TCR_Public/011101.mbx        T R O U B L E D   C O M P A N Y   R E P O R T E R

          Thursday, November 1, 2001, Vol. 5, No. 214


AT PLASTICS: On Track to Complete Balance of Restructuring Plan
ACTERNA CORP: Working with Lenders to Strengthen Liquidity State
AMES DEPARTMENT: Taps Arthur Andersen for Financial Advice
ARMSTRONG HOLDINGS: Inks New Deal with Expeditors International
ATLANTIC COAST: S&P Affirms Ratings, Keeping Negative Outlook

BETHLEHEM STEEL: Honoring Most Prepetition Employee Obligations
BRIDGE INFORMATION: Repudiates Useless Moneyline Contracts
CKE RESTAURANTS: S&P Affirms Junk Rating on Subordinated Debt
COMDISCO: Secures Approval to Assign Pennsylvania Lease to MCI
EPICOR SOFTWARE: Q3 Revenues Slide Due to Market Slowdown

EXIDE TECHNOLOGIES: Strained Finances Spur S&P Downgrades
EXODUS COMM: Flaschen & Smits Serving as Foreign Representatives
FEDERAL-MOGUL: Proposes $26MM Key Employee Retention Program
HOLLYWOOD ENTERTAINMENT: Posts Improved Results in Third Quarter
HOMESEEKERS.COM: Selling MLS Assets to Fidelity National

HOMESEEKERS.COM: No Replacement Yet for Ernst & Young Auditors
IMC GLOBAL: Facing Suit for Breach of Contract Re Sale of Assets
IMX PHARMACEUTICALS: Gets Substantial Offer From Cater Barnard
INTEGRATED HEALTH: Provident Bank Eyes Clara Burke Sale Proceeds
INT'L AIRCRAFT: Q3 Income Adversely Affected By Sept. 11 Events

KEYSTONE: Big Noteholders Defer Rights Exercise Until Dec. 7
LTV CORPORATION: Promotes John T. Delmore to VP & Controller
LIONBRIDGE: Expects to Save Over $30MM per Year from Cost-Cuts
MATSUSHITA ELECTRIC: Losses Reflect Continuing Economic Slowdown
MILACRON: S&P Cuts Credit & Debt Ratings to Low-B Range

NEXTEL INT'L: Considering Alternative Plans to Fund Business
PACIFICARE HEALTH: Cost Stabilization Yields Results in Q3
PACIFIC GAS: Leading Agricultural Groups Oppose Bankruptcy Plan
PENTACON INC: Makes Interest Payment on 12-1/4% Senior Sub Notes
PHARMING GROUP: Sells Belgian Manufacturing Facility to Genzyme

PIONEER COMPANIES: Postpones Release of Q3 Results to November 8
POLAROID CORP: Intends to Auction & Sell I.D. Systems Business
PROTECTION ONE: S&P Concerned About Weakening Credit Protection
QUAKER COAL: Completes Sale of Assets to AEP For $101MM + Debts
SAM THE RECORD MAN: Files an Assignment in Bankruptcy in Canada

SERVICE MERCHANDISE: Seeks Release of Real Estate Sale Proceeds
STILLWATER MINING: S&P Anticipates Potential Covenant Violations
TRITON NETWORK: Stockholders Okay Plan for Complete Liquidation
USINTERNETWORKING: Debt Restructuring Talks Underway
VENCOR: Reaches Agreement with IRS to Extend Discovery Period

VSOURCE INC: Resumes Trading on Nasdaq Under VSRC Symbol
WEBLINK WIRELESS: Set to File Plan to Emerge from Chapter 11
WEBVAN GROUP: Seeks Approval of Joint Plan of Liquidation
WHEELING-PITTSBURGH: CWVEC Wants Decision on Coal Contract
WINSTAR COMMS: Moves to Reject T.J. Graham Employment Agreement

XEROX CAPITAL: S&P Knocks CorTS Trust Rating Down to B
YORK RESEARCH: Defaults On 12% Senior Secured Bonds
YOUNG BROADCASTING: Weak Credit Measure Prompts S&P Downgrades


AT PLASTICS: On Track to Complete Balance of Restructuring Plan
AT Plastics (AMEX:ATJ) (TSE:ATP.) announced financial results
for the third quarter and nine months ended September 30, 2001.

The focus of the Company's financial statements is on the
Company's continuing operations, the Specialty Polymers and
Films businesses. The Wire & Cable business, which was sold May
31, 2001 and the Packaging business, which is in the process of
being sold, have been presented as discontinued operations.

"The third quarter results show steady improvement as raw
material costs have declined in response to market demand and
falling natural gas prices. We are pleased with this performance
in light of softening economic conditions and an immediate fall
off in volume after Sept. 11th," said Gary Connaughty, President
and CEO. "Average selling prices for AT Plastics' specialty
products have been holding compared to declining prices for
commodity resin. This validates AT Plastics' specialty focus
strategy and points to improved profitability as polyethylene
market conditions improve."

"We believe the success of our share issue, which was
oversubscribed, demonstrates confidence in our new strategic
direction of focusing on core operations where we have a strong
market position, and withdrawing from non-core operations," said
George Czubak, Chief Financial Officer. "We have paid down debt
by $23 million in the third quarter, and are in discussions to
refinance the remaining debt. We are also in final negotiations
for the sale of our Packaging business."

                    Financial Summary

The Company reported sales of $62.3 million from continuing
operations in the third quarter of fiscal 2001, 3.6% lower than
the same quarter last year. For the first nine months revenue
was $189.6 million, essentially flat compared with $192.9
million in the first nine months of 2000. Higher selling prices,
due to improved mix, were essentially offset by reduced volumes.

Earnings before interest, taxes, depreciation, amortization and
special charges (EBITDA) from continuing operations, increased
38% to $9.7 million from $7.0 million in the second quarter,
primarily reflecting declining feedstock costs and implemented
cost controls. Compared to last year however, year to date
EBITDA of $23.6 million is significantly lower primarily due to
the higher cost of ethylene raw material driven by the
unprecedented spike in natural gas prices in early 2001. The
Company estimates the impact of this gas spike under present
market conditions to be as much as $15 million against year to
date EBITDA.

The Company reported Special Charges amounting to $7.9 million
in the third quarter representing anticipated lender exit
charges related to the debt refinancing, professional fees
related to the Company's restructuring program, and losses on
the buy-out of remaining US exchange hedge contracts.

In the quarter the Company reported a net loss from continuing
operations of $8.4 million after special charges. This compares
with a net loss of $4.5 million in the second quarter and a net
income from continuing operations of $1.9 million in the same
quarter of 2000 when no special charges were incurred. For the
first nine months the Company reported a net loss from
continuing operations after, special charges, of $15.7 million,
compared with a net income of $752,000 in the same period a year
ago. Including discontinued operations, in the first nine months
of 2001 the Company reported a net loss of $16.9 million,
compared with a net loss of $1.1 million in the same period last
year. Excluding the impact of the unprecedented natural gas
spike and special charges, earnings would have been about the
same as last year.

                  Specialty Polymers

In the third quarter, Specialty Polymers volumes declined
compared to the second quarter of this year, reflecting the
general economic slowdown and the tragic events of September 11.
Business Unit revenue was $50.3 million on volume of 63.3
million pounds in the third quarter compared to $52.3 million in
revenue and 66.9 million pounds in the same quarter last year.
Average selling prices have increased reflecting improved
product mix.

Year to date Business Unit revenue is $164.4 million, only
slightly down from $169.5 million from same period last year
reflecting lower volumes partially offset by higher prices.
Lower volumes reflect lower sales of off-grade product due to
increased manufacturing efficiency; prime grade product sales
volumes have increased from last year.

Results for the Specialty Polymers Business Unit have also
benefited from cost reduction programs.


In the third quarter of fiscal 2001, horticultural and
agricultural films volumes and revenues increased from the
second quarter primarily due to the seasonal nature of the
business. Revenue was $15.5 million on volume of 9.4 million
pounds in the third quarter compared to $14.1 million revenue
and 8.5 million pounds of volume in the second quarter. It is
expected that the positive seasonal effect will extend into the
fourth quarter of this year due to the delayed harvest season
that the Midwestern United States is currently experiencing.

Year to date revenue of $35.2 million and volume of 21.9 million
pounds was slightly lower than last year. Volume was ahead of
last year until Sept.11th.


The Company entered into natural gas forward call contracts in
the third quarter when gas prices were at a low point, to
protect against potential ethylene feedstock cost increases
driven by a potential increase in natural gas prices in December
2001, January and February 2002.

During the quarter the Company bought out its remaining US
dollar hedging contracts which had been set at unfavorable
rates. Going forward it is expected that the Company will
benefit from favorable Canadian/US exchange rates on its


AT Plastics expects the economic slowdown for the petrochemicals
industry to be longer than earlier projected, reflecting the
general level of economic activity. However, AT Plastics is
positioned to perform better than the industry, given its focus
on specialty plastics and its initiatives to increase market
share, with an emphasis on higher margin business through a
customer targeting and servicing program. The Company will also
benefit from lower raw material costs, the lower Canadian dollar
in relation to its previous hedge program, and a stronger
financial base following completion of the restructuring program
announced in the second quarter which is targeted to be
completed by December 31, 2001.

As of Sept. 30, 2001, the Company's current liabilities was
recorded twice as much as its current assets.

ACTERNA CORP: Working with Lenders to Strengthen Liquidity State
Acterna Corporation (Nasdaq: ACTR), the world's largest provider
of test and management solutions for optical transport, access
and cable networks and the second largest communications test
company overall, reported its results for the second quarter of
fiscal 2002 ended September 30, 2001.

The company also announced that it has signed a definitive
agreement to sell ICS Advent and has elected to retain Itronix
Corporation. As a result, the company is no longer treating
these businesses as discontinued operations and has included
them in the company's results for the current quarter and has
reclassified them in the previously reported periods.

Net sales for the second quarter of fiscal 2002 were $315
million, down 12 percent from pro forma net sales of $359
million for the same period last year. Excluding the results of
the industrial computing subsidiaries, pro forma net sales for
the quarter were $267 million down 15 percent from $316 million
a year ago. Pro forma sales of communications test products
totaled $244 million, which compared to $287 million a year

Gross margin for the second quarter was 54.7 percent. Excluding
Itronix and ICS Advent, it was 59.3 percent, which compared to
62.8 percent a year ago and 61.8 percent in the first quarter on
a comparable, pro forma basis.

Acterna's pro forma profit from operations (earnings before
interest, taxes, amortization and special charges) was $21
million for the second quarter, before a restructuring charge of
$8 million and integration expense of $7 million related to the
implementation of an ERP system. Pro forma profit from
operations was $47 million on a comparable basis a year ago.
Excluding the results of the industrial computing subsidiaries,
pro forma profit from operations for the quarter was $22 million
versus $49 million on a comparable basis a year ago.

For the first-half of fiscal 2002, net sales were $671 million,
compared to pro forma net sales $702 million for the same period
last year. First-half pro forma profit from operations was $62
million, before restructuring and other special charges of $13
million and integration expense of $10 million.

On an as-reported basis for the second quarter of fiscal 2002,
the company reported a net loss of $148 million, which reflected
total charges and other special items of $108 million. These
charges and special items include a restructuring charge of $8
million related to severance and other costs, $11 million of
cumulative losses for Itronix and ICS Advent for the last five
quarters, an $18 million loss from the asset write-down
principally of ICS Advent, and a $71 million reserve against the
company's U.S. deferred tax assets. For the same quarter a year
ago, the company reported a net loss of $50 million.

The company's results for the current and prior periods referred
to above reflect a reclassification to include the results of
the company's industrial computing subsidiaries, which were
previously treated as discontinued operations. In addition, the
company's pro forma results for the prior year referred to above
have been restated to reflect all acquisitions and divestitures,
including the acquisition of Wavetek Wandel Goltermann, Inc. in
the first quarter ended June 30, 2000, and the acquisition of
Cheetah Technologies in the second quarter ended September 30,

Orders of $202 million in the second quarter, which included
orders of communications test products of $154 million, were
down 49 percent from the prior year. Commenting on the quarter,
Ned C. Lautenbach, chairman and chief executive officer, said,
"Our order levels were adversely impacted by continued global
economic slowdown, capital spending cutbacks in the
communications industry, and the impact of the events of
September 11. In light of this environment and pressure on our
gross margin, our focus is on right-sizing our business through
cost reduction, maintaining or gaining market share through new
product development, and managing cash flow and liquidity."

The company announced an expanded cost reduction plan, which
includes a reduction of 500 positions or 9 percent of its total
workforce, excluding ICS Advent. The company will also
consolidate some of its development and marketing offices,
institute a reduced workweek at selected manufacturing locations
and reduce capital expenditures. These measures, which are in
addition to the cost reductions announced in August 2000, are
expected to yield annualized savings of $115 to $125 million,
and to reduce the quarterly operating expense runrate to
approximately $130 million as the company exits its fiscal year.
This will result in a restructuring charge of $15 to $17 million
in the third quarter.

"These cost cutting actions, though difficult, are expected to
align the size of our business to the current business
environment," said John R. Peeler, president. "The goal of the
company's actions is to achieve a cost structure in fiscal 2003
that would result in breakeven EBITA performance at
approximately $225 to $235 million in quarterly sales."

Peeler added, "However, we intend to implement these cuts in a
way that does not compromise our market leading positions around
the world. We have successfully launched a new generation of
test and management products in our optical transport, access,
and cable markets. Our customers continue to rely on our
products to optimize their networks, improve service quality and
reduce costs."

As of September 30, 2001 the company had total debt of $1.1
billion, cash of $51 million, and approximately $65 million of
unused capacity under its credit agreements, of which $40
million is due to expire on December 31, 2001. The company is
working with its financing sources to investigate ways for
strengthening its financial position and maintaining its

"We believe the long-term fundamental drivers of our market
remain intact," Lautenbach continued. "Our new product flow, as
well as our leading position in the market and long-standing
relationships with virtually every service provider worldwide
and the leading equipment manufacturers, position us well to
benefit as the market recovers. "

In light of limited market and economic visibility, the company
has elected not to provide guidance for the third quarter or for
fiscal 2002 at this time.

      Acterna to Sell ICS Advent; Elects to Retain Itronix

The company also announced it entered into a definitive
agreement to sell ICS Advent, one of two industrial computing
businesses previously treated as discontinued operations, for
approximately $23 million. The company elected to retain
Itronix, its remaining industrial computing business. As a
result, the company's financial statements for the current and
previous periods include the full results of the industrial
computing segment.

Based in Spokane, Washington, Itronix is a leading supplier of
rugged wireless computing devices for field service
applications. "With its new GoBook rugged notebook PC, Itronix
is positioned well, particularly in its international markets,"
said Lautenbach.

Acterna is the world's largest provider of test and management
solutions for optical transport, access and cable networks and
the second largest communications test company overall. Focused
entirely on providing equipment, software, systems and services,
Acterna helps customers develop, install, manufacture and
maintain their optical transport, access, cable, data/IP, and
wireless networks. The company serves customers globally with a
presence in more than 80 countries. In addition, the company
supplies in-flight passenger information systems and video color
correction systems through its AIRSHOW and da Vinci Systems
subsidiaries. Through its Itronix subsidiary, the company sells
ruggedized computing devices for field service applications.
Additional information about the company is available at

AMES DEPARTMENT: Taps Arthur Andersen for Financial Advice
Ames Department Stores, Inc. presents to the Court an
application to employ Arthur Andersen LLP as their auditors and
accounting, tax, and financial advisors services that are
necessary to the administration of the Debtors' chapter 11

Jay A. Scansaroli, a partner with Arthur Anderson LLP, tells the
Court that in its capacity as auditors and accounting, tax, and
financial advisors, and in connection with its restructuring
work relating to the Debtors' chapter 11 cases, Andersen will
work closely with the Debtors and their professionals as well as
the professionals retained by the Creditors' Committee. The
services provided by Andersen may include, but will not be
limited to, the following:

A. audit financial statements and assist in preparing and filing
   financial statements and disclosure documents required by
   the SEC;

B. audit examinations of any benefit plans as may be required by
   the Department of Labor or the Employee Retirement Income
   Security Act and provide consultation with respect to other
   employee matters;

C. review unaudited quarterly financial statements of the
   Debtors as required by applicable law or regulations, or as
   requested by the Debtors;

D. outsource the Debtors' tax function;

E. provide other tax consulting services;

F. assist in preparing financial disclosures required by the
   Court, including the schedules of assets and liabilities,
   the statement of financial affairs, and monthly operating

G. assist the Debtors, and other financial professionals
   retained by the Debtors, with the preparation of their
   business plan on a collaborative basis so as not to be
   duplicative in effort or expense;

H. assist the Debtors by identifying areas of potential cost
   savings and operating efficiencies;

I. assist in the coordination of responses to creditor
   information requests and interfacing with creditors and
   their financial advisors;

J. assist Debtors' legal counsel, to the extent necessary, with
   the analysis and revision of the Debtors' plan or plans of

K. attend meetings and assist in discussions with the Creditors'
   Committee, the U.S. Trustee, and other interested parties,
   to the extent requested by the Debtors;

L. consult with the Debtors' management on other business
   matters, including, but not limited to, merchandising and
   internal audit, relating to their chapter 11 reorganization
   efforts; and

M. assist with such other matters as Debtors' management or
   legal counsel and Andersen may mutually agree.

The customary hourly rates of Andersen are as follows:

      Partners/Principals                   $425 - 600
      Managers/Directors                     310 - 525
      Seniors/Associates/Consultants         180 - 495
      Staff/Analysts/Paraprofessionals        90 - 250

Mr. Scansaroli contends that maintaining these arrangements is
in the best interests of the Debtors, their estates, and their
creditors because the services are obtained at a lower cost than
might otherwise be charged. In order to facilitate providing
these normal course services, the Debtors request that Andersen
not be required to submit detailed time entries in connection
with the Audit Services and Tax Outsourcing Services.

Such engagements do not involve restructuring services, are
normal course services are billed on a fixed fee basis which
reflects a discount from Andersen's normal hourly rates. For all
other advisory services, Mr. Scansaroli relates that Andersen
will seek to be compensated for services actually rendered on an
hourly basis at the firm's customary rates and disbursements
incurred upon appropriate application to this Court. The Debtors
believe these are customary charges for professionals performing
similar services and submit that such rates are reasonable.
(AMES Bankruptcy News, Issue No. 7; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

ARMSTRONG HOLDINGS: Inks New Deal with Expeditors International
Armstrong World Industries, Inc., Debtor, represented by Mark D.
Collins of the Wilmington firm of Richards Layton & Finger, and
Expeditors International of Washington, Inc., represented by
Thomas S. Hemmendinger of the Providence, Rhode Island firm of
Brennan Recupero Cascione Scungio & McAllister, present Judge
Joseph Farnan with a Stipulation regarding a postpetition credit
arrangement between the Debtor and Expeditors, and ask his

Expeditors is a non-vessel owned common carrier and customs
broker. Before the Petition Date and in the ordinary course of
its business the Debtor regularly hired Expeditors to transport
its inventory both in international commerce and interstate
commerce. The pre-petition agreements consisted of Expeditors'
Terms and Conditions of Service, a Credit Application by the
Debtor, and Customs Power of Attorney. Pursuant to these Pre-
Petition Contracts, Expeditors granted the Debtor net 15-day
credit terms on its invoices for services rendered and costs
advanced. The Pre-Petition Contracts also granted to Expeditors
a consensual replacement lien upon all goods, documents of title
and other property in Expeditors' possession, custody or control
or en route to secure payment of outstanding invoices and other
charges pursuant to the Pre-Petition Contracts.

As of the Petition Date, the Debtor owed Expeditors for certain
unpaid invoices, plus interest and fees (including counsel fees)
pursuant to the Pre-Petition Contracts. The Pre-Petition Debt
was secured pursuant to pre-petition agreements and applicable
law by perfected and valid priority security interests and liens
granted by Debtor to Expeditors upon goods and documents of
title in Expeditors' possession. custody or control or en route
as of the Petition Date. Expeditors promptly released possession
of the Pre-Petition Collateral upon receipt of the irrevocable
payment of its pre-petition invoices (which the Debtor paid
pursuant to prior Orders of this Court), without releasing its
claims against the Debtor or the Pre-Petition Collateral for its
counsel fees.

