mogul stated that, in conjunction with the filings, it
has obtained commitments of up to $675 million in a new loan
through debtor-in-possession financing from a group of banks.

Federal-Mogul manufactures and distributes components for
automobiles, heavy-duty trucks, farm and construction equipment,
and industrial products. The company's operating results have
deteriorated significantly in the past year due to weakness in
the automotive aftermarket, declines in original equipment
automotive and heavy-duty truck production, and internal
operating inefficiencies.

In the first half of 2001, the company reported a loss before
extraordinary items of $96 million (including a restructuring
charge of $32 million), which compares with earnings of $64
million (including a restructuring charge of $69 million) in the
comparable period of 2000.

                         Ratings Lowered

     Federal-Mogul Corp.                   TO      FROM

        Corporate credit rating            D       CCC+
        Senior secured debt                D       CCC+
        Senior unsecured debt              D       CCC-
        Preferred stock                    D       CC

     Federal-Mogul Financing Trust

        Preferred stock rating             D       CC
          (Guaranteed by Federal-Mogul Corp.)

FEDERAL-MOGUL: Court Grants Use of $450MM In Interim Financing
Federal-Mogul Corporation (NYSE: FMO) received court approval of
$450 million of interim debtor-in-possession (DIP) financing
provided by J.P. Morgan Chase & Co. to continue operations, pay
employees, and purchase goods and services going forward during
its voluntary Chapter 11 case.  

The interim funding is part of the commitment that Federal-Mogul
received from J.P. Morgan Chase of $675 million to supplement
liquidity and fund operations during the restructuring process.  
The final hearing on the DIP agreement has been set for November
7, 2001.

At Thursday's hearing, the court also granted Federal-Mogul
approval to, among other things, pay pre-petition wages,
salaries and benefits for employees in the United States and
United Kingdom included in the filing.

As announced October 1, 2001, to resolve its asbestos
liabilities, Federal-Mogul and its wholly owned United States
subsidiaries commenced financial restructuring proceedings under
Chapter 11 of the U.S. Bankruptcy Code and in the case of
certain United Kingdom subsidiaries, under Chapter 11 and
Administration under the U.K. Insolvency Act.  Many Federal-
Mogul affiliates (such as those in Canada, Continental Europe,
Africa, Latin America and Asia Pacific) did not file and are
completely unaffected.

Federal-Mogul Chairman and Chief Executive Officer Frank E.
Macher said he was pleased with the court's approval of its
"first-day" orders and interim DIP financing.

"We expect the DIP financing to provide adequate funding for our
post-petition supplier and employee obligations and business
investment" said Macher, adding that the company has contacted
many of its major customers, who have indicated their full
support of Federal-Mogul. "Our customers have pledged their
support and commitment to continue to keep Federal-Mogul as a
valued supplier.  There has been an overwhelming level of
support and understanding of our decision to restructure"

Macher said that Federal-Mogul's operations worldwide have
continued without interruption and customer needs have been met.
"Our operations are all up and running and we are maintaining
our commitment to provide quality products and superior service
to our customers"

Critical to customer service have been Federal-Mogul's employee
and supplier efforts.  A comprehensive communication effort
unfolded Monday to Federal-Mogul's 52,000 employees.  On a
worldwide basis, employee wages and salaries will continue as
before and the company expects no job losses or facility
closures as a direct result of the filings.  

In addition, the company has been in active dialogue with
suppliers, especially those who supply the U.S. and U.K.
operations included in the filing.  All suppliers will be paid
for goods furnished and services provided after the filing.

The court also granted approval for the company to honor U.S.
aftermarket customer accommodations and programs in place at the
time of the filing, including rebates, stock adjustment returns,
warranties, and cooperative advertising and promotions programs.

Federal-Mogul availed itself of the Chapter 11 and
Administration proceedings to continue its day-to-day operations
while it develops a financial reorganization plan that will
resolve its asbestos liabilities and protect the long-term value
of the business.

"After aggressively working toward a legislative solution and
operating with our new litigation approach for managing asbestos
claims, we determined that the financial reorganization
proceedings presented the best means to effectively separate our
asbestos liabilities from our true operating potential, said
Macher.  We have identified several restructuring goals that
we believe can be achieved with Federal-Mogul eventually
emerging as a stronger, more competitive company"

Macher said the goals of Federal-Mogul's restructuring include:

* Continue business operations without interruption, including
  the full support of customers.

* Continue to compensate and reward employees as valued
  corporate assets.

* Create an environment where employees can focus on serving our
  customers without distractions.

* Grow the business on a global basis.

* Invest capital and human resources in core businesses for
  ongoing competitive advantage.

* Develop advanced technologies to maintain performance

* Provide for asbestos claimants.

* Complete the restructuring proceedings in a reasonable

* Treat creditors and shareholders fairly.

Federal-Mogul and certain of its U.S. and U.K. subsidiaries
filed their voluntary Chapter 11 petitions in the U.S.
Bankruptcy Court for the District of Delaware in Wilmington.  
The Administration Orders were granted by the High Court of
Justice, Chancery Division, London, England.

For more information on Federal-Mogul's financial restructuring,
visit the company's Web site at

Headquartered in Southfield, Michigan, Federal-Mogul is an
automotive parts manufacturer providing innovative solutions and
systems to global customers in the automotive, heavy duty, small
engine and industrial markets. The company was founded in 1899.

FOUNTAIN VIEW: Gets Okay to Use Cash to Pay Employee Obligations
Fountain View, Inc., a leading operator of 49 long-term care
facilities, announced that it has received Bankruptcy Court
approval to use cash on hand and to be collected from operations
to, among other things, pay pre-petition and post-petition
employee wages, salaries and benefits during its voluntary
restructuring under Chapter 11, which commenced yesterday.

The Court also granted approval for the Company to use its bank
accounts, which had been attached by plaintiffs' attorneys in
connection with a $6.1 million judgment against the company.

"We are very pleased that the Court approved all of the motions
that we put forth [Wednes]day," said Robert Snukal, Fountain
View's Chief Executive Officer. "We have sufficient cash on hand
to fund our operations, and [Wednes]day's rulings mean that it
will be business as usual at all of our facilities. Our
employees will be paid as usual, and our patients will continue
to receive the highest caliber of healthcare."

"We were particularly pleased that the Court allowed us to use
funds, not withstanding the plaintiffs' attachment of our bank
accounts. We dispute this judgment in its entirety and intend to
vigorously appeal the decision," Mr. Snukal added.

The Company filed its voluntary petition for Chapter 11
reorganization on October 2, 2001, 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 services.

FOUNTAIN VIEW: Chapter 11 Case Summary
Lead Debtor: Fountain View Holdings, Inc.
             2600 W Magnolia Boulevard
             Burbank, CA 91505

Debtor affiliate filing separate chapter 11 petitions:

             Fountain View Inc., a Delaware Corporation
Chapter 11 Petition Date: October 2, 2001

Court: Central District of California (Los Angeles)

Bankruptcy Case Nos.: 01-39679 and 01-39678

Judge: Sheri Bluebond

Debtors' Counsel: Daniel J. Bussel, Esq.
                  Klee Tuchin Bogdanoff & Stern
                  1880 Century Pk East
                  Suite 200
                  Los Angeles, CA 90067

FRUIT OF THE LOOM: Seeks 2nd Extension of Solicitation Period
Fruit of the Loom and its debtor-affiliates ask Judge Walsh for
a further extension of their exclusive period within which it
may solicit acceptances of a plan of reorganization, through and
including December 31, 2001, without prejudice to their right to
request more time if necessary.

On March 15, 2001, Luc A. Despins, Esq., at Milbank, Tweed,
Hadley & McCloy, reminds Judge Walsh, Fruit of the Loom filed
its Joint Plan of Reorganization of Fruit of the Loom Under
Chapter 11 of the Bankruptcy Code, and its Disclosure Statement
Pursuant to Section 1125 of the Bankruptcy Code With Respect to
Joint Plan of Reorganization of Fruit of the Loom Under Chapter
11 of the Bankruptcy Code.

On March 19, 2001, the Creditors' Committee filed a motion
seeking, among other things, to stay the consideration of the
Plan and the Disclosure Statement.  The Court directed Fruit of
the Loom not to schedule a hearing to consider the adequacy of
the Disclosure Statement, which is the first step toward
soliciting acceptances of the Plan, until the hearing on the
Committee's Stay Motion.

Fruit of the Loom, at the Court's behest, has refrained from
pressing for approval of its Disclosure Statement in order to
permit the mediation process with Professor James J. White of
the University of Michigan Law School to move forward in an
effort to resolve the disputed issues among the Creditors'
Committee, Fruit of the Loom and the Prepetition Secured

The mediation process is now complete; Fruit of the Loom, the
Committee and the representatives of the prepetition secured
creditors have reached an agreement in principle.  "It is the
intent and understanding of the parties that this agreement be
implemented as a part of an amended plan of reorganization for
Fruit of the Loom," Mr. Despins advises.  "The parties are, at
present, engaged in the process of memorializing this agreement
and setting forth the required changes to the Plan.  Fruit of
the Loom anticipates that an amended Plan and amended Disclosure
Statement will be filed within the next month, reflecting this

By this motion, Fruit of the Loom seeks an extension of the
Solicitation Period, until January 31, 2002, to permit it
adequate time to complete the necessary amendments to the Plan
and Disclosure Statement, then gain approval of the Disclosure
Statement and solicit acceptances of the Plan.

Section 1121(b) of the Bankruptcy Code gives a debtor the
exclusive right to file a plan of reorganization for an initial
period of 120 days from the Petition Date. If the debtor files a
plan within this exclusive period, then the debtor has the
exclusive right for 180 days from the Petition Date to solicit
acceptances to its plan. 11 U.S.C. 1121(c). During these
Exclusive Periods, no other party in interest may file a
competing plan of reorganization. Section 1121(d) provides that
the Court may extend the Exclusive Periods "for cause" upon
request of a party in interest and after notice and hearing.

