TCR_Public/011012.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 12, 2001, Vol. 5, No. 200

                            Headlines

ACCUHEALTH INC.: Seeks More Time To Decide On Ridge Hill Lease
ALLIANCE CAPITAL: Fitch Downgrades Class B Notes to B from BBB-
CFI MORTGAGE: Widening Capital Deficit Amounts To $2,364,945
CINEMASTAR LUXURY: California Court Confirms Chapter 11 Plan
COMDISCO INC.: Court Establishes Equity Trading Wall Procedures

COMDISCO INC.: Management Group Plans to Buy IT Leasing Business
CYBEREDGE: Debtor To Merge With TTI Holdings Subsidiary
DELSOFT CONSULTING: Court Sets Initial Case Conference On Nov. 6
eNUCLEUS INC.: Plan Confirmation Hearing Set For October 18
EXODUS COMMUNICATIONS: Gets Okay to Maintain Bank Accounts

FEDERAL-MOGUL: Outlines Strategy To Resolve Asbestos Claims
GENESEE CORP: Associated Brands Acquires Ontario Foods For $27MM
GENESIS HEALTH: May Repay ElderTrust $12MM Loan Before Due Date
GOLDEN BOOKS: Asks Court To Extend Exclusive Period To Nov. 16
HAMBURGISCHE LANDESBANK: Fitch Drops Rating to C from B/C

HARVEY ELECTRONICS: Reports Third Quarter Losses
HARVEY ELECTRONICS: Matthew & Alicia Larson Hold 6% Equity Stake
HEALTHCENTRAL.COM: Chapter 11 Case Summary
HECHINGER COMPANY: Court Confirms Liquidating Plan
INSILCO TECHNOLOGIES: Records Q2 Net Loss of $108.3 Million

INTEGRATED HEALTH: Has Until January 26 To Remove Proceedings
KELLSTROM: Noteholders Tap Jefferies & Co. as Financial Advisor
KMART CORPORATION: Ronald Burke Discloses 6.8% Equity Stake
LERNOUT & HAUSPIE: Revised Belgium Plan Conditionally Approved
LERNOUT & HAUSPIE: Receives Bid For SLT Division

LOEWEN: FDLIC Soliciting Votes to Reject 4th Amended Plan
LTV STEEL: Minnesota Power & Cleveland-Cliffs to Acquire Assets
METROMEDIA FIBER: Randall R. Lay is New Senior VP & CFO
MIDWAY AIRLINES: Says No Plan Will Deliver Value to Equity
NETCENTIVES INC: Chapter 11 Case Summary

PACIFIC GAS: Will Explain Chapter 11 Plan in Court on Dec. 19
POLAROID CORPORATION: Expected to File For Chapter 11
RELIANCE: Seeks Okay to Hire Zeller as New President & CEO
RELIANCE INSURANCE: A.M. Best Cuts Ratings to F From E
SL INDUSTRIES: Closes Reynosa, Mexico Facility

SUNBEAM CORP.: Court Stretches Lease Decision Period to Feb. 4
SUN HEALTHCARE: Hires ADP To Perform Benefits Administration
TANDYCRAFTS INC: Court Resets Plan Filing Deadline to January 10
TANDYCRAFTS: Court Approves $2.65 Million DIP Financing
TENNECO AUTOMOTIVE: Market Outlook Prods Fitch to Drop Ratings

TERRA CAPITAL: Fitch Rates New Senior Secured Notes at BB-
USG CORPORATION: Entergy Demands $2.67 Million Utility Deposit
VERSATEL TELECOM: Exchange Offer Prompts Moody's to Junk Ratings
WARNACO GROUP: Employs FTI Consulting as Lawyers' Accountants
WASHINGTON GROUP: Chairman Makes Offer To Facilitate Recovery

WINSTAR COMMUNICATIONS: Fleet Capital Presses For Rent Payment

BOOK REVIEW: AS WE FORGIVE OUR DEBTORS: Bankruptcy and Consumer
              Credit in America

                            *********

ACCUHEALTH INC.: Seeks More Time To Decide On Ridge Hill Lease
--------------------------------------------------------------
Accuhealth, Inc. asks U.S. Bankruptcy Court Judge Adlai S.
Hardin, Jr. to give it until December 10, 2001 to make a
decision whether they will assume or reject the lease with Ridge
Hill Development Corporation.

Accuhealth leases a nonresidential real property at Ridge Hill
in Yonkers, New York, which they use as their corporate
headquarters.  Accuhealth asserts they must be given the
extension considering that the lease is integral to their
ability to continue the orderly liquidation of their assets.

At the moment, the company has not yet been able to fully
analyze the value of the lease since they had been busy focusing
their efforts on the liquidation of their estates and in the
preparation of their schedules and statements of financial
affairs.

Accuhealth, Inc., one of the largest integrated providers of
home health care services in the New York, New Jersey and
Connecticut area, filed for Chapter 11 protection on August 10,
2001 in the Southern District of New York Bankruptcy Court.
Gerard Sylvester Catalanello, Esq., at Baer, Marks & Upham LLP,
represents the Debtors in their restructuring effort.  Subject
to further extensions, the Debtors exclusive period during which
to file a plan expires on December 8, 2001.


ALLIANCE CAPITAL: Fitch Downgrades Class B Notes to B from BBB-
---------------------------------------------------------------
Fitch has downgraded the $53,000,000 class B notes of Alliance
Capital Funding, L.L.C. from 'BBB-' to 'B'. The notes have been
taken off of Rating Watch Negative. Alliance Capital Funding,
L.L.C. is a collateralized debt obligation (CDO) established to
invest in bank loans, high yield bonds, and a small portion of
emerging market debt. Additionally, Fitch affirms the rating of
$197,707,744 million class A-2 notes and $114,938,728 class A-3
notes at 'AA-'. The class A-1 notes have been paid in full.

Fitch's rating action on the class B notes reflects higher than
expected defaults in the portfolio. The transaction has been
failing its total overcollateralization test since June 1999 and
currently holds 15.5% of assets rated below 'CCC+'. Fitch met
with the collateral manager for the CDO, Alliance Capital
Management L.P., and felt that after careful review of the
portfolio assets and current cash flow scenarios that the class
B notes more accurately reflect a 'B' credit risk.

Fitch's affirmation on the class A notes reflects the available
credit enhancement and excess spread in the deal. Fitch is very
comfortable with the collateral management capabilities of
Alliance Capital Management, and believes that based on the
current portfolio the class A noteholders will continue to
receive the timely payment of interest and ultimate payment of
the outstanding principal balance consistent with a 'AA-'
rating.


CFI MORTGAGE: Widening Capital Deficit Amounts To $2,364,945
------------------------------------------------------------
The results of operations of CFI Mortgage Inc., for the three
months ended June 30, 2000, reflect only one month of mortgage
related revenue, as the Company did not begin any mortgage
operations until June 2000.

The Company recognized a loss from operations of $1,413,137 for
the three months ended June 30, 2001 compared to a loss of
$855,450 for the comparable period in 2000 an increase of
$557,687. This large increase is primarily the result of the
termination of the warehouse line of credit that was due in part
to the unauthorized misrepresentations by a former officer of
the Company in the initial credit application. As a result, the
Company had to shut down and restart the entire mortgage
operation with new employees, brokers and a new warehouse line
of credit. The Company is confident that it is now positioned
with these changes in place to move forward with an improved 3rd
quarter, and a strong 4th quarter.

The net loss available to stockholders for the three months
ended June 30, 2001 is $1,464,649 compared to $1,365,910 for the
same period in 2000, an increase of $98,739.

Total revenues decreased $63,410 to $248,446 for the three
months ended June 30, 2001 compared to $311,856 for the same
period in 2000. The decrease is the result of shutting down and
restarting the entire mortgage operation resulting, as mentioned
above, from the unauthorized misrepresentation on the credit
application with the Company's warehouse lender perpetrated by a
former officer, which resulted in the termination of the
Company's warehouse line. In February 2001, the Company
discovered that this same officer, who was responsible for
overseeing the Company's mortgage lending operations, had
diverted approximately $54,000 in mortgage payment checks due to
the Company to his own company. The Company believes that all
the funds are in an account that has been frozen and is
confident that it will be able to recover the funds in civil
litigation.

The results of operations for the six months ended June 30, 2000
reflect only one month of mortgage related revenue, because, as
indicated above, the Company did not begin any mortgage
operations until June 2000. The Company recognized a loss from
operations of $1,830,347 for the six months ended June 30, 2001
compared to a loss of $1,063,688 for the comparable period in
2000 an increase of $766,659. This large increase is primarily
the result of the factors cited above regarding the unauthorized
misrepresentations by a former officer of the Company in the
initial credit application.

The net loss available to stockholders for the six months ended
June 30, 2001 is $1,906,859, compared to a loss of $1,474,148
for the same period in 2000, and increase of $432,711.

Total revenues increased $607,993, or 58%, to $1,043,998 for the
six months ended June 30, 2001 compared to $436,005 for the same
period in 2000. The increase is the direct result of six months
of mortgage related operations for the six months ended June 30,
2001, as compared to only one month for the comparable period in
2000. The vast majority of the increase occurred in the first
quarter of 2001. With the termination of the warehouse line of
credit the Company had to shut down and restart the entire
mortgage operation in the second quarter of 2001. This action,
while dramatically reducing revenue in the second quarter of
2001, should enable the Company to move forward with increased
revenue in the third quarter, along with an anticipated very
strong fourth quarter.

Working capital at June 30, 2001 was a deficit of $2,364,945
compared with a deficit of $1,675,551 for the comparable period
in 2000. The increase of $689,394 or 29% in the deficit is
primarily the result of additional liabilities incurred in
relation to additional fundraising by the Company.


CINEMASTAR LUXURY: California Court Confirms Chapter 11 Plan
------------------------------------------------------------
CinemaStar Luxury Theatres Inc. announced that the United States
Bankruptcy Court for the Southern District of California has
entered an order confirming the company's plan of
reorganization.

CinemaStar voluntarily filed a petition to reorganize its
business under chapter 11 of the U.S. Bankruptcy Code on Jan. 4,
2001, after overbuilding in the motion picture theatre industry
and the resulting intense competition for movie patrons caused
the company to incur significant losses.

Under the company's plan of reorganization, unsecured creditors
were given the option of accepting an immediate one time payment
equal to 65 percent of their claim, or a promissory note equal
to 100 percent of their claim, payable semi-annually
installments with interest over five years. Shareholders were
given the option of being cashed out for an amount equal to the
current going concern value of their stock, or they could elect
to contribute cash to the reorganized debtor and be issued new
shares of common and preferred stock in the reorganized debtor.
Shareholders were advised that CinemaStar's previously
outstanding shares of stock will be cancelled under the plan and
that CinemaStar will cease to be a publicly traded company.

CinemaStar anticipates that the confirmed plan will become
effective on Oct. 18, 2001. Upon the effective date of the plan,
CinemaStar will operate four first-run theatres, containing 61
screens, in Southern California, and one first-run theater,
containing 10 screens, in Baja California, Mexico.

"The bankruptcy process has been a challenging time for
CinemaStar, and we appreciate those customers, vendors and
employees who have continued to support the company during these
past 10 months," said Don Harnois, CinemaStar's chief financial
officer. He added, "CinemaStar is emerging as a smaller yet
stronger organization, poised to take advantage of any
opportunities that may become available to the company in the
years ahead."


COMDISCO INC.: Court Establishes Equity Trading Wall Procedures
---------------------------------------------------------------
Judge Barliant granted the Equity Committee's motion to
establish a Trading Wall with certain conditions.

The Court ruled that the Trading Wall procedures to be employed
by a Securities Trading Committee member, if it wishes to Trade
in Securities, shall include these following information
blocking procedures:

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

   (b) Committee Personnel will not share non-public Committee
       information with any other employees of such Securities
       Trading Committee Member (except employees of such
       Securities Trading Committee Member that, due to such
       employees' duties and responsibilities, have a need to
       know such information (including without limitation senior
       management with direct and indirect oversight
       responsibility over the work or activities of the
       Committee Personnel with respect to their participation on
       the Committee), employees providing assistance to the
       Committee Personnel, and regulatory, compliance, auditing
       and legal personnel, in each case provided that such
       individuals:

           (i) comply with the Trading Wall;

          (ii) do not share such non-public Committee information
               with other employees; and

         (iii) use such information only in connection with
               official Committee business or their oversight
               responsibility or use such information other than
               for official Committee business;

   (c) Committee Personnel and employees of the Securities
       Trading Committee Members who receive such information
       will keep non-public information generated from Committee
       activities in files inaccessible to other employees;

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

   (e) The Securities Trading Committee Member's compliance
       department personnel shall review from time to time the
       Trading Wall procedures employed by the Securities Trading
       Committee Member as necessary to insure compliance with
       this Order and shall keep and maintain records of their
       review.  A Trading Wall may also include among other
       things, such features as the employment of different
       personnel to perform each function, physical separation of
       the office and file space, procedures for locking
       committee related files, separate telephone and facsimile
       lines for each function, and special procedures for the
       delivery and posting of telephone messages.

However, Judge Barliant warned that the Court will take action
if it determines an actual breach of fiduciary duty has occurred
as a result of the ineffectiveness in the implementation of a
Trading Wall.