The Debtor disputes Expeditors' claim for such counsel fees, and
reserves all of its rights with respect to that issue.

                        The Stipulation

The Debtor and Expeditors desire to continue to do business upon
the substantially same terms and conditions as set forth in the
Pre-Petition Contracts. To that end, the Debtor has submitted to
Expeditors a Credit Application and a Customs Power of Attorney
(each incorporating by reference Expeditors' Terms and
Conditions of Service) in the same form as the Pro-Petition

To secure payment of amounts owed by the Debtor to Expeditors
under the Post-Petition Contracts, the Debtor, pursuant to the
Post-Petition Contracts, has granted Expeditors certain liens,
which liens, the Debtors assure Judge Farnan, are customary in
the business.

The Debtor represents and warrants to Expeditors that it has not
granted to third parties any liens upon the assets encumbered or
to be encumbered by the Post-Petition Liens. The Debtor agrees
that it shall not hereafter grant third parties any liens upon
such assets, unless:

       (a) The Debtor gives advance written notice thereof to
Expeditors, with a reasonable opportunity for hearing; and

       (b) Such third party liens are expressly subordinate to
the Post-Petition Liens.

Upon Court approval of this Stipulation, this Stipulation shall
be sufficient and conclusive evidence of the perfection and
validity of all of the Post-Petition Liens, without the
necessity of filing, recording or serving any financing
statements or other documents which may otherwise be required
under federal or state law in any jurisdiction or the taking of
any other action to validate or perfect the Post-Petition Liens,
and there shall be no requirement of tracing proceeds of the
goods and documents of title encumbered by the Post-Petition

The Debtor believes that the Post-Petition Contracts are in the
best interests of the Debtor and its estate, in that they will
facilitate the Debtor's acquisition and transportation of raw
materials and other inventory and merchandise on favorable
terms, consistent with the manner in which the Debtor engaged in
business prior to the Petition Date.

Upon Judge Farnan's approval of this Stipulation, the Post-
Petition Contracts shall constitute valid and binding
obligations of Debtor, enforceable against Debtor in accordance
with their respective terms nunc pro tunc to the date on which
they were executed.

                      Remedies on Breach

Expeditors may terminate service to the Debtor and exercise its
remedies under the Post-Petition Contracts and applicable non-
bankruptcy law in accordance with the terms and conditions of
the Post-Petition Contracts and applicable non-bankruptcy law or
if the Debtor breaches any of its obligations under this
Stipulation or the Post-Petition Contracts or if Expeditors
determines that any representation or warranty by the Debtor in
this Stipulation was false or misleading when made or has become
false or misleading.

               Stay is Modified to Perfect Lien

To the extent necessary, the automatic stay imposed by
Bankruptcy Code 362 shall be deemed modified to permit
Expeditors to take such actions necessary to perfect the Post-
Petition Liens, consistent with the practice of the parties
prior to the Petition Date and consistent with the Post-Petition

                     Binding on Successor

The Post-Petition Contracts and this Stipulation shall be
binding upon Expeditors, Debtor and its successors and assigns
(including any Chapter 7 or Chapter 11 trustee hereinafter
appointed or elected for the estate of Debtor), and shall inure
to the benefit of Expeditors and Debtor and their respective
successors and assigns.

If any or all of the provisions of this Stipulation or any Order
approving this Stipulation are hereafter reversed, modified,
vacated or stayed, such reversal, stay, modification or vacation
shall not affect:

       (a) the validity of any obligation. indebtedness or
liability incurred by Debtor to Expeditors under the Post-
Petition Contracts prior to written notice to Expeditors of the
effective date of such reversal, stay, modification or vacation,

       (b) the validity and enforceability of any lien or
priority authorized or created hereby or thereby or by the Post-
Petition Contracts with respect to any such obligations,
indebtedness or liability.  Notwithstanding any such reversal,
stay, modification or vacation, any indebtedness, obligation or
liability incurred by Debtor to Expeditors prior to written
notice to Expeditors of the effective date of such reversal,
stay, modification or vacation shall be governed in all respects
by the original provisions of this Stipulation, and Expeditors
shall be entitled to all the rights, remedies, privileges and
benefits, granted herein and/or pursuant to the Post-Petition
Contracts and this Stipulation with respect to the Post-Petition
Contracts and such indebtedness, obligation or liability.

                      Discharge Waiver

The obligations of Debtor under this Stipulation and the Post-
Petition Contracts shall not be discharged by the entry of an
order confirming a plan of reorganization in this case and under
the Bankruptcy Code, Debtors hereby having waived such
discharge. (Armstrong Bankruptcy News, Issue No. 12; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   

ATLANTIC COAST: S&P Affirms Ratings, Keeping Negative Outlook
Standard & Poor's affirmed its ratings on Atlantic Coast
Airlines Holdings Inc. and removed them from CreditWatch, where
they were placed Sept. 13, 2001. The ratings were subsequently
lowered to current levels on Sept. 20, 2001.

The outlook is negative.

The rating action is based on the company's continuing
relatively strong performance, despite a very adverse airline
industry environment. Atlantic Coast operates two regional
airlines that offer feeder service for both United Air Lines
Inc. and Delta Air Lines Inc., primarily along the East Coast
and in the Midwest and Canada, under fee-per-departure

The company reported a profit of $12.8 million in the third
quarter of 2001 (including $4.6 million pretax aid from the
federal government), versus $2.7 million in the prior-year
period, when the company was negatively impacted from
disruptions in United's level of flying. Fee-per-departure
flying enables both United and Delta to take full control of
seats Atlantic Coast flies for them as well as responsibility
for all risks, including fuel and the sale of seats.

These agreements reduce operating and financial risks for a
regional airline in periods of economic weakness, such as now,
resulting in more stable earnings and cash flow. While United
and Delta have both reduced capacity in their main line
operations, they have replaced some through their feeder
partners. As a result, Atlantic Coast's operations are currently
back to pre-Sept. 11 levels.

In addition, Atlantic Coast, with its hub located at Dulles
Airport outside Washington, D.C., has benefited from diversion
of traffic from Washington's Reagan Airport, with that airport's
reduction of operations, as well as the reduction of service
from some competitors, such as US Airways Inc. Going forward,
Atlantic Coast could benefit from the continued shifting of
flying from United's and Delta's main line operations.

However, the possibility remains that, with these larger
carriers attempting to reduce their costs, they might attempt to
renegotiate their current contracts with their feeder partners
through reduced compensation. In addition, the number of
additional regional jet aircraft that Atlantic Coast would fly
for United (but not Delta) is based on United's flying a certain
number of aircraft within its own operation. With United
retiring aircraft and likely deferring new aircraft deliveries,
its fleet size will be smaller than expected, which could reduce
Atlantic Coast's growth opportunities with United.

                      Outlook: Negative

Atlantic Coast's earnings and cash flow have held up fairly well
in the current weak airline environment. However, any adverse
actions taken by either of its partners, United and Delta, could
have a negative impact on Atlantic Coast's earnings potential.

                       Ratings Affirmed

Atlantic Coast Airlines Holdings Inc.
Corporate credit rating                                B-
Equipment trust certificates
$24.734 mil 7.35% pass-thru ser 1997-1B due 2011       BB
$57.714 mil 7.2% pass-thru ser 1997-A due 2014         BBB+
$23.333 mil 8.75% pass-thru ser 1997-1C due 2007       B+

BETHLEHEM STEEL: Honoring Most Prepetition Employee Obligations
Bethlehem Steel Corporation has approximately 13,200 employees.  
According to Jeffrey L. Tanenbaum, Esq., at Weil, Gotshal &
Manges LLP, in New York, around 500 salaried employees and
10,000 hourly employees are employed under collective bargaining
agreements with the United Steel Workers of America.  The rest
are not covered by CBA's.

By this motion, the Debtors seek Judge Lifland's permission to
honor their obligations to their employees, and to continue
their existing employee compensation programs.

(1) Wages, Salaries and Compensation Expenses

    Salaried employees are paid on monthly basis, while
    represented employees who earn an hourly wage are paid on a
    weekly or bi-weekly basis, Mr. Tanenbaum relates.  The
    Debtors ordinarily withhold:

    (a) from the wages of represented employees dues payable on
        their behalf to the USWA;

    (b) from the wages of participating employees contributions
        toward 401(k) savings plans; and

    (c) from their employees' pay all applicable federal, state,
        and local income taxes, state unemployment taxes, and
        social security and Medicare Taxes.

    In addition, Mr. Tanenbaum says, the Debtors are required to
    match form their own funds the social security and Medicare
    taxes, and pay additional amounts for state and federal
    unemployment insurance.

    According to Mr. Tanenbaum, the Debtors' obligations for the
    immediately preceding payroll periods are approximately

    Furthermore, Mr. Tanenbaum continues, the Debtors' workers
    compensation obligations include claim expenses and
    assessments for which the Debtors are self-insured,
    insurance premiums and certain administrative and processing

                       Self-Insured Programs

    In several jurisdictions, some Debtors operate as self-
    insured employers with respect to their workers'
    compensation obligations.  These Debtors, Mr. Tanenbaum
    reports, maintain a variety of self-insured workers
    compensation programs under which they directly pay
    applicable workers' compensation obligations as they arise.

    The Debtors have been required to post various forms of
    collateral as security:

   Jurisdiction                               Total Surety Bonds
   ------------                               ------------------
    Indiana                                       $ 3,000,000
    Maryland                                        9,200,000
    New York                                       10,290,000
    Longshore Harbor Workers' Compensation Act     16,000,000
    Black Lung Benefits Act                        10,230,000

                         Insured Programs

    In certain jurisdictions, the Debtors maintain insurance
    programs, Mr. Tanenbaum informs the Court.  To secure the
    Debtors' obligations under the insured programs, the Debtors
    have posted collateral including surety bonds and
    irrevocable letters of credit.  Mr. Tanenbaum places at
    $13,000,000 the aggregate amount of outstanding collateral
    posted by the Debtors.

                Processing and Administrative Costs

    Mr. Tanenbaum advises Judge Lifland that the Debtors incur
    also processing and administrative costs in connection with
    the workers' compensation obligations.

    In summary, their workers' compensation programs cost the

    Type                                      Amount      Due
    ----                                      ------      ---
    Self Insured Jurisdictions              $2,500,000  Monthly
    Insured Programs                           400,000  Annually
    Cash expenditures for deductibles          200,000  Monthly
    Processing and Administrative Costs         50,000  Monthly

(2) Retirement Benefits

    In the ordinary course of business, the Debtors sponsor and
    maintain a single U.S. tax-qualified noncontributory defined
    benefit pension plan that provides retirement income
    benefits for substantially all employees.  Another benefit
    pension plan, the Pension Plan for Marmoraton Mining
    Company, Ltd., is maintained outside the United States for
    the benefit of Canadian employees, Mr. Tanenbaum adds.

    According to Mr. Tanenbaum, the Debtors annually contribute
    to the Pension Plan the amount required by the Employee
    Retirement Income Security Act and the Internal Revenue
    Code. In addition, ERISA obligates the Debtors to
    participate in an insurance program administered by the
    Pension Benefit Guaranty Corporation.  In 2001, the Debtors
    paid $2,000,000 from the Pension Plan trust to the PBGC, Mr.
    Tanenbaum recounts.

    The Debtors also sponsor and maintain several tax-qualified
    contribution plans which provide eligible employees with the
    opportunity to make pre-tax salary deferral contributions.
    Amounts contributed to the savings plans are later
    distributed to the eligible participants and their
    beneficiaries upon retirement or other separation from
    service, Mr. Tanenbaum tells the Court.

(3) Health and Welfare Benefits

    The Debtors sponsor several health and welfare benefit plans
    to provide benefits to employees.  According to Mr.
    Tanenbaum, benefits provided under the welfare plans are
    self-insured by the Debtors and are paid out of general
    corporate assets.

    The Debtors shell out approximately $100,000,000 under the
    welfare plans.

(4) Vacation Benefits

    Under the Debtors' vacation policy, non-represented
    employees are eligible for 1-5 weeks of vacation per year,
    while represented employees are eligible for the same length
    of vacation time, provided that these represented employees
    worked at least 520 hours in the preceding year.  Mr.
    Tanenbaum relates that non-represented employees can
    generally carry a portion of unused vacation into the next
    year, and unused vacation is generally paid only upon layoff
    or death.

    Pre-petition, the Debtors paid approximately $5,000,000 per
    month in respect of vacation obligations.

(5) Business Expense Reimbursement

    The Debtors customarily reimburse employees who incur
    business expenses in the ordinary course of performing their
    duties.  According to Mr. Tanenbaum, the reimbursement
    obligations due to employees total $600,000 as of the
    Petition Date.

(6) Administration of Employee and Retiree Benefit Plans

    In the ordinary course of business, the Debtors utilize the
    services of approximately 35 firms and professionals to
    facilitate the administration and maintenance of their books
    and records in respect of Debtors' employee benefit plans.
    Mr. Tanenbaum says that approximately $4,000,000 of
    administrative obligations are accrued and unpaid as of the
    Petition Date.

(7) Independent Contractors

    The Debtors also hire approximately 300 independent
    contractors, individuals from temporary service agencies and
    freelance consultants who provide services with respect to
    general management and various professional disciplines,
    such as engineering and environmental consulting.  The
    Debtors estimate that their total accrued and unpaid pre-
    petition obligations to the independent contractors do not
    exceed $325,000, Mr. Tanenbaum reports.

The Debtors believe that very few employees are owed in excess
of the allowable $4,650 on account of pre-petition compensation
obligations.  Accordingly, Mr. Tanenbaum argues, substantially
all of the Debtors' pre-petition compensation obligations
constitute priority claims.  The Debtors are convinced that
payment of such amounts at this time is necessary and
appropriate.  To the extent, however, that any employee is owed
more than $4,650, the Debtors submit that payment of such
amounts is necessary and appropriate and is authorized under the
"necessity of payment" doctrine.

Mr. Tanenbaum tells Judge Lifland that the employees' support
for the Debtors' reorganization efforts is critical to the
success of those efforts.  According to Mr. Tanenbaum, the
Debtors cannot risk the damage that would attend any decline in
their employees' morale attributable to the Debtors' failure to
pay wages, salaries, benefits and other similar terms.  Mr.
Tanenbaum also expresses concern that the employees will suffer
undue hardship and financial difficulties if the Debtors do not
honor their claims.  Finally, Mr. Tanenbaum warns, the stability
of the Debtors will be undermined, and otherwise loyal employees
will seek other employment alternatives, without the requested

                        *     *     *

Moved by the Debtors' pleas, Judge Lifland allows the Debtors

  (1) pay pre-petition employee obligations, provided that any
      amount paid on account of reimbursement of business
      expenses shall not exceed $5,000 per employee;

  (2) continue their existing workers' compensation programs,
      pay the pre-petition obligations under the Self Insured
      Programs, the Insured Programs, and processing costs, and
      pay the obligations under the programs that become payable

Judge Lifland likewise authorized and directed all applicable
banks and other financial institutions to honor checks issued by
the Debtors in connection with their employee obligations.
(Bethlehem Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

BRIDGE INFORMATION: Repudiates Useless Moneyline Contracts
Bridge Information Systems, Inc. seeks the entry of an order:

  (a) approving the rejection of 163 executory contracts and/or
      unexpired leases that were not assumed and assigned to
      Moneyline Network Inc., which rejection would be effective
      as of the closing date for the sale of certain of the
      Debtors' assets to Moneyline; and

  (b) approving the rejection of 125 executory contracts and/or
      unexpired leases, which rejection date would be effective
      as of the date of the filing of this motion (October 10).

According to Thomas J. Moloney, Esq., at Cleary, Gottlieb, Steen
& Hamilton, these contracts will be unnecessary to the Debtors'
ongoing business operations after the proposed rejection date.
Mr. Moloney explains that the business operations that utilize
the services and/or goods provided under these contracts will
have been sold and transferred to purchases of the Debtors'
assets.  And the purchases have elected not to seek the
assumption and assignment of these contracts, Mr. Moloney notes.
Obviously, the Debtors conclude that it would not be in their
best interests to maintain these contracts.  That's why
rejection should be granted, Mr. Moloney asserts.

"The balance of equities (also) favor the rejection of the
contracts as of the proposed rejection dates, given that the
Debtors, which are in the process of liquidating their assets,
are not using or benefiting from the services and/or goods
provided under the Contracts," Mr. Moloney contends. (Bridge
Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service,
Inc., 609/392-0900)    

CKE RESTAURANTS: S&P Affirms Junk Rating on Subordinated Debt
Standard & Poor's revised its outlook on CKE Restaurants Inc. to
developing from negative.

At the same time, Standard & Poor's affirmed its single-'B'-
minus corporate credit and senior secured bank loan ratings and
its triple-'C' subordinated debt rating on the company.

The outlook revision is based on the significant progress CKE
has made in reducing balances under its credit facility. During
the second quarter of 2001, the sale of additional Carl's Jr.
stores and cash flow from operations enabled the company to
reduce indebtedness under its credit facility to $19.5 million
at end of the quarter.

Standard & Poor's believes the debt repayment enhances the
company's ability to secure a new credit facility prior to the
Feb. 1, 2002, maturity of its existing $135 million facility.

The ratings on CKE reflect its participation in the highly
competitive quick-service sector of the restaurant industry,
leveraged capital structure, and weakened credit protection
measures. The ratings also take into account the poor operating
performance at its Hardee's restaurant concept, despite major
efforts to revitalize the brand. These risks are mitigated,
somewhat, by the strength of the company's established Carl's
Jr. concept.

CKE has been experiencing weak operating performance since the
Hardee's acquisition in 1997. The company's operating margin
dropped to 11.8% in 2000 from 16.9% in 1996. Still, some
positive trends are emerging. Same-store sales at its Hardee's
units were positive in the second quarter of 2001 after many
years of declining sales, and CKE's consolidated operating
margin increased to 13.9% in the first half of 2001 from 12.6%
in the same period of 2000. The margin improvement is largely
due to a 30% increase in franchise revenue and the closing of
underperforming units in both concepts.

The company's credit protection measures are weak, with EBITDA
coverage of interest expense only 1.5 times, and leverage is
high, with total debt to EBITDA at 3.6x. CKE had $67 million
available under the bank loan as of Aug. 13, 2001.

                     Outlook: Developing

CKE's financial flexibility is limited because of the near-term
maturity of its credit facility. However, the ratings could be
raised if the company improves financial flexibility by
successfully raising capital or renegotiating the bank
agreement. The ratings could be lowered if the company has
difficulty securing additional sources of funds.

COMDISCO: Secures Approval to Assign Pennsylvania Lease to MCI
Comdisco, Inc. seeks to assume and assign its sublease and sub-
sublease for property located at 1717 Pennsylvania Avenue, N.W.,
Washington, D.C. to MCI Worldcom Communications, Inc.

Felicia Gerber Perlman, Esq., at Skadden, Arps, Slate, Meagher &
Flom, in Chicago, explains that in 1997, MCI Telecommunications
Corporation, predecessor-in-interest to the assignee, entered
into an office lease with 1717 Pennsylvania Avenue L.L.C. for
the property.  Two years later, Ms. Perlman says, MCI Worldcom
entered into a sublease with Prism Communication Services, Inc.
When Prism discontinued its operations, Ms. Perlman relates
further, Prism assigned the sublease to Comdisco.  Ms. Perlman
tells Judge Barliant that Comdisco then sub-subleased the
premises to Goodwin Proctor LLP on January 25, 2001.

On October 12, 2001, Ms. Perlman continues, Comdisco entered
into an Assignment of Sublease and Sub-Sublease and Release
Agreement with MCI Worldcom.  The terms of the assignment
agreement include:

    (a) a complete assumption by MCI Worldcom of all sublease
        and sub-sublease obligations, and

    (b) an indemnification of Comdisco by MCI Worldcom against
        all claims arising under the sublease and sub-sublease.

Goodwin Proctor LLP, the present occupant, and 1717 Pennsylvania
Avenue L.L.C., the prime landlord, has consented to these
assignments, Ms. Perlman adds.

In order to effectuate an assignment to MCI Worldcom, the
Debtors also request that any provisions in the sublease and
sub-sublease, which in effect precludes alienation of the
sublease and sub-sublease be deemed unenforceable.