Mr. Despins states that although the Bankruptcy Code does not
define "cause" for an extension, courts have looked to the
legislative history of section 1121(d) for guidance.

Fruit of the Loom believes that the additional time requested
will allow for an appropriate amount of time for the amendment
to be completed to the satisfaction of the parties to the
settlement, consideration of the Disclosure Statement, and,
following approval of the Disclosure Statement, the solicitation
of the Plan.

Fruit of the Loom's request for an extension of the Solicitation
Period therefore is not a negotiation tactic, but instead merely
a reflection of the fact that an extension is required to
provide sufficient time to complete the solicitation process in
this complex chapter 11 case.

Fruit of the Loom recognizes the need to deal with all parties
in interest in these cases. Fruit of the Loom and its
professionals have consistently conferred with these
constituencies. Fruit of the Loom has no intention to
discontinue this exchange of views if this Motion is granted.

Judge Walsh will convene a hearing on October 22, 2001, to
consider this request.  Consistent with Rule 9006-2 of the Local
Bankruptcy Rules applicable in the District of Delaware, the
Debtors' exclusive solicitation period is automatically extended
through the conclusion of that hearing. (Fruit of the Loom
Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   

INTERIORS: Completes Sale of Stylecraft for $26.5M to Cut Debts
INTERIORS, INC. (OTCBB: INTXA, INTXP) announced that it
completed the sale of Stylecraft Lamps, Inc. The purchase price
consisted of $26.5 million in cash. A substantial portion of the
purchase price was used to partially repay the Company's secured
creditors, including Foothill Capital Corporation.

The closing occurred on October 1, 2001.

Stylecraft is the sixth business sold by the Company since it
announced earlier this year a plan to sell substantially all of
its assets.

Despite the Company's efforts to pay down its outstanding debt,
the Company remains in default with respect to its senior debt
securities. In order to complete the transaction, the Company
also granted a security interest to Limeridge, LLC and The
Endeavour Fund to secure almost $19.0 million, including
interest, of convertible notes which remain outstanding.

The Company's lenders have currently agreed to forbear from
foreclosing on the Company's assets until December 14, 2001.

Following the completion of the Company's plan, the Company's
business will primarily consist of its APF Master Framemakers
division located in Mt. Vernon, New York. The Company stated
that it would have no further public comment on this subject
until there are definitive transactions. There can be no
assurance, however, that there will be any transactions or, if
one is proposed, that it will be completed.

Interiors, Inc., is a designer, manufacturer and marketer of
museum-quality traditional and contemporary picture frames,
framed wall mirrors, oil paintings and prints under glass for
the residential, commercial, institutional and contract markets.

The Company primarily markets its products to museums, art
galleries, designers, interior decorators and custom frame
retailers. The Company's principal operations are located in
Mount Vernon, New York.

J. CREW CORP: S&P Airs Concern About Weakening Credit Protection
Standard & Poor's revised its outlook on J. Crew Group Inc. and
unit J. Crew Corp. to stable from positive.

At the same time, Standard & Poor's affirmed its triple-'C'-plus
rating on J. Crew Corp.'s senior subordinated notes due 2007 and
its triple-'C'-plus rating on J. Crew Group's senior discount
debentures due 2008.

In addition, the single-'B' corporate credit and bank loan
ratings on J. Crew Corp., as well as the single-'B' corporate
credit rating on J. Crew Group, were affirmed.

The outlook revision is based on J. Crew's deteriorating credit
protection measures. The company's operating results were weak
in the first half of 2001, and Standard & Poor's does not expect
credit protection measures will improve in the near term.

The ratings on J. Crew reflect the high business risk associated
with its participation in the intensely competitive apparel
retailing industry and leveraged balance sheet. These risks are
partially mitigated by the company's good market position in
catalog and store retailing.

New York, N.Y.--based J. Crew is a leading mail order and store
retailer of women's and men's apparel, shoes, and accessories.
The company circulates more than 70 million catalogs annually
and owns and operates 113 J. Crew retail stores and 41 factory
outlet stores.

The company has generally had a good track record of operating
performance.  J. Crew has improved its operating margins
significantly since 1998, to 15.1% in 2000 from 6.7%, through a
combination of leveraging its core brand across its retail,
catalog, Internet, and outlet distribution channels;
exiting non-core businesses; higher initial mark-ups on
merchandise; and better inventory management.

Still, the company has had difficulty in 2001 due to the weak
retail environment and consumers' poor response to its men's
apparel. Same-store sales were down 11.6% in the first half of
2001. Near term, the company could be challenged to generate
positive comparable-store sales trends given the weak U.S.
economy. The company's operating margin dropped to 6.4% in the
first half of 2001 from 8.7% in the same period the year before.

Credit protection measures have declined as a result of J.
Crew's weak operating performance. EBITDA interest coverage
declined slightly to about 2.0 times in the trailing 12 months
ended Aug. 4, 2001, from 2.2x in 2000. The company's debt burden
is high, with total debt to EBITDA at 3.5x.

Given J. Crew's high leverage, credit protection measures could
quickly decline if operating results continue to decline. Some
financial flexibility exists through a $200 million credit
facility, under which J. Crew had $40 million available as of
Aug. 4, 2001.

                      Outlook: Stable

J. Crew's good market position in catalog and store retailing
supports the ratings. However, the company's highly leveraged
balance sheet and the challenge of improving operations in the
competitive specialty retail industry limit the potential for an

JUNIPER GENERATION: Fitch Bullish About Restructuring of Pacts
Fitch has upgraded from 'CC' to 'BB' its rating of Juniper
Generation LLC's (Juniper) $105 million senior secured bonds due
2012, and placed it on Rating Watch Evolving.

This rating action follows the significant restructuring of
operating and financing agreements at the project and portfolio
level. The rating is based on the level and seniority of
expected payments to Juniper from its portfolio of power
projects, El Paso's willingness to take a subordinate but
secured position on outstanding invoices, and the plan of
reorganization recently filed by Pacific Gas & Electric.

Juniper bondholders rely on the equity distributions from a
portfolio of 10 gas-fired generation plants and two service
companies. Each of these generating plants is a Qualifying
Facility (QF) under federal PURPA legislation, obligating the
local utility to purchase the plant's output at prices
established by the California Public Utilities Commission

The output from nine plants (including eight collectively termed
the Bakersfield Projects) is sold under Power Purchase
Agreements (PPAs) with Pacific Gas & Electric (PG&E). The output
from the remaining plant is sold under a PPA with Southern
California Edison (SCE). The service companies perform
operations and maintenance at nine of the plants, and fuel
procurement at eight of the plants.

Juniper is 51% owned by Mesquite Investors, which is indirectly
owned by El Paso Corp. and Limestone Electron Trust. The
remaining 49% of Juniper is held by a financial investor.

                       Recent Events

PG&E and the eight Bakersfield Projects agreed to amend their
PPAs to comply with the CPUC's authorized pricing for energy
delivered by QFs. These PPAs were affirmed by PG&E and approved
by the bankruptcy court on July 27. Effective Aug. 1, 2001,
through July 16, 2006, the energy price is an annual average
fixed price of $53.70 per MWh.

Each of the Bakersfield Projects entered into a gas swap
transaction that results in a fixed price for natural gas
through July 16, 2006. The pricing is adequate to result in
positive monthly operating cash flow at each of the projects,
excluding periods of planned maintenance outages.

Each of the Bakersfield Projects restructured the terms of its
project level loan indenture to address debt service reserve
funding, interest and principal payments, and the priority of
future and outstanding operating expenses. Notably, El Paso has
provided the projects the flexibility to elect to defer payments
of outstanding invoices for fuel below debt service obligations
in the waterfall.

Importantly, the seniority of operating and fuel management fees
has been maintained, providing Juniper with a source of monthly
income and cash flow via distributions from the service
companies. Fitch has reviewed the restructured project level
debt indentures and believes that defaults thereunder are

On September 20, PG&E filed a plan of reorganization with the
U.S. bankruptcy court. Under the plan, PG&E would be separated
into two companies, one of which would be comprised of PG&E's
regulated electric and gas distribution businesses. This
regulated entity would be the offtake counterparty for all QF
PPAs. The plan envisions the regulated entity emerging from
reorganization with an investment grade rating.

Although this plan has the support of the PG&E creditors'
committee, there are still other potential intervenor groups as
well as judicial actions that could force modification of this
plan. However, Fitch believes that it is in the interest of the
State of California that the distribution company achieve
investment grade ratings so that the state can terminate its
role as wholesale power purchaser.

                      Rating Rationale:

Projected debt service coverage ratios (DSCRs) for the Juniper
debt are in the neighborhood of 2.3 times through 2006, and 1.8x
thereafter. Absent counterparty credit rating issues (i.e.
unsecured debt ratings of PG&E and SCE), Fitch views the
underlying credit quality of Juniper to be consistent with a
'BBB-' rating.

Until PG&E emerges from bankruptcy, payments for post-assumption
energy deliveries have administrative priority, which Fitch
believes to be commensurate with an investment grade
counterparty rating.

However, there is no certainty that under the ultimate
reorganization plan the PPA counterparty will have an investment
grade rating. Accordingly, and given the structural
subordination of the rated Juniper bonds to the project level
debt, Fitch has assigned a 'BB' rating.

Furthermore, the rating is assigned a Rating Watch Evolving
status pending clarification of PG&E's prospective credit
quality following resolution of its bankruptcy.

