TCR_Public/011129.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 29, 2001, Vol. 5, No. 233


360NETWORKS: Strikes Settlement Agreement with XO Communications
ANC RENTAL: Seeks Approval to Honor & Pay Critical Vendor Claims
ACCUHEALTH INC: Has Until December 10 to Assume or Reject Leases
AEROVOX INC: Wants Lease Decision Period Extended Until March 4
AIR CANADA: Incurs Operating Loss of $57MM in Third Quarter

ALLMERICA ASSET: Fitch Cuts Two Classes of CBO Ratings
AMES DEPT: Proposes Key Employee Retention & Incentive Programs
BETHLEHEM STEEL: Court Okays Greenhill as Financial Advisors
BIOVAIL CORP: S&P Assigns BB on $400MM Sr. Secured Debt Rating
BRIDGE INFO: FT Interactive & Telerate Get OK to Set-Off Claims

BURLINGTON: Wins Court Nod to Pay Pre-Petition Trust Fund Taxes
CHESAPEAKE: S&P Revises Outlook On Completion of New Debt Issue
CHIQUITA BRANDS: Files Pre-Pack Plan Under Chapter 11 in Ohio
CHIQUITA BRANDS: Chapter 11 Case Summary
CLARENT CORP: Violates Nasdaq Continued Listing Requirements

CLASSIC COMMS: Signs-Up PricewaterhouseCoopers as Auditors
COLOR SPOT NURSERIES: Completes Out-Of-Court Recapitalization
COOKER RESTAURANT: Must Carry-Out Plans to Continue Operations
DAW TECHNOLOGIES: Fails to Meet Nasdaq Listing Requirements
DJ ORTHOPEDICS: S&P Affirms B+ Corporate Credit Rating

ELDORADO RESORTS: S&P Places Low-B Ratings on Watch Negative
ENRON CORPORATION: Dynegy Pulls Plug on Merger Agreement
ESOFT INC: Completes Restructuring of Conv. Note with Gateway
EXODUS COMMS: Gets Okay to Hire Ordinary Course Professionals
FEDECAFE EXPORT: Fitch Concerned About Weakening Credit Profile

FEDERAL-MOGUL: Seeks Approval of Interim Compensation Procedures
FINOVA: UST Balks at Reimbursing Steering Committee's Fees
FRUIT OF THE LOOM: Inks 6th Amendment to DIP Financing Facility
GOLDEN BOOKS: Wants Plan Filing Time Extended Further to Jan. 2
HASBRO INC: Fitch Rates $225MM Convertible Senior Notes at BB

INACOM CORP: Has Until February 1 to File Chapter 11 Plan
INDYMAC WIRES: Fitch Rates $175 Million Securities at BB+
INTEGRATED HEALTH: Selling Litho Stock for $42.5MM or More
KMART CORP: Incurs Loss of $127MM on $8BB Sales in Third Quarter
KNOWLEDGE HOUSE: Creditors Okay Proposal Under BIA in Canada

LTV CORP: Committee Reaches Deal with USWA on Labor Pact Changes
LERNOUT & HAUSPIE: Court Approves Sale of Assets to Dictaphone
METALS USA: Court Allows Payment of Employee Wages & Benefits
NEW YORK REGIONAL RAIL: Feldman Replaces Ehrlich as Auditors
NOBLE CHINA: Seeks Options to Meet Operating & Debt Obligations

PDC INNOVATIVE: Seeking Financial Options to Continue Operations
PILLOWTEX CORP: Intends to Assume Supply Agreements with Wellman
POLAROID CORP: Gets Approval to Retain Skadden, Arps as Counsel
SOUTHWEST SUPERMARKETS: Completes Planned Asset Sale to Bashas'
SPORTS AUTHORITY: Third Quarter Sales Drop to $304 Million

SUNBEAM: Confirmation of 2nd Amended Plan Adjourned to March 19
TOUCH AMERICA: S&P Lowers Ratings Citing Weak Liquidity Position
TOUCHSTONE SOFTWARE: Weighing Options to Source New Financing
US MINERAL: Seeks to Extend Exclusive Periods to May 25, 2002
UNITED NATIONAL BANCORP: Fitch Affirms Low-B Ratings on Trust 1

WARNACO GROUP: Taps Keen Realty to Sell Murfreesboro Facility
WESTERN WIRELESS: S&P Revises Outlook and Affirms Low-B Ratings
XETEL CORP: Reaches Accord to Collect Payment Due from Tellabs
ZILOG INC: Key Bondholders Agree to Back Recapitalization Plan

* DebtTraders Real-Time Bond Pricing


360NETWORKS: Strikes Settlement Agreement with XO Communications
360networks inc., and its debtor-affiliates seek authority to:

   (1) enter into a settlement agreement with XO Communications,
       Inc.; and

   (2) assume a joint build agreement between one of the
       Debtors, 360networks (USA) inc. and an affiliate of XO,
       Nextlink Washington Inc. n.k.a. XO Washington, Inc.

Alan J. Lipkin, Esq., at Willkie Farr & Gallagher, in New York,
relates that the Joint Build Agreement dated June 1998 and the
Scope of Work addendum dated September 2000 between the Debtor
and XO Washington provides for the Debtor to:

    (a) construct the Bellevue Ring and allocate 1.25" 40 PVC
        conduits on that ring to XO Washington; and

    (b) maintain related joint manholes and handholes.

On May 29, 2001, Mr. Lipkin reports, the Debtor submitted a
completion notice for construction of the project to XO
Washington, and XO was consequently required to pay the Debtor
$5,863,470.  Mr. Lipkin advises the Court that XO Washington is
prepared to consummate the sale upon Court authorization of the
Debtor's assumption of the Joint Build Agreement and the
Debtor's presentation of a bill of sale for the Project to XO

The Debtor and XO are also parties to a National Master
Communications Services Agreement dated December 2000, Mr.
Lipkin continues.  According to Mr. Lipkin, the Master
Communication Agreement sets forth general terms and conditions
to facilitate the Debtor's ability to obtain dedicated transport
and other communications service from XO.  Pursuant thereto, Mr.
Lipkin says, the Debtor ordered various communications services
from XO by submitting requests for quotation, which XO
subsequently provided:

            Palo Alto Circuits              $538,140
            Additional Capacity               60,000 (unpaid)
            Dallas Circuits                   33,000 (total)

The parties have agreed that through October 31, 2001, the
Debtor owes XO $589,846 for post-petition invoices in connection
with the Palo Alto Circuits, the Additional Circuits and the
Dallas Circuits, Mr. Lipkin advises the Court.

The Settlement Agreement provides:

    (i) XO Washington shall pay the Debtor $5,863,470 under the
        Joint Build Agreement.  The Debtor shall pay XO $589,846
        for the post-petition invoices under the Master
        Communications Agreement.

   (ii) These amounts shall be netted so that XO shall pay
        $5,273,624 to the Debtor.  That amount currently is held
        in an escrow account.

  (iii) The Debtor will receive the funds in escrow upon:

        (a) entry of a final, non-appealable order of the Court
            authorizing the Debtor to assume the Joint Build
            Agreement and approving certain netting of claims
            between the Debtor and XO; and

        (b) delivery to XO of a bill of sale for the project.

   (iv) Upon assumption of the Joint Build Agreement, the
        Debtors' only substantial obligation thereunder will be
        the maintenance obligations.

    (v) Upon court approval of this motion, the Debtor will have
        satisfied substantially all of its obligations with
        respect to the Master Communication Agreement and the
        Joint Build Agreement through October 31, 2001.
        Additionally, no cure payments under wither agreement
        shall be required.

Mr. Lipkin contends that the Settlement Agreement is fair,
equitable because:

  (A) The Settlement Agreement would enable the Debtors to
      receive the cash due under the Joint Build Agreement on an
      expedited basis and with minimal expense;

  (B) The Debtors' only future obligations under the Joint Build
      Agreement would be for operational and maintenance costs;

  (C) The settlement would resolve the Debtors' post-petition
      obligations under the Master Communications Agreement; and

  (D) These results will follow without the need for costly
      litigation over various issues, including the amounts owed
      under the various agreements.

"These benefits far outweigh any possible detriment due to
assumption of the Joint Build Agreement," Mr. Lipkin notes. (360
Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   

ANC RENTAL: Seeks Approval to Honor & Pay Critical Vendor Claims
Wayne Moore, ANC Rental Corporation's Senior Vice President and
Chief Finance Officer, relates that in the highly competitive
leisure travel industry, it is essential to maintain programs
pursuant to which the Debtors are referred business from other
companies and/or agents or established preferred provider
programs in different segments of the industry. Maintaining
these sales and/or marketing relationships with these Program
Partners, such as travel booking companies, travel agents,
general sales agents, airlines, tour operators, and affinity
groups, who direct customers to the Debtors' businesses, as well
as with certain corporate partners, is vital to the Debtors'
ability to compete in the industry. Moreover, the Debtors
believe that the failure to pay the Debtors' Customer/Partner
Obligations to certain Program Partners may result, in many
cases, in the immediate termination of these relationships and
the Debtors being excluded from important reservation and
booking sources. Mr. Moore claims that the termination of these
relationships would result in the loss of the substantial
revenue that is generated from these relationships, which, in
turn would likely be transferred to the Debtors' competitors.
Accordingly, it is imperative to the Debtors' business and their
reorganization effort, that the Debtors be authorized, in their
discretion, to honor the Partner Related Obligations to certain
Program Partners in order to preserve the Debtors' existing
sales and/or marketing practices.