Ms. Perlman tells Judge Barliant that the Debtors' books and
records reflect that the Debtors do not owe any payments to MCI
Worldcom or to 1717 Pennsylvania Avenue L.L.C.  Therefore, Ms.
Perlman notes, there is no cure amount, which must be satisfied
in order to assume and assign a lease.  The Debtors reserve
their rights not to proceed with the assignment if a dispute
arises regarding the cure amount, Ms. Perlman adds.

The assumption and assignment of the sublease and sub-sublease
provides a substantial benefit to the estates and is within the
Debtors' business judgment, Ms. Perlman contends.  BY assigning
the sublease and the sub-sublease, Ms. Perlman claims, the
Debtors are able to maximize the value of property that was no
longer useful for the Debtors' continuing business operations.

After due deliberation, Judge Barliant grants the relief
requested.  Upon execution of the assignment agreement, Judge
Barliant rules that the Debtors:

    (a) shall be released and forever discharged of any and all
        obligations and claims under the sublease and sub-

    (b) are authorized to deliver possession of the premises
        subject to the sublease and sub-sublease to the

    (c) are authorized to sell and assign the sublease and sub-
        sublease to the assignee free and clear of all liens,
        claims and encumbrances, with all such valid and
        enforceable liens, claims and encumbrances to attach to
        the proceeds of the assignment, in the same relative
        priority. (Comdisco Bankruptcy News, Issue No. 13;
        Bankruptcy Creditors' Service, Inc., 609/392-0900)    

EPICOR SOFTWARE: Q3 Revenues Slide Due to Market Slowdown
Epicor Software Corporation (Nasdaq: EPIC), a leading provider
of integrated enterprise and eBusiness software solutions for
the midmarket, reported its financial results for the third
quarter ended September 30, 2001.

Total revenues for the quarter were $38.6 million compared to
$51.9 million for the third quarter 2000, and within the range
of preliminary results announced by the company on October 2nd.  
Software license revenue totaled $8.8 million compared to $16.4
million for the same quarter last year, while service and
maintenance revenue totaled $28.9 million compared to $34.5
million in the same period last year.  These decreases are
indicative of the significant slowdown in the economy over the
past year, particularly in capital spending.  Also, total
revenue figures for the third quarter 2000 include revenues for
the two product lines that were divested in the second quarter
of 2001.

Net loss for the third quarter 2001 was $4.5 million, including
a gain of $1.5 million resulting from the final payment received
for a product line sold in the second quarter of 2001, compared
to a net loss of $12.3 million in the third quarter of 2000.

The company's balance sheet as of September 30, 2001 showed cash
and cash equivalents of $23.3 million.  The company's balance
sheet also showed accounts receivable of $36.3 million and
deferred revenue of $37.6 million. Days sales outstanding
increased to 85 from 79 in the prior quarter due primarily to
lower third quarter revenues.

The company will continue to manage aggressively costs and
expenses, aligning its resources with current market conditions
to mitigate the ongoing risks of an accelerated economic
slowdown and a delayed recovery.  However, the company will
remain committed to its strategic investments in R&D for the
continued development of new technology initiatives based on XML
standards and Microsoft's .Net platform.  The company's
quarterly cost and expense structure for the fourth quarter 2001
is expected to be in the range of $44 million to $46 million.

"We have proven products and technology, strong customer
references, superior implementation execution, strength in
focused verticals and an installed base of approximately 15,000
customers," said George Klaus, Chairman, CEO and President.  "We
believe that these differentiating factors coupled with our
aggressive cost, expense and accounts receivable management will
allow us to preserve our cash flow levels during this downturn.  
We are very pleased to have maintained positive overall cash
flow for two consecutive quarters under extremely challenging
economic conditions.  We feel that fourth quarter software
license sales will increase slightly over the third quarter. We
intend to continue to pursue our overall strategic goal of
providing leading next generation technology and products, which
we believe will deliver long term growth for software license
revenues as the market recovers."

Klaus added, "We held our annual international customer
conference last week and were delighted with its' success,
including attendance of 1,000 participants.  The event was one
of the strongest attended events we have ever hosted, with
management and customer presentations highlighting the strategic
importance of Epicor's enterprise solutions."

Midmarket companies are reassessing their IT requirements for
the short term and balancing these with fiscal capabilities in
order to remain competitive in challenging economic conditions.  
The company believes that the midmarket prefers to limit its
risks and costs by doing business with providers of a "full
solution suite" who can offer domain expertise, extended
functionality with lower costs and a strong ROI.  Epicor
continues to gain leverage against "best of breed" competitors
with limited breadth of product, as well as tier one vendors who
have higher costs of ownership.  Epicor offers the midmarket a
single source of rich, flexible, scaleable and collaborative,
enterprise applications that allow companies to streamline
operations thereby reducing costs and delivering a rapid ROI.

Founded in 1984, Epicor is a leading provider of end-to-end
integrated enterprise, eBusiness and collaborative commerce
software solutions exclusively for midmarket companies.  Epicor
helps businesses around the world build eBusiness into their
entire organization by integrating their systems and operations
with the Internet to focus their entire enterprise on their
customers.  By integrating leading edge eBusiness applications
with advanced front office customer relationship management
(CRM) applications and proven back office enterprise
applications, Epicor provides midmarket companies with the "full
solution suite" they need to compete in the new Internet
economy. Epicor is headquartered at 195 Technology Drive,
Irvine, California, 92618, and the main phone is (949) 585-4000.  
More information about Epicor, its products and services is
available at

Epicor is a trademark of Epicor Software Corporation.  The
product and service offerings depicted in this document are
produced by Epicor Software Corporation.

As at Sept. 30, 2001, the Company's current liabilities exceeded
its current assets by $15 million.

EXIDE TECHNOLOGIES: Strained Finances Spur S&P Downgrades
Standard & Poor's lowered it ratings on Exide Technologies
(formerly Exide Corp.) and related Exide Holdings Europe S.A. At
the same time, the ratings remain on CreditWatch with negative
implications, where they were placed Aug. 31, 2001.

The rating actions follow Exide's announcement that its
operating results for the quarter ended Sept. 30, 2001 will be
weaker than expected, that it is negotiating with its bank group
once again for covenant waivers, and that it has hired
turnaround specialist, Jay Alix and Associates, to help in
restructuring the company. In addition, the rating actions
reflect Standard & Poor's increased concerns about the company's
current liquidity situation and operating outlook.

Exide is a leading producer of automotive batteries and
industrial batteries in North America and Europe. The company
achieved its current business position through a series of
acquisitions that left the company highly leveraged. Exide's
operating results and cash generation have been under pressure
for the past several years due to industry pressures, costs
associated with internal restructuring activities, and legal

As a result of these factors and the company's substantial debt
burden, cash flow protection measures have been quite weak.
Adjusted for operating leases and accounts receivable sales and
nonrecurring items, debt to EBITDA was more than 7 times in
fiscal 2001 (fiscal year ended March 31, 2001), and funds from
operations to debt was less than 10%.

No material improvement in credit protection measures is
expected in the near term. Exide continues to face declining
demand in its automotive original equipment business and in its
industrial battery business (primarily related to the slowdown
in the telecommunications market), and weather related swings in
demand in its largest market segment, the automotive

Cash requirements of its restructuring program, seasonal
borrowing requirements, a heavy debt service burden, and slowing
end-market demand have all combined to significantly constrain
the company's financial flexibility. Availability under its
revolving credit facility was just $44 million at June 30, 2001.
Given market fundamentals in recent months, seasonal working
capital requirements and debt service requirements, borrowing
capacity is believed to have become even more constrained in
recent months. Exide is currently in the process of negotiating
covenant waivers with its banks. Exide last amended its
covenants in June 2001.

Standard & Poor's will monitor the status of ongoing bank
negotiations and will continue to assess near-term financing
requirements and restructuring plans. If it appears that
financial flexibility will remain as constrained as it currently
is during the near to intermediate term, or if Exide has trouble
negotiating waivers or amendments with its bank group, ratings
are likely to be lowered again.

        Ratings Lowered, Remain On Creditwatch Negative

     Exide Technologies                          TO    FROM

       Corporate credit rating                   B-    B+
       Senior unsecured rating                   CCC   B-
       Senior secured bank loan                  B-    B+
       Subordinated debt rating                  CCC   B-

     Exide Holding Europe S.A.

       Senior unsecured debt rating              CCC   B-

EXODUS COMM: Flaschen & Smits Serving as Foreign Representatives
Exodus Communications, Inc. asks the Court to appoint Evan D.
Flaschen, Esq., and Anthony J. Smits, Esq., as official foreign
representatives of the Debtors' estates in foreign matters,
including foreign insolvency proceedings, and as the emissaries
of this Court in seeking cooperation and harmonization with
foreign countries as the need may arise.

Adam W. Wegner, the Debtors' Adviser for Corporate and Legal
Affairs, tells the Court that the Debtors are part of an
international group of affiliated companies, majority of which
are incorporated outside the United States, including in
Australia, Belgium, Canada, France, Germany, Ireland, Japan,
Hong Kong, the Netherlands, and the United Kingdom. To date, the
Debtors have only commenced these chapter 11 proceedings and
have not commenced any parallel or ancillary proceedings in any
other foreign jurisdiction. At some point, Mr. Wegner believes
that it may be in the best interests of the Debtors' estates to
commence local, parallel or ancillary foreign insolvency
proceedings with respect to some or all of the Debtors and
certain of the other members of the Exodus Group.

The Debtors are advised that it has long been the policy of
United States courts to seek coordination and cooperation with
related actions pending in courts outside the United States. In
the bankruptcy arena in particular, Mr. Wegner submits that both
the law and the jurisprudence favor coordination and cooperation
with foreign insolvency proceedings, both as a matter of
international comity and as a matter of value maximization for
the benefit of all stakeholders wherever located. The Debtors
are further advised that the Court has experience coordinating
and harmonizing cross-border insolvency proceedings. The Debtors
believe that foreign insolvency proceedings might be commenced
by or against the Debtors or other members of the Exodus Group,
and that in such event cross-border cooperation and coordination
will be desirable from an international comity point of view and
may be essential to preserving the Debtors' businesses and the
Exodus Groups enterprise value generally.

The Debtors are advised that some foreign jurisdictions do not
have any legal mechanisms for recognizing or coordinating with
non-local insolvency proceedings, but that the majority of
jurisdictions do have statutory, jurisprudential or implicit
mechanisms for working with non-local insolvency proceedings and
the representatives of those proceedings. The Debtors are
advised that United States courts have dealt with cross-border
cooperation in several ways and in some circumstances,
especially when there is a strong adversarial relationship
involved, United States courts have sometimes appointed an
examiner with special powers to serve as the United States
estate's foreign representative.

Thus, Mr. Wegner concludes that it is possible that there will
be foreign insolvency proceedings in which foreign local courts
and office holders may be subject to statutory or cultural
barriers to the recognition of the United States debtors in
possession as the appropriate foreign representatives of the
United States estates. Mr. Wegner adds that it is also likely
that, in the absence of formal insolvency proceedings,
assistance will be needed in dealing with local governments,
courts, creditors and regulators unfamiliar with the
significance and implications of these chapter 11 cases -- and
uncomfortable with the concept of the Debtors remaining as post-
petition management as the continuing debtors-in-possession.

In these circumstances, the Debtors request that the Court
specially appoint Evan D. Flaschen and Anthony J. Smits as
Foreign Representatives with duties that will include serving as
the official representatives of the Debtors' estates in foreign
matters, including foreign insolvency proceedings, and as the
emissaries of this Court in seeking cooperation and

Consistent with the strong United States policy favoring the
debtor-in-possession, Mr. Wegner states that the Foreign
Representatives will be part of the Debtors' restructuring team,
but consistent with the desire to be sensitive to foreign
reluctance to recognize the debtor-in-possession itself, the
Foreign Representatives will not be "insiders" of the Debtors.

Mr. Wegner informs the Court that Mr. Flaschen is a partner with
Bingham and the co-head of Bingham's 75+ attorney Financial
Restructuring Group while Mr. Smits is a senior associate with
Bingham where his practice is focused on the representation of
high yield, distressed debt, institutional and other investors
and creditors in complex, cross-border workout and insolvency
matters. Mr. Flaschen was also appointed and is continuing to
serve as the Foreign Representatives in the Singer and Owens
Corning proceedings and has been the lead lawyer in many chapter
11 cases and cross-border matters. Mr. Flaschen and Mr. Smits
were also appointed and are continuing to serve as the Foreign
Representatives in the Outboard Marine Corporation, Viatel,
Comdisco and Goss Holdings proceedings. Mr. Flaschen is
currently serving as lead counsel to the official creditors
committee of Loewen Group International, Inc., which also
involved a negotiated cross border insolvency protocol and is
also currently serving as international bankruptcy counsel to
The Singer Company N.V., Owens Corning and Outboard Marine
Corporation. Mr. Wegner adds that both Mr. Flaschen and Mr.
Smits are members of a number of national and international
professional organizations between them, including INSOL
International, the American Bankruptcy Institute, the American
Law Institute, the American College of Bankruptcy, and the
International Insolvency Institute. The Debtors submit that both
Mr. Flaschen and Mr. Smits possess the requisite credentials,
experience and international profile to fulfill the role of
Foreign Representatives.

Mr. Wegner contends that it is evident that the Debtors' lead
counsel, Skadden Arps, also has the requisite credentials,
experience and international profile to represent the interests
of the Debtors both domestically and abroad. However, Mr. Wegner
explains that a key element to the appointment of the two
Bingham lawyers as the Foreign Representatives is to assist in
those situations where foreign creditors, a foreign court or a
foreign office holder might feel that Skadden Arps, as lead
counsel to the Debtors, is too closely linked to the "debtor-in-
possession" concept itself.

The Debtors propose that the Foreign Representatives be assigned
the general mandate to serve as the official United States
representatives of the Debtors' estate in other countries and as
this Court's emissaries to other courts in order to seek to
coordinate and harmonize any foreign matters, including foreign
insolvency proceedings that may now or hereafter be opened or
commenced with respect to any of the Debtors or any other
members of the Exodus Group, and including other foreign
situations, in all cases in coordination with Skadden Arps as
the Debtors' lead counsel.

In furtherance of the foregoing general mandate, the Debtors
request that the Foreign Representatives be appointed and
instructed to:

A. act as the representative of the Debtors' estates, and to
   seek formal recognition as such, in Relevant Foreign
   Proceedings and Other Foreign Situations;

B. where appropriate under the circumstances, act in the name of
   the Debtors in Relevant Foreign Proceedings and Other
   Foreign Situations and speak and sign pleadings and
   documents in the name of, and binding upon, the Debtors;

C. serve as this Court's emissaries to the courts in which
   Relevant Foreign Proceedings are proceeding, in order to
   convey to such courts the orders entered by this Court and
   any requests that this Court may wish to direct to such

D. seek and promote wherever possible the coordination and
   harmonization of the within chapter 11 proceedings with
   Relevant Foreign Proceedings and Other Foreign Situations
   with the objective of preserving and continuing the
   relevant members of the Exodus Group as going concerns in
   order to maximize their value for the benefit of all
   stakeholders wherever located;

E. seek and promote wherever possible the coordination of the
   within chapter 11 proceedings with any other foreign
   matters involving governments, courts, regulators,
   creditors or other stakeholders;

F. canvas, determine and identify the issues and impediments
   that must be resolved internationally in order to facilitate
   reorganization of the core businesses within the Exodus

G. work with the representatives and other office holders
   appointed in Relevant Foreign Proceedings in respect of the
   foregoing matters; and

H. act as a facilitators in respect of all of the foregoing
   matters. (Exodus Bankruptcy News, Issue No. 4; Bankruptcy
   Creditors' Service, Inc., 609/392-0900)

FEDERAL-MOGUL: Proposes $26MM Key Employee Retention Program
Laura Davis Jones, Esq., at Pachulski Stang Ziehl Young & Jones,
P.C., in Wilmington, Delaware, tells the Court that Federal-
Mogul Corporation's management consists of highly regarded
industry veterans who have significant knowledge of the Debtors'
operations and of the key factors for success in the automotive
parts market.  These managers, who make the day-to-day decisions
that determine the operating profitability of the Debtors, are
an extremely valuable commodity not only to the Debtors but also
to the Debtors' competitors and other manufacturing companies.  
Ms. Jones submits that the managers play a key role in ensuring
that the Debtors' manufacturing facilities maintain quality and
productivity, and for the Debtors meet all supply requirements
to their just-in-time manufacturing customers. Ms. Jones
explains that a breakdown or slow down in manufacturing could
have disastrous effects on the Debtors' ability to meet its
delivery requirements.

Ms. Jones relates that the current market for talented managers
is very competitive due to the complex nature of the Debtors'
manufacturing techniques and management processes, which makes
the Debtors' managers highly marketable to other manufacturing
companies. Traditionally, Ms. Jones says that the Debtors have
been able to hire and retain the best and brightest managers
through competitive salaries and benefit programs, and an
employee-friendly work environment. However, recent events have
negatively affected the Debtors' ability to retain their staff,

A. substantial fall in the Debtors' stock price caused a decline
   in the income and the net worth of many of the key
   employees & has negated the effectiveness of the Debtors'
   existing stock-based retention plans.

B. despite the Debtors' operating profitability, the bankruptcy
   filing has created concerns that a downsizing or change of
   control of the Debtors may occur.

C. many of the key employees have undertaken significant
   additional duties in order to comply with the operating
   guidelines and disclosure requirements of the Bankruptcy
   Code and Rules.

Ms. Jones believes that employee morale has suffered as a result
and these factors has greatly increased the risk that the
Debtors' most talented managers may be successfully recruited by
other companies. In order to maintain the managerial consistency
that is crucial to achieving quality and profitability in a
highly complex manufacturing and sales operation, the Debtors
seek an order from the Court approving an employee retention
plan for their key employees.

Ms. Jones points out that the Employee Retention Plan will serve
to reduce key employee turnover, which would otherwise cause
significant cost to the Debtors. Prior to the bankruptcy filing,
the average cost to the Debtors of hiring a non-senior level key
employee was approximately $7,000, which would likely to
increase significantly now that the Debtors are operating under
chapter 11. Additionally, if an executive search firm is used,
the charge is typically 30% of the employees' first-year cash
compensation payout and with nearly 500 key employees, the cost
of replacing a large number of these employees would be
significant. Additionally, if new employees are hired at rates
that exceed the current pay structure, then the Debtors will
likely have to adjust their entire pay structure upward to
ensure compensation equity in the Debtors' workforce, which
would be very costly to the Debtors.

Ms. Jones submits that an even greater detriment to the Debtors
from the loss of key employees would be the loss of
institutional knowledge. Although a new manager may quickly
learn the general job requirements, Ms. Jones says that the
manager cannot quickly assimilate the nuances of the internal
management structure and gain the trust and respect of the
workforce. As a result, relationships with line workers and
other critical labor inputs will be lost and overall
productivity and morale will be negatively affected. Ms. Jones
contends that the existing management of the Debtors has built
relationships with vendors and customers that are an integral
part of the Debtors' ability to maintain sales and keep costs
low. Consequently, losing key managers would likely cause a
decline in the Debtors' operating profitability.

In order to address the problems related to key employee
turnover, Ms. Jones explains that the Debtors undertook
significant analysis of similar firms in the industry and of the
ability of the Debtors to fund a viable retention plan with
minimal impact on liquidity.  The Debtors first considered the
retention plans implemented by other similar manufacturing
companies that had recently filed under chapter 11.  Based on
this benchmarking analysis, the Debtors created a retention plan
that incorporates the most effective components of the retention
plans denoted above.  An evaluation of the Plan by Arthur
Andersen resulted in a conclusion that the value of the Employee
Retention Plan to employees was well within the range of values
of retention plans that have been approved in other chapter 11
cases of similar size.

The proposed Employee Retention Plan represents one component of
the Debtors' overall employee benefits package that the Debtors
propose to implement during these chapter 11 cases.  The
Employee Retention Plan itself provides for stay bonus payments
that reward employees who decide to remain employed by the
Debtors for a specified period of time and which aligns the
interests of the key employees with those of the creditors to
ensure that the value of the Debtors' estates is maximized. Ms.
Jones relates that the Employee Retention Plan is applicable to
approximately 455 key employees and provides for Stay Bonuses
equal to 15% to 100% of the employee's base salary depending
upon each employee's level in the organization and relative
impact of the bankruptcy filing on the particular employee's job
duties. The Stay Bonuses are paid annually to those key
employees that remain employed as of the applicable payment date
and estimated to cost about $23,000,000 for 2002 and $2,700,000
for 2003.