LAIDLAW INC: Court Allows Debtor to Assume AIG Insurance Deals
Judge Kaplan authorized Laidlaw Inc. to assume the American
International Group Programs in their entirety, provided that
the Debtors shall not be deemed to have assumed any obligation
that they did not previously or does not hereafter undertake by
contract or agreement.  

The assumption of the American International Group Programs
shall be deemed to be consistent with Article V of the Debtors'
proposed joint plan of reorganization, should the Plan be

The Debtors are also authorized to enter into further renewals
of the American International Group Programs without further
order of the Court, Judge Kaplan added.  Judge Kaplan emphasized
that substantial and material terms and conditions of such
renewals shall be provided to the Creditors' Committee, the Bank
Group and the Noteholders' Committee at least 30 days prior to
the effectiveness of such renewals, with the opportunity to
comment and object to such terms and conditions.  The Court will
resolve any disputes related to this authorization to renew the
AIG Programs, Judge Kaplan adds.

Judge Kaplan grants the Debtors permission to carry out their
obligations under the AIG Programs, including payment of
premium, indemnity or losses, in the ordinary course of
business, without further order of the Court.

In addition, Judge Kaplan's order provides that in the event of
default by the Debtors or any other Insured, AIG may cancel the
AIG Insurance Program and/or the AIG Surety Program and AIG may
draw upon any AIG collateral that it has an interest in,
consistent with the operative terms governing the AIG Programs.
AIG must, however, provide 10 days' written notice, by mail or
facsimile to:

    (i) Counsel to the Debtors, Ray C. Schrock, Jones, Day,
        Reavis & Pogue, 77 W. Wacker, Chicago, IL 60601-1692,
        facsimile: 312-782-8585;

   (ii) Counsel to the Creditors' Committee, Raymond L. Fink,
        Harter, Secrest & Emery LLP, One HSBC Center, Suite
        3550, Buffalo, New York 14203, facsimile: 716-853-1617;

  (iii) Counsel to the Bank Group, Margot B. Schonholtz,
        Clifford Chance Rogers & Wells, LLP, Two Hundred Park
        Avenue, New York, NY 10166, facsimile: 212-878-8375;

   (iv) Counsel to the Noteholders' Committee, Peter L.
        Borowitz, Debevoise & Plimpton, 875 Third Avenue, 23rd
        Floor, New York, NY 10022, facsimile: 212-909-6836; and

    (v) Counsel to AIG, Michael S. Davis, Zeichner Ellman &
        Krause LLP, 575 Lexington Avenue, New York, NY 10022,
        facsimile: 212-753-0396.

The automatic stay shall be deemed modified for such purpose
after such notice has been given by AIG and the cure period has
expired, without further order of this Court, Judge Kaplan

The Debtors' obligations under the AIG Programs shall be
administrative obligations entitled to priority under section
503(b) of the Bankruptcy Code, Judge Kaplan directed.  AIG does
not have to file a proof of claim relating to administrative
expenses or request for payment of administrative expenses,
Judge Kaplan adds, and AIG shall be exempted from any bar date
that may be issued for the filing of proofs of claim related to
administrative expenses. (Laidlaw Bankruptcy News, Issue No. 7;
Bankruptcy Creditors' Service, Inc., 609/392-0900)  

MARINER POST-ACUTE: Court Okays Settlement Agreement with CIT
Mariner Post-Acute Network, Inc. and MHG Debtors reached
Settlement Agreement with CIT to resolve fully and finally all
issues surrounding the Equipment Leases between the Debtors and
CIT. The issues for contention are mostly over payments and
serverability of the Leases.

To put this settlement in effect, the Debtors sought and
obtained the Court's order: (a) approving their Stipulation re
Settlement with CIT Communications Finance Corporation, (b)
granting in part their Amended Motion to Reject Telephone System
Leases with Lucent/CIT Communications Equipment Finance Corp.
(the First Lease Rejection Motion) (Docket No. 2917), (c)
authorizing withdrawal of Motion for Order Approving Rejection
of Additional Telephone System Leases with CIT Communications
Finance Corporation (Docket No. 3102).

The Debtors lease telecommunications equipment from CIT
Communications Finance Corporation, formerly known or doing
business as, inter alia, Newcourt Communications Finance
Corporation, AT&T Credit Corporation, Lucent Technology Product
Finance, and Avaya Financial Services (collectively, "CIT").
During a seven-year period from 1992 to 1999, the Debtors
obtained more than a thousand separate pieces of equipment from
CIT pursuant to approximately two hundred separate agreements
(the CIT Leases). This Equipment consists of, among other
things, individual telephones, wiring, phone switches, and
control panels. A list of the Leases is attached to the

CIT alleged that the Debtors breached the Leases in three
different ways:

   (1) by failing to make all required prepetition payments due
       under the Leases;

   (2) by failing to make approximately $220,000 in postpetition
       payments due under the Leases; and

   (3) by divesting facilities in which Equipment was located
       without providing advance notice to CIT.

The Debtors acknowledged that they have not made certain
payments and that they divested certain facilities in which
Equipment was located. The Debtors, however, disputed many of
CIT's specific allegations concerning the amount of payments
that allegedly were not made, the Debtors' liability for
divesting facilities containing Equipment, and the appropriate
measure of damages to CIT for various issues concerning the

CIT alleged and argued that the Leases are in fact merely
components of a much smaller number of integrated "Master
Leases."  Therefore, CIT argued, the Debtors may not "cherry-
pick" which Leases the Debtors wish to assume or reject, but
must instead assume or reject all Leases that have a given
"Master Lease" number. The Debtors disputed CIT's interpretation
of the Leases and believe that the Leases constitute separate
agreements that may be assumed or rejected independently.

The Debtors desired to purchase much of the Equipment, including
some Equipment that is subject to Leases that may have expired
or will expire soon. The Debtors and CIT differed materially in
their valuations of the Equipment. Were the Debtors required to
purchase replacement equipment, however, the cost and disruption
to their operations would be substantial.

On March 20, 2001, the Debtors filed the First Lease Rejection
Motion to reject a number of the Leases with CIT and various
other contracts with third parties. CIT opposed the First Lease
Rejection Motion. The First Lease Rejection Motion was granted
with respect to various contracts unrelated to CIT, but was
continued as to the Leases and to certain other contracts that
the Debtors and CIT could not determine whether they were CIT
Leases (the "Non-CIT Leases"). The portion of the First Lease
Rejection Motion concerning CIT Leases and the Non-CIT Leases
was amended and ultimately was set for hearing on June 1, 2001.

Prior to the conclusion of the June 1, 2001 hearing, CIT and the
Debtors reached an agreement regarding the continued portion of
the First Lease Rejection Motion. CIT and the Debtors read the
agreement into the record of the hearing. After the hearing, the
parties negotiated the terms of an "Agreed Order Authorizing
Rejection of Certain Telephone System Leases with CIT
Communication Finance Corporation" with respect to the First
Lease Rejection Motion. However, the parties did not submit the
Agreed Order to the Court because they were reaching a

On June 29, 2001, the Debtors filed an additional motion to
reject another set of Leases. The Second Lease Rejection Motion
was originally set for hearing on July 22, 2001 but that hearing
was continued until August 7, 2001, and subsequently until
August 22, 2001, again in light of the settlement that the
parties were reaching.

                      The Settlement

In settlement of the matter, CIT and the Debtors have agreed to
execute the Settlement, the salient terms of which are as

(A) Monetary Payments

  The MPAN Debtors shall pay CIT $541,192.73 and the MHG Debtors
  shall pay CIT $18,807.27 to purchase all of the Equipment and
  in full satisfaction of all unpaid post-petition obligations.

(B) General Unsecured Claim

  CIT shall have a general unsecured claim in the amount of
  $344,781.10 in the MPAN Cases and a general unsecured claim in
  the amount of $11,981.48 in the MHG Cases.

(C) Title To Equipment

  CIT shall transfer title to all of the Equipment to the

(D) Release

  The Debtors and CIT shall grant each other a release of all
  claims arising under the Leases including, without limitation,
  (i) any claims of CIT under sections 365(d)(10) and 502 of
  the Bankruptcy Code, and (ii) avoidance actions pursuant to
  sections 544, 547, 548, 549, or 550 of the Bankruptcy Code.

(E) Status of Motions

  The Second Lease Rejection Motion shall be deemed withdrawn in
  its entirety as moot. As concerning the CIT Leases only, the
  First Lease Rejection Motion also shall be deemed withdrawn as
  moot. As concerning the Non-CIT Leases, CIT does not object to
  the First Lease Rejection Motion being granted, and CIT shall
  have no claim with respect to such agreements. Except to the
  extent that the Debtors become successors in interest to CIT
  as lessors under the Leases, the Leases shall be deemed

The Debtors believe that the Settlement is in the best interest
of their estates, creditors, and other parties in interest and
represents a fair deal from the perspective of creditors other
than CIT. It enable the Debtors to purchase the Equipment at a
reasonable price and need not replace any Equipment until it is
obsolete. Absent substantial additional and costly litigation,
the Debtors doubt that they could achieve a better result than
that contained in the Settlement.

The alternative to the Settlement is particularly unattractive
to the Debtors. Most of the Leases are either near the end of
their term or are in a holdover stage pursuant to the Lease
terms. The Leases typically allow the lessor to terminate a
given Lease with little advance notice to the lessee and then
remove the Equipment.

Therefore, the Debtors would have little protection under the
Leases even if the Debtors were to assume the Leases. In the
event that CIT terminated one or more of the Leases, the Debtors
could be left in the untenable position of having to replace the
necessary Equipment on an emergency basis at significant cost.