Notwithstanding any term of this Order, Judge Barliant ruled
that no Committee member shall be, or shall be deemed to be, a
Securities Trading Committee Member unless and until it
satisfies these provisions:

   (1) Each Committee member who deems to become a Securities
       Trading Committee Member must file and serve on the
       Debtors, the United States Trustee and counsel to the
       Creditors' Committee an affidavit disclosing all direct or
       indirect connection such Committee member has with any of
       the Debtors or their affiliates.

   (2) Upon filing and service of the Disclosure Affidavit, the
       Debtors, the United States Trustee and counsel to the
       Creditors' Committee shall have 5 business days to file an
       objection to the Committee member's request to be deemed a
       Securities Trading Committee Member.

   (3) The Debtors, the United States Trustee or counsel to the
       Creditors' Committee may object to the relief requested on
       the basis of inadequate disclosure or on a substantive
       basis related either to the disclosure itself or the
       relief requested.

   (4) If no objection is filed by the objection deadline, the
       Committee member shall be deemed to be a Securities
       Trading Committee member upon expiration of such 5-day
       period.

   (5) If an objection is filed, the matter may be heard at the
       next omnibus hearing scheduled before this Court and such
       Committee member shall not be, or shall not be deemed to
       be, a Securities Trading Committee Member unless and until
       the Court so orders or all objections with respect to such
       Committee member have been withdrawn or otherwise
       resolved.

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


COMDISCO INC.: Management Group Plans to Buy IT Leasing Business
----------------------------------------------------------------
A group of current and former employees of Comdisco Inc. (NYSE:
CDO) announced that on October 29, 2001, they plan to bid for
the Comdisco IT Leasing business.

On July 16, 2001, Comdisco, Inc. and 50 domestic U.S.
subsidiaries filed voluntary petitions for relief under Chapter
11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for
the Northern District of Illinois. Representatives of Comdisco
have stated that, "the filing allows the company to provide for
an orderly sale of some of its businesses, while resolving
short-term liquidity issues ... "

The Comdisco Acquisition Group is being led by former Chairman
of the Board, President and CEO of Comdisco Jack Slevin,
assisted by current and former employees of Comdisco. The
management team has engaged AMT Capital Partners of New York to
act as its advisor.

The team feels that the best possible outcome for the company,
employees and customers is our proposal and bid for the
management to buy out the IT Leasing business, which has been
the flagship of Comdisco for 30 years. The team involves
existing management and prior employees lead by former, CEO Jack
Slevin. Mr. Slevin with his 24 years of experience with Comdisco
says, "I feel its important to focus on the core assets and
competencies of the business, maintaining senior members of the
current management team and it's dedicated employees working in
the Chicago area and throughout the U.S."

In addition, Mr. Slevin added, "Our people and Comdisco's
independence are and have always been our greatest asset along
with our outstanding customer relationships and I have been
tremendously proud of everything we have achieved in the past
and I am confident we can do it again. We also expect that
virtually all members of the IT Leasing Group management team
will remain with the Company in Chicago following the
acquisition. We hold the team in high regard and feel that they
have done a great job during a difficult period where the
capital structure the Company had inherited created a need to
restructure its balance sheet through a Chapter 11 filing."

The court approved bidding procedures for the sale of the IT
Leasing business on August 9th, 2001. The "bid deadline" for the
IT Leasing business was set for September 30th, 2001, but was
extended to Monday, October 29, 2001. The auction date will be
Thursday, November 8, 2001, and the sale hearing date will be
Thursday, November 15, 2001. This transaction is still subject
to the higher or otherwise better offers in a court-approved
bidding process.

AMT Capital Partners, LLC is a private equity investment banking
firm providing conventional, specialty and dedicated financial
services to a broad client base of both private and public
growth companies.


CYBEREDGE: Debtor To Merge With TTI Holdings Subsidiary
-------------------------------------------------------
TTI Holdings of America Corp entered into a definitive agreement
to merge its wholly owned subsidiary, Transventures Industries,
Inc. into Cyberedge Enterprises, Inc.

Cyberedge has recently filed for reorganization under Chapter 11
of the U.S. Bankruptcy Code and intends that the merger with
Transventures will be one of the foundation blocks of its
reorganization plan.

The closing is scheduled to take place later in the fourth
quarter and is subject to approval of the Bankruptcy Court and
TTI shareholders, due diligence and certain other conditions. At
closing, TTI shall receive 20% of the total shares outstanding
of Cyberedge, subject to certain adjustments.

"The merger of Transventures into Cyberedge which is building a
premier transportation logistics consulting company is another
important step in TTI unlocking and leveraging value from one of
its holdings," said Andrew B. Mazzone, Chairman and President of
TTI.

"Cyberedge's strategy following its reorganization is to
aggregate operating companies, technology and expertise in order
to become a leading player in the multi-million dollar
transportation logistics field as well as other complementary
industries. With Transventures and its network of strategic
partners, Cyberedge will exploit these business opportunities in
building its transportation logistics business plan," said James
W. Zimbler, Interim President of Cyberedge.


DELSOFT CONSULTING: Court Sets Initial Case Conference On Nov. 6
----------------------------------------------------------------
United States Bankruptcy Court Judge Arthur J. Gonzalez will
conduct an initial case management conference for Delsoft
Consulting Inc.'s chapter 11 cases on November 6, 2001 at 9:30
a.m. in Room 523 at One Bowling Green in New York, New York.

According to Judge Gonzalez, among the topics to be considered
in the efficient administration of Delsoft's cases include the
retention of professionals, creation of a committee to review
budget and fee requests, use of alternative dispute resolution,
timetables and scheduling of additional case management
conferences.

Delsoft Consulting offers its clients a broad range of business
and technical services as a service outsourcer and systems
integrator capable of providing complex tool solutions.  The
company filed for Chapter 11 protection on August 28, 2001 in
Southern District of New York Bankruptcy Court.  Marilyn Simon,
Esq., at Marilyn Simon & Associates, represents the Debtors in
their restructuring effort.  Subject to further extensions, the
Debtors exclusive period during which to file a plan expires on
December 26, 2001.


eNUCLEUS INC.: Plan Confirmation Hearing Set For October 18
-----------------------------------------------------------
eNucleus, Inc. (NASDAQ OTC-BB: ENCSQ) says its Plan of
Reorganization received "overwhelming acceptance" by creditors.
As documented in the ballot report filed with the Bankruptcy
Court on October 2, creditors and shareholders voted positively
by 84% and 97%, respectively. The Company is pleased with the
outcome and looks forward to emerging from Chapter 11. The
Company's confirmation hearing is scheduled for Thursday,
October 18th.

Operating in Chicago and Atlanta, eNucleus (NASDAQ OTC-BB:
ENCSQ) helps growth-oriented middle-market companies innovate
and accelerate their business performance through a dynamic
solutions suite (eNucleus Powered Solution -"ePS"), dedicated
professionals and exceptional customer service, to achieve a
sustaining and scalable e-business capability linking business
processes, technology, client and partner communities.


EXODUS COMMUNICATIONS: Gets Okay to Maintain Bank Accounts
----------------------------------------------------------
The United States Trustee for the District of Delaware has
established certain operating guidelines for Exodus
Communications, Inc. in order to supervise the administration of
its chapter 11 cases:

    A. close all existing bank accounts and open new debtor-in-
       possession bank accounts;

    B. establish one debtor-in-possession account for all estate
       monies required for the payment of taxes, including
       payroll taxes;

    C. maintain a separate debtor-in-possession account for cash
       collateral

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 enterprise. The Debtors routinely deposit, withdraw
and otherwise transfer funds to, from and between such accounts
by various methods including check, wire transfer, automated
clearing house transfer and electronic funds transfer. The
Debtors believe that all of the Bank Accounts, whether located
within or outside the District of Delaware, are in financially
stable banking institutions with FDIC or FSLIC insurance.

By motion, the Debtors sought and obtained entry of an order
authorizing continued use of their existing bank accounts. The
Debtors seek a waiver of the United States Trustee's
requirements that the Bank Accounts be closed and that new post-
petition bank accounts be opened. If enforced in these cases,
such requirements would cause significant and unnecessary
disruption in the Debtors' businesses.

The Debtors also request that the Bank Accounts 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, be authorized.

Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP,
in Wilmington, Delaware, relates 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
subsidiaries. Mr. Chehi submits 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. In turn, such action
would jeopardize the Debtors' efforts to successfully reorganize
in a timely and efficient manner. Mr. Chehi contends that it is
essential that the Debtors be permitted to continue to maintain
their existing Bank Accounts and, if necessary, open new
accounts irrespective of whether such banks are designated
depositories in the District of Delaware.

In other cases of this size and complexity, Mr. Chehi says it
has been recognized that the strict enforcement of bank account
closing requirements does not serve the rehabilitative purposes
of chapter 11. Accordingly, Mr. Chehi claims that Courts have
waived such requirements and replaced them with alternative
procedures that provide the same protections. (Exodus Bankruptcy
News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


FEDERAL-MOGUL: Outlines Strategy To Resolve Asbestos Claims
-----------------------------------------------------------
"This Court is the ONLY forum that can address the unique issues
of this unique international enterprise whose tort problems are
primarily U.S.based," Federal-Mogul Corporation tells the U.S.
Bankruptcy Court in Wilmington.  "The sheer volume of asbestos
claims, irrespective of their individual merit, together with
the manner in which so many of them have been consolidated for
trial in the state court system -- where the vast majority are
pending -- have resulted in overwhelming expenditures by the
Debtors for their defense and resolution. These expenditures, in
turn, have severely impaired the Debtors' equity value and
working capital, thereby threatening the viability of Debtors'
core businesses. Debtors consequently have been left with no
alternative but a restructuring. Debtors' primary goal in these
proceedings is, therefore, to rationally manage the asbestos
litigation so that transaction costs associated with evaluating
and resolving claims are minimized and the value of Debtors'
businesses is preserved for all legitimate creditors and
shareholders."

The Debtors tell the Court that they intend to use these
insolvency proceedings to negotiate a comprehensive
restructuring of their capital structure and a resolution of all
claims. To do that, the core issues that need to be addresses
are:

     * the overall cost of resolving claims,
     * claim resolution transaction costs,
     * the amount of insurance available to pay such claims, and
     * the ongoing strength and value of the Debtors' businesses.

If a consensual resolution isn't possible, however, the Debtors
are fully prepared to exercise what they see as the only
alternative to find a cost effective way to distinguish among
and value the asbestos claims. That process, the Debtors
outline, would involve use of the bar date and claim objection
process to establish meaningful standards of proof of exposure
to Debtors' products and of resulting illness.  Those Claim
Standards would be applied uniformly and efficiently to disallow
or to defer claims that don't meet minimum established proof
requirements. Should it prove necessary to follow this strategy,
Debtors would ultimately seek to confirm a reorganization plan
based upon an estimation of the amount of current and future
asbestos claims that satisfy the Claim Standards. The
establishment of Claim Standards would require litigation in
this Court, the results of which would establish the framework
within which the asbestos claims against the Debtors would be
settled or adjudicated post- confirmation.

The Debtors indicate that they intend to propose that the
interests of future asbestos claimants (who do not presently
have claims pending) be represented by a Legal Representative
for Future Claimants, who will be appointed to negotiate on
behalf of future claimants on what Debtors hope will be a
consensual plan of reorganization, or, should it become
necessary, to litigate and negotiate a plan of reorganization
that would incorporate Claim Standards.

The Debtors advise that they currently face more than 300,000
asbestos personal injury claims pending against six separate and
significant defendant Debtors.  These claims arise from various
corporate acquisitions that were made from the 1960s through the
1990s.

Simply put, the Debtors and others debtor-defendants like them
are "drowning in a . . . wave of asbestos claims that has
engulfed the courtrooms of America."  The Debtors point to these
"depressing and astounding" statistics:

       * in 1985 the total expenditures of Debtors on asbestos
         claims did not exceed $2 million;

       * by 1989 that number had grown to more than $30 million;

       * by 1993 the number was in excess of $70 million; and

       * by 1998 the number exceeded $100 million.

And the worst was yet to come: the 1997 invalidation by the
Supreme Court of the Amchem class action settlement -- and the
accompanying lifting of the injunction that had halted new
claims against the defendant-participants in that settlement for
more than three years -- led, in 1998, to a surge of new
filings, consolidations, and damages.  Thus, by year-end 2000
the Debtors' annual expenditures to deal with the asbestos
problem had climbed to $350 million. Finally, the Debtors were
on track to duplicate the $350 million in annual expenditures
again in 2001.

The Debtors' legal team -- consisting of dozens of attorneys
from Sidley Austin Brown & Wood;  Pachulski, Stang, Ziehl, Young
& Jones P.C.; Gilbert, Heintz & Randolph, LLP; and Coblence &
Warner, P.C. -- make no secret that Federal-Mogul and its
debtor- affiliates come to the Bankruptcy Court seeking what
they have been unable to find in the tort system -- the
efficient, cost- effective application of a uniform, fair system
for assessing and compensating asbestos-related claimants. They
outline their game plan to the Court:

       A. U.K. Administration
          -------------------
          134 of the Debtors are companies organized under the
laws of the United Kingdom and have their principal offices in
the U.K. or other foreign jurisdictions. In order to protect
those Debtors and their assets fully, those Debtors have
concurrently commenced complementary U.K. administrations.
Debtors will propose protocols to coordinate these
reorganization proceedings with the U.K. administrations.
Certainly, as these cases progress toward a Plan of
Reorganization, careful coordination will be essential to
satisfy the requirements of the U.K. administrations and to
insure implementation of a global resolution.