Ms. Jones tells the Court that the specific content and details
of the proposed Employee Retention Plan are proprietary and
confidential. Additional details of the Employee Retention Plan
will be provided to the U.S. Trustee, any official committees
appointed in these cases, and any other parties in interest.
However, Ms. Jones says that such disclosure will be made only
upon the signing of a confidentiality agreement regarding the

In addition to the Employee Retention Plan, the Debtors intend
to maintain post-petition the same incentive compensation plans
that existed prior to bankruptcy. Ms. Jones claims that the
plans were instituted by the Debtors' boards of directors in the
exercise of their business judgment after consultation with
outside compensation consultants. In general, the plans include
both short-term and long-term compensation components that were
created to align the employees' personal financial interests
with those of the shareholders. (Federal-Mogul Bankruptcy News,
Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-0900)

HOLLYWOOD ENTERTAINMENT: Posts Improved Results in Third Quarter
Hollywood Entertainment Corporation (Nasdaq: HLYW), owner of the
Hollywood Video chain of over 1800 video superstores, announced
financial results for the third quarter ended September 30,

The Company reported consolidated revenue of $344.9 million for
the third quarter ended September 30, 2001, as compared to
$306.5 million last year, an increase of 13%.  Total same store
sales increased 11% for the third quarter, driven by a 10%
increase in same store rental revenues.  The Company's EBITDA
for the third quarter was $56.7 million.  At the end of the
third quarter, the Company operated 1,809 superstores in 47
states and the District of Columbia.

The Company's net income for the third quarter benefited as the
result of the recognition of net operating loss carryforwards
arising primarily from charges recorded by the Company during
fiscal year 2000, the tax benefit of which has previously been
unrecognized.  Adjusting net income to give pro forma effect for
a normalized effective tax rate, pro forma net income for the
quarter was $9.3 million.

Mark Wattles, Chairman, CEO and Founder of Hollywood
Entertainment Corporation, commenting on the results, said, "We
are very pleased with our Company's performance in the third
quarter.  Our same store sales exceeded both the industry and
our major competitors for the second straight quarter as we
continue to see the benefits from the changes and additions to
the management team and the corresponding improvement to our

For the nine months ended September 30, 2001, total revenues
were $1.012 billion as compared to $938 million for the nine
months last year (excluding  Pro forma net income
(giving effect to a normalized tax rate) for the nine month
period ended September 30, 2001, was $15.6 million.

The Company raised its target for same store sales in the fourth
quarter to the 6% to 7% range, up from the previous target of 4%
to 5%.  The Company now expects pro forma net income per diluted
share for fiscal year 2001 to be in the range of $1.365 billion
to $1.370 billion.  The new estimate is based upon assumed same
store sales increases in the 3% to 4% range and no new store

Hollywood Entertainment owns and operates the second largest
video store chain in the United States.  Hollywood Entertainment
and Hollywood Video are registered trademarks of Hollywood
Entertainment Corporation.

HOMESEEKERS.COM: Selling MLS Assets to Fidelity National
-------------------------------------------------------- Inc. (OTC Bulletin Board: HMSK), a leader in
online real estate technology and services, announced that it
has entered into a definitive agreement to sell the assets of
its multiple listing services (MLS) division to Fidelity
National Information Solutions (Nasdaq: FNIS).  The consummation
of the transaction is subject to certain specified conditions.

The sale of the division will assist HomeSeekers in raising the
necessary capital to fund its operations and consolidation

A unique part of the transaction is the ongoing service
relationship between the companies. Eric Swenson, president and
COO of FNIS said, "With almost three-quarters of real estate
professionals in North America utilizing FNIS' advanced
technology solutions, we are strengthening our relationships and
product lines to provide the cutting-edge solutions that our
industry needs.  A long-term relationship with HomeSeekers will
further solidify that mission."

HomeSeekers will aggressively pursue a consolidation and
realignment of its products and services.  With the disposition
of its MLS group, the company returns to its roots as a real
estate technology provider.

"HomeSeekers has industry-leading software," noted Thomas
Chaffee, the sole board director.  "However, it lacked any sort
of strategic alignment of its organization.  We hope that by re-
focusing the company on the deployment of enabling technologies,
we can achieve the growth rates associated with other software

The restructuring of the company will redefine the customer
constituencies as well.

"Previously, HomeSeekers battled with its own brand in the
marketplace," said Chaffee.  "MLS margins are notoriously thin,
and the financing necessary to achieve the kind of dominance in
that space is simply not available in today's capital markets.  
HomeSeekers will now concentrate its efforts directly upon the
core constituents that brought us here, the engine of the real
estate economy -- the agent and the broker." Incorporated is a leading provider of technology
to North American real estate industries.  The company provides
technology solutions and services targeted to brokers, agents,
Multiple Listing Services (MLS), builders, consumers and others
involved in the real estate industry.  Product and service
offerings can be viewed at the company's primary website,  

HOMESEEKERS.COM: No Replacement Yet for Ernst & Young Auditors
On October 16, 2001, Ernst & Young LLP resigned as independent
accountants for, Incorporated.

The reports of Ernst & Young LLP for both the fiscal year ended
June 30, 2000 and 2001 contained a paragraph expressing
substantial doubt about the Company's ability to continue as a
going concern.

A new independent accountant has not been engaged, nor have any
consultations taken place.

IMC GLOBAL: Facing Suit for Breach of Contract Re Sale of Assets
In its first amended complaint (October 2001), Madison, Dearborn
Partners (MDP) filed suit in the Circuit Court of Cook County,
Illinois against IMC Global Inc., IMC Salt, Inc. and more than a
dozen "Interested Parties" that MDP alleges would have been
purchased but for IMC's breach of contract.

The suit alleges that IMC failed to negotiate in good faith for
the sale of its salt operations. Alternatively, MDP alleges
promissory estoppel in the event the Court determines that there
was no cause of action for breach of contract. IMC believes that
the suit is without merit and intends to vigorously defend this

Meanwhile, Fitch has assigned a rating of 'BB' to IMC Global's
new Polk County Industrial Development Authority (Florida),
industrial development revenue bonds (refunding series 2001).

Fitch has also affirmed IMC Global's senior secured credit
facility rating of 'BB+', senior secured notes rating of 'BB+',
senior unsecured notes (with subsidiary guarantees) rating of
'BB' and a senior unsecured notes (without subsidiary
guarantees) rating of 'B+'.

IMX PHARMACEUTICALS: Gets Substantial Offer From Cater Barnard
On November 20, 2000, IMX Pharmaceuticals, Inc. filed for
protection from its creditors under Chapter 11 of the United
States Bankruptcy Act. That proceeding is continuing in the
Southern District of Florida, West Palm Beach Division. The
Company's Plan of Reorganization was approved on September 26,

During 2000, the Company had engaged in a series of acquisitions
designed to transform the Company from a development company
into a Multi Level Marketing company with a large North American
Independent Distributor network and a modern manufacturing,
warehousing, and distribution facility for its growing array of
proprietary products.

Prior to the second quarter of 2000, IMX was primarily engaged
in the development of lines of health and beauty products that
the company believed would offer superior benefits to consumers.
The Mother 2 Be(R), Proctozone(TM), and Podiatrx(TM) lines were
launched in 1999 and the first quarter of 2000. By July of 2000,
the Company had completed its acquisition of the Enviro-Tech
Distribution Network and acquired new product lines to join its
earlier lines in direct distribution.

Achieving the results proposed in the Company's post acquisition
business plan required the Company to raise approximately
$1,500,000 in asset based financing and achieve prompt
consolidation of its operations in Boca Raton, Florida, and
Elbow Lake, Minnesota. The Company was not able to obtain the
required financing and was substantially delayed in
consolidating its operations.

The Company's cash flow became insufficient to either sustain
operations or pay creditors currently. As a result, on November
20, 2000 the Company and imx-eti LifePartners, Inc., its wholly
owned subsidiary, filed for protection from their creditors and
an opportunity to reorganize under Chapter 11 of the United
States Bankruptcy Act. The Company's other active subsidiaries,
Sarah J, Inc. (d/b/a Mother 2 Be(TM)), Proctozone(TM), Inc.,
Podiatrx(TM), Inc., and IMX Select Benefits Corporation, are not
parties to the bankruptcy proceedings.

The company has incurred operating losses for each of the last
four years ended December 31, 1997, 1998, 1999 and 2000. The
Company's current liabilities exceed its current assets by
$4,129,905 and its total liabilities exceed its total assets by
$3,894,253. These matters raise substantial doubt about the
ability of the Company to continue as a going concern. The
Company's continuance will be dependent on the ability to
restructure its operations to achieve profitability in the near
term and its ability to raise sufficient debt or equity capital
to fund continuing operations until such restructuring is

Post-petition, The Company has derived revenues from its
subsidiaries through the sale of their respective products. The
Company continues to operate as a debtor in possession. On March
16, 2001 the Company and imx-eti filed a Motion to Extend the
Exclusivity Period for filing a Plan and the periods to Solicit
Exceptances of Plan. On April 4, 2001 the court entered an Order
granting the Exclusivity Motion and extended the time within
which the Company had exclusive rights to file a plan for an
additional thirty (30) days there from and extended the period
for solicitation of acceptances for an additional sixty (60)

Subsequent to the filing of the bankruptcy case it became
evident that the Company could not sustain itself as an entity
to assist in the operation of the subsidiaries respective
businesses- the sole source of its revenues. The Company sought
offers for recapitalization of the business and each of the
subsidiaries' businesses by third parties.

The Company received two expressions of interest, only one of
which, in the opinion of the Company's management was
substantial. The appeal to the two parties who expressed an
interest in investing in the Company was based primarily on its
status as a public company. Consequently, there is no value in
the assets of the Company to provide a return to unsecured
creditors and if the Company were liquidated, after payments are
made to the secured creditors and priority and administrative
creditors, there would be no property available for distribution
to unsecured creditors.

In the opinion of management, the only substantial offer was
received from Cater Barnard, plc.  Management determined that
the value to be invested in the Company is substantially in
excess of the Company's value as a going concern or on a
liquidation basis. The Company has filed a plan of
reorganization with the United States Bankruptcy Court, Southern
District of Florida dated May 23, 2001 pursuant to section 1125
of Title 11 of the United States Code. The plan is currently
pending approval of the United States Bankruptcy Court.

INTEGRATED HEALTH: Provident Bank Eyes Clara Burke Sale Proceeds
Following the closing of the sale of the Clara Burke Facility by
Integrated Health Services, Inc. to the buyer on September 25,
2001, Provident Bank, a secured creditor of Clara Burke Nursing
Home, Inc. moves the Court for an order compelling the Debtors
to pay Provident the proceeds of the recent sale of Provident's

According to the Sale Order, Clara Burke is sold free and clear
of liens, claims and encumbrances, and all valid liens and
encumbrances not specifically excepted would attach to the sale
proceeds. The Debtor has acknowledged that Provident Bank is
entitled to the entirety of the Proceeds as a result of its

On December 12, 1995, Provident loaned the Debtor $6,500,000
(the Loan) for the purchase by the Debtor of the Clara Burke

The Loan is evidenced by a Loan and Security Agreement and a
Term Note and was secured by a Mortgage on the Clara Burke
Facility duly recorded in the land records of Township of
Whitemarsh, County of Montgomery, Commonwealth of Pennsylvania
(the Mortgage) and a Collateral Assignment of Licenses
(collectively, the Loan Documents), all executed on December 12,
1995. The Loan is guaranteed by IHS pursuant to a Guaranty
Agreement, also executed on December 12, 1995.

Pursuant to the Loan Documents, Provident is secured both in the
Debtor's real property, including the Clara Burke Facility, and
its personal property, including all of the Debtor's inventory,
instruments, equipment, general intangibles, licenses, permits
and other governmental approvals, accounts and all cash and non-
cash proceeds of such collateral.

The Debtors' admit in the Sale Motion that Provident "maintains
a perfected lien on substantially all of [Clara Burke's]
assets." The property sought to be sold pursuant to the sale
Motion consisted entirely of Provident's Collateral.

In connection with the closing of the sale, the Debtor and the
Bank entered into an Escrow Agreement which provided for the
escrowing of the Proceeds pending an order of this Court
authorizing the Debtor to pay the Proceeds to Provident in
satisfaction of its lien. The Escrow Agreement further provided
that the Debtor would fully cooperate in obtaining such an

Given Provident's lien and the escrowing of the funds pursuant
to the escrow Agreement, the Debtor cannot use the Proceeds in
furtherance of its reorganization. Further retention of the
Proceeds therefore will not benefit the Debtors but any failure
to pay the Proceeds to Provident would be to inflict harm upon
Provident tells the Court.

Accordingly, Provident requests that the Court issue an Order
(1) compelling the Debtors to pay the Proceeds to Provident; and
(2) granting Provident such other, further and different relief
as is just and proper. (Integrated Health Bankruptcy News, Issue
No. 21; Bankruptcy Creditors' Service, Inc., 609/392-0900)   

INT'L AIRCRAFT: Q3 Income Adversely Affected By Sept. 11 Events
International Aircraft Investors (Nasdaq:IAIS) announced third-
quarter net income of $581,000.

Earnings were reduced as a result of the loss of one month's
rent on a repossessed Boeing Model 737-300 and associated
maintenance costs. The aircraft was leased for three years to
Panair, an Italian airline operating out of Sicily.

The company has a 1990 MD-83 on lease to Air Liberte, a French
airline, to April 2002. On June 19, 2001, Air Liberte filed for
bankruptcy under French law. On July 27, 2001, the French courts
adopted a plan by which the airline was purchased by an outside
investor group. The company is currently in negotiations to
restructure and extend the lease of this aircraft to the
airline. The results of the negotiations will result in a
reduction in monthly rental revenue.

Following the terrorist attacks on September 11, the world's
airlines have entered into the worst financial crisis in the
history of the industry. While governments around the world have
agreed to provide assistance to varying degrees, the fate of the
individual carriers and the industry is uncertain. The company's
lessees have been adversely affected by these events. However,
it is too soon to accurately evaluate the extent of the impact
on the company.

The company faces many risks in the current climate. These risks
include, but are not limited to, lease rate reductions,
collection of rents, airline bankruptcies, refinancing risk and
reductions in the value of aircraft. In order to minimize these
risks, the company requires most of its lessees to pay rents in
advance, pay lease deposits, and make payments to be applied to
scheduled aircraft maintenance. In addition, the company is
beginning to reap the benefits of lower interest rates in the
refinancing of its debt.

Revenues from rental of flight equipment decreased by 5%, or
$509,000, to $9,974,000 in the three months ended Sept. 30,
2001, compared to the same period in 2000 as a result of
recording an MD-82 on lease to American Airlines as a direct
financing lease in March 2001 and the reduction of rent on the
MD-83 lease to Air Liberte, partially offset by two months rent
on the Boeing 737-300 on lease to Panair.

The company's lease portfolio consisted of 15 aircraft with a
book value of $265,445,000 and one aircraft under a financing
lease with a net investment of $16,194,000 at Sept. 30, 2001,
compared to 16 aircraft with a book value of $301,882,000 at
Sept. 30, 2000.

During the third quarter of 2001, the company earned $6,000 of
consulting and other fees compared to $200,000 earned in the
third quarter of 2000. Quarter-to-quarter comparisons are
impacted by the timing and amount of consulting fees, which are
earned from time to time.

Interest income increased to $423,000 for the three months ended
Sept. 30, 2001, from $353,000 for the same period in 2000
principally as a result of interest income from the recording of
an MD-82 as a direct financing lease in March 2001, partially
offset by lower interest rates and cash balances in 2001.

Interest expense decreased to $4,239,000 for the three months
ended June 30, 2001, from $4,745,000 for the same period in 2000
as result of the effect of continued loan paydowns and reduced
interest rates. The company's composite interest rate was 6.88%
at Sept. 30, 2001 and 7.1% at Sept. 30, 2000.

Depreciation expense decreased to $4,458,000 in the third
quarter of 2001 from $4,661,000 in the third quarter of 2000,
primarily as a result of the recording of an MD-82 as a direct
financing lease in March 2001. The company incurred $219,000 of
repossession expense in the third quarter of 2001 as a result of
a settlement with a repair facility compared to $207,000 in the
same period of 2000. The aircraft for which these costs were
incurred has now been leased.

General and administrative expenses were $519,000 in the three
months ended Sept. 30, 2001, and $523,000 in the same period of
2000. During the three months ended Sept. 30, 2001, no stock
compensation was incurred compared to $63,000 of non-cash stock
compensation incurred in the same period of 2000 related to the
vesting of options granted to executive officers.

Income tax expense increased to $387,000 in the three months
ended Sept. 30, 2001, from $314,000 in the same period of 2000
as a result of an increase in income before taxes of $131,000.
Income tax expense represents a non-cash provision for deferred
income taxes at an effective rate of 40% in 2001 compared to
37.5% in 2000.

Net income increased to $581,000 for the three months ended
Sept. 30, 2001, from $523,000 for the same period in 2000. The
increase was enhanced by the reduction of shares outstanding as
a result of the company's stock repurchase program.

Total revenues for the nine months ended Sept. 30, 2001,
decreased 8% to $30,141,000. Net income decreased to $755,000,
or $.21 per diluted share, primarily as a result of lost rent on
two repossessed aircraft and the associated repossession and
maintenance costs.

The company has repurchased 915,811 shares, or 20% of its
outstanding shares, since the repurchase program was initiated.
The company has remaining authorization to repurchase 111,568
shares, or approximately 3% of the outstanding common stock. The
company's book value increased to $10.08 per share at Sept. 30,
2001, compared to $9.79 at Sept. 30, 2000.

IAI is an owner/lessor of used, single-aisle jet aircraft on
lease to domestic and foreign airlines. The company currently
leases aircraft to airlines in North America, Central America,
Europe, Asia and the South Pacific.

As of Sept. 30, the Company's cash and cash equivalents amounted
to $8.8 million, while it had notes payable of $239.9 million.
Total liabilities stood at $266.8 million as opposed to total
shareholders' equity of $36 million.

KEYSTONE: Big Noteholders Defer Rights Exercise Until Dec. 7
Keystone Consolidated Industries, Inc. (NYSE: KES) announced
that holders representing more than 75% of the principal amount
of its $100 million 9 5/8% Senior Secured Notes have agreed to
extend further the deferral of the exercise of such holders'
right to accelerate the payment of the Notes and to defer
directing the Trustee of the Notes to take any action or
exercise any remedy prior to December 7, 2001, as a result of
Keystone's failure to make the interest payment on the Notes due
August 1, 2001.

As previously announced, Keystone has received an agreement from
its primary revolving credit lender to forbear remedies
available to it solely as a result of Keystone's failure to make
the August 1, 2001 interest payment on the Notes and its
noteholders had agreed to forbear through October 31, 2001.

Keystone also announced that Robert W. Singer has resigned as
president and chief executive officer of Keystone.  The Keystone
board of directors is expected to appoint David L. Cheek as
president and chief operating officer of Keystone in addition to
his current duties as president of Keystone Steel and Wire, a
division of the Company, at its regularly scheduled board of
directors meeting on October 31, 2001.  

The board of directors will also consider strategic alternatives
that will be presented at the meeting by its advisors, Gleacher
& Company LLC, including a possible restructuring of the

Keystone Consolidated Industries, Inc. is headquartered in
Dallas, Texas. The company is a leading manufacturer and
distributor of fencing and wire products, carbon steel rod,
industrial wire, nails and construction products for the
agricultural, industrial, construction, original equipment
markets and the retail consumer.  Keystone is traded on the New
York Stock Exchange under the symbol KES.

LTV CORPORATION: Promotes John T. Delmore to VP & Controller
The LTV Corporation (OTC Bulletin Board: LTVCQ) announced two
significant appointments in its financial management

John T. Delmore has been promoted to vice president and
controller.  His responsibilities include the financial
accounting and reporting functions of the Company including tax
and audit departments.

Mr. Delmore joined the Company in 1977 and has held positions of
increasing responsibility in the finance organization.  His most
recent position was controller-financial accounting and
financial reporting.  He holds a Bachelor of Science Degree in
accounting from the University of Notre Dame.