The Debtors believe that the release of liability under the
Leases given to CIT represents minimal value to the Debtors.
Based upon the Debtors' review of the CIT payment history, the
Debtors believe that it would be difficult to prove that any
payments to CIT would be avoidable as preferences or otherwise.
Moreover, because the release is mutual, it ensures that no
further claims will be asserted against the Debtors with respect
to the Leases. (Mariner Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc., 609/392-0900)  

MATTHEWS STUDIO: Court Okays Proposed Settlement With Creditors
Matthews Studio Equipment Group, which filed for bankruptcy in
April 2000, announced that on September 19, 2001, the United
States Bankruptcy Court, Central District of California, San
Fernando Valley Division, approved a Settlement and Compromise
Agreement among the Company and its subsidiaries, the Official
Committee of Creditors Holding Unsecured Claims and The Chase
Manhattan Bank, as agent for PNC Bank, N.A., Wells Fargo Bank,
N.A., CIBC, Inc., Michigan National Bank and The Chase Manhattan
Bank (the Bank Group).

As of September 19, 2001, the Matthews Group had disposed of
most of its assets and does not conduct any business. The assets
that remain consist principally of a receivable of approximately
$1.5 million owed by Vitec DC Holding Corp. to Duke City Video,
Inc. (a Matthews Group company) pursuant to an Asset Purchase
Agreement, and potential preference actions with respect to
approximately $6.9 million of pre-bankruptcy payments made by
Duke City Video, Inc.

The Bank Group has asserted against the Matthews Group claims
totaling not less than $60 million and a lien on all assets of
the Matthews Group, including the $18.9 million in cash that
remains available for distribution to creditors of the Matthews
Group. Prior to September 19, 2001, the Bank Group had received
in excess of $14 million from the Matthews Group.

The Settlement Agreement provides that the Bank Group will
receive all cash available for distribution to the Matthews
Group's creditors, except for: $550,000 to be remitted to
allowed unsecured creditors of the Matthews Group; $600,000 to
satisfy allowed priority claims; $250,000 to satisfy allowed
operating expenses and the Matthews Group's professional fees
incurred from and after August 1, 2001; $375,000 to satisfy
allowed administrative expenses incurred or accrued before
August 1, 2001; and $75,000 to fund the Unsecured Committee's
professional fees in prosecuting general unsecured non-priority
claim objections and the Unsecured Creditors' Committee's costs
and fees in administering distributions to holders of general
unsecured claims. The Settlement Agreement also provides that
the Bank Group's lien against the assets of the Matthews Group
will not be disputed.

The bankruptcy cases of two Matthews Group companies, Duke City
Holdings, Inc. and Duke City Video, Inc. (collectively, "Duke
City"), will remain open to permit Duke City to pursue amounts
owed by Vitec DC Holding Corp. and potential preference actions.
Except for the Duke City preference actions, the Matthews Group
will not pursue any other preference actions. Amounts collected
by Duke City from Vitec DC Holding Corp. and from preference
actions will be distributed to the Bank Group and to allowed
unsecured creditors of the Matthews Group.

Shareholders of the Company will not receive any cash or other
assets of the Matthews Group.

Once distributions are made and general, unsecured claim
objections are completed, it is anticipated that all bankruptcy
cases filed by the Matthews Group, other than the Duke City
bankruptcy cases, will be dismissed and there will be no further
activities on the part of any Matthews Group company (other than
Duke City).

Matthews Studio Equipment Group had been in the business of
supplying traditional lighting, grip, transportation,
generators, camera equipment, professional video and audio
equipment, automated lighting and complete theatrical equipment
and supplies to entertainment producers through its worldwide
distribution network.

METROMEDIA FIBER: Remains On Negative Despite $611MM Financing
Standard & Poor's ratings on Metromedia Fiber Network Inc. (MFN)
remain on CreditWatch with negative implications following MFN's
announced completion of a $611 million financing package.

The company had previously indicated that if it were not able to
consummate the financing it would have to file for bankruptcy
protection. While the funding alleviates Standard & Poor's near-
term concerns about the company's liquidity, Standard & Poor's
will review management's revised business and financial plans
before resolving the CreditWatch listing.

        Ratings Remaining on Creditwatch Negative

     Metromedia Fiber Network Inc.              RATING

       Corporate credit rating                  CCC
       Senior unsecured debt                    CCC-

       Shelf registration:
        Senior unsecured debt       preliminary CCC-
        Preferred stock             preliminary CC

MOONEY AIRCRAFT: Engages First Equity Dev't as Financial Advisor
First Equity Development, Inc., the aerospace industry's leading
specialized investment bank, has been retained by Mooney
Aircraft Corporation as financial advisor to assist the company
in a sale or potential investment, contingent on final court

Mooney, headquartered in Kerrville, Texas, filed for bankruptcy
protection under Chapter 11 of the Federal Bankruptcy
Code on July 27, 2001. Congress Financial Corporation, the
debtor, and the creditors committee have approved First Equity's
retention, also contingent on court approval.

Mooney Aircraft Corporation has a long and rich history of
producing the highest performance single engine aircraft
available. The company has prospered for over 50 years by
providing aircraft with a superior performance/value equation.
Mooney's unmistakable brand, the forward swept tail, is
instantly recognizable at airports all over the world and helps
to create its performance advantage.

The company has produced over 10,500 aircraft and continues to
sell high-margin service parts to support the 7,500 Mooney
aircraft that remain in operation worldwide.

The current Mooney product line succeeds as the fastest, most
efficient, and most capable aircraft on the market.

Over forty years of engineering and improvements have resulted
in an extremely proven airframe that is a study in aerodynamics,
safety and stability. While Mooneys are known to have impeccable
safety records, it is their outstanding capabilities as a
serious cross-country aircraft that have generated a cult-like
following of Mooney pilots.

In addition to their superior speed and operating economy,
Mooneys offer redundant electrical and vacuum systems, the
latest in avionics and engine / fuel management systems, and
advanced systems such as TKS anti-ice technology, PreciseFlight
speed brakes, and Goodrich Skywatch traffic avoidance systems.

First Equity feels that there are multiple strong business cases
for Mooney going forward. According to Dan Boland, Manager of
Investment Banking at First Equity, "Mooney serves a unique
niche among single-engine aircraft. Despite current concerns of
the General Aviation market, the Mooney product line will
continue to serve an important role in the industry going

It is widely believed that an acquisition of Mooney Aircraft
Corporation will provide the right investor with ample
opportunity for significant returns.

NEXTEL INT'L: Cash Depletion Rate Compels S&P to Junk Ratings  
Standard & Poor's lowered its corporate credit rating on Nextel
International Inc. to triple-'C'-plus from single-'B' and
lowered its senior unsecured debt rating to triple-'C'-minus
from single-'B'-minus. The ratings remain on CreditWatch with
negative implications.

The downgrade is based foremost on heightened concerns over
liquidity because Standard & Poor's now views Nextel
International on a stand-alone basis.

Nextel Communications Inc. has indicated that, despite its 99%
ownership of Nextel International, it does not plan to provide
support to Nextel International, at least in the form of
additional cash infusion, beyond the $250 million committed by
year-end 2001.

Nextel Communications had previously acknowledged that Nextel
International was strategic to its business plan. With about
$212 million in cash and available credit at the end of the
second quarter of 2001 and no additional cash support from
Nextel Communications beyond what has been committed, Nextel
International will likely run out of cash by the end of 2001
based on its current cash depletion rate of about $200 million
per quarter.

Although Nextel International could lower overhead and capital
expenditures to conserve capital, increased execution risks due
to the economic slowdown in Latin America could make this
challenging to achieve.

Although Nextel Communication's recent privately negotiated
exchange of its common stock for $857 million of Nextel
International notes reduces total debt, this transaction does
not relieve Nextel International's immediate funding needs
because the bulk of the exchanged notes did not require cash
interest payment until late 2002. With weak capital market
conditions, Nextel International may find it challenging to
raise the necessary capital in the near term.

Nextel International primarily provides wireless services in
Argentina, Brazil, Chile, Mexico, and Peru. Because it employs
the same iDEN technology as Nextel Communications in the U.S.,
Nextel International is able to offer the Direct Connect

The unsecured debt ratings are two notches below the corporate
credit because the concentration of priority obligations in
payables and vendor financing exceeds Standard & Poor's current
assessment of the value of Nextel International's assets. The
value of these assets may be affected by their exposure to Latin
America and the use of a proprietary technology that is not
readily compatible with those of other operators.

Nextel International ratings remain on CreditWatch with negative
implications because of the company's weak liquidity and
operating challenges. The resolution of the CreditWatch is
dependent on the company receiving additional funding.

NOVO NETWORKS: Units File Reorg. Plan and Disclosure Statement
Novo Networks, Inc.(Nasdaq:NVNW) announced that its principal
operating subsidiaries -- Novo Networks Operating Corp., AxisTel
Communications, Inc. and e.Volve Technology Group, Inc. - filed
a reorganization plan and disclosure statement with the U.S.
Bankruptcy Court for the District of Delaware.

The proposed plan contemplates a restructuring of debt and other
financial obligations of the subsidiaries while refocusing the
surviving operating entity on e.Volve's existing international
telecommunications services.

Barrett N. Wissman, Novo Networks' President and co-founder,
commented, "The proposed reorganization plan, if confirmed by
the Bankruptcy Court, is intended to maximize the value of our
subsidiaries' core telecommunications assets for the benefit of
creditors and position the surviving entity to emerge from this
process in stronger financial shape. The filing of the plan is
an important first step towards successfully reorganizing the
business and, importantly, will have no effect on e.Volve's
operations, customers or ability to continue delivering low-
cost, high quality transmission services over its international
facilities based network."

The proposed disclosure statement has not been approved by the
Bankruptcy Court, which must first determine whether the
disclosure statement contains "adequate information" as required
by the U.S. Bankruptcy Code prior to the solicitation of votes
for acceptances of  the plan.