       B. A Legal Representative for
          Future Claimants Must Be Appointed
          ----------------------------------
          The Debtors' Plan of Reorganization, whether the result
of successful negotiations or the result of a litigation
strategy, will provide for the entry of a permanent injunction
channeling both present claims that are asserted during the
Chapter 11 cases and unasserted claims that may be brought in
the future to a post-confirmation trust. Debtors will seek the
appointment of a Futures Legal Representative who will be
authorized to employ appropriate professionals, such as
attorneys and consultants, so that he can adequately represent
the interests of future claimants.

          Courts have routinely appointed representatives for
Future Claimants in mass tort-related bankruptcy proceedings. In
re Amatex Corp., 755 F.2d 1034 (3a Cir. 1985); In re H.K. Porter
Co., 156 BR. 16 (W.D. Pa. 1993); In re Eagle-Picher Indus. Inc.,
144 B.R. 69 (S.D. Ohio 1992); In re Forty-Eight Insulations,
Inc., 58 BR. 476 (N.D.111. 1986); In re UNR Indus., Inc., 725
F.2d 1111 (7`h Ch. 1984); In re Johns-Manville Corp., 36 B.R.
743 (S.D.N.Y. 1984). Their authority to do so derives from
Section 1109 of the Bankruptcy Code. In re Amatex Corp., 755
F.2d 1034, 1042 (3d Cir. 1984). In addition, courts have found
the appointment of a Futures Representative to be within their
equitable powers under 11 U.S.C. Sec. 105(a). In re Forty-Eight
Insulations, Inc., 58 BR. 476 (N.D. Ill. 1986); In re Johns-
Manville Corp., 36 BR. 743 (S.D.N.Y. 1984).

       C. The District Court May Retain
          Jurisdiction over the Asbestos-Related Claims
          ---------------------------------------------
          The Debtors will move for a partial withdrawal of the
reference from the Bankruptcy Court, to the District Court, of
asbestos personal injury claims, when and as necessary to begin
the process of adjudicating certain threshold issues concerning
the validity of those claims. If a consensual plan of
reorganization can be achieved, the parties' agreement may
provide the critical claims resolution procedures. If consensus
cannot be reached as to some types of claims, the Debtors may
need several adjudications designed to establish uniform,
objective Claim Standards. These Claim Standards would ensure
that only those claims that have a reliable scientific basis and
can establish claimant's exposure to the Debtors' products may
proceed. If such a strategy becomes necessary, retaining
jurisdiction over tort liability issues in the Bankruptcy
District Court would be necessary for the efficient and
effective management of those claims.  First, it would obviate
jurisdictional disputes regarding the power of the bankruptcy
court to resolve bodily injury claims. See, e.g., Pettibone
Corp. v. Easley, 935 F.2d 120, 123-24 (7th Cir. 1991)
(bankruptcy court lacks jurisdiction to resolve limitations
defense in personal injury suits against Chapter 1 I debtor);
but see e.g., In re Chateaugay Corp., 146 BR. 339 (S.D.N.Y.
1992) (". . . The Bankruptcy Court has jurisdiction to disallow
legally deficient personal injury tort and wrongful death claims
in the first instance."). Second, the Bankruptcy District Court
could use its expertise as an Article III court to address
evidentiary issues that are critical to properly evaluating the
great majority of the asbestos-related claims now pending
against the Debtors. Finally, the Bankruptcy District Court and
the Bankruptcy Court could maintain complementary, overall
control of the direction of this case. Matters relating to the
Debtors' ongoing business operations, the preservation of their
assets, and the proposal and confirmation of a Plan of
Reorganization -- including the appointment of a Futures
Representative -- should remain with the Bankruptcy Court.

       D. Unless Negotiations Provide an Alternative,
          the Debtors Will Ask the Court to Establish
          Uniform, Scientifically-Valid Criteria for
          Asbestos-Related Claims to Proceed
          -------------------------------------------
          Largely because of the sheer volume of cases, any
system for efficiently resolving asbestos claims must provide a
mechanism to quickly and inexpensively eliminate claims where
the claimants cannot demonstrate exposure to the Debtors'
products and demonstrate a recognized injury. The case by case
litigation of such issues depletes the assets that can and
should be preserved for the payment of other creditors. Unless
negotiations provide some such method, the Court may need to
establish Claim Standards that comport with the rules of
evidence and the scientific method. These Claims Standards,
which would include criteria for product identification and
medical injury, will make possible the post-confirmation
management of the cases in an efficient and fair manner.

       E. A Panel of Medical and Scientific
          Experts Would Assist in Establishing
          Medical and Scientific Standards
          ------------------------------------
          To assist the District Court in establishing Claim
Standards, the Debtors may propose that a panel of medical and
scientific experts give its opinion regarding the proper medical
standards for determining whether a claimant has a compensable
illness caused by asbestos. The panel's opinion would assist the
court in deciding when "expert" testimony is inadmissible under
Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993),
because it is not scientifically valid. Debtors may suggest that
the panel be composed of medical and scientific experts in
asbestos-related disease, including pathologists,
pulmonologists, radiologists and epidemiologists. They would be
asked to report on the proper diagnostic standards for asbestos-
related illnesses. Debtors would also suggest procedures for
selecting the panel, perhaps through a neutral, respected
scientific body such as the National Academy of Sciences.

       F. Determination of Common Factual Issues That
          Bear on the Validity of Asbestos-Related Claims
          -----------------------------------------------
          Once the universe of claims has been identified through
a Proof of Claim process, the Debtors may file omnibus
objections to categories of asbestos-related claims that raise
common issues of fact, particularly facts that require
scientific or expert testimony to resolve. The Debtors might
then submit Omnibus Motions for Summary Judgment on their
objections to asbestos personal injury claims. The Debtors might
ask the Court to temporarily disallow claims where there is no
evidence of any meaningful contact with Debtors' asbestos-
related products. The Debtors might also ask the Court to
temporarily disallow claims that currently fail to meet minimal
diagnostic criteria.

          To the extent that any threshold issues which need to
be adjudicated in the absence of a consensual resolution survive
the Debtors' summary judgment motions, Debtors might ask that
those issues be tried on a consolidated basis before the
District Court. Fed. R. Civ. P. 42(a) gives the district courts
broad discretionary authority to consolidate claims for trial on
common issues of law or fact. See In re Air Crash Disaster, 549
F.2d 1006, 1013 (5th Cir. 1977); Ellerman Lines, Ltd. v.
Atlantic & Gulf Stevedores, Inc., 339 F.2d 673, 675 (3d Cir.
1964). In that regard, several circuit courts of appeal have
recognized consolidation as an appropriate tool for resolving
common issues of law and fact in asbestos personal injury cases.
See, e.g., Cantrell v. GAF Corn., 999 F.2d 1007, 1010-11 (6th
Cir. 1993); Johnson v. Celotex Corn., 899 F.2d 1281, 1285 (2d
Cir. 1990); In re Fibreboard Com., 893 F.2d 706, 708 (5th Cir.
1990); Jenkins v. Raymark Indus., 782 F.2d 468, 471 (5th Cir.
1986); Hendrix v. Raybestos-Manhattan, Inc., 776 F.2d 1492,
1495-96 (11th Cir. 1985). The policy underlying this rule is to
avoid unnecessary repetition or confusion, cost or delay where
several cases (here, potentially several hundred or even
thousands of cases) can be disposed of in a single proceeding.
These considerations have particular strength here, where the
outcome of the entire bankruptcy proceeding may hinge on the
resolution of these issues.

          The determinations made in these common issue
proceedings would become the Claim Standards used to estimate
the liability of the Debtors for purposes of voting on and
confirming a Plan of Reorganization and used post-confirmation
to determine whether a claimant may proceed. (Federal-Mogul
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


GENESEE CORP: Associated Brands Acquires Ontario Foods For $27MM
----------------------------------------------------------------
Genesee Corporation (Nasdaq: GENBB) completed the sale of its
Ontario Foods, Incorporated, subsidiary to Associated Brands,
Inc. for $27 million USD. The Corporation estimates that the
transaction will result in a net pre-tax loss of approximately
$1.1 million.

Ontario Foods is a leading producer of dry packaged food
products such as noodles and rice side dishes, iced tea and
instant beverage mixes, bouillon and artificial sweeteners which
are sold under private label by many of the nation's leading
food store chains. Associated Brands, Inc. is a privately held,
Toronto-based producer of branded and private label food
products that are sold to food store chains throughout Canada
and to customers in the U.S.

Net of purchase price adjustments, the Corporation received
$22.1 million USD in cash at closing. The balance of the
purchase price was paid by the Corporation taking back a $2.25
million USD promissory note and first mortgage on the Ontario
Foods facility in Medina, New York. The note and mortgage is
further secured by a $500,000 USD letter of credit issued by
Scotiabank Inc. The note, together with $178,000 USD in cash
paid by Associated Brands, was placed into escrow for a period
of eighteen months to cover any contingent liabilities or post-
closing obligations of the Corporation. During the escrow term
the Corporation will receive payment on the note of interest
only at the rate of 12% during the first six months and 15% for
the balance of the escrow term. If the Medina property is not
refinanced by Associated Brands to pay off the note and mortgage
held by the Corporation prior to expiration of the escrow term,
the Corporation may be required to refinance the remaining
balance owing under the note and mortgage after drawing down the
$500,000 letter of credit.

"We are pleased that we were able to find a strategic buyer like
Associated Brands, which will use the acquisition of Ontario
Foods as the U.S. platform to execute its cross-border private
label growth strategy," said Karl D. Simonson, President of
Ontario Foods. "The sale to Associated Brands will make Ontario
Foods' Medina, New York facility an important component of a
larger and more strategically positioned player in the North
American private label foods business," said Mr. Simonson.

With the completion of the sale of Ontario Foods, the
Corporation declared a partial liquidating distribution of
$13.00 per share, payable on November 1, 2001 to Class A and
Class B shareholders of record on October 25, 2001. The partial
liquidating distribution is the second liquidating distribution
paid to the Corporation's shareholders pursuant to the plan of
liquidation and dissolution approved by the Corporation's
shareholders on October 19, 2000. A liquidating distribution of
$7.50 per share was paid on March 1, 2001.

The announced liquidating distribution distributes to
shareholders a portion of the proceeds received by the
Corporation from the sale of Ontario Foods, after making
provision for taxes and reserves for contingent liabilities and
post-closing obligations related to the transaction. The
Corporation expects to make additional liquidating distributions
as the contingent liabilities and post-closing obligations from
the sale of Ontario Foods and the December 2000 sale of the
Corporation's brewing business are discharged. The Corporation
also expects to make additional liquidating distributions when
it receives payment on the $2.25 million note and cash placed
into escrow in connection with the sale of the foods business
and the $11 million of promissory notes from High Falls Brewing
Company that financed a portion of the brewing business sale.
Other factors that will affect the amount and timing of
additional liquidating distributions include the amount that
will ultimately be realized from and the timing of the sale of
the Corporation's real estate investments and other assets,
which will depend on the terms of the transactions in which
those assets are sold; the payment or provision for the payment
of debts, expenses, taxes and other liabilities of the
Corporation; and the timing and cost of liquidating and winding
up the Corporation's business and affairs.


GENESIS HEALTH: May Repay ElderTrust $12MM Loan Before Due Date
---------------------------------------------------------------
ElderTrust (NYSE:ETT), an equity healthcare REIT, says it has
discussed with Genesis Health Ventures, Inc. (NASDAQ:GHVEV) the
possibility that Genesis may refinance its mortgage loans with a
third party and payoff amounts owed to the Company before their
June 2002 due dates.

These discussions have resulted from Genesis' recent emergence
from bankruptcy and the current interest rate environment. Based
on these conversations with Genesis, the Company believes the
loans may be repaid by November 30, 2001. The current balance on
the loans is approximately $12.2 million and, when the proceeds
are received, the Company expects to apply the proceeds to
further reduce its Bank Credit Facility.

ElderTrust is a real estate investment trust that invests in
real estate properties used in the healthcare services industry,
principally along the East Coast of the United States. Since
commencing operations in January 1998, the Company has acquired
direct and indirect interests in 32 buildings and has loans
outstanding of $12.2 million in construction and term financing
on four additional healthcare facilities.


GOLDEN BOOKS: Asks Court To Extend Exclusive Period To Nov. 16
--------------------------------------------------------------
Golden Books Family Entertainment, Inc. -- now known as GB
Holdings Liquidation, Inc., GB Publishing Liquidation, Inc., GB
Video Liquidation, Inc., LRM Liquidation Corp. and SLEP
Liquidation, Inc. -- asks the U.S. Bankruptcy Court for the
District of Delaware to extend its exclusive periods for 45
days.

The company tells Judge Roderick R. McKelvie that it has been
focusing its attention on the sale of substantially all of its
assets to Random House and Classic Media.  That sale has been
approved and consummated, and now the Debtors are in the process
of retaining GDL Management Services as restructuring advisor to
evaluate the remaining assets and liabilities in the estates.
Once GDL has had an adequate opportunity to understand, identify
and evaluate the universe of outstanding issues, Golden Books
assures the Court that the plan will proceed swiftly.