Clifford R. Brown has joined LTV as vice president and
treasurer.  His responsibilities include the treasury, credit
and risk management functions of the Company.

Prior to joining LTV, Mr. Brown held a number of significant
positions at the Goodyear Tire & Rubber Company in treasury,
strategic acquisitions and divestitures, information technology
and financial management.  His most recent position was director
of finance for the Engineered Products and Chemical divisions of
Goodyear.  He holds the Bachelor of Science degree in Accounting
from the University of Akron.

Both Mr. Delmore and Mr. Brown report to Thomas L. Garrett, Jr.,
senior vice president and chief financial officer.

The LTV Corporation is a manufacturing company with interests in
steel and metal fabrication.  LTV's Integrated Steel segment is
a leading producer of high-quality, value-added flat rolled
steel, and a major supplier to the transportation, appliance,
electrical equipment and service center industries. LTV's Metal
Fabrication segment consists of LTV Copperweld, the largest
producer of tubular and bimetallic products in North America.

LIONBRIDGE: Expects to Save Over $30MM per Year from Cost-Cuts
Lionbridge Technologies, Inc. (Nasdaq: LIOX), a provider of
solutions for worldwide deployment of technology and content,
announced financial results for the quarter ended September 30,

Total revenues for the third quarter were $25.9 million, an
increase of 14% compared to revenue of $22.7 million for the
second quarter of 2001 and a decrease of 15% compared to revenue
of $30.3 million for the third quarter of 2000.  Lionbridge
reported a net loss of $7.6 million.

The Company reported a cash balance of $10.1 million for the
quarter, a decrease of $3.0 million from June 30, 2001, after
payment of certain costs associated with the integration of Data
Dimensions, Inc., which was acquired by the Company at the end
of the second quarter.

"Throughout the individual months of the third quarter, we began
to see an up-tick in demand and the results of our Q2 cost
reductions.  These factors can be seen by our September gross
margins of approximately 40% and near EBITDA breakeven, despite
the impact of September 11th," said Rory Cowan, Lionbridge CEO.  
"The recently increased customer demand and new operational
efficiencies, combined with our strongest pipeline in a year,
demonstrate our trend toward a stable, profitable business."

Lionbridge has implemented annualized cost reductions with an
anticipated benefit of more than $30 million, including
reductions associated with Data Dimensions, Inc.

New customer wins for the third quarter remained strong with 96
new customers, and a total of 316 unique customers serviced.

"In addition to a strengthening pipeline, our recurring revenue
is increasing.  We saw an increase in revenue from our top 25
customers this quarter over last quarter, which is significant
in this challenging business environment," continued Cowan.  
"Moreover, as the Internet becomes more mainstream, we are
seeing new opportunities in the life sciences and financial
markets, enabling us to further diversify our client base."

The VeriTest business unit of Lionbridge, which accounts for
approximately 22% of Company revenue for the third quarter,
recorded sales for the quarter of $5.8 million.  New customer
wins accounted for approximately 40% of VeriTest revenue for the
quarter, with record demand for certification services as
enterprise applications become more complex and organizations
face growing interoperability challenges.

"The localization business is clearly strengthening.  And, while
VeriTest's top line revenue was slightly weaker than we
expected, we also realized significantly more cost synergies
from our existing global infrastructure than we anticipated,"
said Rory Cowan.  "With the DDI integration nearly complete and
a newly structured sales team, we have the strategic advantage
of being able to focus our efforts on increasing client value
and growing our business."

Business highlights for the quarter included:

-- Recurring revenue:  Despite the challenging business climate,
Lionbridge increased revenue from its top 25 customers by more
than 20%.  The Company continues to establish long-standing
client relationships as evidenced by 65% of Lionbridge revenue
coming from customers of more than two years and 73% of revenue
coming from customers of more than one year.

-- New customer wins:  For the quarter, Lionbridge secured 96
new customers, bringing the total of unique customers serviced
to 316. Significant new contract wins included JD Edwards, PTC
and others. Demonstrating an increasingly diverse client base,
Lionbridge is also securing new contracts with customers in the
life sciences, defense and financial services markets.

-- Operational efficiencies:  Lionbridge has implemented
significant cost savings across every department. The Company
has implemented cost reductions with an anticipated benefit of
more than $30 million on an annualized basis.  In addition, due
to highly focused management of operations, the Company
maintained a DSO of 52 days.

-- Gross margin returns:  As the cost reductions implemented in
the first half of the year took effect, Lionbridge began to see
its expenses more closely align with operations.  In addition,
Lionbridge began to see increased sales activity resulting from
a newly structured localization sales team.  Both factors
contributed to a September gross margin percentage of 40%, a
level not seen since 2000.

Lionbridge Technologies, Inc. provides solutions for worldwide
deployment of technology and content to global 2000 companies in
the technology, life sciences and financial services industries.   
Lionbridge testing and compatibility services, globalization
solutions, and multilingual content management technologies help
clients reduce cost, speed time to market, and ensure the
integrity of global brands.  Based in Waltham, Mass., Lionbridge
maintains facilities in England, Ireland, The Netherlands,
France, Germany, China, South Korea, Japan, Taiwan, Brazil, and
the United States. To learn more, visit

As at Sept. 30, 2001, the Company's current liabilities exceeded
its current assets by over $12 million.

MATSUSHITA ELECTRIC: Losses Reflect Continuing Economic Slowdown
Matsushita Electric Industrial Co., Ltd. (NYSE:MC) reported its
consolidated financial results for the second quarter and first
half, ended September 30, 2001, and non-consolidated (parent
company alone) results for the first fiscal half.

           Consolidated Second-quarter Results

Consolidated group sales for the second quarter were down 13% to
1,710.8 billion yen (U.S.$14.38 billion), from 1,964.7 billion
yen in the same three-month period a year ago. Of the total,
domestic sales decreased 19% to 823.9 billion yen ($6.92
billion), while overseas sales decreased 6% to 886.9 billion yen
($7.45 billion). Excluding the effects of currency translation,
overseas sales decreased 14% from a year ago on a local currency

Matsushita attributes these declines primarily to worsening U.S.
and worldwide economic conditions and further depressed demand
from the global IT industry. In explaining external conditions,
the Company said that the Japanese economy experienced continued
setbacks due mainly to decreased exports and depressed capital
investments, while outside of Japan, the U.S. economy slowed
further, with countries in Europe and Asia also showing signs of
deepening economic slowdowns.

Matsushita's earnings were severely impacted by sales declines,
especially in mobile communications equipment, including
cellular phones, and components and devices for the IT industry,
as well as intensified price competition. The negative effects
caused by these factors could not be offset by companywide
efforts to reduce fixed costs and streamline parts and materials
costs. As a result, second quarter operating profit declined to
a loss of 37.0 billion yen ($311 million), as compared with an
operating profit of 78.4 billion yen recorded a year ago. Income
before income taxes in the second quarter also sharply decreased
to a loss of 66.1 billion yen ($555 million), from a pre-tax
profit of 76.5 billion for the same period last year.
Accordingly, the Company registered a quarterly net loss of 50.1
billion yen ($421 million), compared with a net income of 42.0
billion in the previous year's second quarter.

               Consolidated First-half Results

Combining the second quarter results with those of the first
quarter, consolidated group sales for the first fiscal half
decreased 9% to 3,385.6 billion yen ($28.45 billion), compared
with 3,737.0 billion yen in the same six-month period a year
ago. Domestic sales decreased 12% to 1,648.5 billion yen ($13.85
billion), while overseas sales decreased 6% to 1,737.1 billion
yen ($14.60 billion). On a local currency basis, overseas sales
were down 13%.

For reasons similar to those given for second quarter results,
the Company's operating profit for the first fiscal half
declined to a loss of 75.7 billion yen ($636 million), compared
with an operating profit of 99.6 billion yen a year ago.

Accordingly, the Company recorded a loss before income taxes of
87.3 billion yen ($733 million) in the first six months,
compared with the previous first half's income before income
taxes of 105.1 billion yen, and a net loss of 69.5 billion yen
($584 million), compared with a net income of 51.4 billion yen
in the first half of the previous year.

  Consolidated First-half Sales Breakdown by Product Category

The Company's first-half consolidated sales by major product
category are summarized as follows:

                    AVC Networks

AVC Networks sales declined 6% to 1,937.2 billion yen ($16.28
billion), compared with 2,060.5 billion yen in the same six-
month period a year ago. Within this segment, sales of video and
audio equipment edged up 1% due to continued growth in such
areas as TVs and DVD players and discs, despite a sales decline
in VCR's.

In information and communications equipment, sales grew steadily
in such lines as car audiovisual (AV) equipment, CD-R/RW drives,
and broadcast- and business-use AV equipment. However, setbacks
recorded in mobile communications equipment, including cellular
phones, and hard disk drives, resulted in an 11% overall sales
decrease within this category.

                    Home Appliances

Sales of Home Appliances fell 5% to 604.2 billion yen ($5.08
billion), compared with 639.2 billion yen in the previous year's
first half. Although air conditioners, washing machines and
cooking equipment recorded modest sales gains, they were offset
by sales declines in refrigerators.

                  Industrial Equipment

Sales of Industrial Equipment were 146.1 billion yen ($1.23
billion), down 36% from 228.9 billion yen in the same six-month
period last year. Sales of factory automation (FA) equipment in
both domestic and overseas markets were down sharply compared
with a year ago, due to continuing decreases in demand from the
IT-related equipment industry.

                  Components and Devices

Sales of Components and Devices decreased 14% to 698.1 billion
yen ($5.87 billion), compared with 808.4 billion yen in the
first half of last year. While compressors for air conditioners
and other uses showed steady sales increases, the fall-off in
demand from the mobile communications and other IT-related
equipment industries resulted in significant sales declines for
semiconductors, general components and electric motors.

  Non-Consolidated (Parent Company Alone) First Half Results

First-half parent-alone sales decreased 17% to 1,962.6 billion
yen, from 2,373.5 billion yen in the same six-month period a
year ago. This decrease is mainly attributable to lower domestic
sales and reduced exports, especially in mobile communications
equipment, components and devices for information and
communications equipment, and FA equipment.

Regarding parent-alone earnings, the favorable effects of a
weaker yen and company-wide cost reduction efforts were not
sufficient to offset lower sales and fierce competition in
domestic and overseas markets, resulting in a parent-alone
operating loss of 29.9 billion yen, compared with an operating
profit of 31.0 billion yen a year ago. Recurring profit
decreased 95% to 2.5 billion yen, from 51.5 billion yen in the
previous first half. Parent-alone net income also decreased 93%
to 2.9 billion yen, compared with 39.8 billion yen in the first
half of last year.

                     Interim Dividend

The Matsushita Board of Directors voted to distribute an interim
cash dividend of 6.25 yen per common share, payable December 10,
2001, to parent-company shareholders of record on September 30,
2001. This dividend rate is unchanged from last year.

  Outlook for the Full Fiscal Year 2002, ending March 31, 2002

Matsushita announced a revision of its forecast made on April
27, 2001 for consolidated and non-consolidated sales and
earnings for the current fiscal year, ending March 31, 2002
(fiscal 2002). Taking into account slowdowns in the U.S. and
worldwide economies, combined with the negative economic effects
caused by the terrorist attacks of September 11, the Company
foresees a worsening overall business environment, and the
possibility of a global simultaneous recession.

The Company currently expects this severe environment, affecting
the AVC Networks and Components and Devices segments in
particular, to continue through the current fiscal year. To
counter this severe environment, and increase profitability,
efficiency and corporate value, Matsushita intends to accelerate
the implementation of its mid-term Value Creation 21 plan, which
started at the beginning of this fiscal year. In addition to its
ongoing business restructuring programs, the Company plans to
enhance employment restructuring initiatives, including the
introduction of a Special Life Plan Assistance Program
(effective only for the current fiscal year) to provide an
additional retirement allowance and other support to employees
opting for early retirement with new careers outside of

On a consolidated group basis, the Company now expects annual
sales for the current fiscal year to decrease 11% from the
previous fiscal year, to approximately 6,800 billion yen,
compared with the original forecast of 7,550 billion yen.
Consolidated income before income taxes is anticipated to
decrease to a pre-tax loss of approximately 370 billion yen,
compared to the previous forecast for pre-tax income of 133
billion yen. The pre-tax loss forecast includes one-time non-
operating expenses of an estimated 200 billion yen related to
the above-mentioned Special Life Assistance Program, the closure
or integration of several manufacturing locations and other
restructuring programs. Net income for the fiscal year is also
forecasted to decrease sharply, resulting in an estimated net
loss of approximately 265 billion yen, as compared with the
original forecast for net income of 57 billion yen.

On a non-consolidated, parent company-alone basis, the Company
now expects sales for the full fiscal year to decrease 17% from
the previous fiscal year, to about 4,030 billion yen, instead of
the earlier forecast of 4,680 billion yen. Parent-alone
recurring profit is projected to decline, resulting in a
recurring loss of 20 billion yen, replacing the earlier forecast
of a recurring profit of 81 billion yen. A non-recurring loss of
approximately 124 billion yen related to implementation of the
Special Life Assistance Program and other restructuring programs
will also be incurred. Accordingly, parent-alone annual net
income is now seen to fall to a net loss of 68 billion yen,
replacing the previous forecast of a net income of 38 billion

Matsushita expects the above-mentioned restructuring programs,
taking place in the current fiscal year, to accelerate its Value
Creation 21 plan, resulting in sizeable reductions of fixed
costs in subsequent years. Based on such positive effects from
the restructuring programs and the anticipated recovery in
sales, management today indicated its confidence in a turnaround
in earnings beginning in the next fiscal year, ending March 31,

MILACRON: S&P Cuts Credit & Debt Ratings to Low-B Range
Standard & Poor's lowered its ratings on Milacron Inc. and
removed them from CreditWatch with negative implications, where
they were placed  on July 2, 2001. The outlook is negative.

The downgrades of the public debt issues also reflect recent
subordination to bank borrowings, which have become secured
under an amended loan agreement. The firm's profitability has
declined materially because of the sharp downturn in North
American demand for plastics machinery and metalworking tools;
the timing and extent of market recovery remains highly

The Cincinnati, Ohio-based company with $1.6 billion sales in
2000, participates in the plastics machinery sector (injection
molding, blow molding, extrusion, mold bases), where demand can
swing widely, and in the cyclical industrial products market
(metalcutting tools, metalworking fluids). Third quarter 2001
North American sales are expected to be down year-to-year 35%-
40% for plastics processing equipment and 25%-30% for
metalworking tools. Milacron's third quarter is expected to post
a $10 million net loss before restructuring charges of about $10
million. By comparison, the year-earlier quarter produced $19
million of net income.

Management has reduced staffing and cut back production in
certain operations. To further conserve cash, inventories are
being worked down and capital expenditures reduced. However, the
company entered this downturn with a somewhat aggressive
financial posture and debt to total capital was in the high-50%
area at June 30, 2001, constraining financial flexibility.

                   Outlook: Negative

The ratings assume recovery in demand beginning in the second
half of 2002. Should the current downturn become more prolonged
and severe, however, with further deterioration in financial
flexibility, the ratings could be lowered.

          Ratings Lowered, Removed From CreditWatch

Milacron Inc.                                       TO    FROM

  Corporate credit rating                           BB-   BB+
  $115 million 8.375% notes due March 15, 2004      B     BB+
  $375 million revolving credit facility            BB-   BB+

Milacron Capital Holdings B.V.

  Euro 115 million 7.625% bonds due April 6, 2005   B     BB+
  (gtd. by Milacron Inc.)

NEXTEL INT'L: Considering Alternative Plans to Fund Business
Nextel Communications, Inc. (NASDAQ: NXTL), has announced
consolidated financial results for the third quarter of 2001
including operating revenues of $1.99 billion and the addition
of approximately 650,000 global proportionate subscribers.
Nextel finished the quarter with approximately 9.6 million
global proportionate subscribers.

"During a quarter marked by a national tragedy, we turned in a
solid performance, in-line with our plans and full-year
guidance," said Tim Donahue, Nextel's president and CEO. "Our
subscriber additions remain strong, operating cash flow and
margins are growing nicely and customer retention has improved
again. We intend to build on this momentum in the fourth quarter
and into 2002."

"We have implemented several new strategies to bolster revenue
growth and enhance our operating efficiencies," said Nextel's
executive vice president and COO, Jim Mooney. "We see tremendous
opportunity in the enterprise space where we can bring our total
solutions of Nextel Direct Connect, digital cellular, messaging
and mission-critical packet data applications to a broad range
of businesses. We are also increasing our sales volume through
lower cost distribution channels such as our retail stores, web
and tele-sales operations. Together with targets for increased
efficiencies in customer care and billing services, we
believe we can cut significant costs from our business while
increasing our revenue share."

In the third quarter of 2001, Nextel's domestic operations
produced a record $526 million in operating cash flow (earnings
before interest, taxes, depreciation and amortization, or
EBITDA), a 34% improvement over the domestic operating cash flow
of $392 million for same period in 2000. Operating cash flow
from consolidated operations was $497 million before an
impairment charge in the third quarter, a 38% improvement over
the $359 million in consolidated operating cash flow for the
third quarter 2000. The third quarter 2001 operating cash flow
results are prior to a $147 million charge related to Nextel
International's operations in the Philippines.

Consolidated revenue for the third quarter of 2001 grew by 30%
to $1.99 billion compared with $1.53 billion generated during
the third quarter of 2000. Domestic revenue was $1.81 billion
for the quarter, a 26% increase over last year's third quarter
revenue of $1.44 billion. Nextel's average monthly service
revenue per domestic subscriber unit remains higher than any
other national wireless carrier at approximately $70 in the
third quarter.

Nextel's domestic operations added approximately 481,200 new
subscribers during the third quarter, and Nextel International
added approximately 145,000 proportionate subscribers. At the
end of the third quarter, Nextel had approximately 9.6 million
global proportionate subscribers, comprised of 8.17 million
domestic subscribers, 1.29 million proportionate international
subscribers and 138,900 proportionate subscribers from Nextel
Partners, Inc. (NASDAQ: NXTP).

The consolidated loss attributable to common stockholders was
$356 million during the third quarter of 2001 excluding special
items recognized during the quarter. Including these items the
reported consolidated loss attributable to common stockholders
was $209 million.  Special items affecting the third quarter
earnings were: an extraordinary gain of $469 million resulting
from the exchange of Nextel Communications, Inc. common stock
for Nextel International, Inc. debt, a loss of $188 million
resulting from the decline in fair market value of securities
held by Nextel International, and an after-tax charge of $134
million associated with a write down of assets in the

Domestic capital expenditures were approximately $534 million in
the third quarter of 2001, a decrease of 13% from $616 million
in the second quarter of 2001 and a decrease of 20% from $666
million of capital expenditures in the third quarter of 2000.
Nextel added approximately 500 domestic cell sites during the
third quarter, ending the quarter with approximately 14,500 cell
sites in service.

"Our results during the third quarter demonstrated balanced
growth," said Paul Saleh, Nextel's executive vice president and
CFO. "Nextel improved its operating cash flow while growing its
subscriber base at a healthy pace and we will continue to focus
on balancing subscriber growth and service improvements with
cost containment.  During the quarter, Nextel made strategic
progress by reducing the domestic churn rate to the lowest among
the national wireless carriers and continuing a strong cash flow
conversion ratio. Not only did we generate record domestic
EBITDA of $526 million, but we also demonstrated solid
improvement in capital efficiency. Nextel ended the third
quarter with approximately $5.7 billion in total liquidity,
which is ample to fund our current business plan."

                      Nextel International

"Once again, Nextel International turned in solid results while
meeting economic challenges in its markets," said Steve
Shindler, CEO of Nextel International. "Despite these
challenges, we were able to significantly grow subscribers and
decrease our EBITDA loss in the quarter. While we continue to
believe in the wireless opportunities on the international
front, we are also realistic about cash funding requirements and
the lack of funding available from the capital markets at this
time. Nextel International is currently working to right-size
our international business and re-prioritize our capital
spending to reduce cash consumption. We are also evaluating
alternative plans to fund our business."