These Program Partners are made up of:

A. Tour Operators - A substantial percentage of the Debtors'
   revenue is generated through business referred by leisure
   tour operator, most of which operate in a shared supplier
   environment which permit tour operators to shift their
   business to the Debtors' competitors with relative ease.
   The tour operators primarily direct business to the Alamo
   brand and account for approximately 30% of Alamo's revenue.
   The Debtors estimate that tour operators have pre-petition
   claims in the aggregate amount of about $14,000,000.

B. Travel Agents - Travel agencies and other similar authorized
   agents in respect of rental transactions represent a
   critical component of both the commercial and leisure
   divisions of the Debtors' business. If the Debtors cannot
   pay agent commissions, the Debtors believe that certain
   Travel Agencies will direct their business to the Debtors'
   competitors. In light of the fact that travel agencies
   bookings account for approximately 40% of the National
   brand revenue and 25% of the Alamo brand revenue, the loss
   of these Travel Agencies would be devastating to the
   Debtors' reorganization efforts. The Debtors estimate that
   travel agents have pre-petition claims in the aggregate
   amount of approximately $2,200,000.

C. General Sales Agents - General Sales Agents ("GSAs")
   represent the sales, reservation and accounting link for the
   Debtors in the geographic markets they represent. GSA's sell
   and market the brands, process and fulfill voice reservations
   from travel agents, consumers, tour operators and
   commercial accounts in their territory. In addition, the
   GSAs pay commissions and provide credit in local currency.
   Alamo and National maintain 54 combined GSA relationships
   on a global basis producing $46,000,000 annually. Any
   disruption to these relationships could severely threaten
   the flow of business from these markets. The Debtors
   estimate that GSAs have pre-petition claims in the
   aggregate amount of approximately $250,000.

D. Affinity Groups - In the ordinary course of business, the
   Debtors' derive substantial revenue from certain member
   based clubs and associations. The Debtors have negotiated
   arrangements to be preferred providers to certain Affinity
   Groups that allow them opportunities to reach their member
   base as a preferred provider, usually in exchange for a
   rebate. The Debtors believe that absent payment of the
   pre-petition obligations owed to certain Affinity Groups
   with which they have special preferred status, such
   Affinity Groups will drop the Alamo and/or National brand
   as a preferred customer and may discontinue their programs
   with the Debtors or discontinue Debtors' preferred status.
   The Debtors' programs with Affinity Groups account for
   approximately 21 of the National brand revenue and 17% of
   the Alamo brand revenue. The Debtors estimate that Affinity
   Groups have pre-petition claims in the aggregate amount of
   approximately $2,200,000.

E. Corporate Partners - The Debtors maintain programs and
   contracts with corporate partners that provide discounts,
   rebates and offer incentives based on the level of business
   provided. These corporate relationships are highly
   competitive in  that many of the Corporate Partners have
   secondary providers that can replace the Debtors without
   significant disruption. The Debtors' programs with their
   Corporate Partners account for approximately 45% of the
   National brand revenue and 15% of the Alamo brand revenue.
   The Debtors estimate that Corporate Partners have
   pre-petition claims including monthly, quarterly or annual
   payments in the aggregate amount of $3,400,000.

Mr. Moore informs the Court that the Debtors maintain several
customer programs designed to distinguish their brands, ease the
rental process and maintain the loyalty and satisfaction of
their customers and which are administered and supported by
certain vendors. The Debtors believe that it is critical to pay
the outstanding pre-petition obligations to the Customer Support
Vendors based on the fact that certain Customer Support Vendors
maintain an inventory of National and Alamo brand collateral
materials; it would be expensive and disruptive to engage new
vendors to provide these services; and maintaining the
continuity for customers is critical to the Debtors'
reorganization plans.

The customer incentive programs and the related Customer Support
Vendors are made up of:

A. Alamo CASH-IN Club - Incentive Program which rewards travel
   agents for booking business with Alamo and administered by
   Marketing Innovators.

B. Emerald Club - National's premier frequent customer program,
   it includes Emerald Isle which allows customers to bypass
   the counter and choose their car, which is the key benefit
   that distinguishes National from other business-oriented
   car rental companies. New enrollments of corporate
   customers who sign rental contracts or individuals who join
   the Emerald Club are supported by Rebco Inc., PrimeNet
   Marketing, NCS Pearson and Right Choice Fulfillment for
   membership cards, legal terms and conditions, and other
   brand information. These vendors store an inventory of
   National brand collateral materials and those members who
   joined prior to 1992 may have joined a loyalty program in
   which they earn points which could be applied to the
   redemption of a catalogue of awards. The Debtors have
   recorded a pre-petition liability of approximately
   $20,000,000 to cover expected redemptions but have not
   determined whether the points reward program will be
   continued on an ongoing basis. The Debtors request the
   right to be able to determine whether to continue the
   program and honor pre-petition claims, and wish to continue
   the program in the ordinary course until such decision is
   made. While assessing the program, the Debtors anticipate
   that the monthly redemptions will be less than $25,000.

C. Quicksilver - Alamo's frequent renter service which, allows
   renters to process their own rentals at automated kiosks, a
   key service for customers who desire to avoid waiting in
   lines. New enrollments are supported by Patterson Press,
   Designer Fine Printing, and Personix Fulfillment for
   membership cards and fulfillment, who store an inventory of
   Alamo collateral material. The aggregate pre-petition debt
   of these vendors is estimated at $35,000.

Mr. Moore states that the Debtors regularly engage self-employed
temporary laborers to supplement their own workforce in the
performance of various tasks essential to the on-going
operations of the Debtors' business, including car shuttling,
car washing and preparation, reservation services, clerical and
administrative tasks, software support, and security and
janitorial services. The Debtors believe that they currently owe
less than 200 of these self-employed temporary and contract
laborers an average of approximately $400 each. Mr. Moore
submits that failure to pay these individuals for services
performed prior to the Filing Date could result in an economic
hardship on those individuals and in the loss of their future
services to the Debtors. These individuals are trained in the
Debtors' operating procedures and should the Debtors lose these
services, it would cause an unnecessary disruption to the
Debtors' business operations and their reorganization efforts.
To ensure the continuation of their services, the Debtors'
request authority to pay existing self-employed temporary
laborers up to $1,500 each, but no more than $100,000 in the
aggregate, for services previously rendered.

Mr. Moore tells the Court that the Debtors also maintain a
corporate card program with American Express whereby their
employees use individual corporate credit cards to pay business
related expenses, incurred in the ordinary course of business.
In addition, the Debtors require their employees to use American
Express Central Billed Accounts to charge expenses for business
travel which is undertaken in the ordinary course of performing
their job functions. In order to ensure the confirmed
participation of American Express in this important program, the
Debtors request authorization to pay the Credit Obligations.

Mark J. Packel, Esq., at Rome Blank Rome Comisky & Macauley LLP
in Wilmington, Delaware, contends that the success, viability
and revitalization of the Debtors' business is dependent upon
the development and maintenance of the Debtors' good
relationship with their Program Partners. The commencement of
the Debtors' chapter 11 cases will no doubt create apprehension
on the part of these Program Partners regarding their
willingness to continue doing business with the Debtors. The
Debtors believe that without the requested relief, the stability
of the Debtors' businesses will be significantly undermined, and
otherwise loyal Program Partners will cease doing business with
the Debtors. Mr. Packel believes that the damage that would
result if the Debtors failed to honor their Pre-petition
Obligations significantly outweighs any detriment to their
creditors or their estates.

The Debtors' believe that the ability to honor, in their
discretion, the Pre-petition Obligations described in this
Motion, is crucial to the successful reorganization of the
Debtors' business. Accordingly, the Debtors believe that the
relief sought herein is in the best interests of the Debtors,
their estates, and their creditors. (ANC Rental Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-0900)

ACCUHEALTH INC: Has Until December 10 to Assume or Reject Leases
The U.S. Bankruptcy Court for the Southern District of New York
awarded Accuhealth, Inc., an extension of its Lease Decision
Period through December 10, 2001, giving the company more time
to decide whether it should assume, assume and assign or reject
its unexpired leases.  

Accuhealth, Inc. provides home health care services in the New
York Metropolitan Areas, filed for Chapter 11 petition on August
10, 2001 in the U.S. Bankruptcy Court for the Southern Distric
of New York. Gerard Sylvester Catalanello at Baer, Marks &
Upham, LLP and Jay L. Gottlieb at Baer Marks & Upham, LLP
represent the Debtors in their restructuring efforts. When the
Company filed for protection from their creditors, they listed
total assets of $1,850,000 and estimated debts of approximately

AEROVOX INC: Wants Lease Decision Period Extended Until March 4
In order to allow Aerovox, Inc. adequate time to assess the role
of each facility in their financial reorganization, the Debtor
asks the U.S. Bankruptcy Court for the Eastern District of
Massachusetts for a further extension of its Lease Decision

The Debtor is actively negotiating with several potential
suitors for the sale of its assets. At this time, the Debtor
asserts, it is premature for the Debtor to judge as to which
lease of nonresidential real property it should assume, assume
and assign, or reject.