A hearing on approval of the subsidiaries' proposed disclosure
statement is scheduled for November 5, 2001.

In addition, approval of a plan of reorganization is subject to
certain voting and confirmation requirements in accordance with
the U.S. Bankruptcy Code. Novo Networks, Inc.'s principal
operating subsidiaries -- Novo Networks Operating Corp., AxisTel
Communications, Inc. and e.Volve Technology Group, Inc. -- each
filed Chapter 11 petitions on July 30, 2001 in the U.S.
Bankruptcy Court for the District of Delaware, Jointly
Administered Case No. 01-10005 (RJN).

PACIFIC GAS: Expresses Commitment to Fulfill All Valid Claims
Pacific Gas and Electric Company issued the following statement,
in response to state claims filed by Attorney General Bill

     "It is entirely normal and expected for state agencies to
file claims in bankruptcy cases. As part of its Plan of
Reorganization (POR), the company is committed to fulfill all of
its valid claims, including all legitimate tax and other
governmental obligations.

     "As the Attorney General should know, Pacific Gas and
Electric Company proactively asked for specific permission from
the bankruptcy court to proceed with its ongoing environmental
remediation programs, shortly after filing for Chapter 11
Bankruptcy protection. The court granted our request on June 26,
2001, and since then, the company's remediation actions have
proceeded unabated. In fact, this year the company's financial
commitment to supporting its robust environmental programs will
exceed previous years' commitments.

     "The Attorney General should also know that the quote
attributed to him in his press release [Wednes]day -- that
PG&E's Plan of Reorganization seeks to avoid scrutiny of the
Securities and Exchange Commission (SEC) -- is completely false.
In fact, the company's POR expressly spells out the approvals
that will be sought from the SEC, in order for the plan to be
approved, and includes a projection that such SEC review will
take several months to obtain (see pages 40-41, 44, 48 and 49 of
the POR, and pages 2, 53, 59 and 108 of the Disclosure Statement
for discussions of the necessary SEC approvals and filings). In
fact, page 53 of the Disclosure Statement includes the following
language addressing SEC approval:

          In connection with its review process, the SEC will
          examine and, as necessary, determine whether (i) the      
          acquisition will unduly concentrate control of utility
          systems, (ii) the purchase price is reasonable, (iii)
          the acquisition will unduly complicate the
          capitalization of the resulting system, (iv)
          applicable state laws have been complied with or
          preempted, and (v) the transaction will serve the
          public interest by facilitating the economic and
          efficient development of an integrated public utility

     "As for the Attorney General's original demand for an SEC
investigation this past summer, we continue to believe that he
is misinterpreting federal law, and the facts continue to
clearly support our position."

PENTACON: S&P Cuts Ratings After Missing Payment On $100M Notes
Standard & Poor's lowered its corporate credit rating on
Pentacon Inc. to 'SD' from single-'B', its subordinated debt
rating to 'D' from triple-'C'-plus, and its senior secured (bank
loan) rating to double-'C' from single-'B'-plus. These rating
actions follow Pentacon's announcement that it did not make the
interest payment due October 1, 2001, on its $100 million 12.25%
senior subordinated notes due April 1, 2009.

The corporate credit and subordinated debt ratings are removed
from CreditWatch, where they were placed on Sept. 21, 2001. The
bank loan rating remains on CreditWatch with negative

On Sept. 28, 2001, the firm's lender under its bank credit
facility exercised its right to establish a reserve in the
amount of $4.9 million, effectively reducing Pentacon's
availability under that facility to meet working capital,
capital expenditures, and debt servicing requirements. At
this time, there is no indication that the missed interest
payment will be made within a 30-day grace period.

Pentacon is a leading distributor of a broad range of fasteners
and other small parts and provider of related inventory
management services from its nationwide distribution network.
The company serves the aerospace and industrial markets, each
representing about 50% of sales. The aerospace business has been
significantly impacted by the consequences of the September 11
terrorist attacks against the U.S.

PHARMACEUTICAL FORMULATIONS: Red Ink Continues to Flow in FY2001
Pharmaceutical Formulations, Inc. announced a net loss for the
fiscal year ended June 30, 2001. Despite the positive effects of
reorganization, improved customer service and cost reduction,
the regrowth of sales from the severe declines experienced in
the second half of fiscal 2000 has been slow and difficult.

The Company had net revenues of $49.2 million for fiscal year
2001 compared with net revenues of $76.6 million for the prior
fiscal year. As a result, the Company incurred a loss of $14.6
million for fiscal 2001 compared to a loss of $7.9 million for
fiscal 2000. The loss for fiscal 2001 included $3.2 million of
year-end adjustments relating to inventory valuations, bad debts
and other potential liabilities.

The reduction in sales resulted from a combination of lost
business, elimination of some small customers and a general
softening in the marketplace. These effects were most
significant in the second half of fiscal 2000 and continued into
the first half of fiscal 2001. While the softness in the general
economy has continued, the Company has successfully begun to
rebuild its customer base. Net sales grew steadily during the
second half of fiscal 2001, and such growth has continued in the
first quarter of fiscal 2002.

The Company continues its initiatives to improve operational
efficiencies and increase revenues. The Company has entered into
long-term supply arrangements with two major pharmaceutical
companies which will significantly increase revenues. These
sales are targeted to begin in the second quarter of fiscal

ICC Industries Inc. the Company's principal stockholder, has
demonstrated its continued confidence in the Company's
management and business plan by the provision of loans to
provide the Company with working capital.

In August 2001, the Company successfully conducted negotiations
with The CIT Group/Business Credit, Inc., its principal lender,
to extend its asset based lending agreement until December 31,
2001. While the Company does not anticipate any problems in
either replacing its CIT line within this period or extending
such agreement, there can be no assurance that a credit facility
will be available on terms acceptable to the Company after
December 31, 2001.

On August 23, 2001 the Company completed the restructuring of
its senior management team with the appointment of Mr. Walter
Kreil as Chief Financial Officer. Mr. Kreil is an experienced
CFO/CPA with public company experience. Before joining PFI, Mr.
Kreil served for over ten years as Vice President and Chief
Financial Officer of IonBond, a U.S. subsidiary of a Swiss
corporation. Prior to that, Mr. Kreil was Vice President &
Controller of Andal Corp., a diversified AMEX holding company,
and Division Controller of Amerace Corporation, a manufacturing
company traded on the NYSE.

In its press release dated June 26, 2001, the Company advised
that ICC had given notice to convert its preferred stock
outstanding in the amount of $2.5 million and the unpaid
dividends on such preferred stock into common stock. In
accordance with the terms and conditions of the preferred stock,
ICC gave the Company three months notice of conversion.

The conversion price is equal to the average of the daily market
price of the common stock for 30 consecutive trading days,
commencing 45 days prior to the conversion date. The conversion
takes place after the three months notice period expires, and
during this time, the Company has the right to redeem the
preferred stock.

The Company is currently exploring a recapitalization plan to
increase the value of the Company represented by its common
equity. Such recapitalization plan may include an offering of
rights to existing shareholders to enable shareholders to
acquire additional share on a basis comparable to ICC in its
conversion of preferred stock or any potential conversion of
debt to equity.

In connection with such proposed recapitalization, the Company
has formally requested from ICC, and ICC has agreed to an
extension of the previously announced conversion of the
preferred stock held by ICC in order that such conversion can be
appropriately integrated into the Company's recapitalization

The Company currently intends to hold its annual meeting in
November 2001. As the Company's Certificate of Incorporation
does not authorize the issuance of enough shares of common stock
sufficient to permit the full conversion by ICC of its preferred
stock or the issuance of shares in the proposed recapitalization
currently under consideration, the Company intends to seek
shareholder approval at such meeting of an appropriate amendment
to its Certificate of Incorporation to increase such
authorization. The date of the meeting might be adjusted to take
account of the proposed recapitalization.

The Company has not been able to return the trading of its stock
to the OTC Bulletin Board, but will continue to seek such
listing in connection with the proposed recapitalization.

The Company has been interviewing potential new Board members
with regard to the reconstitution of its Board.

ICC Industries Inc., the holder of approximately 20 million
shares (approximately 65%) of the common stock of PFI, is a
major international manufacturer and marketer of chemical,
plastic and pharmaceutical products with 2000 sales in excess of
$1.6 billion.

PHAR-MOR INC: Closes 65 Stores as Part of Reorganization Scheme
Phar-Mor, Inc. (Nasdaq: PMORQ) filed a motion with the U.S.
Bankruptcy Court in the Northern District of Ohio to close 65
stores as part of the restructuring of its operations under
Chapter 11 of the U.S. Bankruptcy Code. Phar-Mor filed for
Chapter 11 protection on September 24, 2001.

With the closing of these stores, the Company will focus
continuing operations on its 74 remaining high-performing stores
-- primarily located in its core geographic areas of Ohio,
Pennsylvania, North Carolina and Virginia -- which each have
average annual sales of over $10 million.

          Strategic Reorganization For Lasting Success

The store closings are part of Phar-Mor's strategy for
reorganizing the Company in an effort to return to
profitability. In addition to consolidating the majority of its
operations within its core markets, the Company is reducing
overhead and implementing a series of in-store promotions
designed to solidify its position as the leading deep discount
drugstore chain in the markets it serves.

In the coming months, all Phar-Mor locations will implement a
"Power Buy" program that has been successfully tested in select
stores. "Power Buy" allows Phar-Mor to deliver deep discounts to
its customers on certain items on a rotating basis. Through the
program, Phar-Mor purchases merchandise opportunistically in
bulk at very low prices, and then passes these savings along to
customers in the form of dramatically lower prices. This program
is designed to promote greater walk-in traffic among customers
who will make more frequent visits to Phar-Mor to review current
low-price items.