Nextel International grew proportionate digital subscribers by
approximately 145,000 during the third quarter, resulting in
approximately 1.29 million proportionate subscribers at
quarter's end. International revenues for the third quarter of
2001 grew to $186 million, a 104% increase over the same period
in 2000. Operating cash flow loss from International operations
was $29 million (before Philippines asset write-down), $4
million less than the loss in last year's third quarter. Capital
expenditures for Nextel International during the third quarter
were $119 million. The company placed about 165 cell sites into
service during the quarter, bringing the total number of sites
in Nextel International's managed markets to approximately

PACIFICARE HEALTH: Cost Stabilization Yields Results in Q3
PacifiCare Health Systems Inc. (Nasdaq:PHSY) announced that
net income for the third quarter ended Sept. 30, 2001 increased
to $17 million, from $5.2 million for the third quarter of 2000.

Results for the most recent quarter include a one-time charge
related to debt refinancing and an extraordinary gain related to
debt retirement. Last year's third quarter EPS benefited from a
credit of $0.11 per share related primarily to the early
termination of a license agreement.

Said Howard G. Phanstiel, PacifiCare president and chief
executive officer: "Looking back a full year, it is gratifying
to see how far we've come since the third quarter of 2000.
Although our commercial medical costs remain too high, we have
produced four straight quarters of improved earnings from
continuing operations, EBITDA and free cash flow during a period
of tremendous change.

"This has been achieved by taking appropriate contracting
actions to stabilize costs, aggressively pursuing price
increases, exiting unprofitable markets and products, and
keeping overhead costs under control. At the same time, we have
invested in new strategic products and strengthened functions
that are key to better managing costs and pricing our business
going forward."

               Revenue Growth and Membership

Total revenue of $3 billion for the third quarter of 2001 rose
2% above the third quarter of 2000. The slight increase was
driven primarily by a 7% rise in Medicare premium revenue.
Commercial premium revenue declined 4% as membership losses
offset increases in premium yield averaging 13%.

PacifiCare's health plan membership totaled approximately 3.6
million on Sept. 30, 2001, a 12% decline year-over-year and a 2%
decrease from the second quarter.

The company's plan to exit unprofitable commercial markets and
products, to implement premium rate increases and to terminate
contracts with higher-cost network providers contributed to a
15% reduction in commercial members year over year. Membership
in the company's Medicare + Choice program also fell 3% as a
result of county exits and freezes on new enrollment.

Both the company's pharmacy benefit management subsidiary
(Prescription Solutions) and behavioral health subsidiary
continued to offset membership reductions at PacifiCare's health
plans by attracting new unaffiliated members.

Unaffiliated Prescription Solutions membership grew 68% in the
third quarter compared with the prior year, while behavioral
health membership unaffiliated with PacifiCare's plans increased

Other income, principally from the company's specialty
businesses, grew 31% from the third quarter of 2000, primarily
due to revenue growth at Prescription Solutions. Net investment
income decreased 8% due primarily to the impact of lower
interest rates on marketable securities yields.

                    Health-Care Costs

Sequentially, the consolidated medical loss ratio (MLR) improved
70 basis points from the second quarter of 2001. The improvement
is the result of revenues per member rising faster than costs.
The consolidated MLR in the 2001 third quarter reflects a
Medicare MLR of 89% and a commercial MLR of 89.5%.

The Medicare MLR was 130 basis points lower than the previous
quarter as a result of enrollment freezes, provider
recontracting and new disease management programs. The
commercial MLR increased 30 basis points from the second quarter
due primarily to charges relating to terminated contracts with
insolvent Texas physician groups.

The Medicare MLR was 89.2% and the commercial MLR was 89.1%
excluding the net effect of additions to provider insolvency
reserves in Texas and all other changes in estimates for the

             Medical Claims and Benefits Payable

Medical claims and benefits payable totaled $1.1 billion at
Sept. 30, 2001, comparable with the second quarter of 2001. Days
claims payable for the quarter increased 3% sequentially to 40.6
days from 39.3 days at June 30, 2001.

Days claims receipts on hand stood at 6.8 days on Sept. 30,
2001, compared with 8.9 days at June 30, 2001, and the elapsed
time between the date of service and a claim being paid was
reduced by 13% from the previous quarter.

                        SG&A Ratio

The selling, general and administrative (SG&A) expense ratio for
the third quarter of 2001 was 10.5%, a 10 basis point
improvement over the same quarter last year due primarily to
higher revenue. On a sequential quarter basis, the SG&A ratio
rose 50 basis points due primarily to higher compensation costs
and health plan legal settlements.

                   EBITDA and Cash Flows

Earnings before interest, taxes, depreciation and amortization
(EBITDA) rose to $89.6 million from $87.3 million in the 2001
second quarter. The company generated free cash flow (net income
plus depreciation and amortization, less capital expenditures)
of $39.8 million, up from $36.2 million in the previous quarter.

In August, PacifiCare reached an agreement with its lenders to
extend the maturity date of its $800 million senior credit
facility by one year, to Jan. 2, 2003. Interest on the bank debt
was 6.1% in the third quarter. The company reduced its
outstanding debt in the quarter by $12 million through a debt-
for-equity exchange in a private transaction with a holder of
its 7% senior notes due 2003.

The one-time charge in the quarter was the result of costs
amounting to $0.04 per share related to an earlier attempt to
refinance the company's debt, partially offset by a $0.02 per
share extraordinary gain from the retirement of the senior

                  Fourth Quarter Outlook

Commenting on the company's outlook for the remainder of 2001,
Phanstiel said: "We remain comfortable with our full-year
guidance of $1.65 to $1.75 per share. This reflects our
expectations in the fourth quarter for higher seasonal health-
care costs impacting our senior population, higher seasonal
marketing expenses related to annual open enrollment, and the
SG&A costs for the roll-out of our new health insurance

"Looking ahead to 2002, we look forward to being positioned to
take fuller advantage of a strong pricing environment. Pricing
will reflect the higher costs of PacifiCare's increased risk-
based business, as well as medical inflation affecting the
entire industry.

"We also expect to benefit from meaningful changes to our
Medicare + Choice plans for 2002, which include benefit
reductions and partially or fully exiting 44 counties where we
could not continue to provide an affordable, quality product to

PacifiCare Health Systems is one of the nation's largest
health-care services companies. Primary operations include
managed care products for employer groups and Medicare
beneficiaries in eight Western states and Guam serving
approximately 3.6 million members.

Other specialty products and operations include pharmacy benefit
management, behavioral health services, life and health
insurance, and dental and vision services. More information on
PacifiCare Health Systems can be obtained at

PACIFIC GAS: Leading Agricultural Groups Oppose Bankruptcy Plan
The following is being issued by the Agricultural Energy
Consumers Association:

In a letter to elected officials agricultural leaders Tuesday
expressed their concern with and strong opposition to the
reorganization plan filed in federal bankruptcy court by Pacific
Gas and Electric Company.  If approved in bankruptcy court, the
proposal would shift billions of dollars worth of nuclear and
hydroelectric generation, as well as the company's vast
transmission system to an unregulated sister corporation at
levels far below full market value.

"This reorganization plan is nothing more than a multibillion-
dollar gift to PG&E's shareholders," said Michael Boccadoro of
the Agricultural Energy Consumers Association.  "These assets
have been paid for on the backs of California consumers, and
PG&E Corporation should not be allowed to just walk away with

Not only does the proposal fail to adequately reimburse the
state's ratepayers for the assets; it substantially worsens
California's position as a buyer of wholesale electricity.  
PG&E's nuclear and hydroelectric generation capabilities have
emerged as vital checks on skyrocketing wholesale power costs
over the last year and a half.  Shifting these over to
unregulated affiliates within the PG&E corporate structure would
take them out of the control of the California Public Utilities
Commission, and result in a much higher price to be paid for
their output.  "Why should customers pay 5 cents for hydro power
that costs PG&E less than a penny to produce?" asked Boccadoro.

The Legislature and Governor affirmed the vital role these
retained generation assets play by approving AB 6X (Dutra),
which expressly forbade further divestiture of the utilities'
generation assets and required that power from them be kept
under state cost-of-service rate making jurisdiction at least
until 2006.  PG&E's proposed reorganization plan completely
ignores this law and the CPUC's constitutional authority to find
the sale to be in the public interest.

PG&E has made a number of misrepresentations about the true
costs to consumers from the reorganization plan, suggesting that
it will not raise rates.  According to Boccadoro, however, the
claim is false.  "They are blatantly lying about their
bankruptcy plan," he said.  "The truth is that the plan will
cost consumers billions of dollars in higher power costs and
higher rates in the long term.  The bankruptcy judge should
soundly reject PG&E's reorganization plan.  It not only flies in
the face of common sense and the law, it is anti-consumer,"
Boccadoro concluded.

Key Signatories of the letter include:

     Agricultural Energy Consumers Association (AECA)
     Western Growers Association
     California Poultry Federation
     CALCOT, Ltd.
     California Cotton Ginners and Growers Association
     Alliance of Western Milk Producers
     Dairy Institute of California
     California Citrus Mutual
     California Cut Flower Commission
     California State Floral Association
     California Tomato Growers Association
     Almond Hullers and Processors Association
     California Grain and Feed Association
     California Warehouse Association
     Prune Bargaining Association
     California Seed Association
     Foster Poultry Farms
     Zacky Farms
     Sunworld, Incorporated
     Paramount Farming Company
     Dreyer's Grand Ice Cream
The full text of the letter that was sent to the State
Legislature and California's congressional delegation today is
posted on AECA's web page

PENTACON INC: Makes Interest Payment on 12-1/4% Senior Sub Notes
Pentacon, Inc. (NYSE: JIT) announced that it made the interest
payment due on October 1, 2001 on its 12-1/4 percent Senior
Subordinated Notes due April 1, 2009.

The Company also announced that it has reached agreement with
its senior lenders under its bank credit facility to amend
certain provisions under that facility giving the Company
additional borrowing availability.

The payment by the Company falls within the 30-day grace period
for making the interest payment on the Notes, and avoids an
event of default under the indenture relating to the Notes and
the Company's bank credit facility.

Pentacon intends to continue discussions with the holders of its
Notes, as well as continuing to evaluate replacement senior debt
financing and explore a variety of additional equity and debt-
related transactions, all with a view toward strengthening the
Company's financial condition.

Rob Ruck, Chief Executive Officer, commented, "I am pleased that
our senior lenders are continuing to show support for the
operational restructuring that we are implementing, and I
believe this agreement should give our suppliers, customers, and
employees comfort that Pentacon is moving in the right
direction.  This will also provide us with a more stable
platform from which to address our capital structure issues."

The quarterly earnings call has been scheduled for November 7,
2001 at 9 a.m. C.S.T., at which time the Company will provide
additional detail about the Company's cost reduction initiatives
that are being undertaken in response to current economic
conditions, and its outlook for the balance of the year.

With regards to the credit facility, the Company has
approximately $3.5 million of additional borrowing capacity
after making the $6.1 million interest payment on the Notes.  
The amendment, without limitation, also (1) accelerates the
termination date of the facility to March 31, 2002; (2)
establishes minimum availability requirements, beginning at $6.5
million at October 31, 2001 and increasing periodically
thereafter up to $9.5 million at March 1, 2002; (3) increases
the interest rate on Base Rate Loans by 1% and eliminates the
Company's ability to make borrowings tied to LIBOR; (4) imposes
new covenants related to monthly EBITDA minimums through
February 28, 2001; (5) limits the maximum gross inventory which
the Company may have at the end of each calendar month through
February 28, 2001; and (6) requires the Company to complete an
inventory appraisal by December 15, 2001.

No assurances can be given that the Company will be able to
obtain replacement financing for the bank credit facility by
March 31, 2002 or that the Company will be able to satisfy the
covenants under the agreement relating to the bank credit
facility.  A default under the Company's bank credit facility
could result in the maturity of substantially all of the
Company's indebtedness being accelerated.  Further, no
assurances can be made that any equity transaction or debt-
related financing would not involve substantial dilution to
existing shareholders.

Pentacon is a leading distributor of fasteners and other small
parts and provider of related inventory management services.  
Pentacon presently has 35 distribution and sale facilities in
the U.S., along with sales offices in Europe, Canada, Mexico and
Australia.  For more information, visit the Company's web site
at .

PHARMING GROUP: Sells Belgian Manufacturing Facility to Genzyme
Genzyme Corp. announced that it has acquired certain assets of
Pharming N.V., the Belgian subsidiary of the Pharming Group
currently operating under a court-supervised receivership.  
These assets include a 70,000 square foot cGMP protein
manufacturing facility currently under construction and a pilot
plant that is currently used to produce transgenic human alpha-
Glucosidase, both located in Geel, Belgium.  

The acquisition has been approved by the Commercial Court in
Turnhout, the Province of Antwerp, and Genzyme's board of

In the near term, the acquisition of the Geel facility is
intended to allow Genzyme to assume control over the production
of the transgenic enzyme and secure its supply to nine patients
with Pompe disease participating in the extension of a clinical
trial.  Genzyme has been solely funding the production of the
enzyme since Pharming Group sought receivership.

In the longer term, this acquisition will broaden Genzyme's
worldwide manufacturing infrastructure by providing the company
with a biopharmaceutical production facility located in
continental Europe. Genzyme is in the midst of a comprehensive
program to substantially expand manufacturing capacity to
support the strong growth of existing products and the launch of
products within its development pipeline.  The company plans
to significantly expand protein production capacity in Geel and
begin full manufacturing operations there in 2003.  As a result,
Genzyme has suspended plans to construct a recombinant protein
production facility adjacent to its Framingham, Massachusetts,
campus.   Genzyme intends to retain all of the full-time
employees of Pharming N.V.

"We believe this is a positive resolution to what has been a
difficult situation," said Jan van Heek, executive vice
president of Genzyme Corp. "Most importantly, this acquisition
helps ensure that patients will continue to receive the
transgenic product.  At the same time, it will allow us to
establish a new protein manufacturing facility much sooner than
we had planned.  We are eager to begin integrating the Geel
facility with our existing and planned operations."

Genzyme Corporation is a biotechnology company that develops and
markets products and services designed to address unmet medical

PIONEER COMPANIES: Postpones Release of Q3 Results to November 8
Pioneer Companies, Inc. (OTC Bulletin Board: PIONA) announced
that its third quarter Earnings Release, which was previously
scheduled for release on October 30, 2001, will be issued on or
about November 8, 2001.  

The Company has determined that certain arrangements for the
purchase of power for one of its plants meets the criteria for
treatment as a derivative under SFAS 133.  The delay is
necessary to enable the Company to obtain valuations of the
instruments determined to be derivatives.

Pioneer, based in Houston, Texas, manufactures chlorine, caustic
soda, hydrochloric acid and related products used in a variety
of applications, including water treatment, plastics, pulp and
paper, detergents, agricultural chemicals, pharmaceuticals and
medical disinfectants.  The Company owns and operates five
chlor-alkali plants and several downstream manufacturing
facilities in North America.  Current financial information and
press releases of Pioneer Companies, Inc. can be obtained from
its Internet web site at

POLAROID CORP: Intends to Auction & Sell I.D. Systems Business
Polaroid ID Systems, Inc. is a wholly owned subsidiary of
Polaroid Corporation that provides secure identification card
systems to government agencies for large programs, which include
driver's licenses, voter I.D. cards and other similar programs.

David S. Kurtz, Esq., at Skadden, Arps, Slate, Meagher & Flom,
in Chicago, Illinois, tells the Court that the Polaroid ID
Systems is the nation's largest provider of such systems with
contracts with state governments in 38 states for the
manufacturing, printing and servicing of secure I.D. cards.  
Polaroid ID System offers both film and digital I.D. systems,
Mr. Kurtz tells the Court.  It also provides the I.D. production
equipment, film, laminates, software and other materials used in
the production of I.D. cards, Mr. Kurtz adds.  Until recently,
Mr. Kurtz notes, the photographs on such I.D. cards were film-
derived and highly lucrative for Polaroid.  Today, however, Mr.
Kurtz explains, the photographs on most I.D. cards are digital
images.  This requires higher maintenance and integration system
that results in lower margins, higher capital expenses and
higher cash consumption, Mr. Kurtz observes.

That's why the Debtors plan to sell their I.D. Business to the
highest bidder.

Mr. Kurtz relates that certain members of existing senior
management of Polaroid ID Systems, Inc. previously approached
the Debtors to discuss the possible sale of the Assets to Senior
Management.  But the Debtors initially declined to pursue the
Senior Management's offer because they were hoping to get a
higher price from a strategic buyer.

Thus, the Debtors engaged an investment banker -- Dresdner
Kleinwort Wasserstein Inc. -- to help them identify and contact
potential purchasers of the Assets, then facilitate a possible
sale.  Wasserstein was able to contact 33 potential strategic
buyers of the Assets.  Of the 33, Mr. Kurtz says, 13 signed
confidentiality agreements and, in turn, received a confidential
offering memorandum and/or additional confidential materials.
Thereafter, Mr. Kurtz notes, 2 buyers expressed interest in
buying the Assets.  But despite good faith and intensive
negotiations, the Debtors were not satisfied with either offer.

PIDS Senior Management then re-entered the scene.  Mr. Kurtz
tells Judge Walsh that Senior Management contacted Hampshire
Equity Partners III, L.P. and its affiliates, a private equity
firm, to assist them in financing the potential sale of the
Debtors' ID Business.  For over six months, Mr. Kurtz relates,
Senior Management and Hampshire performed substantial due
diligence in connection with this proposed transaction.
"Significant amounts of financial records and documents were
produced and reviewed.  A financial audit of PIDS was performed.
After that, Senior Management and Hampshire decided to make an
offer for the Assets," Mr. Kurtz says.

Finally, the Debtors and Senior Management have come up with an
Asset Purchase Agreement, which contemplates an efficient and
rapid sale of substantially all of the Assets to PIDS Holdings,
subject to a competitive auction process designed to flush-out
the highest and best bid for the I.D. business.

The Debtors contend that an order, efficient and quick sale of
their I.D. Business is necessary to preserve it value.  Mr.
Kurtz emphasizes that most customers of the I.D. Business are
state agencies who depend on PIDS to provide essential
governmental functions.  As such, Mr. Kurtz asserts, it is
imperative that those customers are provided with a clear signal
as to the future of the I.D. Business.  Otherwise, the Debtors
fear that such customers might attempt to terminate existing
agreements, which will surely create a negative impact on the
value of the I.D. Business.

The Debtors' management, board of directors, and team of
financial advisors are convinced that only way to maximize the
value of their estates is to sell the I.D. Business as a going
business concern, thereby preserving the substantial goodwill of
the business, maintaining customer relationships and avoiding a
liquidation sale of the I.D. Business at depressed prices.  This
was the decision reached after an exhaustive analysis on the
company's continuing cash losses, its inability to obtain
financing, the increasingly competitive nature of their
industry, and their diminishing operating and profit margins.

By selling the Assets now, Mr. Kurtz notes, the Debtors will
also relieve themselves of certain ongoing costs and expenses,
thereby minimizing administrative expenses. (Polaroid Bankruptcy
News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-

PROTECTION ONE: S&P Concerned About Weakening Credit Protection
Standard & Poor's lowered its corporate credit and senior
unsecured debt ratings on Protection One Alarm Monitoring Inc.
to single-'B' from single-'B'-plus and its subordinated note
ratings to triple-'C'-plus from single-'B'-minus. The outlook
remains negative.

The downgrade is based on deteriorating operating performance
resulting in weaker credit protection measures. Topeka, Kansas-
based Protection One Alarm Monitoring is the second largest
security alarm company in the U.S., providing monitoring and
related security services to nearly 1.3 million customers in
North America.

The ratings on Protection One take into consideration a highly
leveraged financial profile and the management challenge of
improving subpar operating performance. These concerns are only
partially offset by the stability and predictability associated
with the security alarm monitoring business, which yields a
recurring revenue stream.

Operating performance deteriorated in 2001 as new management
struggled to stem high customer attrition rates and reduce
operating costs, while revamping its customer acquisition
strategy. Revenues have declined by nearly 15% over the past
year as the subscriber base declined, hampering profitability
and credit measures. The company's annualized customer
attrition rate for the first nine months of 2001 remained high
at nearly 16%. Efforts to streamline operations through customer
service facility consolidation and staff rationalization have
reduced costs, but not fast enough to offset the decline in

As sales decline, operating margins, which deteriorated to 30%
in the first nine months of 2001 from above 35% in 2000, are
likely to remain pressured, despite management's efforts to
improve service levels and stabilize sales. Consequently, EBITDA
interest coverage of about 1.7 times for the 12 months ended
September 2001 is susceptible to further deterioration over the
near term. Moreover, Standard & Poor's is concerned about the
company's reliance on its credit facility that expires in early
2002. The facility is provided by Westar Industries, which owns
87% of Protection One's stock. As of Sept. 30, 2001 the company
had $138 million outstanding on the credit facility.