The Debtor asks that the deadline be moved to March 4, 2002.
Absent the extension requested, the current deadline will expire
on December 4, 2001.

Aerovox Inc., a leading manufacturer of electrostatic and
aluminum electrolytic capacitors, filed for chapter 11
protection on June 6, 2001 in Massachusetts.  When the company
filed for protection from its creditors, it listed $70,702,599
in assets and $54,721,050 in debt.

AIR CANADA: Incurs Operating Loss of $57MM in Third Quarter
Air Canada reported preliminary third quarter results on
November 2, 2001. At that time, the company advised that it was
completing a review of the carrying value of its intangible
assets in view of the events of September 11, 2001, and the
increased economic uncertainty. The company reported that the
review would likely require significant downward adjustments to
existing intangible asset values such as future income taxes,
goodwill and other intangible assets. The review has now been
completed, and as stated on November 2, 2001, the adjustments
have no impact on Air Canada's cash position.

For the quarter ended September 30, 2001, Air Canada reported an
operating loss of $57 million and a pre-tax loss of $160 million
and these figures remain unchanged in this final results
release. The operating loss was the best result, pre-government
assistance, of any major international carrier in North America.
A detailed analysis of the pre-tax loss can be found in the
Management Discussion and Analysis of Results released on  
November 2, 2001.

The results reported reflect the outcome of the intangible asset
review announced on November 2, 2001. Air Canada has recorded a
$410 million valuation allowance against the value of the $812
million non-cash future income tax asset. The valuation
allowance, combined with Air Canada's decision to report results
of operations without tax affecting losses in the third quarter
2001, results in an unrecognized off balance sheet income tax
benefit of $455 million as at September 30, 2001. No other
adjustments to the carrying value of the Corporation's
intangible assets were considered necessary as a result of this
review which reflects the changing operating environment.

"The accounting standard that relates to income tax assets
requires the valuation decision to be based primarily on the
results of the recent past a nd current conditions," said Rob
Peterson, Executive Vice-President and Chief Financial Officer.
"As a consequence of this relatively conservative approach we
have retained the tax asset off balance sheet. The $455 million
off balance sheet tax benefit remains available for use, with
substantially an indefinite life. While the review has resulted
in an adjustment to the carrying value of the tax asset, it has
also reaffirmed the carrying value of all the other intangible
assets of the Corporation and there is no impact on our
liquidity position," concluded Mr. Peterson.

A net loss of $598 million was reported in the third quarter
2001, as compared to a net income of $101 million in the third
quarter of 2000. Removing non-recurring and other significant
items, the net income for the quarter would have been $14

Q3, 2001 operating income (loss) results posted by the six
largest US carriers provide context for Air Canada's results
given its ranking as the 7th largest carrier in North America.
The US airline results are obtained from published reports
removing government assistance and special charges/provisions or
writedowns from operating income.

ALLMERICA ASSET: Fitch Cuts Two Classes of CBO Ratings
Fitch downgrades two classes of notes issued by Allmerica CBO I,
Limited, a collateralized bond obligation (CBO) managed by
Allmerica Asset Management. Both classes are also removed from
Rating Watch Negative.

Allmerica CBO I, Ltd. was established in June 1998 and currently
maintains approximately 87% of its invested note proceeds in
high yield bonds, 12% in emerging market sovereign debt, and 1%
in senior loans. Fitch has recently met with the portfolio
manager and feels that after conducting onsite meetings and
reviewing cash flow scenarios, the original ratings no longer
reflect the credit quality of the current portfolio and the risk
to noteholders.

Allmerica CBO I, Ltd. had been failing its senior and second
priority par value tests since April 2001 and continues to fail
its weighted average rating test. In addition, the CBO currently
maintains 38.3% of its portfolio in assets rated 'CCC' or worse,
which is well above the 5% maximum trigger level.

After reviewing the portfolio performance and conducting
different cash flow scenarios amidst the increasing levels of
defaults and deteriorating credit quality of the underlying
assets, Fitch downgrades the following classes of notes and
removes both classes from Rating Watch Negative:

    * $254,362,601.72 senior secured floating-rate notes from
      'AA' to 'A-';

    * $58,590,500 second priority senior secured fixed-rate
      notes from 'BBB-' to 'C'.

AMES DEPT: Proposes Key Employee Retention & Incentive Programs
Ames Department Stores, Inc., and its debtor-affiliates move the
Court for an entry of an order authorizing the Debtors to:

A. pay certain retention bonuses to approximately 816 key

B. modify the Debtors' existing incentive bonus program
   affecting approximately 1,947 key employees, and

C. assume, with certain modifications 13 employment agreements
   for certain key employees.

The Debtors seek to establish the Retention Program as a
critical element of their successful reorganization to ensure
that key employees continue to provide essential management and
other necessary services during the Debtors' chapter 11 cases.
Martin J. Bienenstock, Esq., at Weil Gotshal & Manges LLP in New
York, New York, relates that the Debtors' ability to maintain
their business operations and preserve value for their estates
is dependent on the continued employment, active participation,
and dedication of key employees who possess knowledge,
experience, and skills necessary to support the Debtors'
business operations.  The Debtors' ability to stabilize and
preserve their business operations and assets will be
substantially hindered if the Debtors are unable to retain the
services of these key employees.  Because several other
retailers have liquidated, Mr. Bienenstock claims that it is
critical to assure the Debtors' employees that management is
intent on reorganizing and is willing to prove the company's
determination and commitment by putting key employees first.
Notably, the cost of replacing this team would be a multiple of
the cost of this retention plan and would result in the
substantial disruption of Debtors' business operations.

As in any large chapter 11 case, Mr. Bienenstock states that the
Debtors' key employees, particularly those in management
positions, are aware of the increased uncertainty arising from
any chapter 11 situation. In addition, absent the Retention
Program, many key employees will have a reduction in their
overall compensation due to the erosion in value of the Debtors'
common stock. In fact, since August 20, 2001, Mr. Bienenstock
submits that certain categories of key employees have
experienced twice the annualized turnover rate as compared to
that of the preceding fiscal year. The Debtors believe that
without the benefit of the Retention Program, this uncertainty
will continue to lead to resignations of key employees and
onerous replacement costs.

The Debtors also believe this uncertainty will affect employee
morale generally. Mr. Bienenstock points out that an increase in
employee responsibilities and other burdens caused by the
Debtors' entry into chapter 11 and their resultant status as
debtors in possession will, without the benefit of the Retention
Program, cause considerable damage to employee morale and the
resignations of additional key employees in the near future. For
these reasons, and despite the Debtors' heightened need for
their abilities, key employees may choose to pursue alternative
employment or may be lured away by lucrative offers from
competitors of the Debtors.

The loss of any of the key employees would be very costly to the
Debtors because:

A. The Debtors have expended significant time and resources in
   recruiting the key employees;

B. A company in chapter 11 is not a particularly appealing
   employment option for experienced job candidates, making it
   difficult to replace departing key employees;

C. To find suitable replacements for these departures, the
   Debtors will have to pay executive search firm fees,
   typically in the range of 25 to 35 percent of base
   salaries, signing bonuses, moving expenses, and above-
   market salaries to induce qualified candidates to accept
   employment with a chapter 11 debtor;

C. Higher salaries are likely to be necessary to attract
   replacement employees in this current environment;

D. The loss of important employees could lead to additional
   employee departures; and

E. As noted, the loss of key employees will hinder, delay, and
   disrupt the Debtors in their pursuit of a timely and
   successful reorganization.

The Debtors believe the most cost effective way to protect
against attrition and to improve employee morale is to offer
financial incentives tied to financial results, offer retention
incentives designed to be paid only if the covered employee
remains actively employed by the Debtors, and assume certain key
employees' employment agreements, negotiated at arms length
outside bankruptcy and adjusted largely to conform to the
bankruptcy laws.

The salient provisions of the Retention Program are:

A. Retention Bonus - The Retention Program provides that a
   Retention Bonus will be paid to key employees who could
   receive over time between 15% and 50% of their annual base
   salaries. To be eligible to receive the Retention Bonus
   under the Retention Program, employees must be:

     a. one of the Debtors' store managers, certain key field
        staff, certain key home office staff, field managers,
        middle managers, or officers,

     b. meet certain other typical performance criteria,
        including a job performance level that meets or
        exceeds the Debtors' expectations, and

     c. not have voluntarily resigned or been dismissed for
        cause as of the date of the Retention Bonus payment.

     The Debtors estimate through consummation of a plan
     Reorganization the maximum aggregate cost of the Retention
     Bonus to be approximately $11,900,000. Retention Bonus
     payments will be paid to the Key Employees according to the
     following schedule:

       a. 25% of the Retention Bonus Amount will be disbursed on
          or about December 15, 2001,

       b. 35% of the Retention Bonus Amount will be disbursed on
          or about April 1, 2002, and

       c. 40% of the Retention Bonus Amount will be disbursed on
          or about the date of substantial consummation of the
          Debtors' chapter 11 plan.