David Schwartz, President and COO of Phar-Mor, said, "Decisions
to close stores are never easy, but we are confident
restructuring our business in this way makes sense, and will
allow us to focus on a geographic base of operations that
contains our most successful retail locations. We believe
this strong regional footprint, the efficiencies we are
achieving at the corporate level, and in-store programs like
"Power Buy" will position Phar-Mor for success in the future."

Mr. Schwartz continued, "We appreciate the support of our loyal
customers and dedicated employees as we proceed with this
reorganization. Customers of the stores that are remaining open
will experience business as usual at Phar-Mor, as we will
continue to offer an unmatched selection of drugstore items at a
great value."

Subject to Court approval, stores that are closing will likely
begin liquidation sales on October 11. Customer prescriptions
that are filled at those stores will be transferred to other
nearby pharmacies to provide seamless service to Phar-Mor
customers, who are also free to make their own arrangements in
terms of transferring their prescriptions. The Company will
provide additional information regarding the closings to its
customers and store employees at the specific store locations.

The Company also announced that it anticipates that the
following non-cash charges will be included in its results for
the thirteen weeks ended June 30, 2001: the impairment of long-
lived assets of $23,377,000; and the write off of its deferred
tax asset of $9,565,000.

The Company has determined that there has been an impairment of
fixed assets and goodwill associated with 30 stores that
operated at a loss in fiscal year 2001 and are expected to
operate at a loss in fiscal year 2002.

Therefore, the Company has written down the value of these
assets to their estimated net realizable value as of June 30,
2001. The Company has also determined that as a result of the
losses incurred in fiscal year 2001 the realization of the
deferred tax assets is no longer more likely than not.
Therefore, the valuation allowance was increased to fully
reserve the net deferred tax assets as of June 30, 2001.

The Company further announced that it has indefinitely postponed
its 2001 Annual Meeting of Shareholders previously scheduled to
occur on November 28, 2001.

Phar-Mor is a retail drug store chain operating 139 stores under
the names "Phar-Mor," "Pharmhouse" and "The Rx Place" in 24
states. Phar-Mor's online store is accessible at and through the company's Web site  

RAMPART SECURITIES: E&Y Replaces PwC as Interim Receiver
Rampart Mercantile Inc. (CDNX: YRH) wishes to advise that Ernst
& Young Inc. has been appointed interim receiver of all the
assets of Rampart Securities Inc., RMI's wholly owned brokerage
subsidiary, pursuant to section 46 of the Bankruptcy and
Insolvency Act to replace PricewaterhouseCoopers LLP, acting
as Monitor, to administer the assets of RSI and the transfer of
client accounts of RSI to Desjardins Securities Inc.

The issued and outstanding capital of RMI is 3,617,545 common
shares and it is traded on the Canadian Venture Exchange under
the symbol "YRH".

RELIANCE INSURANCE: Commonwealth Court Enters Liquidation Order
Pennsylvania Insurance Commissioner M. Diane Koken announced
that the Insurance Department petitioned Commonwealth Court to
approve an Order of Liquidation for Reliance Insurance Company.
The Commonwealth Court granted the Petition for Liquidation
Wednesday afternoon.

"After extensive and diligent effort, we have determined that
there is no alternative to the liquidation of Reliance Insurance
Company," Commissioner Koken said. "The financial difficulties
of Reliance are worse then we knew on May 29, when we obtained
an Order of Rehabilitation. Further attempts to rehabilitate
Reliance would be futile and would substantially increase the
risk of loss to Reliance policyholders, claimants and creditors.

"These conclusions are supported by the company's recently
completed first quarter 2001 financial statements that show a
substantially increased negative surplus.

"The ongoing shortfall of cash receipts -- especially those of
reinsurance -- needed to pay policyholder claims and
administrative expenses has been exacerbated significantly by
the terrorist attack on the World Trade Center. Recent output
from the financial model shows that Reliance will be unable to
pay policyholder claims as early as the fourth quarter of 2001.

"Our responsibility now is to take the necessary steps to
orderly liquidate the company. The court's liquidation order
triggers the state guaranty associations to pay policyholder
claims to the maximum levels allowed by law."

Those with policyholder and claim questions should call
212-858-3600 or email

A statement from Commissioner Koken regarding Wednesday's action
by the Insurance Department is available on the Insurance
website at

A Pennsylvania domiciled company, Reliance Insurance Company was
licensed to write business in all 50 states, although it stopped
writing most new or renewal business in June 2000. The states
with the largest number of policyholders include California, New
York, Florida, Pennsylvania, Illinois and Texas. Reliance
Insurance Company's insurance business consisted primarily of
workers' compensation, commercial auto, commercial liability and
personal auto coverage. The Pennsylvania Insurance Department
took statutory control of the company on May 29, under an Order
of Rehabilitation.

This Order of Liquidation applies to all the former subsidiaries
that were merged into Reliance Insurance Company, including
Reliance National Indemnity Company, Reliance National Insurance
Company, United Pacific Insurance Company, Reliance Direct
Company, Reliance Surety Company, Reliance Universal Insurance
Company, United Pacific Insurance Company of New York, and
Reliance Insurance Company of Illinois.

STATION CASINOS: S&P Affirms Low-B Ratings On Lower EBITDA
Standard & Poor's revised its outlook for Station Casinos Inc.
to negative from stable. Station's double-'B' corporate credit,
double-'B'-plus senior secured debt, double-'B'-minus senior
unsecured debt, and single-'B'-plus subordinated debt ratings
were affirmed.

The outlook revision reflects Station's weaker-than-expected
operating performance during the first half of 2001 and Standard
& Poor's expectation that recovery will be delayed by a few
quarters, given an anticipated slowdown in Las Vegas. Station
previously had high debt leverage for the rating, and current
expectations now support the outlook revision.

Las Vegas has been affected by the terrorist attacks of Sept.
11, which have led to a meaningful decline in both business and
leisure travel. Station does not operate properties on the Las
Vegas Strip, where performance is most directly tied to tourism
and air travel. Rather, Station targets those individuals who
live and work in Las Vegas with off-Strip casino properties
that offer such amenities as casual dining, pubs, movie
theaters, and bowling alleys.

Standard & Poor's expects that increased layoffs by Strip
operators and a slowdown in the economy will have a negative
impact on Station's business, resulting in lower-than-
anticipated cash flow in the near term.

As a result, debt leverage, as measured by total debt to EBITDA,
is expected to rise above previous expectations to the high 5
times area. Offsetting this is the expectation that Station has
completed most of its planned near-term-growth capital
expenditures. Consequently, Standard & Poor's expects that
Station will have discretionary cash flow in 2002 that will
enable modest debt reduction.

Leverage is expected to be reduced gradually throughout the
year, as debt is repaid and as operating performance improves.
Operating performance for 2001 has been affected by the addition
of new capacity to the market, road construction impeding access
to Palace Station, disruption caused by renovation and expansion
projects, and now the expectation for a slowing economy.

Standard & Poor's expects cash flow to grow in 2002 as projects
are completed, newly acquired properties are fully integrated
into the portfolio, and the economy improves in the second half
of the year.

Ratings reflect Station's leading position in the Las Vegas
"locals" market, offset by an aggressive financial policy. Once
current renovations are complete, Station will own seven quality
off-Strip casino properties, more than any other locals

Standard & Poor's believes that the long-term prospects for the
Las Vegas locals market remain favorable and that Station's
position will provide an opportunity for much-improved operating
results over time. Las Vegas continues to be one of the fastest-
growing cities in the country, and zoning restrictions limiting
new casino development in neighborhoods is expected to further
provide established operators with a competitive edge.

                    Outlook: Negative

The outlook reflects high debt leverage for the rating, and
anticipates de-leveraging, beginning in 2002. Ratings on Station
could be lowered if operating performance weakens beyond current
expectations or if the company favors share repurchases or
additional growth capital spending over debt reduction.

SWISSAIR: SR Technics Will Continue Business Operations
SR Technics, a SwissAir subsidiary, has not applied for any kind
of official administration of its affairs or protection from
creditors.  The company is able to meet its financial
commitments, and continues to provide products and services for
its customers.

It also has a healthy balance sheet and sufficient liquid funds.
The company will, however, be resizing its maintenance, repair
and overhaul operations in line with the new demands in its home
Swiss market.

The capacity released will be used to further develop its
business with other customer airlines.

Under Swiss law regarding "Nachlass" administration procedures,
the assets of subsidiaries or their customers cannot be
appropriated to meet the debts or other liabilities of the
parent company. There is thus no danger of the property of SR
Technics customers being appropriated to such ends.

TEMPLE-INLAND: S&P Places Ratings on CreditWatch Negative
Standard & Poor's placed its ratings on Temple-Inland Inc. on
CreditWatch with negative implications.

At the same time, Standard & Poor's placed its ratings on
Gaylord Container Corp on CreditWatch with negative

The CreditWatch placements follow Temple-Inland's announcement
that it intends to acquire Gaylord, a medium-size manufacturer
and distributor of containerboard and kraft paper. In addition,
Temple-Inland has stated that it will begin cross-conditional
tender offers for Gaylord's three outstanding senior debt issues
at materially less than par.

Total consideration for the transaction is about $786 million,
consisting of $1.80 per share, or about $100 million, to
purchase the outstanding shares of Gaylord, and about $686
million to acquire all of Gaylord's senior notes and to pay or
otherwise satisfy its bank debt and other senior secured debt

Because Temple-Inland's balance sheet is already stretched,
Standard & Poor's is concerned that this acquisition could lead
to the deterioration of the company's financial profile,
particularly given softening conditions in certain markets.
Nevertheless, the acquisition of Gaylord should enhance
Temple-Inland's market position in containerboard and provide
opportunities for increased operational efficiency.