                      Outlook: Negative

Uncertainty associated with refinancing the credit facility and
the challenge of stabilizing operating performance leave the
ratings susceptible to a further downgrade.

QUAKER COAL: Completes Sale of Assets to AEP For $101MM + Debts
American Electric Power (NYSE: AEP) announced it has completed
its acquisition of Quaker Coal Co. under terms approved by the
U.S. Bankruptcy Court for the Eastern District of Kentucky.

The acquisition resolves Chapter 11 bankruptcy proceedings
initiated by Kentucky-based Quaker. On Oct. 19, the bankruptcy
court accepted AEP's reorganization plan for Quaker Coal.

Under the revised agreement, AEP will pay $101 million to
creditors -- as originally announced -- for Quaker assets that
include surface and coal mining operations and associated
facilities and coal reserves in Kentucky and Ohio; coal reserves
in Pennsylvania; property interests in Colorado, and royalty
interests in West Virginia.  AEP also will assume associated
liabilities of approximately $40 million.

The acquisition will be immediately accretive to earnings and
will be funded with short-term debt.

"Our acquisition of the Quaker assets is another illustration of
our wholesale business strategy at work," said Eric J. van der
Walde, executive vice president - marketing and trading for AEP
Energy Services Inc.  "We are creating value for our customers
and shareholders all along the energy chain. From coal mines to
barge lines to natural gas pipelines to generating plants, we're
involved in every aspect of energy production, up to and
including the marketing and trading of power, gas and coal in
the wholesale marketplace.  We expect the Quaker Coal
acquisition will significantly expand our coal marketing

AEP will continue to operate Quaker's currently active mines and
associated businesses, which employ approximately 840 people.  
The Quaker operations are expected to increase AEP's coal
production by approximately 7 million tons annually and once
again place AEP among the top 20 coal producers in the region.

AEP also maintains ownership interests in lignite reserves in
east Texas and northwestern Louisiana.  AEP's Southwestern
Electric Power Co. (SWEPCO) subsidiary operates the Dolet Hills
Lignite Co. in Mansfield, La., which produces approximately 3
million tons of lignite per year for the nearby Dolet Hills
Power Station, which is co-owned by SWEPCO and CLECO Power LLC
(CLECO) and operated by CLECO.

AEP Energy Services, Inc., is a subsidiary of AEP involved in
trading and marketing energy commodities, including electric
power, natural gas, natural gas liquids, oil, coal and SO2
allowances in North America and Europe. American Electric Power
is a multinational energy company based in Columbus, Ohio. AEP
owns and operates more than 38,000 megawatts of generating
capacity, making it America's largest generator of electricity.
The company is also a leading wholesale energy marketer and
trader, ranking second in the U.S. in electricity volume with a
growing presence in natural gas. AEP provides retail electricity
to more than 7 million customers worldwide and has holdings in
the U.S. and select international markets.  Wholly owned
subsidiaries are involved in power engineering and construction
services, energy management and telecommunications.

SAM THE RECORD MAN: Files an Assignment in Bankruptcy in Canada
Sam The Record Man, a Canadian household word for over 50 years,
has been forced to file an assignment in bankruptcy. The
Sniderman family has supported the declining business for the
last several years in the firm belief that the structural
problems in the industry, the fiercely competitive market place
for its products, and the recent general economic downturn in
Canada could be overcome.

"Until very recently, we believed that if we persevered, we
could turn things around. The family's own commitment to the
promotion of Canadian talent will continue", says 81 year old
Sam Sniderman, speaking from the original Toronto flagship store
on Yonge Street, north of Dundas.

The Sniderman family hopes that the landmark Canadian business
it founded in the mid 1920's and expanded to a national chain,
will ultimately survive in a refocused form. Independent
franchises operating under the Sam The Record Man name are not
included in the company's bankruptcy.

Peter Aykroyd, a Senior Vice-President of BDO Dunwoody Limited,
the Trustee and Receiver of Sam's commented, "This is a very
trying experience for a family that has been so dedicated to the
recorded music industry in Canada.  Times are extremely tough
for retailers, and Sam's is no exception. We will be moving
quickly to consolidate the operations across the country for a
major coast-to-coast sale."

SERVICE MERCHANDISE: Seeks Release of Real Estate Sale Proceeds
In connection with the initial phase of Service Merchandise
Company, Inc.'s reorganization, the Debtors engaged in a surplus
real estate disposition program.  Under this program, the
Debtors sold or assigned their interests in 76 parcels of
property.  The Court-approved sales resulted in gross proceeds
of about $80,000,000.

Paul G. Jennings, Esq., at Bass, Berry & Sims PLC, at Nashville,
Tennessee, notes that 12 properties of the Surplus Real Property
secured the Debtors' pre-petition obligations under the
Indenture -- among Service Merchandise, H.J. Wilson Company,
Inc., and The Long-Term Credit Bank of Japan Limited (New York
Branch).  Of those 12 properties, Mr. Jennings says, there were
sufficient proceeds realized from the Sale to pay the Release
Price of those properties:

     Property No.         Location           Release Price
     ------------         --------           -------------
         24          Huntsville, Alabama      $ 2,556,950
        257            Midland, Texas           2,062,060
        677        Virginia Beach, Virginia    11,052,580

As to the remaining 9 properties, Mr. Jennings relates, there
were insufficient proceeds realized to pay the Release Price.
Accordingly, Mr. Jennings explains, all of the proceeds net of
costs and expenses of sale are payable to the Trustee -- HSBC
Bank USA.

To date, Mr. Jennings reports, the Debtors have distributed
$21,705,288 of the net real estate proceeds in the Non-DIP
Escrow Account to the Trustee.  This amount reflects the
Debtors' calculation of the net proceeds payable to the Trustee,
less the Trustee's pro rata share of a $1,500,000 "holdback"
pending the parties' agreement on a final reconciliation,
according to Mr. Jennings.  As of June 2001, Mr. Jennings notes,
there remained $4,557,012 in the Non-DIP Escrow Account.  Thus,
Mr. Jennings calculates, after subtracting the amounts still due
to the Trustee, there would remain $4,234,905.  At the same
time, there remains $2,532,393 in the Fleet-DIP Escrow Account.

Mr. Jennings informs Judge Paine that the Debtors and the
Trustee have agreed to a final reconciliation of real estate
proceeds of $22,028,295 and to a final distribution of no more
than $323,007 ($22,028,295 less than the $21,705,288 already
distributed).  The final distribution is due to the Trustee to
satisfy the Trustee's and the Senior Noteholders' right, title
and interest in the real estate proceeds.

Because there is no outstanding lien or interest in the real
estate proceeds in excess of the amount of $323,007 owed to the
Trustee, the Debtors sought and obtained the Court's authority
to disburse the remaining $6,767,298 of real estate proceeds to
the Debtors.  The Debtors intend to use such amounts for general
corporate purposes subject to and in compliance with the terms
of their post-petition DIP facility.

Judge Paine is convinced that the release of the proceeds is in
the best interests of the Debtors, their estates, creditors and
interest holders.  The Court also agrees that it is necessary to
the Debtors' prospects for a successful reorganization.

                        *     *     *

In a separate related order, Judge Paine also approves the
agreement by and between the Debtors and the Trustee (and Senior
Noteholders) regarding the Trustee's continued consent and
support of the Subleasing Program.

This Subleasing Program, Mr. Jennings explains, consists of a
series of strategic real estate initiatives designed to maximize
the value of the Debtors' substantial real estate holders.  The
Debtors began this program more than a year ago in February

The initiatives include capital improvements and renovation to
the Debtors' 218 stores over the next two years, Mr. Jennings
relates.  Moreover, Mr. Jennings says, the Debtors have also
reduced the amount of store selling space utilized by them and
sublease the unused portions of such space at a majority of
their go-forward locations.  "The Debtors believe that such
reduction and subleasing of space will unlock the value of the
Debtors' real estate assets and allow the Debtors to maximize
the value of the estates for the benefit of all parties-in-
interest in these cases," Mr. Jennings relates.  According to
Mr. Jennings, each of the Debtors' properties in which the
Trustee claims and interest are subject to the Subleasing

The Court rules that the Trustee will continue to consent to the
implementation of the Debtor's Subleasing Program, which shall
include, but is not limited to, the subdivision of the Debtors'
properties in which the Trustee may have an interest, the
renovations, alterations and improvements to the properties, and
the uses of the tenants and subtenants as agreed to by the

At the Debtors' request, Judge Paine also requires the Trustee
to execute a separate consent agreement -- separately
documenting the Trustee's consent with respect to a particular
lease or sublease transaction.  Furthermore, as to any lease or
sublease approved by the Court and executed in connection with
the Subleasing Program relating to a property in which the
Trustee may have an interest:

  (i) in the event that the Trustee succeeds to be the interest
      of the Debtors, the Trustee will agree not to disturb the
      rights or interests of the tenant or subtenant with
      respect thereto provide that such tenant or subtenant:

        (a) attorns to the rights/interests of the Trustee, and
        (b) is not in default of its obligations, and

(ii) at the request of the Debtors, the Trustee will execute a
      non-disturbance and attornment agreement.

According to Judge Paine, the Debtors should provide the Trustee
with a reasonable opportunity to review the lease or sublease
relating to the execution of the non-disturbance and attornment
agreement and to make non-material changes to such form based
upon the review of the lease/sublease.  The Court also directs
the Debtors to reimburse the Trustee for reasonable costs and
expenses incurred by the Trustee that are associated with the
evaluation of lease and sublease transactions and/or in
connection with the drafting and negotiation of any non-
disturbance and attornment agreement in the chapter 11 cases
consistent with the protection of the Trustee's rights under the

The Trustee reserves the rights:

  (a) to object to any particular lease or sublease transaction,
      if, in the sole discretion of the Trustee, such lease or
      sublease transaction:

       (i) will, or may potentially, materially adversely affect
           the value of the property, which is the subject of
           the Trustee's liens; or

      (ii) when considered in conjunction with the non-
           disturbance and attornment agreement, will not
           satisfy the criteria listed in the Deed of Trust
           executed in connection with the Indenture; and

  (b) to decline to execute an non-disturbance and attornment
      agreement in connection with any lease or sublease that
      does not become an Approved Lease. (Service Merchandise
      Bankruptcy News, Issue No. 18; Bankruptcy Creditors'
      Service, Inc., 609/392-0900)

STILLWATER MINING: S&P Anticipates Potential Covenant Violations
Standard & Poor's lowered its ratings on Stillwater Mining Co.
and placed them on CreditWatch with negative implications.

The rating actions reflect: the rapid and severe decline in
platinum group metals (PGM) prices and its impact on
Stillwater's financial profile; Standard & Poor's concerns over
potential covenant violations; a higher-than-expected cost
profile; and the company's third quarter earnings announcement,
which stated that the company is seeking alternative means of
financing to complete the development of its East Boulder mine
project, as it may not have sufficient funding in light of
weaker PGM prices.

After reaching a record high in January 2001 of $1,094 per ounce
for palladium and a 13-year high of $645 per ounce for platinum,
the price of the PGMs, especially for palladium, has declined
dramatically. Substitution risk by automakers and slowing demand
from the electronics and jewelry industries significantly
reduced the price of palladium and platinum to their current
levels of $343 and $423 per ounce, respectively. This extreme
volatility underscores the inherent commodity risk and opaque
nature of PGM metals.

Standard & Poor's does not expect a meaningful improvement in
near-term PGM prices in light of the terrorist attacks in the
U.S on September 11. It is all but certain the U.S. economy is
in a recession and consumer confidence levels will decline
further, lowering demand from many of the PGM's key end markets.
Russia continues to remain a 'wild card' in any outlook for PGM
prices as the amount and timing of any liquidation of Russian
PGM stockpiles is difficult to predict.

The company benefits from supply contracts with General Motors
Corp., Ford Motor Co., and Mitsubishi Corp., companies that
require PGMs for use in automobile emission converters. These
contracts act as a hedge for Stillwater, reducing price risk
during the company's expansion and provide price floors for the
production of these metals. Nevertheless, after adjusting the
company's third quarter results to reflect current spot market
prices and factoring minimum price floors for these contracts,
the EBITDA to capitalized interest ratio would be a very weak
1.4x. Furthermore, Stillwater's high cost profile has negatively
affected its financial performance and is measurably higher than
Standard & Poor's had anticipated.

For the third quarter ending Sept 30, 2001, total cash costs
were $264 per ounce. Renewed efforts to maximize the existing
mine plan at the Stillwater mine could lead to reductions in the
company's cost profile. Also, without a marked improvement in
PGM prices and current production levels over the near term,
Stillwater could be in potential violation of some of its
financial covenants as well as its production covenant.

To address the company's lack of operating diversity and reach
its stated goal of 1 million ounces during 2003, the company is
currently in the midst of a $370 million expansion project at
the East Boulder mine, and has spent approximately $240 million.
The project is scheduled to reach full production of 370,000
ounces in late 2002 (down from an original 450,000 estimate).
However, given current levels of PGM prices, Stillwater  
announced that it will seek alternative means of financing as
existing capital sources will be insufficient to meet required
capital expenditures at the East Boulder mine.

Standard & Poor's plans to meet with management to evaluate the
company's alternatives to continue development of the East
Boulder property as well as assess the impact of company
initiatives and the current PGM price outlook on its financial

         Ratings Lowered And Placed On CreditWatch
               With Negative Implications

Stillwater Mining Co.              To                 From
   Corporate credit rating         BB-                BB
   Senior secured bank loan rating BB                 BB+
   Senior unsecured debt            B                  B+

TRITON NETWORK: Stockholders Okay Plan for Complete Liquidation
Triton Network Systems, Inc. (Nasdaq:TNSI) announced that its
stockholders approved a Plan of Complete Liquidation and
Dissolution of the Company at a Special Meeting of Stockholders
held on October 29, 2001. As a result, the Company's board of
directors and officers are now authorized to proceed with the
liquidation and dissolution of the Company in accordance with
the Plan.

USINTERNETWORKING: Debt Restructuring Talks Underway
USinternetworking, Inc. (USi) (Nasdaq: USIX), the leading
Application Service Provider, reported results for the third
quarter ended September 30, 2001.

Revenue in the third quarter was $31.7 million. USi achieved
EBITDA profitability for the quarter of $680,000, after
including the effect of a $2.6 million restructuring charge from
actions taken during the third quarter. The net loss amounted to
$37.6 million.

"Reaching EBITDA breakeven is a significant milestone for USi,"
said Andrew Stern, Chief Executive Officer. "This achievement
reflects the improvements we've made in the management of our
operations and evidences the overall efficacy of USi's business

Reported gross margin for the quarter improved to $11.7 million
or 37%, further evidence of gains in operational efficiency. The
Company's cost structure was also improved by further reductions
within its employee base, primarily in indirect functions. At
the end of the quarter the Company employed approximately 625

"Despite difficult economic conditions and financial viability
concerns that significantly limited new sales, USi delivered
substantial improvements on bottom line performance, as
evidenced by our improving margins and significantly reduced
cash consumption," said Stern. "Moreover, these results were
achieved while improving client service levels, which rose to
historical highs in the third quarter."

                     Financing Overview

As previously disclosed, USi worked throughout the quarter with
its investment bank to identify more permanent funding and
evaluate strategic alternatives. Following a four-month process,
which included discussions with a broad variety of strategic and
financial investors and extensive business due diligence with a
select group of interested parties, the Company executed a
letter of intent with Bain Capital Partners, LLC (Bain)
providing for an equity investment of up to $100 million.

The investment is contingent upon a number of conditions,
including, among others, a mutually agreeable restructuring of
the Company's obligations, execution of definitive
documentation, and any necessary regulatory approvals. Bain and
USi continue to work closely to structure the form of the
transaction and to execute a definitive agreement. Subsequent to
closing, it is expected that Bain will own substantially all of
USi's equity, materially diluting the Company's current equity.
Upon completion of the transaction and the associated
restructuring, the Company expects to be fully funded to cash
flow positive.

"Our current clients and prospects have responded favorably to
the Bain announcement of October 11," said Stern. "The proposed
recapitalization, upon completion, will ensure our long-term
viability, and will enable us to extend our leadership position
into the future."

The Company's restructuring adviser, Conway Del Genio Gries &
Co., LLC (CDG), has recently begun discussions with the
Company's creditors. While it is the Company's intention to come
to consensual agreement with its creditors, there can be no
assurance that the restructuring will be successfully completed
outside of court.

To preserve its cash while discussions with creditors are
ongoing, the Company has elected not to make the interest
payment due in November 2001 on the 7% Convertible Subordinated
Notes issued in November 1999.

                       Business Outlook

The Company provided the following guidance for fiscal year

-- Revenue for 2001 is expected to be approximately $130.0
million, a 19% increase over 2000.

-- The gross margin for the full year 2001 is expected to be
slightly above 30%.

-- For the full year, the Company expects to report an EBITDA
loss of $19.0 to $20.0 million, including restructuring charges.

-- For the full year, the expected loss per share is in the
range of $1.20 to $1.21.

-- The Company expects capital expenditures for 2001 to be in
the range of $30.0 - 35.0 million.

USinternetworking Inc. (Nasdaq: USIX), the leading Application
Service Provider, delivers enterprise and e-commerce software as
a service. The company's iMAP portfolio of service offerings
delivers the functionality of leading software from Ariba,
BroadVision, Lawson, Microsoft, Oracle, PeopleSoft, Plumtree and
Siebel as a continuously supported, flat-rate monthly service
via an advanced, secure global data center network.
Additionally, USi's AppHost managed application hosting services
provide the most advanced solutions for enterprises, software
companies, marketplaces, and system integrators that are seeking
a better way to deliver solutions over the Internet to their
customers and end users. For more information, visit

Internet Managed Application Provider, iMAP, AppHost,
PriorityPeering, USiGSP, USiSAN USiAccelerate, and Making
Software Simple are service marks of USinternetworking, Inc. All
other trademarks are the property of their respective owners.
USi strategic partners and providers are publicly traded on
Nasdaq under the symbols: ARBA, BVSN, CSCO, MSFT, ORCL, PSFT and

As of Sept. 30, 2001, the Company's current assets amounted to
$97 million while its current assets totaled $240 million. Its
$125 million subordinated notes payable issued in November 1999
have been reclassified to current debt as a result of the
Company's election not to make the interest payment due in
November 2001.

VENCOR: Reaches Agreement with IRS to Extend Discovery Period
Vencor, Inc. have objected to claims filed by the Internal
Revenue Service (IRS) in their Fifth Omnibus Objection To
Claims, Seventh Omnibus Objection To Claims, Ninth Omnibus
Objection To Claims, Eleventh Omnibus Objection To Claims,
Thirteenth Omnibus Objection To Claims and in their Seventeenth
Omnibus Objection To Claims.

The United States on behalf of the IRS filed with the Court (1)
United States' First Document Request and (2) United States
First Set Of Interrogatories and has been an order regarding the
extension of discovery period with respect to the IRS Discovery

The parties agree to further extension of period and adjournment
as follows:

(1) The deadline for the Debtors to respond or otherwise object
    to the IRS Discovery Request is adjourned until October 31,

(2) The hearing on the Objections with respect to the IRS Claims
    is adjourned until November 14, 2001 at 9:30 a.m.

(3) The response deadline to the Objections with respect to the
    IRS Claims is adjourned until November 7, 2001 at 4:00 p.m.
    (Vencor Bankruptcy News, Issue No. 33; Bankruptcy Creditors'
    Service, Inc., 609/392-0900)

VSOURCE INC: Resumes Trading on Nasdaq Under VSRC Symbol
Vsource Inc. (NASDAQ:VSRCE), a market leader in providing
customized Business Process  Outsourcing (BPO) and Distribution
Services in Asia-Pacific, has been informed by Nasdaq that on
Thursday, Oct. 18, 2001, Nasdaq resumed using "VSRC" as the
company's trading symbol.  

Nasdaq had changed Vsource's trading symbol to "VSRCE" on Sept.
24, 2001 after the company  was delinquent filing its Form 10-Q
for the quarterly period ended July 31, 2001.  The company
subsequently filed the Form 10-Q on Sept. 26, 2001,
and an amendment to the Form 10-Q on Oct. 5, 2001.