Thus, Golden Books asks Judge McKelvie to extend their exclusive
period for filing a plan of reorganization to November 16, 2001,
and their exclusive period for soliciting acceptances of the
plan to January 16, 2002.

Golden Books Family Entertainment, one of the largest children's
books publishers in the U.S., filed for chapter 11 protection on
June 4, 2001 in the U.S. Bankruptcy Court for the District of
Delaware.  Curtis J. Crowther, Esq., at White & Williams,
represents the firm in its restructuring efforts.  As of March
30, 2001, the company had $156,135,000 in assets and $215,533 in
debt.


HAMBURGISCHE LANDESBANK: Fitch Drops Rating to C from B/C
---------------------------------------------------------
Fitch, the international rating agency, has downgraded the
Individual rating of Hamburgische Landesbank (Guaranteed) (HLB)
to 'C' from 'B/C'.

At the same time, the agency has affirmed the bank's Long-term
rating of 'AAA', its Short-term of 'F1+' and its Support of '1'.
The Outlook for the Long-term rating remains Stable.

The rating action reflects Fitch's view of increasing risk in
the bank's loan portfolio, which includes significant exposures
to international real estate and the airline industry. During
recent years HLB has built up a growing real estate loan book
outside Germany, focusing in particular on the US and the UK. In
aircraft finance, the loan portfolio is well diversified by
borrower and country and secured on relatively new aircraft.
Although these books are currently both performing well, Fitch
expects some deterioration reflecting the marked slowdown in the
global economic environment and its impact on real estate in the
US and the airline industry worldwide.

The expansion of risk assets has eaten into the high capital
ratios the bank had last year. The Tier 1 ratio remained at a
relatively solid 7.0% at end-June 2001, and is one of the best
among Landesbanks, but coming down from 9.1% at end-1999. The
agency expects to see a substantial increase in retained
earnings to compensate for this, which is still to come through,
and the bank may require further capital in the future to
support continued loan growth.

The change in the Individual rating also factors in uncertainty
over the future performance of HLB. Focusing on higher margin
business and higher risk assets should lead to increased
revenues, but profitability is more likely to be volatile under
this business model and the proportion of lower risk assets
(public sector, interbank and mortgage loans) is declining.

HLB's Support, Long-term and Short-term ratings, like those of
the other 11 Landesbanks, are based on the guarantees provided
by its owners. In HLB's case these are the Free and Hanseatic
City of Hamburg and Landesbank Schleswig-Holstein.

According to an agreement between the European Commission and
the German authorities in July 2001, this guarantee mechanism
will be abolished on 18 July 2005. But all liabilities incurred
up to 18 July 2001 plus those incurred in the four-year
transition period and maturing before end-2015 will continue to
be covered by the guarantors. Fitch will assign new, separate
ratings for obligations of Landesbanks not covered by the state
guarantees in due course.


HARVEY ELECTRONICS: Reports Third Quarter Losses
------------------------------------------------
Harvey Electronics Inc.'s pretax loss for the nine months ended
July 28, 2001 was $247,000 as compared to pretax income of
$1,067,000 for the same period last year. The net loss for the
nine months ended July 28, 2001 was $247,000 as compared to a
net profit of $677,000 for the same period last year. The net
loss for the nine months ended July 28, 2001 included
approximately $520,000 of operating losses and pre-opening
expenses for new stores and the Company's website. Operating
losses of approximately $150,000 related to the Company's new
Bang & Olufsen branded store opened in Greenwich, Connecticut in
October 2000. Approximately $220,000 of operating losses related
to the new website launched in October 2000. Included in the
$220,000 of operating losses is $144,000 of depreciation, as
website related assets are being amortized to expense over a
period of only one to three years. The remaining $10,000 of
operating losses related to the new Harvey retail store opened
in Eatontown, New Jersey in April 2001. Pre-opening expenses,
also relating to the new Eatontown store, approximated $140,000.

The Company reported a pretax loss of $537,000 for the third
fiscal quarter ended July 28, 2001 as compared to pretax income
of $25,000 for the same quarter last year. The net loss for the
third quarter of fiscal 2001 was $422,000 as compared to net
income of $15,000 for the same quarter last year. The net loss
for the third quarter of fiscal 2001 included approximately
$100,000 of operating losses from the new Bang & Olufsen store
and website, which was offset by modest profitability in the
third quarter from the new Eatontown store.

The Company's net loss for the nine months and third quarter
ended July 28, 2001 was negatively affected by the slowdown in
retail sales, coupled with an increase in costs and expenses.
For the nine months ended July 28, 2001, net sales approximated
$29,526,000, an increase of approximately $3,172,000, or 12%,
from the same period last year. For the third fiscal quarter
ended July 28, 2001, net sales approximated $8,838,000, an
increase of approximately $906,000, or 11.4%, from the same
quarter last year.

Comparable store sales for the nine months ended July 28, 2001
increased by $1,561,000 or 5.9% from the same period last year.
Comparable store sales for the third quarter ended July 28, 2001
declined slightly by 1.5% from the same period last year.
Overall net sales increases have been achieved from a base year,
fiscal 2000, that resulted in approximately 60% increases over
fiscal 1999. Fiscal 2000 increases included the maturation of
several retail locations. The Company's comparable store sales
results for the third quarter of fiscal 2001 were down slightly
by 1.5%, however, these sales were competing against very high
comparable store sales increases of 57.5%, from the same quarter
last year.

Overall net sales benefited primarily from the new Bang &
Olufsen branded store opened in Greenwich, Connecticut in
October 2000 and to a greater extent from the new Harvey
showroom opened in Eatontown, New Jersey in April 2001. To date,
sales and operating profitability from the new Eatontown store
have exceeded management's expectations, while sales from the
new Bang & Olufsen store have been slower than anticipated.

While the Company's overall sales and comparable store sales
results through June 2001 were favorable in comparison to
certain other electronics retailers, the slowing economy did
have a negative impact on third quarter sales, especially in the
month of July. The decline in comparable store sales in the
third quarter was primarily related to the Company's Paramus,
New Jersey store and its 45th Street store in Manhattan. The
reduction in comparable store sales at these locations was
offset by sales growth from the Company's Harvey showrooms in
Greenwich, Connecticut, Greenvale, Long Island and from the
retail store located within ABC Carpet and Home in Manhattan.

At July 28, 2001, the Company's ratio of current assets to
current liabilities was .94. The Company had negative working
capital of $394,000 at July 28, 2001, as compared to 1.12 and
$747,000 at October 28, 2000. However, it is important to note
that at July 28, 2001 and October 28, 2000, the Company's
outstanding balances on its revolving line of credit facility
($2,941,950 and $1,068,000, respectively) were classified as
current liabilities, despite the three-year term of the
Company's credit facility. The current ratio was negatively
impacted by the Company's increase in the revolving line of
credit facility. The increase in the line of credit facility was
necessary to fund retail store expansion and renovation.

Wells Fargo obtained a senior security interest in substantially
all of the Company's assets. The revolving line of credit
facility provides Wells Fargo with rights of acceleration upon
the breach of certain financial covenants or the occurrence of
certain customary events of default. The Company is also
restricted from paying dividends on common stock, retiring or
repurchasing its common stock, and generally from entering into
additional indebtedness.


HARVEY ELECTRONICS: Matthew & Alicia Larson Hold 6% Equity Stake
----------------------------------------------------------------
Matthew and Alicia Larson beneficially own 6.0% of the
outstanding common stock of Harvey Electronics Inc. They hold
sole voting and dispositive powers over the 196,800 shares held.


HEALTHCENTRAL.COM: Chapter 11 Case Summary
------------------------------------------
Lead Debtor: HealthCentral.com
              aka HealthCentral, and Jones
              aka WebRx
              aka WebRx.com
              aka Comfort Living
              aka Comfort Living.com
              aka Vitamins.com
              aka Vitamins Superstore
              aka Drug Emporium
              aka Drug Emporium.com
              aka Epills, Inc.
              aka More.com
              6005 Shellmound St. #250
              Emeryville, CA 94608

Court: Northern District of California (San Francisco)

Bankruptcy Case No.: 01-45442

Debtor affiliates filing separate chapter 11 petitions:

        Entity                              Case No.
        ------                              --------
        HealthCentralRx.com, Inc.           01-45443

        HealthCentral Enterprise
        Web Services Inc.                   01-45446

        JandM Direct Corporation            01-45447

        WebRx.com, Inc.                     01-45448

        HealthCentral.ca                    01-45449

        Vitamins.com, Inc.                  01-45450

        LandH Vitamins, Inc.                01-45451


Chapter 11 Petition Date: October 9, 2001

Judge: Edward D. Jellen

Debtors' Counsel: Tobias S. Keller, Esq.
                   Pachulski, Stang, Ziehl, Young
                   3 Embarcadero #1020
                   San Francisco, CA 94111
                   415-263-7000


HECHINGER COMPANY: Court Confirms Liquidating Plan
--------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware confirmed
Hechinger Company's First Amended Consolidated Liquidating Plan
of Reorganization. (New Generation Research, October 10, 2001)


INSILCO TECHNOLOGIES: Records Q2 Net Loss of $108.3 Million
-----------------------------------------------------------
For the second quarter of 2001, Insilco Technologies Inc.'s net
sales decreased 37% to $58.4 million from the $92.3 million
recorded in the second quarter of 2000. For the first half of
2001, net sales decreased 19% to $138.4 million from the $170.7
million recorded in the first half of 2000. The decrease is said
by the Company to be due to the decelerating macroeconomic
conditions and reduced demand for its customers' end products,
partially offset by incremental sales from the Company's recent
acquisitions.

As a result, net sales from the Custom Assemblies segment in the
second quarter 2001 decreased $20.4 million, or 44%, to $26.2
million, from the $46.6 million recorded in the second quarter
of 2000. Sales in the first half of 2001 decreased $14.5
million, or 18%, to $64.6 million, from the $79.1 million
recorded in the first half of 2000. Sales to the Company's major
optical equipment customer declined $26.9 million, or 90%, in
the second quarter 2001 compared to the same period last year
and were down $31.9 million, or 72%, in the first half of 2001
compared to the same period last year. This decrease was
partially offset by incremental sales from Precision, which was
acquired in August 2000.

Net sales from the Passive Components segment in the second
quarter 2001 decreased $7.9 million, or 31%, to $17.3 million,
from the $25.2 million recorded in the second quarter of 2000.
Sales in the first half of 2001 decreased $8.1 million, or 16%,
to $41.8 million, from the $49.9 million recorded in the first
half of 2000. Lower transformer and connector sales were
partially offset by incremental sales from InNet Technologies,
which was acquired in January 2001.

In the Precision Stampings segment, net sales in the second
quarter 2001 decreased $5.6 million, or 27%, to $14.8 million
from the $20.4 million recorded in the second quarter of 2000.
Sales in the first half of 2001 decreased $9.7 million, or 23%,
to $31.9 million from the $41.6 million recorded in the first
half of 2000. This decrease was due to the general slow down in
economic and manufacturing activity, more specifically in the
automotive and electronics markets. Precision Stampings was
particularly affected by reduced demand from a large customer in
the electrical market, which was in the process of restructuring
its Far East distribution channels.

As a result of the dramatic decline in capital spending in the
telecommunications industry, the Company now believes that the
growth prospects from its TAT Technologies, Precision, and InNet
acquisitions are significantly less than previously expected and
those of historical periods. As a result of an extensive review,
the Company has determined that the goodwill resulting from
these acquisitions is impaired and, in order to write-down
goodwill to fair market value, the Company has taken a $97.3
million goodwill impairment charge in the second quarter of
2001.

Excluding the goodwill impairment, operating income for the
second quarter of 2001 decreased $16.8 million to a loss of $7.7
million from income of $9.1 million recorded in the second
quarter of 2000. On the same basis, operating income for the
first half of 2001 decreased $22.1 million to a loss of $5.9
million from income of $16.2 million recorded in the first half
of 2000. The decrease was due to the decline in EBITDA coupled
with incremental depreciation and amortization expense primarily
attributable to the Precision and InNet acquisitions.

The loss from continuing operations before income taxes and
excluding the goodwill impairment charge increased $13.9 million
to a loss of $15.0 million in the second quarter of 2001 from a
$1.1 million loss recorded in the second quarter of 2000. On the
same basis, the loss from continuing operations before income
taxes increased $17.8 million to a loss of $21.5 million in the
first half of 2001 from a $3.7 million loss recorded in the
first half of 2000. The increase was attributable to the decline
in operating income. Net interest expense for the second quarter
and first half of 2001 decreased by $1.4 million and $1.8
million, respectively from the same periods in the prior year,
due to the receipt of $1.9 million in interest income related to
a tax refund and, to a lesser extent, the reduction in interest
rates compared to the same periods in the prior year.

Insilco recorded a net loss of $108.3 million in the second
quarter of 2001 as compared to net income, after accounting for
discontinued operations, of $3.3 million in the second quarter
2000. In the first half of 2001 the Company recorded a net loss
of $113.2 million as compared to net income, after accounting
for discontinued operations, of $45.7 million in the first half
of 2000.