     For all those key employees who received pre-petition
     payments, the 35% payment on or about April 1, 2002 is
     subject to full repayment should the employee voluntarily
     terminate employment prior to the earlier to occur of
     October 31, 2002 or substantial consummation of the
     Debtors' chapter 11 plan.

B. Incentive Plan - Prior to the Commencement Date, the Debtors
   maintained a long-standing incentive plan keyed to the
   Debtors' annual net profit. Based on the Pre-petition
   Incentive Plan formula and the Debtors' recent operating
   losses, employees effectively lost this element of their
   compensation. If the employees had lost it due to their own
   subpar performance the situation would not warrant
   sympathy. But, these employees lost it due to economic and
   industry conditions that caused vendors to withhold
   shipments, which worsened results well beyond the
   employees' control. As a result, the Debtors have
   determined for this fiscal year to institute an incentive
   plan for key employees, other than the Senior Group, tied
   to meeting a financial target revised to account for
   current conditions. The total potential payment under this
   revised plan is slightly more 1/2 of what it could have
   been under the Pre-petition Incentive Plan. If the
   financial target level is met, depending on each employee's
   level, Key Employees would receive between 3% and 20% of
   their annual base salaries as an incentive plan bonus. The
   Incentive Plan also provides that if financial target
   levels are exceeded, Key Employees could receive an
   Incentive Bonus up to a maximum amount of between 6% and
   40% of their annual base salaries. Based on prior
   experience, if financial targets are achieved, the Debtors
   estimate the actual Incentive Plan Bonus payment related to
   results for this fiscal year should not exceed
   approximately $4,000,000. Should the Debtors' results
   exceed the financial plan by 30% or more, the Debtors
   estimate that the maximum Incentive Plan Bonus payment
   related to results for this fiscal year should not exceed
   approximately $7,900,000. If, indeed, results exceed plan
   by 30% or more, the benefit to the estate will be many
   times more than the cost of the Incentive Plan Bonus. For
   fiscal year 2002, the Debtors intend to return to their
   more standard incentive plan program, with financial goals
   to be developed in light of the business plan for the year.

C. Assumption of Employment Agreements -The Debtors request
   approval of the assumption of thirteen employment
   agreements with:

    a. Joseph R. Ettore, chairman and chief executive officer,

    b. Denis Lemire, president and chief operating officer,

    c. Rolando de Aguiar, senior executive vice president and
       chief financial officer,

    d. Grant Sanborn, executive vice president, and

    e. the nine senior vice presidents of the Debtors.

    The Employment Agreements with the Debtors' nine senior
    vice presidents are identical. The substantial elements of
    the Modifications include:

    a. Existing severance provisions contained in the
       Employment Agreements with Ettore, Lemire, and de
       Aguiar are modified to provide a minimum amount of
       severance benefits to 36 months of salary for Ettore,
       and 24 months of salary for Lemire and de Aguiar;

    b. Existing severance provisions contained in the
       Employment Agreement with Sanborn are modified to
       provide a minimum amount of severance benefits of 12
       months of salary;

    c. End of term payments to the Senior Group aggregating in
       the amount of $725,000 are eliminated; and

    d. Change of control provisions contained in the Employment
       Agreements exclude changes of control in connection
       with a chapter 11 plan filed by the Debtors in these

The Debtors estimate the aggregate cost of assuming the
Employment Agreements is a maximum of approximately $12,000,000,
representing the maximum aggregate cost of severance payments
due pursuant to the terms of the Employment Agreements.

Mr. Bienenstock informs the Court that in developing the
Retention Program, the Debtors engaged the services of Deloitte
Consulting as special consultants for human resources and
reviewed the Debtors' compensation obligations and employee
benefit obligations and the retention or "stay" bonus programs
of various other retail companies that have adopted compensation
programs while operating under chapter 11. From this review, the
Debtors and Deloitte were able to determine competitive
participation levels, amounts, and total costs. Mr. Bienenstock
adds that Deloitte also initiated numerous discussions focusing
on financial, operational, and human resource strategies with
the Debtors' top management and board of directors, including
the Debtors' current situation and the unique issues that will
face the Debtors over the next few years. The Retention Program
should encourage approximately 2,000 key employees to remain in
the Debtors' employ during the chapter 11 cases by providing
them with additional compensation similar to that provided by
other large retail chapter 11 debtors to their key employees.

The Debtors have determined the costs associated with adoption
of the Retention Program are more than justified by the savings
from not having to replace numerous key employees and by the
benefits expected to be realized by boosting morale and
discouraging resignations among Key Employees, dispelling the
perceived risk of working for the Debtors in light of their
chapter 11 status, and obtaining the value of the key employee's
experience, knowledge, and determination. Mr. Bienenstock
submits that the payments under the Retention Program will serve
as an incentive for the Key Employees to remain with the Debtors
during the course of these chapter 11 cases and to work
diligently toward their successful conclusion and will also
retain these Key Employees and avoid the prohibitive costs of
replacing them.

Since the Retention Program is needed to retain Key Employees,
who are in turn necessary for the preservation of the Debtors'
estates, Mr. Bienenstock believes that the payment rights of Key
Employees under the Retention Program are actual, necessary
costs and expenses of preserving the Debtors' estates, and will
be administrative expense priority to the extent they become due
under the Retention Program.

The Debtors submit the approval and implementation of the
Retention Program is absolutely essential to the Debtors'
continued operations. Without the implementation of the
Retention Program, the Debtors fear they will likely will lose
valuable employees which, in turn, will jeopardize the Debtors'
businesses and impair their ability to successfully reorganize
and provide a return to creditors. (AMES Bankruptcy News, Issue
No. 9; Bankruptcy Creditors' Service, Inc., 609/392-0900)

BETHLEHEM STEEL: Court Okays Greenhill as Financial Advisors
Bethlehem Steel Corporation, and its debtor-affiliates obtained
the Court's authority to employ Greenhill & Company LLC, as
their financial advisors, effective as of Petition Date.

In these chapter 11 cases, the Debtors will look to Greenhill
for these financial advisory services:

(A) General Financial Advisory Services

      (i) to the extent it deems necessary, appropriate and
          feasible, review and analyze the business, operations,
          properties, financial condition and prospects of the

     (ii) evaluate the Debtors' debt capacity in light of its
          projected cash flows;

    (iii) assist in the determination of an appropriate capital
          structure for the Debtors;

     (iv) determine a range of values for the Debtors on a going
          concern basis and on a liquidation basis;

      (v) advise and attend meetings of the Debtors' Boards of

     (vi) if necessary, participate in hearings before the Court
          with respect to matters upon which Greenhill has
          provided advice.

(B) Restructuring Services

     If the Debtors pursue a Restructuring:

      (i) provide financial advice and assistance to the Debtors
          in developing and seeking approval of a chapter 11

     (ii) provide financial advice and assistance to the Debtors
          in structuring any new securities, other consideration
          or other inducements to be offered and/or issued under
          the Plan;

    (iii) assist the Debtors and/or participate in negotiations
          with entities or groups affected by the Plan; and

     (iv) assist the Debtors in preparing documentation required
          in connection with the Plan.

(C) Sale Services

     If the Debtors pursue a Sale:

      (i) provide financial advice and assistance to the Debtors
          in connection with a Sale, identify potential
          acquirors and, at the Debtors' request, contact such
          potential acquirors;

     (ii) assist the Debtors in preparing a memorandum (with any
          amendments or supplements); and

    (iii) assist the Debtors and/or participate in negotiations
          with potential acquirors.

Prior to the filing of these cases, Mr. Anthony informs Judge
Lifland, the Debtors paid Greenhill $810,000 for Pre-petition
Services rendered and expenses incurred.

In the course of these chapter 11 cases, the Debtors propose to
pay Greenhill:

  (a) a $175,000 Monthly Advisory Fee;

  (b) a $12,000,000 Transaction Fee; and

  (c) in the event of a sale of all or a substantial portion of
      the Debtors' assets, a Sale Transaction Fee, which may be
      credited against the Transaction Fee. (Bethlehem
      Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
      Service, Inc., 609/392-0900)

BIOVAIL CORP: S&P Assigns BB on $400MM Sr. Secured Debt Rating
Standard & Poor's raised its corporate credit rating on Biovail
Corp. to double-'B' from double-'B'-minus. At the same time,
Standard & Poor's assigned its double-'B' senior secured debt
rating to the company's US$400 million senior secured bank
facility. The outlook is stable.

Biovail's US$400 million bank facility is rated the same as the
corporate credit rating. The facility is secured by a first-
ranking security interest and charge over all of the present and
future undertakings, property, and assets of Biovail including
product rights, pledge of all shares held by Biovail, and
assignment of insurance. Although the facility derives strength
from its secured position, based on Standard & Poor's simulated
default scenario, it is unclear that a distressed enterprise
value would be sufficient to fully cover the entire loan

The ratings reflect greater visibility afforded by a larger
product portfolio, a track record of success to date in the
integration of acquisitions, the establishment of a sales and
marketing presence in the U.S. and Canada, the competitive
advantages of a broad technology platform, and management's
prudent approach to financing through the repayment of debt and
new equity issuances. These factors are mitigated by the risks
associated with the company's rapid expansion, and execution
risks associated with the management of a larger sales force.