Although the tender offers for Gaylord's senior debt issues
would be subject to a minimum tender condition of 90% of the
outstanding principal amounts, in Standard & Poor's view, their
completion would be tantamount to a default.

Specifically, Temple-Inland intends to commence a tender offer
to purchase 100% of the outstanding principal amount of
Gaylord's 9 3/8% senior unsecured notes due 2007 at a price of
$735 per $1,000 principal amount, 100% of the outstanding
principal amount of the 9 _% senior unsecured notes due 2007 at
a price of $735 per $1,000 principal amount, and 100% of the 9
7/8% senior subordinated notes due 2008 at a price of $240 per
$1,000 principal amount.

In addition, a consent payment of $20 per $1,000 principal
amount will be paid for each note tendered prior to the consent
payment deadline.

Standard & Poor's will meet with Temple-Inland's management to
further review its plans. In particular, Standard & Poor's will
assess whether or not the company is likely to reduce leverage
sufficiently in the next year or two in order to maintain the
existing ratings. If the acquisition is completed as currently
structured, Gaylord's corporate credit rating will be lowered to
'SD' and the senior unsecured and senior subordinated debt
ratings will be lowered to 'D', and then all ratings would be

Ratings Placed on Creditwatch with Negative Implications

     Temple-Inland Inc. Ratings

        Corporate credit rating                   BBB
        Short-term corporate credit rating        A-2
        Senior unsecured debt                     BBB
        Commercial paper                          A-2

     Inland Container Corp.

        Corporate credit rating                   BBB
        Short-term corporate credit rating        A-2
        Senior unsecured debt                     BBB

     Gaylord Container Corp.

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

TRITON NETWORK: Liquidation Plan to Be Decided on October 29
Triton Network Systems, Inc. (Nasdaq:TNSI) announced that it has
begun mailing a proxy statement to its stockholders. The proxy
statement notifies the stockholders of a special meeting
scheduled to be held on October 29, 2001 to vote on a Plan of
Complete Liquidation and Dissolution of the Company.

Only stockholders of record at the close of business on
September 18, 2001 will be entitled to vote at the special

The Company had previously announced on August 20, 2001 that its
Board of Directors had unanimously approved the Plan of
Completion and Liquidation and Dissolution of the Company.

US OFFICE: Files Joint Liquidating Chapter 11 Plan in Del.
U.S. Office Products Company and its subsidiary debtors filed a
Joint Liquidating Plan of Reorganization and an accompanying
Disclosure Statement with the United States Bankruptcy Court for
the District of Delaware. Full-text copies of the Plan and
Disclosure Statement are available at:

The Plan provides for all of the property of the Debtors,
consisting primarily of residual interests under sale and escrow
agreements and other non-cash assets, to be liquidated over

Under the Plan, claims and interests are divided into classes.  
Certain unclassified claims, including Administrative Claims and
Priority Tax Claims, will receive payment in full in cash either
on the Effective Date or as agreed with the holders of such
claims.  All other claims and interests are classified into:

   Class 1 (Other Priority Claims)
   Class 2 (Pre-Petition Lender Secured Claims)
   Class 3 (Pre-Petition Lender Deficiency Claims)
   Class 4 (General Unsecured Claims)
   Class 5 (Interests and Subordinated Securities Claims)
   Class 6 (Intercompany Claims)
   Class 7 (Insured Litigation Claims)

Classes 2, 3, 4, 5 and 6 are considered impaired and are
entitled to vote to accept or reject the Plan.  Holders of
claims and interests in Classes 1 and 7 are not impaired and are
deemed to have accepted the Plan.

All Allowed Administrative Claims, Allowed Priority Tax Claims
and Allowed Other Priority Claims will be paid in full.  Holders
of Insured Litigation Claims will receive the right to prosecute
their Claims to judgment, and to the extent their Claims are
found to be valid, to share in proceeds of insurance policies
that provide coverage for such Claims.  

Holders of other Allowed Claims will receive Pro Rata
distributions of the cash and net cash proceeds of other assets
allocated to them under the Plan.  Holders of Interests will
receive no distribution under the Plan and their Interests will
be cancelled.  

If a holder's Allowed Insurance Litigation Claim is not paid in
whole by insurance proceeds, the unsatisfied amount of such
holder's Claim will be reclassified as either a Class 4 General
Unsecured Claim or a Class 5 Interest and Subordinated
Securities Claim, as appropriate.

When the Bankruptcy Court enters a Confirmation Order, the Plan
becomes effective and a Liquidating Agent appointed by the Court
will take control of the Debtors' assets and make the
distributions contemplated under the Plan.  On the Effective
date, the Liquidating Agent will pay or provide for the future
payment of Administrative Claims, Class 1 Other Priority Claims
and Priority Tax Claims.  After all reserves and accounts have
been established and funded, the Liquidating Agent will make
distributions (for Allowed Claims) or deposits (for Disputed
Claims) of funds in the Class 4 General Unsecured Claims.  

Any assets that are not distributed to creditors on the
Effective Date will be held in a Liquidating LLC established on
the Effective Date to implement the Plan.  The Liquidating LLC
will be managed by the Liquidating Agent under the supervision
of a Liquidating Committee, which will be comprised of 5
individuals.  A majority of the Liquidating Committee members
must vote in favor of any decision relating to the liquidation
and collections of assets and bankruptcy causes of action.  

The confirmation hearing will be held on December 13, 2001, at
10:30 a.m. before the Honorable Peter J. Walsh, at 824 North
Market Street, Marine Midland Plaza, Wilmington, Delaware 19801.

U.S. Office Products, one of the world's leading suppliers of
office products and business services to corporate customers,
filed for chapter 11 protection on March 5, 2001 in the US
Bankruptcy Court for the District of Delaware.  The company,
which posted $2.5 billion in sales last year, is represented in
its restructuring efforts by Brendan Linehan Shannon, Esq., at
Young Conaway Stargatt & Taylor, LLP.  As of January 2001, USOP
reported $850,468,000 in assets and $1,325,204,000 in debt.

UPRIGHT INC: Co-Exclusive Plan-Filing Period Extended to Jan. 31
United States Bankruptcy Court Judge Whitney Rimel granted
Upright, Inc., more time to prepare its reorganization plan by
extending the filing deadline up to January 31, 2002.  At the
same time, Judge Rimel postponed Upright's exclusive period to
solicit acceptances of the plan until March 31, 2002.

However, the Court is also giving the Official Committee of
Unsecured Creditors of Upright and the Union Bank of California,
N.A., until November 30, 3001 to file an objection to the
Debtors' exclusivity period being extended to any date after
December 31, 2001.  If an objection is filed, Judge Rimel
advises Upright to show good cause why the exclusive period
should be extended to January 31, 2002.

Upright Inc., a subsidiary of W.R. Carpenter, makes platforms
and hydraulic lifts that aid aerial construction and maintenance
on facilities such as retail centers, airports, stadiums, and
other public buildings. The firm filed for Chapter 11 protection
on June 12, 2001 in the Eastern District of California, Fresno
Division.  Hagop T. Bedoyan and Merle C. Meyers represent
Upright in their restructuring effort.  As of July 10, the
company listed $122,536,025 in assets and $138,061,328 in debt.

WAVVE TELECOMMS: Closes Chapter 11 Asset Sale to Discharge Debts
Wavve Telecommunications, Inc., a California corporation which
filed on August 15, 2001, for Chapter 11 bankruptcy protection,
has sold its partnership interest in its primary operating
asset, a secure co-location facility for Internet access and
servers, located in Sacramento.

The Board of Directors has determined to use the proceeds of the
sale to discharge the company's liabilities under the bankruptcy

The company is the wholly owned subsidiary of Wavve
Telecommunications, Inc., a Yukon corporation that trades on the
Vancouver stock exchange.

"This has been a trying time for an entire market sector, and it
is with great sorrow that Wavve Telecommunications must announce
that it has failed to realize its business plan" said Matthew
Goff, the company's chairman of the Board of Directors.

"Wavve currently retains ownership of the OSS, a software
project still in its development stage. Unfortunately, Wavve
lacks the resources to complete this project or to pursue
operations of any sort" said Goff.

The company has requested that those with questions e-mail them
to the address ""

WHEELING-PITTSBURGH: CWVEC Moves to Compel Decision On Coal Pact
Central West Virginia Energy Company asks Judge Bodoh to compel
Wheeling-Pittsburgh Steel Corporation to make a decision now to
assume or reject a 10-year coal supply agreement, first entered
into on November 15, 1993, under which CWVEC agreed to supply
WPSC with high-volatile coking coal.  

The initial base price was subject to annual adjustments during
the first five years of the contract, according to changes in
the Producer Price Indices for Industrial Commodities.

CWVEC tells Judge Bodoh - and reminds WPSC - that high-volatile
coking coal is essential for the operation of WPSC's coking
ovens. Immediately before the Petition Date, CWVEC suspended
shipments of coal under the contract because of WPSC's failure
to pay for the coal in accordance with the agreement.  In
addition, CWVEC asserted a reclamation claim for coal which had
been shipped.

As of the Petition Date, Benjamin C. Ackerly, Esq., at Hunton &
Williams, relates, WPSC was indebted to CWVEC in the amount of

Under a letter agreement dated December 1, 2000, CWVEC agreed to
resume shipping coal on the terms and at the price provided by
the contract, with WPSC to pay for each shipment by wire
transfer upon arrival for unloading on WPSC's barges.  The
letter agreement specifically reserved CWVEC's rights under the
contract and applicable law.  