INTEGRATED HEALTH: Has Until January 26 To Remove Proceedings
-------------------------------------------------------------
Integrated Health Services, Inc. sought and obtained a sixth
order from the Court enlarging the time within which they may
file notices of removal of related proceedings under Bankruptcy
Rule 9027(a) through and including January 26, 2002.

The Debtors believe that they may be party to Pre-petition
Actions currently pending in the courts of various states and
federal districts. However, due to the size and complexity of
these cases, the Debtors have not had a full opportunity to
investigate their involvement in the Pre-Petition Actions.
Because the attention of the Debtors' personnel and management
has been focused primarily on stabilizing the business,
administering the bankruptcy proceeding and developing a
business plan to take the Debtors through reorganization, the
Debtors and their professionals have not had sufficient time to
fully review all of the Pre-Petition Actions to determine if any
should be removed pursuant to Bankruptcy Rule 9027(a).

The Debtors submit that the extension of the removal period
requested is in the best interests of the Debtors, their estates
and their creditors because this will afford them an opportunity
to make more fully informed decisions concerning the removal of
each Pre-Petition Action so that they do not forfeit the
valuable rights afforded to them under 28 U.S.C. section 1452.
The rights of the IHS Debtors' adversaries, on the other hand,
will not be prejudiced by such an extension, as any party to a
Pre-Petition Action that is removed may seek to have it remanded
to the state court pursuant to 28 U.S.C. section 1452(b), the
Debtors tell Judge Walrath. (Integrated Health Bankruptcy News,
Issue No. 20; Bankruptcy Creditors' Service, Inc., 609/392-0900)


KELLSTROM: Noteholders Tap Jefferies & Co. as Financial Advisor
---------------------------------------------------------------
Kellstrom Industries, Inc. (Nasdaq: KELL) reported constructive
progress it is making to address certain financial and business
issues it is confronting.

Certain of the holders of the Company's $54 million of its
5-3/4% convertible subordinated notes due October 15, 2002 and
$86.25 million of its 5-1/2% convertible subordinated notes due
June 15, 2003 have formed a Steering Committee and retained
Jefferies & Company, Inc., the principal operating subsidiary of
Jefferies Group, Inc. (NYSE:JEF), and Bingham Dana as financial
and legal advisors, respectively, to work with Kellstrom to
restructure the interests of the Noteholders in the Company.
These ongoing discussions have been constructive and have
focused on the potential conversion of the outstanding notes
into equity.

Key Principal Partners, Kellstrom's mezzanine lenders, has
engaged P.J. Solomon as its financial advisors, to work with
Kellstrom to restructure the interests of Key in the Company.
Key has expressed a willingness to discuss the conversion of its
$30 million 13% subordinate note due November 2007 into equity
in Kellstrom. The Company is working with Key to conclude an
agreement.

Kellstrom is also working with its senior lenders and their
agent, Bank of America, to formulate an operating plan that
factors in the September 11, 2001 terrorist attacks and their
impact on the commercial aviation industry, which represented
approximately 75% of Kellstrom's 2000 revenues. With input
from its senior lenders, Kellstrom is working to devise a plan
that it hopes will enable the Company to confront the current
industry downturn and turmoil.

"In the aftermath of the terrorist attacks, our commercial
aviation business has been adversely impacted," according to
Zivi Nedivi, President and CEO. "We continue to assess the
impact of these events on our commercial aviation business on a
going forward basis. While we are not seeing any material impact
on our aerospace defense business, it is still premature to
speculate on any future build-up in this area."

Kellstrom is a leading aviation inventory management company.
Its principal business is the purchasing, overhauling (through
subcontractors), reselling and leasing of aircraft parts,
aircraft engines and engine parts.

Headquartered in Miramar, FL, Kellstrom specializes in
providing: engines and engine parts for large turbo fan engines
manufactured by CFM International, General Electric, Pratt &
Whitney and Rolls Royce; aircraft parts and turbojet engines and
engine parts for large transport aircraft and helicopters; and
aircraft components including flight data recorders, electrical
and mechanical equipment and radar and navigation equipment.


KMART CORPORATION: Ronald Burke Discloses 6.8% Equity Stake
-----------------------------------------------------------
Being held for investment purposes the following hold shares of
the common stock of Kmart Corporation:

      * American Companies, LLC and Vincent C. Smith hold shared
voting and dispositive powers on 12,648,000 shares, representing
2.5% of the outstanding common stock of Kmart.

      * U.S. Transportation, LLC and The Yucaipa Companies, LLC
hold shared voting and dispositive powers over 20,211,850
shares, representing 4.1% of the outstanding common stock of
Kmart.

      * Ronald W. Burkle holds sole voting over 1,102,345 shares,
shared voting on 32,859,850 shares, and shared dispositive
powers on 20,211,850 shares. The total held represent 6.8% of
the outstanding common stock of Kmart.

Westgate Enterprises III, LLC no longer beneficially owns Kmart
common stock.  These figures reflect (i) additional purchases of
shares of common stock, par value $1.00 per share, of Kmart
Corporation, a Michigan corporation; (ii) the replacement of
Kenneth J. Abdalla by Vincent C. Smith as the managing member of
American Companies, LLC, a Delaware limited liability company
and Westgate Enterprises III, LLC, a Delaware limited liability
company and (iii) the appointment of Ronald W. Burkle as a co-
managing member of American.

U.S. Transportation used an aggregate of $135,311,628 to
purchase the common stock that it holds directly. The source of
funds used by UST to purchase the common stock was working
capital derived from capital contributions from its members out
of their assets. Mr. Burkle used an aggregate of $5,528,090 of
personal funds to purchase the common stock that he holds
directly.

American used an aggregate of $84,337,848 to purchase the
12,648,000 shares of common stock held of record by it. The
source of funds used by American to purchase the common stock
was working capital derived from capital contributions from its
members out of its members' assets.


LERNOUT & HAUSPIE: Revised Belgium Plan Conditionally Approved
--------------------------------------------------------------
Lernout & Hauspie Speech Products N.V. commenced a concordat
reorganization proceeding in Belgium on November 30, 2000, which
was rejected by the Belgium Court in December 2000. On December
27, 2000, L&H NV commenced a subsequent concordat proceeding
Belgium, which was granted in January2001. Under the January 5,
2001, order of the Ieper commercial Court granting the concordat
proceeding, L&H NV had six months, or until June 5, 2001, to
have a plan of reorganization approved by its creditors in the
concordat proceeding. On June 5, 2001, the creditors in the
concordat approved L&H NV's plan. However, the Belgium court
declined to approve the plan as filed, but extended the
concordat proceeding through September 30, 2001, to allow L&H NV
to file a revised Belgium plan, which was done by L&H NV on
September 10, 2001. On September 21, 2001, the Ieper Commercial
Court conditionally approved the revised Belgium reorganization
plan.  (L&H/Dictaphone Bankruptcy News, Issue No. 12; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


LERNOUT & HAUSPIE: Receives Bid For SLT Division
------------------------------------------------
Lernout & Hauspie Speech Products NV relates it received a
binding offer for its speech and language technology division,
SLT, Dow Jones reported. A company spokesman declined to
disclose the identity of the bidder.  The division is the last
remaining unit L&H needs to sell. The company collapsed after it
was forced to admit accounting errors and irregularities.
Bankrupt L&H has appealed against some of the conditions in its
bankruptcy ruling, which it sees as too stringent and which
could hinder the sale of SLT. (ABI World, October 10, 2001)


LOEWEN: FDLIC Soliciting Votes to Reject 4th Amended Plan
---------------------------------------------------------
Funeral Directors Life Insurance Company is circulating this
letter to Loewen creditors soliciting rejections of the Debtors'
Fourth Amended Plan of Reorganization:

               FUNERAL DIRECTORS LIFE INSURANCE COMPANY
                       A Legal Reserve Company
                           P.O. Drawer 5649
                         Abilene, Texas 79608
                            (915) 695-3412

October 1, 2001

Dear Fellow Loewen Creditor:

            Vote "REJECT" to Loewen's Reorganization
                Plan and Disclosure Statement.

      As an unsecured creditor of The Loewen Group, Inc. or
Loewen Group International, Inc. or a Loewen subsidiary
(referred to jointly as "Loewen" ), we are asking you to join us
in voting to "REJECT" Loewen's Reorganization Plan.  In working
with our legal counsel and our consultants, we submit the
following for your consideration:

      * We believe that the Liquidation Analysis in Loewen's
Disclosure Statement is inaccurate, thus distorting the values
of Loewen's assets if the company were liquidated. Our analysis
indicates that you could receive a cash dividend of a value
greater than the Loewen stock you are to receive under the Plan,
if the Loewen Debtors were liquidated. In fact, some Loewen
subsidiary creditors may actually be entitled to a dividend of
up to 100% based on the asset-to-debt ratio of certain
individual subsidiary debtors.

      * We believe that the value of the "New Common Stock" that
Loewen intends to use to pay a portion of your claim as stated
in Loewen's Disclosure Statement at $17.17 per share is grossly
overstated (this per share value is more than 60 times earnings,
while other death care industry stocks are publicly trading, on
the average, at less than 18 times earnings).

      * We believe that Luewen's financial projections, as
illustrated in their Disclosure Statement, for calendar years
2002 and 2003 are unrealistic and misleading, given historical
tads and anticipated future economic conditions (Loewen claims
that it will grow revenue at an annual rate of approximately 4%,
even though their press releases for the past two years indicate
"same store" volume declining in excess of 4%).

      * We believe that the senior management of Loewen has
virtually no funeral industry experience.

      * Three of the five members of the Unsecured Creditors
Committee also hold CTA secured claims, which raises serious
questions about who has been protecting our best interests as
unsecured creditors.

      * John Lacey, Chairman of the Loewen Hoard, and Paul
Houston, President of Loewen, will receive a total of $4.5
million if Loewen simply emerges from the Chapter l I
proceeding, regardless of how long Loewen is able to stay in
business.

      These bullet points are only the highlights of what we have
learned.  We would like to invite you to discuss more about
Loewen's proposed Reorganization Plan and their Disclosure
Statement.  We are hosting a meeting at the Hyatt Regency at DFW
airport on October 17, 2001 at 1:30 p.m. in order to assist you
in casting an informed vote against Loewen's plan. The meeting
should only take a few hours, so you can come in and leave out
in the same day.  If you would like to attend this crucial and
important meeting please call us at 1-800-692-9515, now, to
reserve your place.

      We need your help to fight Loewen's Reorganization Plan,
which only offers to unsecured creditors Loewen's "New Common
Stock," which we anticipate to be of minimal value; stock that
we symbolically refer to as "wallpaper." We are not asking for,
nor do we need, your money -- we are asking simply for your vote
to reject Loewen's plan.  The only cost to you will be either
your travel expense to hear, as Paul Harvey would say, "the rest
of the story," or the cost of the ink for a pen to vote against
Loewen's unrealistic Reorganization Plan.  Now is the last
chance to let your opinion be heard.

      Thank you for your attention to this important matter.
Whether you are able to come to the meeting at the Hyatt at DFW
or not, call us at 1-800-692-9515 and join forces with us to
defeat Loewen's Reorganization Plan. Vote "Reject."

                     Best regards,

                         /s/ Kris Seale

                     Kris Seale
                     President
                     Funeral Directors Life Insurance Company


LTV STEEL: Minnesota Power & Cleveland-Cliffs to Acquire Assets
---------------------------------------------------------------
Minnesota Power, a business of ALLETE, Inc. (NYSE: ALE), and
Cleveland-Cliffs Inc (NYSE: CLE) announce that they have
executed an Asset Purchase Agreement with LTV to acquire all of
the assets of LTV Steel Mining Co. (LTVSMC). The LTVSMC mining
operation was closed on Jan. 5, 2001, after LTV initiated a
Chapter 11 bankruptcy proceeding. The purchase agreement is
subject to approval from the U.S. Bankruptcy Court and
satisfaction of other closing conditions.

Under terms of the purchase agreement, a subsidiary of Cliffs
would pay $12.5 million to LTV to acquire the taconite
processing plant along with all of LTVSMC's property that is
related to mining operations.

Rainy River Energy Corp. - Taconite Harbor, a wholly owned
subsidiary of Minnesota Power, would pay $75 million in total to
LTV and Cliffs to acquire certain non-mining properties from
LTVSMC, including its electric generating facility and existing
coal pile at Taconite Harbor, a sixty-mile transmission line
connecting the generating facilities to the Iron Range, railroad
trackage rights, and approximately 30,000 acres of forest and
recreation land in northeast Minnesota. Rainy River companies
are engaged in merchant generation and wholesale power
marketing.

"Minnesota's growing need for electricity is well documented,"
said Don Shippar, Minnesota Power chief operating officer. "The
Taconite Harbor generation facility will help serve Minnesota's
energy requirements while returning dozens of jobs to the East
Range.

"We are pleased that we were able to work with the State of
Minnesota, the IRRRB and other stakeholders to ensure these
assets are available for future economic development in
Northeastern Minnesota," he continued. "As a part of this
transaction, we will donate public use properties in Hoyt Lakes
for the enjoyment of residents of Hoyt Lakes and the East Range.
We will also work with the IRRRB to develop property near Giants
Ridge."

The LTVSMC electric generation facility comprises three 75 MW
(megawatt) electric generating units, all of which burn sub-
bituminous coal. The electricity will be generated for system
capacity and energy needs. A portion of the power will be
reserved for redevelopment at the former LTVSMC site.