Biovail is an integrated Canada-based pharmaceutical drug
company specializing in the development, manufacture, license,
and distribution of once-daily formulations utilizing advanced
oral controlled-release delivery technologies. The company's
product portfolio currently consists of 17 marketed drugs and 22
pipeline products, up from three marketed drugs and 20 pipeline
products in 1998. In the near to medium term, Biovail's branded
controlled-release and flashdose products are expected to form
an increasing proportion of overall revenues; generic sales
contribute to about 30%-35% of total product sales.

Biovail has increased its representation in the U.S. through
selected sales and marketing and product acquisitions, including
the acquisition of Biovail Pharmaceuticals USA (formerly DJ
Pharma Inc.) in October 2000. Agreements with GlaxoSmithKline
PLC (GSK) for the out-licensing of Buproprion, the copromotion
of Wellbutrin Once Daily and Wellbutrin SR, and the acquisition
of distribution rights for GSK's topical antiviral Zovirax in
the U.S. and Puerto Rico should accelerate Biovail's competitive
position in the highly competitive pharmaceutical industry.
Initially, Biovail expects to receive US$50 million in revenues
in the next five quarters, which will be used for sales force
expansion in the U.S. In addition to the financial benefits,
Biovail also will be able to benefit from the marketing and
economies of scale that a larger organization possesses, which
will aid in achieving higher early-stage market penetration.

A more diversified revenue base and enhanced financial
flexibility through a US$600 equity issue in November 2001 have
significantly improved the company's financial profile. EBITDA
interest coverage and debt to capitalization (adjusted for
operating leases) amounted to 11.6 times and 48.0% at September
30, 2001, respectively. Standard & Poor's believes Biovail will
continue with its growth through acquisition strategy, which
may be reflected in varying degrees of leverage in the near
term.  Nevertheless, an established North American sales
presence of about 400 sales representatives (growing to 900
sales representatives in 2002), and a solid base of marketed and
pipeline products, makes strategic acquisitions an upside
opportunity and not a necessity. Out-licensing and marketing
agreements are expected to grow in number.

                        Outlook: Stable

Biovail's commitment to a well-balanced capital structure and
improving cash flow generation resulting from a number of
positive developments related to product filings and approvals
should further enhance credit protection measures, which are
currently strong for the rating. Standard & Poor's believes
Biovail will continue with its prudent approach toward strategic
growth opportunities through debt financing.

BRIDGE INFO: FT Interactive & Telerate Get OK to Set-Off Claims
FT Interactive Data Corporation and Telerate, Inc., are parties
to certain pre-petition agreements.

As of Petition Date, FT Interactive owed Telerate $1,918,530
under some of the Agreements while Telerate also owed FT
Interactive $2,938,360 under certain of the Agreements.

According to Spencer P. Desai, Esq., at Campbell & Coyne PC, in
Clayton, Missouri, FT Interactive timely filed a proof of claim
in these cases for periods prior to the Petition Date.

Over the last two months, Mr. Desai relates that representatives
of Bridge Information Systems, Inc., and representatives of FT
Interactive have conferred in an effort to agree as to a correct
allocation of the Pre-petition Creditor Obligation and the Pre-
Petition Debtor Obligation as between the parties.

As a result of these discussions, Jennifer A. Merlo, Esq., at
Bryan Cave LLP, in St. Louis, Missouri, tells the Court that the
Debtors and FT Interactive have agreed upon the treatment of the
Pre-petition Creditor Obligation and the Pre-petition Debtor

"The Debtors and FT Interactive agree that substantially all of
the Debtors' pre-petition obligations are attributable to the
Telerate," Ms. Merlo relates.

Mr. Desai notes, "It is clear that no portion of the Pre-
petition Debtor Obligation was incurred by FT Interactive in
contravention of Code Section 553(a)(3):

    (i) after 90 days prior the Petition Date;
   (ii) while Telerate was insolvent; and
  (iii) for the purposes of obtaining a right of set-off against

Telerate and FT Interactive further agree, that the Pre-Petition
Creditor Obligation and the Pre-Petition Debtor Obligation are
mutual debts subject to set-off.

And so, Judge McDonald approves the Telerate and FT  
Interactive's stipulation.  The Court rules that the Pre-
petition Creditor Obligation shall be set off against the Pre-
petition Debtor obligation - resulting in the satisfaction in
full of the Pre-petition Creditor Obligation and an allowed pre-
petition claim of FT Interactive against Telerate under the
Agreements in the amount of $1,019,830.  Judge McDonald reminds
FT Interactive to amend any proof of claim filed against
Telerate to reflect the amount of the pre-petition claim.  FT
Interactive must do this within 10 business days of the entry of
the Court's order.

Judge McDonald further grants FT Interactive relief from the
automatic stay in order to consummate the setoff contemplated by
the Order.  Accordingly, the Court authorizes both parties to
perform all actions necessary to carry out the terms of the
Order. (Bridge Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   

BURLINGTON: Wins Court Nod to Pay Pre-Petition Trust Fund Taxes
In the ordinary course of business, Burlington Industries, Inc.,
and its debtor-affiliates collect certain trust fund taxes from
their customers or employees and hold them for a period of time
before remitting them to the appropriate taxing authorities.  
For example, Daniel J. DeFranceschi, Esq., at Richards, Layton &
Finger, P.A., in Wilmington, Delaware, relates, the Debtors
collect sales and use taxes from certain customers, as well as
income, FICA and Medicare taxes from their employees.  These are
then remitted periodically to the appropriate federal, state or
local taxing authorities, Mr. DeFranceschi explains.

The Debtors are thus seeking authority to pay the trust fund
taxes collected prior to the Petition Date, but not yet remitted
by the Debtors to the applicable taxing authorities, to avoid
the serious disruption to their reorganization efforts that
would result from the nonpayment of such taxes.

According to Mr. DeFranceschi, the pre-petition trust fund taxes
that have been collected or withheld by the Debtors are held in
trust for the benefit of those third parties to whom payment if
owed or on behalf of whom such payment is made.  As such, Mr.
DeFranceschi contends, the pre-petition trust fund taxes are not
property of the Debtors' estates, and their payment will not
adversely affect the Debtors' estates.

In addition, Mr. DeFranceschi tells Judge Walsh, state and local
taxing authorities impose personal liability on the officers and
directors of entities responsible for collecting trust fund
taxes to the extent that such taxes are collected but not
remitted.  These taxing authorities may also cause the Debtors
to be audited, Mr. DeFranceschi adds.  Such actions, Mr.
DeFranceschi warns, would divert attention and resources from
the reorganization process.

The Debtors estimate that, as of the Petition Date, their
remaining obligations for pre-petition trust fund taxes are:

    Sales, use and similar taxes           $  400,000
    Taxes withheld from employees             775,000
    TOTAL                                  $1,175,000

Mr. DeFranceschi assures the Court that the Debtors have
sufficient cash reserves, together with anticipated access to
sufficient debtor in possession financing, to pay promptly all
of their respective remaining obligations for the pre-petition
trust fund taxes in the ordinary course of business.

                              *  *  *

Moved by the Debtors' arguments, Judge Walsh authorized them, in
their sole discretion, to pay the pre-petition trust fund taxes
in the ordinary course of business.  "Nothing in this Order
shall be construed as impairing the Debtors' rights to contest
the validity or amount of any pre-petition trust fund taxes,"
Judge Walsh stresses. (Burlington Bankruptcy News, Issue No. 2;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   

CHESAPEAKE: S&P Revises Outlook On Completion of New Debt Issue
Standard & Poor's affirmed its ratings on Chesapeake Corp. and
removed the corporate credit and senior unsecured debt ratings
from CreditWatch, were they were placed on November 1, 2001. The
current outlook is stable.

Proceeds from the company's recently completed o115 million
subordinated debt issue were used to reduce borrowings under its
fully utilized $250 million revolving credit facility,
eliminating the near-term liquidity concerns that prompted the
CreditWatch placement.

The ratings reflect Chesapeake Corp.'s slightly below-average
business position within specialty packaging, a growth by debt-
financed acquisition strategy, and aggressive financial

Chesapeake has grown in the specialty packaging business and
moved away from the pulp and paper business over the past few
years through a series of acquisitions and divestitures.
Specialty packaging is a stable, less capital-intensive, but
highly seasonal business with good growth prospects.  The
company is concentrating on higher-margin applications for the
pharmaceutical, healthcare, and cosmetics industries. Although
the sale of the non-strategic businesses has had a positive
impact on earnings, and corporate overhead costs will be
reduced, the economic slowdown in Europe (about 90% of
Chesapeake's sales), competitive pricing pressures, and higher
plastic raw material costs may delay further earnings
improvement until late 2002.