The removal of the "e" from the company's trading symbol
indicates that the filing delinquency is no longer an issue
before the Nasdaq Listing Qualifications Panel that is
considering the listing status of the company's common stock on
the Nasdaq National Market System. However,  the Panel is still
considering, and has not yet ruled on, whether the company meets
Nasdaq's  net tangible asset test or whether its acquisition of
substantially all of the assets of NetCel360 Holdings Limited
constituted a "reverse  merger".  

There  can  be no assurances that the company will receive a
favorable outcome with respect to these issues.   If the Panel
rules against the company on  either of these remaining issues,
it could be required to submit a new listing  application and  
meet all initial Nasdaq national market listing criteria.  If  
the company were required to reapply for a Nasdaq NMS listing,
it could not currently meet  all of these listing requirements.  
Vsource's oral hearing before the Panel regarding these issues
was held on Sept. 28, 2001.

Vsource Inc., based in Ventura Calif., focuses on providing
Business Process Outsourcing  (BPO) and Distribution Services to
Fortune 500 and Global 2000 organizations wanting to expand into
or across Asia-Pacific or streamline their existing operations
into the region.  Vsource's range of services and infrastructure
include traditional BPO services: Payroll and Financial
Services, Customer Relationship Management (CRM) and Supply
Chain Management (SCM), as well as Distribution Services, which
include Sales and Marketing Services, Market  Research and
Operations Solutions.  Vsource has offices in Hong Kong,
Singapore, Malaysia (including a 39,000-square-foot-customer
center), the United States and Japan.  Vsource's  
customers include Gateway, AIG, EMC, Network Appliance, Cosine
Communications, Credit Suisse First Boston, HSBC Investment
Bank Asia, Miller Freeman, and other Fortune 500/Global 2000  

WEBLINK WIRELESS: Set to File Plan to Emerge from Chapter 11
WebLink Wireless, Inc. (OTC Bulletin Board: WLNKA) announced an
internal restructuring of its operations that positions the
Company to emerge from its Chapter 11 proceeding either on a
stand alone basis or upon consummation of a transaction with an
outside investor.  

The moves streamline the company by consolidating its five
strategic business units (SBUs) into two.  The Carrier Services
SBU will now include the former Reseller and Wireless Control
Systems (Telemetry) SBUs, and the new Business Sales SBU will
include the former National Retail, National Accounts and Field
Sales SBUs.  WebLink Wireless expects the consolidation of the
SBUs and other cost saving measures to reduce the annual run
rate of its operating expenses by approximately 20 percent.

"Consolidating our business into two strategic business units
capitalizes on our strengths and leverages our most profitable
opportunities in the marketplace, with a primary emphasis on
large carrier partners and enterprise customers," said N. Ross
Buckenham, president of WebLink Wireless.  "Our operating cash
flow remains positive, and we believe these restructuring
efforts will enable us to operate and grow the Company without
the addition of any new capital."

As part of the restructuring, approximately 160 positions will
be eliminated at the end of the year.  The cash severance
expense associated with the restructuring is expected to be less
than $1 million, which will be recorded in the fourth quarter of
2001.  The Company anticipates that the economic benefit of the
restructuring will not be fully reflected in its financial
results until the first quarter of 2002.

WebLink Wireless, which filed for Chapter 11 bankruptcy
protection in May of this year, and its investment bankers at
Greenhill & Co. are soliciting proposals from outside investors
as the Company seeks to maximize value for its stakeholders.  
The moves announced further this goal by making the Company more
attractive to new investors and by positioning the Company to
file a stand alone plan of reorganization if proposals
satisfactory to the Company and its stakeholders are not
received in the coming weeks. Confirmation of the reorganization
plan will be subject to the requirements of the Bankruptcy Code,
including approval of the bankruptcy court.  However,
implementation of the internal restructuring is not subject to
bankruptcy court approval or confirmation of any plan of

John D. Beletic, chairman of WebLink Wireless, also announced
the promotion of N. Ross Buckenham to the additional position of
chief executive officer of the Company effective upon bankruptcy
court approval.  Mr. Beletic, who has served as the Company's
chairman and CEO since 1994 will continue to serve as chairman
of the board.  Mr. Buckenham, 44, joined the Company in 1996 and
became president in 1997.  Prior to joining WebLink Wireless,
Mr. Buckenham was president of two high technology firms and a
senior strategy consultant at Bain and Company.  He holds a
master's degree from the Harvard Business School.

"Ross is a great leader and has been instrumental in WebLink
Wireless' entry into wireless data and building relationships
with our network partners," said Beletic.  "I believe he will do
an outstanding job as chief executive officer."

"I am delighted to lead WebLink Wireless and I am honored by the
board's confidence in me," said Mr. Buckenham.  "The Company has
an outstanding nationwide wireless data network that delivers
wireless email service to many of the largest telecommunications
and business enterprises in the United States.  We also have
extremely committed and talented employees who are dedicated to
delivering the high quality wireless email services to which our
enterprise customers have become accustomed."

Mr. Beletic also announced that Kelly Prentiss has been promoted
to the position of vice president of finance.  He will also
assume the additional position of chief financial officer when
John R. Hauge leaves the Company at the end of the year.  Mr.
Prentiss has been with WebLink for almost five years, most
recently serving as department vice president and director of
investor relations and financial reporting.

"Kelly has a topnotch record with WebLink and I expect continued
outstanding performance as he assumes the challenges of the CFO
position," Mr. Beletic commented.  "It is unfortunate that one
result of these cost cutting measures is the loss of the talent
of John Hauge.  He has done a good job for us and we will miss

The company also announced the resignation of Michael Hoffman as
a member of the board of directors.  Mr. Hoffman was one of
three directors nominated by Morgan Stanley & Co., which,
through affiliates, is the Company's largest stockholder.

WebLink Wireless, Inc. is a leader in the wireless data
industry, providing wireless email, wireless instant messaging,
information on demand and traditional paging services throughout
the United States.  The company's nationwide, 2-way network is
the largest of its kind reaching approximately 90 percent of the
U.S. population and, through a strategic partnership, extends
into Canada.  The Dallas-based company, which serves
approximately 1.7 million customers, recorded total revenues of
$290 million for the year ended December 31, 2000.  For more
information, visit the website at .

WEBVAN GROUP: Seeks Approval of Joint Plan of Liquidation
Webvan Group, Inc., Webvan Bay Area, Webvan Operations, Inc.,
and presents a joint plan of liquidation and a
disclosure statement to the United States Bankruptcy Court for
the District of Delaware.

The plan provides for the expeditious distribution of proceeds
already been realized from the liquidation of each of the
Debtors' assets to each of the creditors. In addition the plan
provides a mechanism by which those assets that are more
difficult to liquidate, such as legal causes of action, can
continue to be pursued in order to obtain the maximum return
possible for each of the Debtors' creditors.

Webvan Group, Inc., an Internet retailer offering delivery of
consumer products through an innovative proprietary business
design that integrated its webstore, distribution facility abd
delivery system, filed for chapter 11 protection on July 13,
2001 in the Bankruptcy Court for the District of Delaware. Laura
Davis Jones, Esq., at Pachulski Stang Ziehl Young & Jones, P.C.,
represents the Debtors in their restructuring effort.

WHEELING-PITTSBURGH: CWVEC Wants Decision on Coal Contract
The Official Committee of Unsecured Trade Creditors of
Pittsburgh Canfield corporation, appearing through Michael A.
Gallo of the Youngstown firm of Nadler Nadler & Burman Co., LPA,
as local counsel, and Marc E. Richards and Rocco A. Cavaliere of
the New York firm of Blank Rome Tenzer Greemblatt LLP as lead
counsel, object to CWVEC's Motion, telling Judge Bodoh that on
December 4, 2000, Wheeling-Pittsburgh Steel Corp. and CWVEC
entered into a Letter Agreement whereby CWVEC agreed to resume
shipping coal to WPSC on the terms and at the price provided by
the original Agreement, but that WPSC would pay for each
shipment by wire transfer upon arrival or unloading in WPSC's

In addition, among other things, the Letter Agreement provided
that the post-petition obligations would be entitled to
administrative expense priority status and would not constitute
assumption or rejection of the Agreement. WPSC has honored all
of the terms of the Letter Agreement so that there are
no outstanding post-petition obligations owing to CWVEC and
CWVEC does not contend otherwise.

By its Motion, CWVEC seeks to compel WPSC to assume or reject
the Agreement.  The Bankruptcy Code provides that "the court,
upon request of any party to such contract . . . may order the
trustee to determine within a specified period of time whether
to assume or reject such contract..." In considering the
purported relief, a court must assess whether the trustee or
debtor in possession has had a reasonable time within which to
decide whether assumption or rejection is appropriate.

Due to the complexities involved in this large bankruptcy case,
WPSC has not had a "reasonable" period of time in which to
determine whether the Agreement should be assumed or rejected.
It appears that the Agreement as amended by the Letter Agreement
is highly beneficial to WPSC and its creditors in that WPSC is
currently receiving coal on favorable terms when compared to
current market prices. At this juncture, however, WPSC is not
prepared to satisfy the cure amount in excess of $7 million in
order to assume this Agreement. The Trade Committee fully

Thus, if the relief requested by the Motion were granted, the
Debtors may be forced to prematurely reject to Agreement. This
result would benefit CWVEC to the detriment of all unsecured
creditors in these cases.  When balancing the equities, it is
clear that the Motion should be denied. After the Petition Date,
pursuant to the Letter Agreement, the Debtors and CWVEC
bargained for an arrangement which would allow CWVEC to continue
to provide coal to WPSC on the terms and price of the Agreement,
with certain added protections to CVY'VEC. Namely, among other
things, the Letter Agreement assured CWVEC that it would not
incur any credit risks or other risks in that CWVEC would be
paid for its coal deliveries by wire transfer immediately after
the deliveries were made.

WPSC has remained current on its post-petition obligations as
contemplated by the Letter Agreement between the parties. CWVEC
has not been prejudiced by the extensions of time that the
Debtors have requested in order to achieve their ultimate goal:
a successful reorganization of the Debtors. On the other hand,
forcing the Debtors to reject the Agreement without allowing the
Debtors reasonable time to formulate a plan of reorganization
and stabilize its operations would severely prejudice the
Debtors and its unsecured creditors.

                WPSC's Arguments: The Same

WPSC echoes the Creditors' Committees' arguments against
granting either of Ryder's Motions. (Wheeling-Pittsburgh
Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service,
Inc., 609/392-0900)  

WINSTAR COMMS: Moves to Reject T.J. Graham Employment Agreement
Winstar Communications, Inc. seeks to reject their employment
agreement of Thomas J. Graham as Vice President of At Your
Office (AYO).

M. Blake Cleary, Esq., at Young Conway Stargatt & Taylor, in
Wilmington, Delaware, relates that Mr. Graham was responsible
for the day-to-day operation and the supervision of the on-line
office supply business of AYO with an annual compensation of
$150,000, along with bonuses and incentives of an additional

Since the filing of these cases, AYO has been consolidated and
moved its operations from Virginia to New York. Mr. Cleary tells
the Court that, under the Agreement, Graham was supposed to
provide services in the metropolitan Washington, D.C. area only
but since AYO no longer operates in that area, under the express
terms of the Agreement, Graham's services are not anymore
required. Therefore, the Debtors believe that its rejection of
the Agreement is appropriate.

Moreover, Mr. Cleary says, in their efforts to successfully
restructure, the Debtors are focusing on their core business, of
which AYO is not a part.  In this light, he contends that
maintaining the Agreement will only mean more costs to the
estates. The Debtors have further determined that the Agreement
is not a source of potential value for the estates.

In recognition of Mr. Graham's legal rights, the Debtors propose
that Graham be given 30 days from the entry of an order
approving this motion within which to file a proof of claim or
damages arising from rejection of the Agreement.

                     Mr. Graham Responds

William J. Cattie, Esq., at Cattie & Fruehauf, in Wilmington,
Delaware, tells the Court that the Debtors' Motion does not
attempt to exercise any of their rights under the Agreement,
since it does not authorize termination of employment without
cause but instead are exercising their statutory right to reject
the Agreement.  In this light, Mr. Cattie argues that Mr. Graham
owes no further obligations under the Agreement including the
obligation to honor any restrictive covenant in the Agreement
that the Debtors may cite.

Mr. Cattie argues that restrictive covenants relating to
employment are not enforceable, unless if reasonably limited in
time and scope, in order to protect the employer. He relates
that the restrictive covenant in the Agreement is not limited in
scope as it covers employment within the entire U.S.
Furthermore, Mr. Cattie says that the Debtors had already ceased
all on-line office-supplies business operations since September
28, 2001, including AYO, as part of their reorganization efforts
and therefore no longer requires the protection of the
restrictive covenant in the Agreement.

On these grounds, Mr. Cattie requests that the Court enter an
order acknowledging that Mr. Graham does not owe the Debtors any
further obligations under the Agreement. (Winstar Bankruptcy
News, Issue No. 16; Bankruptcy Creditors' Service, Inc.,

XEROX CAPITAL: S&P Knocks CorTS Trust Rating Down to B
Standard & Poor's lowered its ratings on CorTS Trust for Xerox
Capital Trust I due to the Oct. 23, 2001 rating action
concerning Xerox Corp. and its related entities.

The lowered rating on the synthetic transaction reflects the
recent lowering of Xerox's long-term corporate credit and
preferred stock ratings. Xerox's long-term credit rating was
lowered to double-'B' from triple-'B'-minus, and its preferred
stock rating was lowered to single-'B' from double-'B'. The
lowered ratings on Xerox and its related entities reflects
Standard & Poor's expectation that non-finance revenue and
operating income will be significantly less than expected for
both 2001 and 2002.

CorTS Trust for Xerox Capital Trust I is a swap-independent
synthetic transaction that is weak-linked to the underlying
collateral, Xerox Capital Trust I, Preferred Stock. The lowered
rating on the structured transaction reflects the credit quality
of the underlying securities issued by Xerox Capital Trust I.

                Outstanding Ratings Lowered

     CorTS Trust for Xerox Capital Trust I $27 Million
            corporate bond-backed certificates


                     To            From
                     B             BB

YORK RESEARCH: Defaults On 12% Senior Secured Bonds
York Research Corporation (Nasdaq: YORK) announced that the
$10,345,000 payment due October 30, 2001 under the terms of the
$150,000,000 12% Senior Secured Bonds due October 30, 2007
issued by York Power Funding (Cayman) Limited would not be made.  

Failure to make this payment on or before November 9, 2001,
constitutes an Event of Default under the Portfolio Bonds
allowing the trustee to exercise remedies against the collateral
for the Portfolio Bonds.  

The collateral for the Portfolio Bonds consists of York's
interest in its Trinidad Project, Big Spring Project, Brooklyn
Navy Yard Project and Warbasse Project.  In addition to this
payment default, approximately $17,500,000 generated by the
Trinidad Project over approximately the last 18 months was
advanced to York for its general corporate purposes, a violation
of the provisions of the documents governing the Portfolio

As a result of the foregoing, Robert M. Beningson will no longer
serve as Chairman, President and Chief Executive Officer of York
and is taking an unpaid leave of absence.  Robert C. Paladino,
formerly York's Executive Vice President, has agreed to become
President and Chief Executive Officer.

York also announced that its negotiations with the creditors of
NAEC alleging claims against York had not been fruitful, and
such creditors were determining whether to file a bankruptcy
petition against York.

Separately, York announced that it had signed an agreement with
a subsidiary of NRG Energy, Inc. to sell its Trinidad Project
for $140,000,000. Consummation of this agreement is subject to
various conditions, including consent of the Trinidad and Tobago
Electricity Commission and the discharge of the liens of the
Portfolio Bonds.  There can be no assurance that such conditions
will be satisfied.  Pursuant to the terms of this agreement, if
the closing fails to occur by November 21, 2001, either York or
NRG has a right to terminate the agreement.

In connection with the foregoing, the independent directors of
York stated "We are delighted that we have someone with the
integrity and experience of Bob Paladino to take over as Chief
Executive Officer and President of York. We have complete
confidence in Bob's judgment and ability."  Mr. Paladino said
"York has faced, and will continue to face, some challenges, but
the core value of its assets remains undiminished, as shown by
the contract to sell the Trinidad facility.  I look forward to
overcoming these challenges and maximizing the value of York's

Please see York's Current Report on Form 8-K filed Tuesday with
the Securities and Exchange Commission for details as to these

York develops, constructs, and operates cogeneration and
renewable energy projects, and through North American Energy
Conservation Inc., a subsidiary, markets natural gas in the
northeastern United States.

YOUNG BROADCASTING: Weak Credit Measure Prompts S&P Downgrades
Standard & Poor's lowered its ratings on Young Broadcasting Inc.
and removed them from CreditWatch where they were placed with
negative implications on Aug. 24, 2001. The current outlook is

At the same time, Standard & Poor's has assigned its single-'B'
rating to the company's proposed seven-year, $250 million senior
unsecured notes, which will be issued under Rule 144A with
registration rights. Proceeds will be used to repay about $190
million of bank debt and to fund a $50 million, two year
interest reserve for the new notes.

The downgrade is based on concern about credit measure weakness
from sharply reduced revenue and cash flow, and the likelihood
that Young's key credit measures could remain depressed for an
extended time, particularly given increased economic uncertainty
following the September 11 terrorist attacks and U.S. military

Proposed senior credit facility amendments will relax financial
covenants and bank debt refinancing will eliminate all
meaningful maturities until 2006. However, these helpful
developments are offset by concern about extended advertising
weakness. Reduced advertising demand could continue to challenge
the company well into 2002 and hamper the success of San
Francisco, Calif. station KRON after its January 2002 transition
to an independent station from its current status as an NBC
Television Network affiliate. These factors, together with
higher total interest expense from the refinancing, could keep
credit measures below the level supportive of a double-'B'-minus
corporate credit rating for an sustained period. Young's
California cash flow concentration, given the company's
ownership of Los Angeles independent VHF station KCAL-TV, in
addition to KRON, is another concern.

Young's financial profile has been weak since its June 2000
acquisition of KRON. Standard & Poor's had expected more
significant financial profile improvement prior to the end of
the station's NBC affiliation. As an independent, KRON will
likely experience greater revenue uncertainty and a meaningful
EBITDA decline from the loss of network compensation and
increased programming cost. These factors heighten Young's need
for financial cushion. Still, KRON has leading news programming
and the station will gain all of the advertising time in former
network program slots, albeit at lower ad rates given expected
reduced audience levels. Young's non-California-based, major
network-affiliated stations have good market positions and the
company has made further operating cost cuts in response to the
weak environment. Political advertising in 2002 should provide a
revenue boost, though to a lesser degree than in 2000.

Young's third quarter 2001 revenue and cash flow projections
suggest that revenue and EBITDA for the first nine months of
2001, pro forma for the KRON acquisition, will decline about 16%
and 30%, respectively. This is largely due to difficult
comparisons in 2000 that include considerable political and dot-
com advertising. Revenue from the California stations and
national advertising have shown the greatest contraction, while
local ad sales at the company's non-California network
affiliates have been more stable. The EBITDA margin for the 12
months ended Sept. 30, 2001, will likely fall to about 38%, from
a pro forma level of almost 46% for the full year of 2000.
Total interest coverage is thin, at less than 1.5x, and gross
debt divided by EBITDA is high, at more than 8x. The new notes'
interest reserve and reduced 2002 capital spending following
completion of digital TV conversion should enable the company to
generate modest discretionary cash flow despite possible
continued ad weakness. Expected depletion of the interest
reserve could renew pressures in 2004 absent a meaningful EBITDA

                       Outlook: Stable

Maintenance of station market positions and key credit measures
is important to rating stability. Debt-financed acquisitions,
difficulty transforming KRON to an independent station, or
deeper demand weakness could undermine rating stability.

                       Rating Assigned

Young Broadcasting Inc.                              Rating

   $250 million senior unsecured notes due 2008        B

         Ratings Lowered And Removed From CreditWatch


Young Broadcasting Inc.              To                   From

   Corporate credit rating           B+                    BB-
   Senior secured bank loan rating   BB-                   BB
   Subordinated debt                  B-                    B


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

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

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

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


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

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

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

This material is copyrighted and any commercial use, resale or
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