Minnesota Power serves 144,000 customers in northeastern
Minnesota and northwestern Wisconsin with low-cost electricity.
ALLETE is a diversified company with corporate headquarters in
Duluth, Minn. Other ALLETE businesses include the second-largest
wholesale automobile auction network in North America; the
leading provider of independent auto dealer inventory financing;
the largest investor-owned water utilities in Florida and North
Carolina; and significant real estate holdings in Florida.


METROMEDIA FIBER: Randall R. Lay is New Senior VP & CFO
-------------------------------------------------------
Metromedia Fiber Network, Inc. (MFN) (Nasdaq:MFNX), the leading
provider of digital communications infrastructure solutions,
announced the appointment of Randall R. Lay to the position of
senior vice president and chief financial officer effective
immediately.

Mr. Lay's appointment comes on the heels of the Company's
closing on a $611 million financing package. He will report to
Mark Spagnolo, MFN president and chief operating officer. Mr.
Lay replaces Jerry Benedetto who has been with MFN since 1998
and is leaving to pursue other options.

Prior to joining MFN, Mr. Lay was executive vice president and
chief financial officer of International Specialty Products
where he led the financial organization of the global $800
million public company. During his tenure at International
Specialty Products, Mr. Lay directed the restructuring of the
financial and operating organization, coordinated the
acquisition and integration of three businesses, and helped
market the company to the financial community under difficult
industry conditions. Mr. Lay was with International Specialty
Products for eight years, starting as business unit controller.
Preceding that position, he was the director of financial
planning for the Otis Elevator Corporation, a subsidiary of
United Technology Corporation.

"Randy joins MFN at a very exciting time and we are very pleased
to have him as part of our senior management team," said Mark
Spagnolo, president and chief operating officer of MFN. "He
brings with him a wealth of experience and leadership that will
enable us to propel MFN to the next level."

"I'm looking forward to working with this outstanding management
team whose vision, enthusiasm and perseverance has built MFN
into a leading infrastructure provider," said Randy Lay, senior
vice president and chief financial officer of MFN. "MFN has
achieved many successes - most recently raising $611 million in
a very difficult market. As CFO, I will meet the challenges
ahead with equal focus, determined to add to the list of
impressive accomplishments."

Mr. Lay has a Masters of Business Administration in Finance from
Boston University, graduating with honors. He also completed his
undergraduate studies at the same university and was awarded a
Bachelor of Arts in Political Science, Summa cum Laude. He is a
member of Phi Beta Kappa.

Jerry Benedetto, MFN's departing CFO, has agreed to stay on
until January 2002 in order to assist in the transition. "We
want to thank Jerry Benedetto for his many years of dedicated
service to MFN," said Nick Tanzi, MFN's Chief Executive Officer.
"We are glad that he is going to stay with us to assist during
the transition period."

               About Metromedia Fiber Network, Inc.

Metromedia Fiber Network is the leading provider of digital
communications infrastructure solutions. The Company combines
the most extensive metropolitan area fiber network with a global
optical IP network, state-of-the-art data centers and award
winning managed services to deliver fully integrated, outsourced
communications solutions for Global 2000 companies. The all-
fiber infrastructure enables MFN customers to share vast amounts
of information internally and externally over private networks
and a global IP backbone, creating collaborative businesses that
communicate at the speed of light.


MIDWAY AIRLINES: Says No Plan Will Deliver Value to Equity
----------------------------------------------------------
An article in Wednesday's News and Observer suggested that an
investor in the common stock of Midway Airlines (Nasdaq: MDWYQ)
might earn 10 to 20 times their investment if Midway "comes
back."  This has resulted in extraordinary trading in Midway's
common stock.

Midway advises its stockholders and potential purchasers of its
stock, that given current market conditions and the
opportunities presently available to Midway, it is more likely
that a Plan of Reorganization would not provide recovery for
common stockholders. In such a Plan of Reorganization, all
shares of common stock would be cancelled and rendered of no
further force and effect.

Midway further advises that it presently evaluating several
possible Plans of Reorganization, including those that
contemplate a resumption of flying operations, and none of such
Plans of Reorganization contemplates any recovery for common
stockholders.


NETCENTIVES INC: Chapter 11 Case Summary
----------------------------------------
Debtor: Netcentives, Inc.
         475 Brannan St.
         San Francisco, CA 94107

Chapter 11 Petition Date: October 5, 2001

Court: Northern District of California (San Francisco)

Bankruptcy Case No.: 01-32597

Judge: Dennis Montali

Debtor's Counsel: Michael W. Malter, Esq.
                   Law Offices of Binder and Malter
                   2775 Park Avenue
                   Santa Clara, CA 95050
                   408-295-1700


PACIFIC GAS: Will Explain Chapter 11 Plan in Court on Dec. 19
-------------------------------------------------------------
Pacific Gas and Electric Co. will explain the details of its
reorganization plan on Dec. 19 before U.S. Bankruptcy Judge
Dennis Montali, Dow Jones reported.  Judge Montali must approve
the utility's disclosure statement before it can be mailed to
creditors for a vote.  Once the creditors' votes are tallied,
another hearing will be held to confirm the plan.  Parties may
file objections to the disclosure statement by Nov. 27, and a
status conference will be held on Dec. 4 to consider the
objections.  PG&E filed a reorganization plan on Sept. 20 that
would spin off the electricity and natural gas distribution
businesses of the utility as a separate corporate entity.  PG&E
Corp. would buy the utility company's generation plants,
electricity transmission and natural gas pipeline assets.
Proceeds from the sale would be used to pay utility creditors.
(ABI World, October 10, 2001)


POLAROID CORPORATION: Expected to File For Chapter 11
-----------------------------------------------------
Polaroid Corp., succumbing to months of pressure from
bondholders pressing for a restructuring, is expected to file
for chapter 11 bankruptcy protection and accelerate efforts to
sell the company, people familiar with the matter say, The Wall
Street Journal reported.  For months, the Cambridge, Mass.-based
company has been struggling to turn around its fading instant-
photography business while the clock ticked on its debt
agreements.  Under the protection of bankruptcy court, Polaroid
will need to devise a plan acceptable to holders of more than
$900 million in debt.  It looks increasingly unlikely that
Polaroid will emerge from the bankruptcy protection process as
an independent entity.  People familiar with the matter say the
most likely scenario is a sale of the company, in its entirety
or in pieces.

In recent weeks, the company's management and bondholders have
been wrangling over terms of new debtor-in-possession (DIP)
financing.  Polaroid management has been pressing for a loan of
about $100 million, while some creditors have been arguing for a
smaller facility, so that the company has just enough money to
provide for an orderly sale of its assets.  Polaroid has been in
discussions about DIP financing with J.P. Morgan Chase & Co.,
which leads a group of Polaroid's existing lenders. (ABI World,
October 10, 2001)


RELIANCE: Seeks Okay to Hire Zeller as New President & CEO
----------------------------------------------------------
Reliance Group Holdings, Inc. asks Judge Gonzalez for authority
to enter into an Employment Agreement, pursuant to 11 U.S.C.
Sec. 363(b)(1), with Paul W. Zeller.  The Board of Directors
elected Mr. Zeller as its President and Chief Executive Officer
and approved the agreement on September 6, 2001, subject to
Bankruptcy Court approval.  The employment agreement ends on
March 31, 2002.

The employment agreement provides, among other things, that in
consideration for Mr. Zeller's services for the six-month term,
Mr. Zeller will receive:

       (i) the pro rata portion of an annual salary of $675,000
           payable in accordance with RGH's standard payroll
           practices and procedures (which amounts to $56,250 per
           month);

      (ii) reimbursement of all reasonable ordinary and necessary
           expenses;

     (iii) two weeks vacation;

      (vi) participation in any medical, dental, disability,
           401(k) or other employee benefit plan (but in no event
           severance beyond the six-month term) maintained by
           RGH.

Steven R. Gross, Esq., at Debevoise and Plimpton, tells Judge
Gonzalez that Mr. Zeller is particularly well suited for the
aforementioned positions as he has detailed knowledge and
familiarity with RGH's affairs.  Mr. Zeller served as Corporate
Secretary of RGH and RFS from April 2000 through May 29, 2001.

From March 16, 2001 until July 12, 2001, he also served as
Executive Vice President and Chief Legal Officer of RIC.  From
March 2000 until March 16, 2001, he served as General Counsel of
RGH and RFS, and from August 1998 until March 16, 2001, her
served as Senior Vice President of RGH and RFS.  Prior to 1998,
Mr. Zeller held various positions with RGH and RFS, and
predecessors of RGH and RFS, since 1981.  Debtors believe that
Mr. Zeller's extensive experience at RGH and RFS will enable him
to effectively manage the Debtors' affairs and estates and
contribute to a reduction in the Debtors' outside counsel fees.

Mr. Gross informs Judge Gonzalez that the failure to employ Mr.
Zeller would cause great harm to RGH's Chapter 11 case.  Mr.
Zeller's proposed employment is in the best interests of the
Debtors' estates and creditors.

Pursuant to Local Bankruptcy Rule for the Southern District of
New York 9013-1(b), because there are no novel issues of law
presented herein, RGH respectfully requests that the Court waive
the requirement that the Debtors file a memorandum of law in
support of this motion. (Reliance Bankruptcy News, Issue No. 10;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


RELIANCE INSURANCE: A.M. Best Cuts Ratings to F From E
------------------------------------------------------
A.M. Best Co. has downgraded the financial strength ratings of
Reliance Insurance Co., Philadelphia, and its subsidiaries to F
(In Liquidation) from E (Under Regulatory Supervision).

This rating action reflects the approval of an order of
liquidation for Reliance Insurance Co. by the Commonwealth Court
of Pennsylvania on October 3. Reliance Insurance Co. had been
under regulatory supervision by the Pennsylvania Department of
Insurance since January 29, 2001.

The following companies had their financial strength ratings
downgraded to F:

      * Reliance Direct Insurance Co.;
      * Reliance Insurance Company of Illinois;
      * Reliance Insurance Co.;
      * Reliance Lloyds;
      * Reliance National Indemnity Co.;
      * Reliance National Insurance Co.;
      * Reliance National Insurance Co. (Europe);
      * Reliance Surety Co.;
      * Reliance Universal Insurance Co. Inc.;
      * Sable Insurance Co.; and


SL INDUSTRIES: Closes Reynosa, Mexico Facility
----------------------------------------------
SL Industries Inc. (NYSE:SL)(PHLX:SL) relates it has completed
its planned restructuring in response to the slowdown in the
telecommunications industry, with the closure of its
manufacturing facility in Reynosa, Mexico.

Owen Farren, president and chief executive officer, said: "To
further reduce the impact on SL Industries of the slowdown in
the telecommunications market, the company's Condor D.C. Power
Supplies subsidiary will close its manufacturing plant in
Reynosa, Mexico, and consolidate operations in its facility in
Mexicali, Mexico.

"We expect these actions to further improve operating profits
and cash flow, while maintaining Condor's flexibility to meet
increased demand for power supplies for customers in the
telecommunications industry when conditions improve.

"The company will record an additional restructuring charge of
approximately $2.5 million in connection with the closure of the
Reynosa facility."

Farren continued: "As a result of aggressive cash management,
cost reductions and restructuring activities, the company's
financial condition has significantly improved over the last
quarter. In addition, the company has experienced continued
strength in all of its business segments other than the
semiconductor and telecommunications markets.

"Assuming that business activity continues at its current levels
and the company is able to draw on its revolving credit
facility, we anticipate that the company will have adequate
liquidity to fund operations and working capital requirements."

As previously announced, the company obtained a waiver of
certain financial covenants in its revolving credit facility for
the fiscal quarters ended March 31, 2001, and June 30, 2001. The
company has advised its banks that it will be in default of the
financial covenants in the revolving credit facility for the
quarter ended Sept. 30, 2001, and is currently in discussions
with its banks to amend its financial covenants for such quarter
and beyond.

As the company and its banks are still in negotiations, it is
too early to determine if these discussions will be successful.
If the company and the banks are unable to reach an agreement,
the company's ability to continue operations as presently
conducted will be materially adversely affected.

Farren concluded: "As mentioned earlier, the company has
experienced strong activity in all of its business segments,
other than sales to the semiconductor and telecommunications
markets. Although the company has not yet been adversely
impacted by the attacks of Sept. 11, it is still too early to
determine future business conditions as a result of the attacks.

"The company's SL-Montevideo Technology and Elektro-Metall
Export subsidiaries engage in substantial business in the
aerospace sector, serving both defense and commercial aerospace
customers. As previously announced, we know of no development or
event to account for the recent unusual trading activity in
shares of the company's common stock.

"The recent attacks have, however, impacted the capital markets
and delayed the sales process for the company and its business
segments. The company and Credit Suisse First Boston expect to
conclude preliminary discussions with potential purchasers and
complete analyses of proposed transactions by the end of
October."

                      About SL Industries

SL Industries Inc. designs, manufactures and markets Power and
Data Quality (PDQ) equipment and systems for industrial,
medical, aerospace and consumer applications. For more
information about SL Industries Inc. and its products, visit the
company's Web site at www.SLpdq.com.