Debt to capital has declined to 55% from about 65% at December
31, 2000, as asset proceeds have been applied toward debt
reduction and acquisition activity has slowed. Funds from
operations to debt is expected to remain in the 15% to 20%
range, and EBITDA interest coverage should average between 3.5
times and 4.0x. Financial flexibility is adequate, with  
availability under the company's revolving credit facility
expected to be about $130 million at year end. However, there is
little room at the current ratings for significant debt-financed

                       Outlook: Stable

Relatively stable earnings from a value-added product mix should
allow the company to generate credit measures appropriate for
the ratings.

               Ratings Removed from CreditWatch

     Chesapeake Corp.                                Ratings

        Corporate credit rating                       BB
        Senior unsecured debt                         BB

                        Rating Affirmed

     Chesapeake Corp.
        Subordinated debt                             B+

According to DebtTraders, Chesapeake Energy's 8.500% bonds due
in 2012 (CHESP3) trade in the high 90s.  Go to  
real-time bond pricing.

CHIQUITA BRANDS: Files Pre-Pack Plan Under Chapter 11 in Ohio
Chiquita Brands International, Inc. (NYSE: CQB) filed in Federal
Court in Cincinnati a Pre-Arranged Plan of Reorganization under
Chapter 11 of the U.S. Bankruptcy Code.  The filing was made
according to an agreement with bondholder committees announced
November 12 that will reduce Chiquita's debt and accrued
interest by more than $700 million and its future annual
interest expense by about $60 million.  The terms of the Plan
are as previously announced.

The Chapter 11 Plan involves a restructuring of only the
publicly held debt and equity securities of Chiquita Brands
International, Inc., which is a holding company without any
business operations of its own.  The Company's subsidiaries,
which hold all of its operations, are independent legal entities
that generate their own cash flow and have access to their own
credit facilities.  These subsidiaries will continue to operate
normally and without interruption, and their creditors will be
unaffected.  Throughout the process, customers will continue to
receive shipments normally and suppliers will continue to be
paid in full according to normal terms.  The Company expects
that the Chapter 11 case will be completed in 90 to 120 days.

Steven G. Warshaw, President and Chief Executive Officer of
Chiquita, said: "The Chapter 11 filing brings us another step
closer to completing the financial restructuring process we
began in January.  Since then, we have operated normally, as we
will continue to do throughout the Chapter 11 process.  It is
our plan to emerge from Chapter 11 in the first quarter of 2002
with a solid balance sheet and a bright future.  With the recent
settlement of the U.S.-EU banana trade dispute, we will have
even stronger prospects for revenue and earnings growth."

Completion of the restructuring plan is subject to certain
conditions, including its acceptance by affected classes of
public debt and equity holders, whose approval will be solicited
as part of the Court process. Having already achieved agreement
with the ad hoc committees representing its bondholders, the
Company continues to believe that it will receive the votes
required for approval of the plan.

A copy of Chiquita's November 12, 2001 press release announcing
its agreement with bondholders is available on

Chiquita is a leading international marketer, producer and
distributor of quality fresh fruits and vegetables and processed

CHIQUITA BRANDS: Chapter 11 Case Summary
Debtor: Chiquita Brands International, Inc.
        250 East Fifth Street
        Cincinnati, Ohio 45202
        Telephone (513) 784-8000
        Fax (513) 784-8030

Chapter 11 Petition Date: November 28, 2001

Court: Southern District of Ohio

Bankruptcy Case No.: 01-18812

Judge: J. Vincent Aug, Jr.

Debtor's Counsel: James H.M. Sprayregen, Esq
                  Matthew N. Kleiman, Esq.
                  Anup Sathy, Esq.
                  Kirkland & Ellis
                  200 East Randolph Drive
                  Chicago, Illinois 60601
                  Telephone (312) 861-2000
Total Assets: $ 2,352,146,000

Total Liabilities: $ 1,823,139,000

CLARENT CORP: Violates Nasdaq Continued Listing Requirements
Clarent Corporation (Nasdaq: CLRNE) announced that it received a
Nasdaq Staff Determination on November 21, 2001 indicating that
the Company's failure to file its Quarterly Report on Form 10-Q
for the quarter ended September 30, 2001 was a violation of the
continued listing requirements set forth in the Marketplace Rule
4310, and that its common stock, therefore, is subject to
delisting from The Nasdaq Stock Market. As a result of the
delinquency, the trading symbol for the Company's securities was
changed from "CLRN" to "CLRNE" at the opening of business on
November 26, 2001.

The Company has requested a hearing before a Nasdaq Listing
Qualifications Panel to review the Staff Determination and, as a
result, the delisting will be stayed pending the Panel's
determination. There can be no assurance the Panel will grant
the Company's request for continued listing.

The Company is continuing its investigation into the previously
announced overstatement of historical revenues. The preliminary
results of this investigation indicate that there have been
financial irregularities that materially affect the previously
reported financial results for fiscal year 2000, as well as the
first two quarters of fiscal year 2001.

Clarent Corporation (Nasdaq: CLRNE) is a leading provider of
voice solutions for next generation networks. Clarent's
solutions enable service providers to deploy a converged network
(voice, data and applications). Clarent solutions reduce costs
and increase operating efficiencies while delivering innovative
new services that allow end users to manage their
communications. Founded in 1996, Clarent is headquartered in
Redwood City, Calif. and has offices in Asia, Europe, Latin
America and North America. For more information please visit

CLASSIC COMMS: Signs-Up PricewaterhouseCoopers as Auditors
Classic Communications, Inc., asks the U.S. Bankruptcy Court for
the District of Delaware for permission to employ and retain
PricewaterhouseCoopers LLP as their independent accountants,
bankruptcy and reorganization consultants.

The Debtors wish to retain PwC to provide them with professional
services in the areas of accounting, auditing, certain tax
advisory and related services of the Debtors.

Pwc has served as the Debtors' independent accountants since
October 4, 1999. Over that period, PwC rendered extensive
accounting, auditing, certain tax advisory and related services.
The Debtors believe that PwC has gained familiarity regarding
the Debtors' operations, management and accounting procedures
that may be affected by these chapter 11 cases.

Classic Communications, Inc., a cable operator focused on non-
metropolitan markets in the United States, filed for Chapter 11
petition on November 13, 2001 in the U.S. Bankruptcy Court for
the District of Delaware, along with its subsidiaries. Brendan
Linehan Shannon, Esq. at Young, Conaway, Stargatt & Taylor
represents the Debtors in their restructuring efforts. When the
Company filed for protection from its creditors, it listed
$711,346,000 in total assets and $641,869,000 in total debts.

COLOR SPOT NURSERIES: Completes Out-Of-Court Recapitalization
Chanin Capital Partners announced the successful completion of
an out-of-court financial recapitalization of Color Spot
Nurseries, Inc.  The recapitalization received 100% approval
from the Company's bondholders.

The recapitalization involved the refinancing of Color Spot's
$70 million senior secured revolving credit facility and a
unanimously accepted exchange offer for Color Spot's $100
million senior subordinated notes.  Chanin Capital Partners also
assisted in the raising of a new $12 million mezzanine facility.

Douglas Martin, Vice President, who led the transaction team for
Chanin Capital Partners said, "We are pleased Color Spot was
able to complete its recapitalization in these turbulent capital
markets, providing the management team with the fiscal resources
to implement its strategic initiatives."

Chanin Capital Partners is a nationally recognized, specialty
investment bank providing the following financial services:
Financial Restructurings, Mergers and Acquisitions, Corporate
Finance and Private Placements, Valuations and Fairness and
Solvency Opinions, and Principal Investments.  The professionals
of Chanin Capital Partners have privately placed over $5 billion
in debt and equity securities, completed over $60 billion in
financial restructuring transactions, consummated over $20
billion in merger and acquisition transactions, and provided
hundreds of companies with valuations and fairness and solvency
opinions.  Please visit its Web site at

COOKER RESTAURANT: Must Carry-Out Plans to Continue Operations
Cooker Restaurant Corporation's sales for the third quarter of
fiscal 2001 decreased 35.9%, or $12,856,000, to $22,989,000
compared to sales of $35,845,000 for the third quarter of fiscal
2000. For the nine months ended September 30, 2001 sales
decreased by 18.1%, or $20,121,000 to $90,837,000 from

The decrease for the three and nine months ended September 30,
2001 is due to a decrease in the number of guests at the
restaurants as well as a decrease in the number of stores
operating during the comparable periods. At the end of the third
quarter of 2001, the Company operated 43 restaurants, compared
to 66 at the end of the third quarter of 2000. Same store sales
were down 16.6% for the three months ended September 30, 2001
from the three months ended October 1, 2000. To address the
decrease in sales, the Company has increased its staffing at its
restaurants, revised its standard national menu to a regional
menu, changed key operations executives and implemented other
procedures to emphasize customer service. The Company has also
embarked on a renovation program that will enhance the
appearance of  its restaurants.

During the nine months ended September 30, 2001, the Company
recorded a net loss of $112,000 which includes a gain on
disposal of fixed assets of $46,000, a loss on disposal of fixed
assets of $250,000 in the second quarter and a net gain of
$92,000 on the sale of the Company's corporate office and two of
its properties in the first quarter of 2001. If management's
plans are not successful, subject to the bankruptcy court
approval, the lenders could exercise their right to accelerate
the repayment of the Company's debt, which would have a material
adverse effect on the Company's financial condition, results of
operations and liquidity.  These conditions may indicate that
the Company may be unable to continue as a going concern for a
reasonable period of time.