Subsequently, CWVEC and WPSC engaged in negotiations to reach a
new coal supply agreement which would replace the contract.  
These negotiations resulted in WPSC and CWVEC signing a letter
of intent dated January 19, 2001.  This letter of intent
specified that CWVEC would provide 100% of WPSC's high-volatile
coal requirements for the period from February 1, 2001, through
December 2005.  

The agreed-upon price was $39.982 per ton from February through
December 2001, and thereafter the price was to be estimated each
year based on good-faith negotiations and binding arbitration if

After WPSC and CWVEC entered into the letter of intent, WPSC
refused to finalize a new coal supply agreement or to otherwise
honor the letter of intent.  CWVEC has continued to provide WPSC
with its coal requirements under the contract, as supplemented
by the letter agreement.

Mr. Ackerly argues that the contract is an executory agreement
because both WPSC and CWVEC have significant unperformed
obligations: CWVEC's obligation to continue to supply coal, and
WPSC's obligation to pay for that coal.  

WPSC, as a chapter 11 debtor, has the power to assume or reject
the contract at any time before confirmation of a plan of
reorganization; however, the Bankruptcy Code also permits a
party such s CWVEC to seek a court order requiring WPSC to
assume or reject within a shorter time frame.  This time frame
should be "reasonable considering the nature of the interests at
stake, the balance of hurt to the litigants, the good to be
achieved, and the safeguards afforded the litigants".

CWVEC seeks an order compelling WPSC to assume or reject the
contract because it dos not appear that plan confirmation will
occur within a reasonable time period.  The original exclusivity
period expired in March 2001, and WPSC has already sought and
obtained three extensions, and is now seeking a fourth through
December 24, 2001 for an extension to file a plan, and an
extension through February 22, 2002, to solicit acceptances.

By repeatedly extending the time in which only WPSC may propose
a plan, WPSC has also indefinitely extended the time in which it
must make a decision as to whether to assume or reject the
contract.  This is unfairly prejudicial to CWVEC because CWVEC
cannot enter into either long or short term contracts at
prevailing market prices, nor can it rely on WPSC's continued
purchase of coal under the contract because of WPSC's right to
reject the contract at any time.

The current market price for high-volatile coking coal of the
quality delivered to WPSC is at least $8.00 per ton higher than
the price under the contract.  CWVEC delivers more than 1.2
million tons of high-volatile coking coal annually to WPSC.

Mr. Ackerly complains that WPSC is enjoying the benefits of the
contract and receiving coal at below-market prices, without
being obligated to purchase coal for the term of, or otherwise
perform under, the contract.  He tells Judge Bodoh that WPSC
"should not be permitted to receive the benefits of the contract
without also accepting its burdens". (Wheeling-Pittsburgh
Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service,
Inc., 609/392-0900)  

WINSTAR COMMS: Court Extends Exclusive Period to Dec. 13
Winstar Communications, Inc. has developed a revised business
plan detailing significant reduction in operational costs and
modifications to key contractual relationships, Pauline K.
Morgan, Esq., at Young Conway Stargatt & Taylor, tells the

The Debtors are moving towards finalizing a further revised
business plan and have begun obtaining proposals for third
parties interested in investing or purchasing the Debtors'
assets.  Additional time before the Debtors can make informed
decisions about how to maximize the value of their estates.

Winstar's on-going restructuring efforts involve a substantial
number of complex issues, Ms. Morgan says, and require
additional time for the Debtors to finalize a reorganization
plan. Accordingly, the Debtors ask the Court for an extension of
their exclusive period for filing a plan of reorganization to
December 13, 2001 and a concomitant extension of their exclusive
period during which to solicit acceptances of that plan to
February 11, 2002.

The factors bankruptcy courts usually look at to support
requests for extensions of a debtor's exclusive periods:

(1) the size of these cases, involving billions of dollars in
    secured and unsecured debt;

(2) the establishment of October 15, 2001 as the date by which
    all creditors must file their proofs of claim in these

(3) the Court's approval of the DIP financing;

(4) the numerous restructuring measures the Debtors have
    instituted and continue to implement;

all point toward an extension in Winstar's cases, Ms. Morgan

Ms. Morgan makes it clear that the Debtors are working on two
tracks aimed to maintain maximum flexibility and maximize value
for the estate:

      (x) a stand alone reorganization plan; and

      (y) a sale of the Debtors or their assets.

By extending the exclusive periods, the Debtors will have the
opportunity to build on the progress they have made and
establish the foundation for maximizing the value of their
estates.  Ms. Morgan assures the Court that the Debtors are not
seeking the time extension in order to coerce creditor consent
or for any other improper motive.  On the contrary, she says,
the Debtors want to maintain good working relationships with
interested parties to resolve various issues in these cases.

                          *  *  *

Judge Farnan ordered the Filing Period extended to December 13,
2001 and the Solicitation Period extended to February 11, 2002.
(Winstar Bankruptcy News, Issue No. 12 & 14; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   

WOLF CAMERA: TM Capital's Employment as Investment Banker Denied
Moved by the objections, United States Bankruptcy Court Judge C.
Ray Mullins denies Wolf Camera, Inc.'s proposed retention of TM
Capital, Inc., as investment banking consultants.

The opposition came from the United States Trustee, First Union
National Bank, and Committee of Unsecured Creditors of Wolf
Camera.  One of the complaints raised by creditors was the
excessive $250,000 Advisory Fee for a sale to Ritz Camera.

Wolf Camera, a company that offers a complete inventory of
traditional photography and digital imaging products and
services, frames, albums and accessories, filed for chapter 11
protection on June 21, 2001 in the Northern District of Georgia.  
David A. Geiger, Esq., at Powell, Goldstein, Frazer & Murphy,
represents the Debtors in their restructuring effort.  

Subject to further extensions, the Debtors exclusive period
during which to file a plan expires on October 18, 2001.  When
the company filed for protection from its creditors, it listed
an estimated over $100,000,000 in assets and $100,000,000 in

               The Men, The Money, The Impact
Author:  Moira Johnston
Publisher:  Beard Books
Soft cover: 395 pages
List Price:   $34.95
Order your personal copy today at

Review by Gail Owens Hoelscher

Takeover is a well-researched, evenhanded account of three 1980s
corporate takeover wars: Crown Zellerbach, TWA, and Unocal.   
The author selected these three as examples of the leveraged
buyouts, proxy fights, tender offers, and negotiated mergers
that characterize the era.  The cases demonstrate how the fate
of corporations intertwine, with Texaco, Getty, CBS, Revlon,
Household, and Union Carbide also playing roles.

Takeover is also a precautionary tale. The author characterizes
the takeover phenomenon as a social issue, and studies its
mindset and place in the continuum of U.S. business history. Ms.
Johnston paints in broad strokes, lamenting the clash the
takeover wars represent between "two conflicting elements in our
national character: the capitalist, who has marched to the beat
of Adam Smith's free trade theories since the nation's founding;
and the humanist, marching to nonmaterialist values, who tries
to buffer the poor from the law of the jungle with benevolent
social programs."

What made these megadeals feasible was the convergence of
several dynamics.  First, the existence of many companies with
stock prices below the appraised value of their underlying
assets.  Second, the recent emergence of institutional
investors, who owned large blocks of stock and whose jobs
depended on quick profits.  These institutional investors jumped
on opportunities of tender offers, sometimes giving the
entrepreneur a controlling share of its target's stock.  Third,
risk arbitragers bought up stock as soon as a bid was announced,
driving stock prices up further.  And finally, junk bonds
attracted larger sums of money than ever could have been
attained through traditional channels.

Johnston scrutinizes the players themselves, lawyers and
investment bankers, proxy fighters and arbitragers,
entrepreneurs, money managers and financial analysts, seeking to
find what drives them, and likening them to mercenaries in a
wild bloodless war of greed and power. She admires them as
individualists in the true American mold, as exemplifying the
ultimate American dream, rediscovering the founding principles
of hard work, risk, and the rewards of enterprise.  She believes
they act in defiance of the "code of gray caution lived by post
World-War corporate man [that] falls pitifully short of a full-
blown experience of life."  But, she questions their disregard
for the long-term consequences of their actions on companies,
employees, communities, the economy, society as a whole, and
even national security.

Takeover speaks to laymen and professionals as well, with a
style that combines technical description and delightful
readability.  Here's a description of Nicholas Brady of Dillon
Reed:  "He is tall and elegant, with a lean, patrician face and
a gracious manner that lets him serve wax paper-wrapped roast
beef sandwiches at his boardroom table as if it were a champagne
hunt breakfast."

Ms. Johnston's extensive research yields brilliant quotes.  Here
is Skadden Arp's Morris Kramer, on Texaco's victory in acquiring
Getty:  "You've put the peg in the last hole.  You've put in
sixty days.  You're too tired to celebrate. We did have
champagne.  But you don't really celebrate.  As soon as the deal
is over, you go on to another deal."  And Ivan Boesky's closing
remarks in a speech to UC Berkeley business school students:  
"Greed is all right by the way.  I want you to know that I think
greed is healthy.  You can be greedy and still feel good about

Moira Johnston is an investigative journalist whose books and
articles have covered q wide array of topics.  Her work has
appeared in the New York Times Magazine, Vanity Fair, National
Geographic, and Esquire.  She is the author of The Last Nine
Minutes:  The Story of Flight 781," an investigation of the
Paris air diasaster of 1974.  She also collaborated with Trevor
Rees-Jones, Princess Diana's bodyguard, in The Bodyguard's


Bond pricing, appearing in each Monday's edition of the TCR, is
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Wednesday's edition of the TCR. Submissions about insolvency-
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Each Friday's edition of the TCR includes a review about a book
of interest to troubled company professionals. All titles are
available at your local bookstore or through Go to order any title today.  

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


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

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

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

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