SUNBEAM CORP.: Court Stretches Lease Decision Period to Feb. 4
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
granted Sunbeam Corporation and its affiliate debtors an
extension of their lease decision period.  The Debtors now have
until February 4, 2002 to assume or reject remaining unexpired
leases of nonresidential real property.  Judge Arthur J.
Gonzales notes that the Debtors retain the right to request
additional extensions of the lease decision period.

Sunbeam Corporation, the largest manufacturer and distributor of
small appliances, sells mixers, coffeemakers, grills, smoke
detectors, toasters, outdoor & camping equipment in the United
States. It filed for chapter 11 protection on February 6, 2001
in the Southern District of New York.  George A. Davis, Esq., of
Weil Gotshal & Manges LLP, represents the Debtors in their
restructuring effort.  As of filing date, the company listed
$2,959,863,000 in assets and $3,201,512,000 in debt.


SUN HEALTHCARE: Hires ADP To Perform Benefits Administration
------------------------------------------------------------
Sun Healthcare Group, Inc. sought and obtained the Court's
approval to employ ADP, Inc., nunc pro tunc to July 17, 2001, to
provide benefits administration and COBRA services, and to enter
into a Master Services Agreement with ADP governing the
provision of such services.

The contemplated Benefit Administration Services will begin with
a lengthy implementation phase that will take approximately four
months to complete. Once this initial phase is finished, ADP
will begin administering the Debtors' COBRA and benefits plan
programs, scheduled to occur sometime in mid-November of this
year.

ADP will charge the Debtors a one time implementation fee of
approximately $1 million, with on going yearly fees to tatal
approximately $3.4 million. Despite these substantial costs, the
Debtors believe that the retention of ADP to provide the
Benefits Administrative Services will result in substantial
savings for the Debtors.

By employing ADP to perform the Benefits Administration Services
the Debtors expect to realize, even utilizing a "middle of the
road" estimate, roughly $4.1 million in gross annual direct
costs savings. These savings arise primarily from reduced
staffing needs and increased productivity through implementation
of a new automated process. In addition, in the Debtor's
estimation, gross annual indirect costs savings - savings that
are associated with freeing employees to attend to other tasks -
are roughly $6.2 million. A more aggressive estimate pegs gross
annual savings indirect cost at approximately $5 million and
indirect costs at approximately $9 million. The Debtors
therefore estimated gross annual savings range between $10.3 to
$14 million.

The Debtors believe that, even using conservative estimate of
about $7.1 million in gross annual savings, once ADP's annual
fees of $3.4 million are backed out, net annual savings will be
approximately $3.7 million before accounting for the $1 million
one time charge for implementing ADP's system. Accordingly, the
Debtors believe that the requested relief is in the best
interests of the Debtors, their estates and the creditors, for
the substantial savings this will bring.

The Debtors submit that ADP is not a professional as that term
is used in Section 327 of the Bankruptcy Code. The Debtors
submit that if any provision of section 327 is implicated in the
proposed retention of ADP, it is section 327(b), which excepts
the need for court approval when the proposed retention of a
professional merely replaces prepetition salaried employees for
services that are "necessary in the operation of the Debtors'
business. In an abundance of caution, and because of the extent
of ADP's proposed engagement, the Debtors have moved the Court
for authorization to employ ADP to perform the Benefits
Administration Services. The Debtors submit that ADP's retention
is necessary and in the best interests of the Debtors, their
estates and their creditors. (Sun Healthcare Bankruptcy News,
Issue No. 23; Bankruptcy Creditors' Service, Inc., 609/392-0900)


TANDYCRAFTS INC: Court Resets Plan Filing Deadline to January 10
----------------------------------------------------------------
Judge Roderick R. McKelvie put his stamp of approval on the
motion of Tandycrafts, Inc. and its affiliate debtors to extend
their exclusive periods by 120 days.  The Debtors now have until
January 10, 2002 to file a plan of reorganization and may
solicit votes thereon until March 11, 2002.

Tandycrafts, a leading manufacturer and marketer of picture
frames, mirrors and other wall decor products, filed for chapter
11 protection on May 15, 2001 in the U.S. Bankruptcy Court for
the District of Delaware.  Mark E. Felger, Esq., at Cozen
O'Connor, represents the company in its restructuring efforts.


TANDYCRAFTS: Court Approves $2.65 Million DIP Financing
-------------------------------------------------------
Tandycrafts Inc., a framemaker, received interim court approval
of a $2,650,000 debtor-in-possession (DIP) credit facility,
Reuters reported.  Chairman and Chief Executive Officer Michael
J. Walsh said that the financing would provide additional
funding and support for Tandycrafts during the important fall
production and sales season.  The Fort Worth, Texas-based
company filed for chapter 11 on May 15. (ABI World, October 10,
2001)


TENNECO AUTOMOTIVE: Market Outlook Prods Fitch to Drop Ratings
--------------------------------------------------------------
Fitch downgrades Tenneco Automotive Inc.'s senior secured bank
debt from 'BB-' to 'B+', subordinated debt from 'B' to 'B-' and
changes the Rating Outlook from Stable to Negative.

While Tenneco has been executing well to its plan to date in the
current market by aggressively managing costs and improving
working capital levels, the downgrade reflects the altered
outlook for Tenneco's markets, specifically original equipment
(OE) production levels in North America and Europe.

Fitch expects that both North American and European OE light
vehicle production levels will be negatively impacted by a
global economic slowdown. In the context of a slowing OE market,
Tenneco's financial profile limits much financial flexibility.
For the balance of 2001 and into 2002, Fitch expects Tenneco
will be net free cash flow negative due to the weakened
environment.

At June 30, 2001, Tenneco had $1.38 billion in long-term debt
and $0.21 billion of short-term debt, or a total of $1.59
billion in debt outstanding. Following its re-amendment to relax
some of the financial covenants, Tenneco was in full compliance
per the March 2001 re-amended bank agreement at June 30, 2001.
Fitch expects that Tenneco will be able to comply with bank
covenants through the rest of 2001. In addition to $70 million
in cash at June 30, 2001, liquidity is afforded through a $500
million credit revolver, which matures November 2005. As of June
30, 2001, $87 million was drawn under this facility.

Tenneco Automotive Inc., headquartered in Lake Forest, IL, is a
leading global producer of ride control and emissions
components, modules and systems for both the OE and the
aftermarket. About 70% of its revenues come from the OE market
and the remainder is derived from the aftermarket.
Geographically, 55% of revenue is from North America versus 45%
for the rest of the world. Major product lines on the ride
control side are shock absorbers, struts, roll control systems,
and on the exhaust management side are manifolds, catalytic
converters, and mufflers.


TERRA CAPITAL: Fitch Rates New Senior Secured Notes at BB-
----------------------------------------------------------
Fitch has assigned a rating of 'BB-' to Terra Capital's new $200
million senior secured notes, a rating of 'BB-' to the $175
million in new Terra Capital senior secured credit facility, and
a rating of 'B-' to the outstanding $200 million in Terra
Industries senior unsecured notes. The Rating Outlook is Stable.

The notching between the senior secured ratings and the senior
unsecured rating reflects the security in current assets granted
to the senior secured credit facility and the security in fixed
assets of Terra's operating subsidiaries (Beaumont, Port Neal,
and Woodward plants) granted to the senior secured notes.

In addition, the notching reflects the structural subordination
of the existing senior unsecured notes issued at the Terra
Industries level to the secured credit facility and new senior
secured notes issued at the Terra Capital level. While both the
senior secured ratings are the same, the smaller amount of debt
and liquid nature of collateral imply more timely recovery for
the senior secured credit facility.

The ratings reflect Terra's position as a leading Midwest
producer of upgraded nitrogen fertilizer products, particularly
UAN solutions, some product diversification into Methanol as
well as some geographic diversification via the UK nitrogen
operations. The ratings also reflect Terra's ability to generate
significant EBITDA to offset interest payments, near term
capital expenditure requirements and in the medium term,
potentially fund debt reduction. Working capital needs are
expected to result in negative free cash flows in 2001, partly
because inventories had declined to low levels in prior years,
but also because sales volumes are expected to increase in the
coming planting season.

Nitrogen fertilizer market conditions are expected to remain
difficult in the near term as a result of volatile natural gas
prices, excess domestic capacity for nitrogen-based fertilizer
relative to expected import levels and historically weak
agricultural commodity prices. A significant portion of Terra's
$157 million in year 2000 EBITDA was classified as natural gas
hedging gains.

Fitch recognizes the unpredictable nature of gas prices and
associated hedging gains, but also realizes that nitrogen
producers are often able to lock in sales in advance through
pre-payments programs and, concurrently, lock in raw material
costs and thus ensure positive cash flows from a portion of
sales. That said, the declining product pricing and raw material
pricing environment has resulted in somewhat reduced first half
2001 EBITDA of approximately $58 million. Third quarter EBITDA
is expected to be minimal as high cost inventories continue flow
through the income statement. Fourth quarter results will depend
on sustained strong sales volumes and firm pricing as
distributors build stocks in anticipation of the spring planting
season.

Planted corn acreage is expected to rise next planting season
after contracting this planting season, potentially spurring an
increase in year-over-year nitrogen fertilizer demand. A
substantial decline in nitrogen prices in recent quarters should
slow the opportunistic imports that deluged US markets earlier
this year. Lower natural gas prices should make North American
producers much more competitive globally.

Total debt at June 30, 2001, was $455 million. Debt-to-total
capitalization was approximately 46% at June 30, 2001, but could
increase in the near term if Terra were to write down goodwill
and/or assets.


USG CORPORATION: Entergy Demands $2.67 Million Utility Deposit
--------------------------------------------------------------
Lee Harrington, Esq., at Blank, Rome Comisky & McCauley, LLP,
presents the Court with requests by Entergy Lousiana, Inc.,
Entergy Mississippi, Inc. and Entergy New Orleans, Inc.
(Entergy), pursuant to 11 U.S.C. Sec. 366, for an order
compelling USG Corporation to provide adequate assurance of
payment for on-going utility service in the amount of two months
usage.

Mr. Harrington states that Entergy is a leading provider of
electric services to business and residential customers in
several markets including those of the Debtors' operations. The
Debtors have approximately seven open accounts with Entergy. He
explains that on the Petition Date, the Debtors filed a motion
seeking the determination that the Debtors' utility providers,
Entergy included, are adequately assured of payment and that the
Debtors are not obligated to provide any postpetition deposits
with the Utilities. In addition, the First Day Motion requested
that the Court order the Utilities to make a demand for adequate
assurance on the Debtors within thirty days from the date the
order was served and thereafter the Debtors would "promptly"
file a motion seeking a determination of adequate assurance for
the requesting Utility. In support of the First Day Motion, the
Debtors claimed that Entergy and the Utilities were adequately
assured of payment because of the "Debtors' prepetition history
of prompt and full payment of outstanding utility bills, their
demonstrated ability to pay future utility bills and the
administrative priority status" afforded the Utilities." The
First Day Motion was granted and the proposed form of order was
entered without notice to or opportunity to be heard for Entergy
and the other Utilities.

Mr. Harrington continues that pursuant to the Utility Order, but
without waiving its rights regarding the procedurally defective
Utility Order under Fed.Bankr.P.9024 and otherwise, Entergy
makes a timely demand on the Debtors for adequate assurance of
payment pursuant to section 366(b) of the Bankruptcy Code for a
total deposit in the amount of two times the monthly usage. He
offers that the Entergy Accounts accrue estimated monthly
aggregate charges in excess of $400,000 on a monthly basis. As
of the Petition Date, the Entergy Accounts were in arrears in at
least the amount of $1,624,585.31.

Section 366(b) of the Bankruptcy Code provides that Entergy "may
alter, refuse, or discontinue service if neither the trustee nor
the debtor, within 20 days after the date of the order for
relief, furnishes adequate assurance of payment, in the form of
a deposit or other security, for services after such date."  In
a hearing determining what form and level of adequate assurance
a utility is entitled to receive from the debtor, Mr. Harrington
says the burden of proof lies squarely on "the debtor, the
petitioning party", citing In re Stagecoach Enterprises, Inc., 1
B.R. 732, 736 (Bankr. M.D. Fla. 1979).

Mr. Harrington asserts that in the First Day Motion, the Debtors
offer three grounds to support their "adequate assurance":

       (a) the Debtors' "excellent payment history",

       (b) the Debtors' alleged ability to pay future utility
           bills; and

       (c) the administrative expense priority treatment that any
           unpaid claims would be entitled to under section
           503(b) of the Bankruptcy Code.

Also, according to the Debtors, the chapter 11 filing of the USG
Companies arose from the litigation pressure generated by the
over 100,000 asbestos plaintiffs.

In light of these claims, Mr. Harrington says the Debtors'
arguments are unsupportable.  He states the Debtors are
requesting that this Court ignore the Debtors' essential
financial stability and find Entergy's future payment adequately
assured by factors that have not been proven.  In fact, he
offers that the Debtors' ability to pay may prove illusory if
their businesses run into financial difficulties.

A "contextual reading of section 366 evinces that a debtor must
provide its utility providers with more than administrative
priority."  In re Best Products, 203 B.R. at 53.  Entergy would
be entitled to a priority administrative expense claim under
sections 503(b)and 507(a) even if 366 was struck from the
statute. The Debtors propose to "furnish" "administrative
priority" as "security", a credit accommodation, in purported
compliance with section 366, when Entergy already possesses a
right to payment of administrative expense for its utility
charges under sections 593 and 507 of the Bankruptcy Code. To
deem pre-existing rights under sections 503 and 507 of the Code
as assurance under section 366, voids section 366.