DAW TECHNOLOGIES: Fails to Meet Nasdaq Listing Requirements
Daw Technologies, Inc. (Nasdaq: DAWKE), announced that it has
received a Nasdaq Staff Determination letter dated November 20,
2001 indicating that the company has failed to comply with
requirements for continued listing set forth in Marketplace Rule
4310(c)(14) by not filing a Form 10-Q for the period ending
September 30, 2001, and that its common stock is, therefore,
subject to delisting from the Nasdaq National Market.  The
company has requested a hearing before a Nasdaq Listing
Qualifications Panel to review the Nasdaq Staff Determination.  
Nasdaq's delisting of the company's common stock is stayed
pending the Listing Qualifications Panel's determination on the
company's appeal.

Although the company's common stock will continue to be listed
on the Nasdaq National Market pending the conclusion of the
appeal, trading was halted by Nasdaq on November 19, 2001
pending the receipt by Nasdaq of additional information
regarding the company's failure to timely file its Form 10-Q for
the third quarter and its recent announcement that it will
likely be necessary to restate its financial statements for
fiscal years 1999, 2000 and the first two quarters of 2001.  The
company has previously reported that its restatement of
previously issued financial statements and its inability to
timely file its Form 10-Q were caused by the inability of the
company to timely reconcile several general ledger accounts
relating to its European branch office operations.

The company is actively involved in a careful examination and
reconciliation of its European accounts from 1999 forward.  The
company will prepare and file its required financial information
as soon as it can do so with confidence that the information is
accurate and complete.  In the meantime, the company intends to
vigorously pursue its appeal of the Nasdaq Staff Determination.  
However, there is no assurance that the Listing Qualifications
Panel will grant the company's request for continued listing.

DJ ORTHOPEDICS: S&P Affirms B+ Corporate Credit Rating
Standard & Poor's affirmed its single-'B'-plus corporate credit
rating, single-'B'-minus subordinated debt rating, and double-
'B'-minus senior secured bank loan rating for dj Orthopedics.

At the same time, Standard & Poor's revised its outlook on dj
Orthopedics LLC to positive from stable.

The ratings for Vista, California-based dj Orthopedics result
from the company's position as a leader in a highly fragmented
niche market, offset by its limited size.

The outlook revision reflects the company's improved financial
profile following a significant reduction of LBO-related debt
from the proceeds of the company's recent IPO.

The company is a leading manufacturer of orthopedic recovery
products, including rigid knee braces, soft goods, specialty,
and other orthopedic products. dj Orthopedics' broad product
line, with 24-hour delivery service (72-hour in the case of
customized braces), and its record of new product development
and product enhancements are strengths. The company sells its
products under the DonJoy and ProCare brand names. The DonJoy
brand, well regarded in the orthopedic community, contributes to
long-standing customer relationships with high retention rates
and provides a degree of revenue predictability.

The July 2000 acquisition of DePuy Orthopedic Technology Inc.
enhanced the company's presence in the orthopedic recovery
products market by broadening its product offerings and
expanding its sales force management and field representation
nationwide. Moreover, the Orthotech acquisition provided dj
Orthopedics with new group-purchasing organizations and payor
contracts. In addition, the company's strategy to expand into
surgical and nonsurgical products that repair and regenerate
soft tissue and bone presents opportunities for the company to
increase its presence in the orthopedic sports medicine market.

Still, dj Orthopedics faces challenges. Despite the company's
enhanced position in the orthopedic recovery products market, it
remains a relatively small operator, with about a 24% market
share. Indeed, with the company's small revenue base and narrow
focus in a niche market, ongoing industry cost-containment
pressures could have a significant impact, and competition from
innovative technology remains a concern. Nevertheless, the
company significantly reduced LBO-related debt (including
preferred stock) with more than $80 million in IPO proceeds.
This reduction in debt and related interest expense, coupled
with improving cash flows and cash of about $35 million,
provides for increased -- albeit still limited -- financial
flexibility, enabling the company to respond to business
opportunities and competitive threats.

                        Outlook: Positive

Maintenance of the company's improved financial profile while
executing its growth strategy could lead to a higher rating.

ELDORADO RESORTS: S&P Places Low-B Ratings on Watch Negative
Standard & Poor's placed its ratings for Eldorado Resorts LLC on
CreditWatch with negative implications.

The rating action followed the filing of the company's 10-Q for
the quarter ended September 30, 2001, in which operating results
continued to be significantly below last year's level due to a
competitive market environment. In addition, the company
reported that it was in violation of bank covenants and is
seeking a waiver from the bank group. Eldorado Resorts also
stated that it will likely be in violation at the end of the
December 31, 2001, quarter and is seeking a waiver for that
period as well.

Standard & Poor's will review its ratings on Eldorado after
evaluating the company's operating and financial strategies.

                  Ratings Placed on Creditwatch
                   with Negative Implications

     Eldorado Resorts LLC
       Corporate credit rating           BB-
       Senior secured bank loan          BB
       Subordinated debt                 B

ENRON CORPORATION: Dynegy Pulls Plug on Merger Agreement
Enron Corp. (NYSE: ENE) announced that it has received a notice
from Dynegy Inc. (NYSE: DYN) that, effective immediately, it is
terminating the merger agreement between it and Enron.  In
addition, Standard & Poor's, Moody's Investors Service and
Fitch, Inc. have downgraded Enron's long-term debt to below
investment grade.

In response to these developments, Enron is taking actions
designed to preserve value in the company's core trading and
other energy businesses. Chief among these is a temporary
suspension of all payments other than those necessary to
maintain core operations.

"Uncertainty during the past few weeks with respect to the
merger has dramatically lowered the market's confidence in Enron
and its trading operations.  With Dynegy's termination of the
merger and the ratings agency downgrades, we are evaluating and
exploring other options to protect our core energy businesses,"
said Kenneth L. Lay, Enron chairman and CEO.  "To do this, we
will work to retain the employees necessary to the continuing
operations of our trading and other core energy businesses."

Enron is reviewing Dynegy's actions, including its assertion
that it is entitled to exercise an option to purchase Enron's
interest in Northern Natural Gas Company.

ESOFT INC: Completes Restructuring of Conv. Note with Gateway
eSoft Inc. (Nasdaq: ESFT), announced that it has completed a
restructuring of its convertible promissory note with Gateway,
Inc.  Under the terms of the agreement, eSoft will make a
prepayment of $3.3 million, while the principal amount of the
loan will be reduced by $6 million.  After giving effect to the
restructuring, the remaining principal on the note is $6.5
million. The other terms of the note remain unchanged.  The
Company believes this transaction will affect its financial
position, results of operation and liquidity as follows:

     -- Increases Fourth Quarter net income through an
        extraordinary gain on the early extinguishment of debt,

     -- Increases net tangible assets,

     -- Allows the Company to maintain cash reserves while
        reducing future capital obligations, maintaining the
        Company's belief that it has the ability to fund
        operations through profitability,

     -- Reduces future interest expense, and

     -- Contributes to the Company's goal of profitability and
        positive cash flow.

"We continue to remain focused on attaining positive EBITDA and
sustained profitability and are encouraged that this transaction
may position eSoft to achieve net profitability for the current
quarter," said Jeff Finn, president and CEO of eSoft.

eSoft is pioneering the delivery of business and IT-related
applications through its secure Internet appliances.  The
company's product line provides security features that include
firewall and VPN, Internet and Web hosting services and
business-enhancing software upgrades.  eSoft's products are sold
internationally through a network of value added resellers,
Internet service providers and value added distributors.  The
company is headquartered in Broomfield, Colorado and trades on
the Nasdaq exchange under the ticker symbol ESFT.  Contact eSoft
at 295 Interlocken Blvd., #500, Broomfield, Colo., 80021; 303-
444.1600 phone; 303-444-1640 fax;  

SoftPak Director, SoftPak, InstaRak and InstaGate are all
trademarks and/or service marks of eSoft.  All other brand and
product names may be trademarks of the respective companies with
which they are associated.