He goes on to say the Debtors failed to pay four accounts prior
to the Proceedings, totaling $423,874.82 and were indebted to
Entergy for approximately $320,000 for electric service which
had been delivered but had not yet been billed. Mr. Harrington
further asserts that the Debtors' bankruptcy filing has been
leveraged to leave Entergy unpaid for amounts in excess of
$1,520,215. Entergy cannot be adequately assured, without a cash
deposit and views the Debtor as a significant credit risk.

Mr. Harrington concludes that the plain language of Section
366(b) requires a debtor to "furnish" some form of adequate
assurance. As the Debtors acknowledge financial instability and
failed to pay for prepetition service, they have demonstrated a
real and growing credit risk for Entergy. Any deposit less than
$2,668,500.00 would place Entergy at an appreciable, statutorily
unacceptable risk of loss. (USG Bankruptcy News, Issue No. 9;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


VERSATEL TELECOM: Exchange Offer Prompts Moody's to Junk Ratings
----------------------------------------------------------------
Moody's Investors Service lowered the ratings of Versatel
Telecom International N.V. to Ca from B3. Versatel was placed
under review for downgrade on August 28, 2001. Approximately
$1.54 billion of debt securities are affected.

Ratings affected by the action:

      * Senior implied rating at Ca

      * Unsecured issuer rating at Ca

      * $225.0 million 13.25% senior notes (with warrants) due
        2008 at Ca

      * $150.0 million 13.25% senior notes (with warrants) due
        2008 at Ca

      * $180.0 million 11.875% senior notes due 2009 at Ca

      * EUR120.0 million 11.875% senior notes due 2009 at Ca

      * EUR300.0 million 11.25% senior notes due 2010 at Ca

      * EUR300.0 million 4.0% senior convertible notes due 2004
        at Ca

      * EUR360.0 million 4.0% senior convertible notes due 2005
        at Ca

The rating action follows Versatel's announcement proposing to
exchange its outstanding senior unsecured notes and convertible
notes for a combination of cash and shares, Moody's said.
Versatel has also proposed consent solicitation with respect to
any outstanding bonds.

The exchange offer is proposed to eliminate substantially all
the company's outstanding indebtedness and interest expense. The
consent solicitation is to eliminate or modify substantially all
restrictive covenants under the indentures (excluding any rights
to receive interest and principal) to enhance the company's
flexibility.

Although Versatel has not defaulted under its indentures as a
result of this recommendation, Moody's said that such an
exchange represents an event of default on its debt obligations,
according to the rating agency's definitions on "distressed
exchanges".

Headquartered in Amsterdam, The Netherlands, Versatel is a
holding company with operations in The Netherlands, Belgium, and
Northwest Germany. Through its affiliates, Versatel is a
facilities-based, competitive local access broadband network
operator with over 67,000 business customers and 1,550
employees.


WARNACO GROUP: Employs FTI Consulting as Lawyers' Accountants
-------------------------------------------------------------
The Warnaco Group, Inc. seeks the Court's authority to retain
and employ FTI Consulting, Inc., as their accountants, effective
as of September 24, 2001.  FTI Consulting will primarily assist
the Debtors' special counsel, Dewey Ballantine.

Stuart Hirshfield, Esq., at Dewey Ballantine, in New York, New
York, explains they require the expertise and assistance of
accountants to review and analyze the Debtors' financial
statements and other relevant documents for the last two fiscal
years.  Accordingly, Mr. Hirshfield says, the Debtors intend to
utilize the services of FTI for accounting support for the
purposes of assisting Dewey Ballantine and the Audit Committee
of the Boards of Directors of Warnaco and Warnaco, Inc., in
evaluating the relevant financial statements and other documents
and in support of the Audit Committee's ongoing oversight
responsibility regarding the Debtors' financial statements.

According to Mr. Hirshfield, the Debtors are satisfied that FTI
will be able to perform the needed services considering the
firm's extensive experience in such matters.  Under the
direction and control of Dewey Ballantine, FTI will be tasked
to:

     (a) analyze and review the Debtors' financial statements and
         related documentation for the previous quarters and the
         last two fiscal years;

     (b) attend meetings with, conduct interviews of and review
         documentation of, third parties;

     (c) provide assistance to Dewey Ballantine in identifying,
         understanding and interpreting the accounting issues
         arising out of Dewey Ballantine's assignment and in
         explaining those issues to the Audit Committee and such
         others as the Audit Committee and Dewey Ballantine may
         direct.

In return for their services, FTI will charge the Debtors with
their customary hourly rates:

            Managing Directors        $430 - 525
            Directors                  350 - 415
            Managers                   310 - 330
            Consultants                250 - 275
            Staff/Paraprofessionals     60 - 135

Raymond T. Sloane, one of FTI's managing directors, advises the
Court that their hourly rates are revised at the end of each
calendar year.  Mr. Sloane also informs Judge Bohanon FTI will
charge the Debtors of expenses at actual costs incurred,
including copying, telephone, facsimile and travel.  FTI will
also be filing appropriate applications for allowance of
compensation and reimbursement of expenses, Mr. Sloane adds.

Mr. Sloane also assures the Court that FTI is a "disinterested
person" as defined under section 101(14) of the Bankruptcy Code.
"To the best of my knowledge, FTI does not hold nor present any
interest adverse to the Debtors in matters upon which the
Debtors have requested that FTI be employed," Mr. Sloan swears.
FTI may represent some parties-in-interests, Mr. Sloan admits.
But Mr. Sloane emphasizes, these are only in matters that are
unrelated to the Debtors' chapter 11 cases. (Warnaco Bankruptcy
News, Issue No. 10; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


WASHINGTON GROUP: Chairman Makes Offer To Facilitate Recovery
-------------------------------------------------------------
Washington Group International, Inc. announced that in order to
facilitate the company's emergence from bankruptcy, Chairman
Dennis R. Washington has offered to relinquish one-third of his
initial stock option package in the newly reorganized company.

Under terms of the company's Amended Plan of Reorganization,
which was unanimously approved by the steering committee of the
company's secured lenders and is subject to Bankruptcy Court
approval, Mr. Washington was to be granted stock options to
purchase up to 15 percent of the new common stock of the
reorganized company in consideration for his continuing services
to the company.

The Plan also includes provisions that remain in place that
permit Mr. Washington to purchase, through private transactions
or on the open market, up to 40 percent of the common stock of
the newly reorganized company.

"The company's prompt emergence from bankruptcy is my number one
priority," said Mr. Washington. "My decision underscores my
commitment to and confidence in our company. We have great
employees who have remained focused on serving our clients. I
hope that my actions will increase the likelihood of a prompt
confirmation of the company's plan of reorganization."

Mr. Washington's offer to relinquish one-third of his stock
options was made at the onset of the first day of confirmation
hearings underway in the U.S. Bankruptcy Court for the District
of Nevada in Reno. The hearings are scheduled to continue
tomorrow and on October 29 - November 2, 2001.

On March 2, 2001, the Company announced that, due to Raytheon
Company's failure to comply with the terms of the April 2000
stock purchase agreement pursuant to which the Company acquired
Raytheon Engineers & Constructors (RE&C), the Company was faced
with a severe, near-term liquidity crisis. As a consequence, the
Company ceased certain activities on two power projects in
Massachusetts acquired in the RE&C transaction and filed suit
against Raytheon Company alleging fraud, seeking rescission and,
alternatively, unspecified damages for breach of contract.
On May 14, Washington Group reached an agreement in principle
with its bank group steering committee on a Plan of
Reorganization for the Company. To facilitate the
reorganization, the Company and certain of its subsidiaries
filed the Plan along with voluntary petitions to restructure
under Chapter 11 of the U.S. Bankruptcy Code in the U.S.
Bankruptcy Court in Reno.

Washington Group International, Inc., is a leading international
engineering and construction firm with more than 30,000
employees at work in 43 states and more than 35 countries. The
Company offers a full life-cycle of services as a preferred
provider of premier science, engineering, construction, program
management, and development in 14 major markets.


WINSTAR COMMUNICATIONS: Fleet Capital Presses For Rent Payment
--------------------------------------------------------------
Fleet Capital Corporation urges the Court to compel Winstar
Communications, Inc. to cough-up post-petition rent payments due
under various lease agreements.

Regina Iorri, Esq., at Ashby & Geddes, in Wilmington, Delaware
tells the Court that Winstar Wireless entered into 2 Master
Lease Agreements in March 1998 which were later assigned to
Fleet Corporation. She relates that, from July to September
2001, the Debtors have not made any payments to these 3 leases
under the Master Agreement:

      a) Telephone Switch Equipment at 525, Market St., San
         Francisco, California, $62,762.70 due rent

      b) Telephone Switch Equipment at 525 Market St., San
         Francisco, California, $151,515.66 due rent

      c) Various Vehicles, due rent $60,608.86

Ms. Iorri says that the Bankruptcy Code requires the Debtor to
timely perform all obligations arising from an unexpired lease
60 days after the Petition Date, until such lease is assumed or
rejected. She contends this "breathing period" is expired as the
Debtors filed these cases in April 2001. However, she says,
despite this fact and Fleet's repeated requests, the Debtors
have not paid Fleet for the rent from July to September 2001,
(except for a partial payment for the first Lease in July 2001),
totaling to $274,887.22 on all three Leases.

The Bankruptcy Code, Ms. Iorri says, provides for priority
treatment of actual and necessary costs to preserve the Debtors'
estates. Ms. Iorri argues that since the Debtors are continuing
to possess and use the Leased Properties in the ordinary course
of their business, Fleet is entitled to allowance and payment of
an administrative claim in the amount of the unpaid post-
petition rental due under the Leases. In this case, Fleet is
entitled to an administrative claim in the amount of
$274,887.22.

On these grounds, Fleet submits that the Debtors should be
ordered to immediately perform all outstanding rent payments and
continue to do so until the Leases are assumed or rejected or,
alternatively, allow the payment of an administrative claim in
the amount of $274,887.22. (Winstar Bankruptcy News, Issue No.
15; Bankruptcy Creditors' Service, Inc., 609/392-0900)


BOOK REVIEW: AS WE FORGIVE OUR DEBTORS: Bankruptcy and Consumer
              Credit in America
----------------------------------------------------------------
Authors:    Teresa A. Sullivan, Elizabeth Warren,
             & Jay Westbrook
Publisher:  Beard Books
Softcover:  370 Pages
List Price: $34.95
Review by:  Susan Pannell

Order your personal copy today at
http://amazon.com/exec/obidos/ASIN/1893122158/internetbankrupt

So you think you know the profile of the average consumer
debtor: either deadbeat slouched on a sagging sofa with a three-
day growth on his chin or a crafty lower-middle class type
opting for bankruptcy to avoid both poverty and responsible debt
repayment.

Except that it might be a single or divorced female who's the
one most likely to file for personal bankruptcy protection, and
her petition might be the last stage of a continuum of crises
that began with her job loss or divorce. Moreover, the dilemma
might be attributable in part to consumer credit industry that
has increased its profitability by relaxing its standards and
extending credit to almost anyone who can scribble his or her
name on an application.

Such are among the unexpected findings in this painstaking study
of 2,400 bankruptcy filings in Illinois, Pennsylvania, and Texas
during the seven-year period from 1981 to 1987. Rather than
relying on case counts or gross data collected for a court's
administrative records, as has been done elsewhere, the authors
use data contained in the actual petitions. In so doing, they
offer a unique window into debtors' lives.

The authors conclude that people who file for bankruptcy are, as
a rule, neither impoverished families nor wily manipulators of
the system. Instead, debtors are a cross-section of America. If
one demographic segment can be isolated as particularly debt-
prone, it would be women householders, whom the authors found
often live on the edge of financial disaster. Very few debtors
(3.7 percent in the study) were repeat filers who might be
viewed as abusing the system, and most (70 percent in the study)
of Chapter 13 cases fail and become Chapter 7s. Accordingly, the
authors conclude that the economic model of behavior--which
assumes a petitioner is a "calculating maximizer" in his in his
decision to seek bankruptcy protection and his selection of
chapter to file under, a profile routinely used to justify
changes in the law--is at variance with the actual debtor
profile derived from this study.

A few stereotypes about debtors are, however, borne out. It is
less than surprising to learn, for example, that most debtors
are simply not as well-off as the average American or that while
bankrupt's mortgage debts are about average, their consumer
debts are off the charts. Petitioners seem particularly
susceptible to the siren song of credit card companies. In the
study sample, creditors were found to have made between 27
percent and 36 percent of their loans to debtors with incomes
below $12,500 (although the loans might have been made before
the debtors' income dropped so low). Of course, the vigor with
which consumer credit lenders pursue their goal of maximizing
profits has a corresponding impact on the number of bankruptcy
filings.

The book won the ABA's 1990 Silver Gavel Award. A special 1999
update by the authors is included exclusively in the Beard Book
reprint edition.

                            *********

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

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

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 Amazon.com. Go to
http://www.bankrupt.com/books/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
de Roda, Aileen Quijano, and Peter A. Chapman, Editors.

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

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
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contained herein is obtained from sources believed to be
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