EXODUS COMMS: Gets Okay to Hire Ordinary Course Professionals
Exodus Communications, Inc., and its debtor-affiliates sought
and obtained an order from the Court authorizing:

A. The retention of Ordinary Course Professionals without the
   necessity of a separate, formal retention application
   approved by this Court for each Ordinary Course
   Professional, and

B. Payment of Ordinary Course Professionals for post-petition
   services rendered and expenses incurred, subject to certain
   limits set forth, without the necessity of additional Court

Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom, LLP,
in Wilmington, Delaware, tells the Court that the Debtors will
continue to require the services of the Ordinary Course
Professionals while operating as debtors-in-possession under the
Bankruptcy Code, to enable them to continue normal business
activities that are essential to their stabilization and
reorganization efforts. Moreover, Mr. Chehi explains that the
work of the Ordinary Course Professionals is directly related to
the preservation of the value of the Debtors' estates, even
though the amount of fees and expenses incurred by the Ordinary
Course Professionals represent only a small fraction of that

Mr. Chehi believes that there is a significant risk that some
Ordinary Course Professionals would be unwilling to provide
services, and that others would suspend services pending a
specific Court order authorizing the services. Since many of the
matters are active on a day-to-day basis, Mr. Chehi says that
any delay or need to replace professionals could have
significant adverse consequences. Mr. Chehi submits that
requiring the Ordinary Course Professionals to file retention
pleadings and participate in the payment approval process along
with the Chapter 11 Professionals would unnecessarily burden the
Clerk's Office, the Court and the Office of the United States
Trustee, while adding significantly to the administrative costs
of these cases without any corresponding benefit to the Debtors'

The salient terms of the proposed retention procedures are:

A. Submission of Rule 2014 Affidavits - The Debtors are
   permitted to continue to employ and retain all Ordinary
   Course Professionals but attorneys will be required to file
   with the Court, and serve upon the U.S. Trustee, counsel for
   any official committees and counsel to the agent for the
   post-petition lenders, a declaration of proposed professional
   and disclosure statement on or before December 5, 2001.
   Upon service of the Declaration, the U.S. Trustee, the
   Committee and the post-petition lenders will have 20 days
   to object to the retention of such Attorney in question.
   Any such objection must be filed with the Court and served
   upon the Attorney, the Debtors, and any of the U.S.
   Trustee, the Committee or the post-petition lenders who are

   If the objection cannot be resolved and withdrawn within
   20 days after service, the matter will be scheduled for
   hearing before the Court at the next regularly scheduled
   hearing date or other date otherwise agreeable to the
   Attorney, the Debtors and the objecting party. If no
   objection is received by the Objection Deadline, or if an
   objection is withdrawn, the Debtors will be authorized to
   retain the Ordinary Course Attorney as a final matter
   without further order of the Court. With respect to the
   Ordinary Course Professionals who are not attorneys, such
   professionals are excepted from the requirement to file a
   Declaration and their retention are deemed approved without
   opportunity for objection.

B. Additional Ordinary Course Professionals - The Debtors are
   authorized to employ and retain additional Ordinary Course
   Professionals, as future circumstances require, without the
   need to file individual retention applications or provide
   further hearing or notice to any party, by filing with the
   Court a supplement and serving a copy of the Supplement
   upon the U.S. Trustee, counsel for the Committee and
   counsel to the agent for the post-petition lenders.

   Each Additional Ordinary Course Professional who is an
   attorney be required to file and serve a Declaration within
   30 days after the filing of the Supplement. The U.S.
   Trustee, the Committee and the post-petition lenders then
   would be given 20 days after service of each required
   Declaration to object to the retention of the Additional
   Ordinary Course Attorney in question. Any objection would
   be handled as set forth above. If no objection is
   submitted, or the objection is withdrawn, the Debtors would
   be authorized to retain the Additional Ordinary Course
   Attorney as a final matter without further order. As with
   Ordinary Course Professionals who are not attorneys,
   Additional Ordinary Course Professionals who are not
   attorneys would be exempted from the requirement to file a
   Declaration and their retention would be deemed approved
   without opportunity for objection.

The terms of the proposed compensation procedures are:

A. Monthly Payment Caps - The Debtors propose that they be
   permitted to pay, without formal application to the Court
   by any Ordinary Course Professional, fees and expenses not
   exceeding a total of $30,000 per month, for each Ordinary
   Course Professional. The Debtors also propose that
   aggregate monthly payments to Ordinary Course Professionals
   be limited to $400,000, unless additional payments are
   authorized by the Court.

   Payments to a particular Ordinary Course Professional would
   become subject to Court approval pursuant to an application
   for allowance of fees and expenses, pursuant to the same
   procedures that are established for Chapter 11
   Professionals, only if such payments exceed $30,000/month.

   The Debtors propose to except from such monthly limitations
   any contingent fee amounts received by Ordinary Course
   Professionals from recoveries realized on the Debtors'
   behalf. In other words, the limitations would apply only to
   direct disbursements by the Debtors. The Debtors further
   propose that the monthly allowance for fees and expenses of
   Ordinary Course Professionals be applied on an average,
   "rolling" basis. Specifically, to the extent that any such
   professional's fees and expenses are in any month less than
   $30,000, the Debtors propose that the remainder of the
   monthly allowance be made available for payment to such
   professional during subsequent months, in addition to the
   monthly allowance amount. Conversely, to the extent that
   any professional's fees and expenses exceed $30,000 in any
   month, the Debtors propose to pay no more than $30,000, but
   to roll the overage into following months, when it can be
   paid if the fees and expenses in such months are less than
   the allowance amount.

B. Periodic Statements Of Payments Made - The Debtors further
   propose to file a payment summary statement with the Court
   approximately 120 days, or such other period as the Court
   directs, and to serve such statement upon the United States
   Trustee, counsel for the Committee and counsel for the
   Debtors' post-petition lenders. The summary statement will
   include the following information for each Ordinary Course

       1. the name of the Ordinary Course Professional;

       2. the aggregate amounts paid as compensation for
          services rendered and reimbursement of expenses
          incurred by such Ordinary Course Professional during
          the statement period; and

       3. a general description of the services rendered by such
          Ordinary Course Professional. (Exodus Bankruptcy News,
          Issue No. 8; Bankruptcy Creditors' Service, Inc.,

FEDECAFE EXPORT: Fitch Concerned About Weakening Credit Profile
Fitch downgraded the rating on Fedecafe Export Receivables
Master Trust to `BB+' from `BBB-' and has removed it from Rating
Watch Negative. The Rating Outlook is Stable.

The rating action is driven by the continued decline of
international coffee prices, which has deteriorated the credit
profile of the National Coffee Fund (the Fund).

In recent months, world coffee stocks have continued to increase
due to excess supply. Because of the price crisis, the Fund's
two main sources of income, which are sales of coffee and taxes
and contributions paid by Colombian coffee growers, have
declined substantially. Financial income, also an important
source of income, has declined due to a reduction in the Fund's
portfolio of marketable securities.

Fedecafe, which administers the Fund, has implemented severe
cost cuts, primarily in support programs to coffee growers and
marketing expenses. Most importantly, in January 2001, Fedecafe
eliminated the domestic floor on coffee prices and now allows
its purchase price to fluctuate according to international
prices. Despite these positive measures, this year the Fund is
estimated to reach an accumulated cash flow operating deficit of
approximately US$67 million.

Fedecafe expects to finance roughly half of this deficit with
liquid assets that were previously held in trust by the Fund for
the provision of loans to coffee growers (the Fund will no
longer provide financing to coffee growers but an agency of the
government will). The remaining will be financed primarily with
increased indebtedness and with cash and marketable securities.
Fedecafe is forecasting total debt of the Fund to increase to
US$143 million at the end of 2001, compared to $115 million at
the end of 2000, and to decline gradually thereafter.

The rating is supported by the strong commitment of the
Colombian government to the coffee industry, the Coffee Fund and
Fedecafe as its administrative agent. The coffee industry
commands tremendous importance to Colombia in terms of foreign
exchange earnings, GDP, employment and social stability.  Fitch
expects that Fedecafe will continue to operate and play a
significant role in the industry.

In response to the international price crisis, the government
has shown its commitment by allocating from the National Budget
a total of US$153 million in an aid package to be provided
between 2001 and 2002. Of this amount, US$67 million consists of
price supplements directly allocated to coffee growers, to
ensure the continuity of coffee growing activities. The
remaining US$86 million consists of research and development and
technical assistance expenses previously undertaken by the Fund,
thus alleviating the Fund's cash outflows. Moreover, going
forward, Fedecafe and the government have agreed to limit the
Fund's expenses in connection with advertising, warehousing and
administrative fees paid to Fedecafe, to approximately $33
million per year.

Colombian coffee commands over 10% of the world's total coffee
exports and is the premium choice for quality. Over the past
three years, volume exports of Colombian coffee have ranged
between 9 million and 10 million 60 kg. bags, of which Fedecafe
commands a market share of 36%. Production is expected to
increase above 11 million 60 kg. bags over the next few years as
Colombia completes a pruning program initiated on its coffee
plants in 1998.  Moreover, Colombian coffee continues to command
a price premium over Arabica, or mild coffee. Because of the
scarcity of premium coffees, such price premium has actually
increased in 2001 to 19 cents of a dollar from 11 to 13 cents
last year. Flows from export receivables continue to generate
healthy debt service coverage levels for the transaction.
Designated customers provide approximately six times coverage
and total exports provide almost 20x coverage.

The Stable Rating Outlook on the rating reflects Fitch's
expectations that the austerity measures described above,
coupled with the abandonment of the fixed domestic purchase
price, will help stabilize the Fund's financial profile in 2002
and beyond. It also reflects Fitch's expectations that the
Colombian government will continue to assist coffee growers,
Fedecafe and the Fund under a scenario of further coffee price

Fedecafe was founded in 1927 as a non-for-profit organization
with the objective of defending and promoting the interests of
Colombian coffee growers. Fedecafe is the administrative agent
for the National Coffee Fund, a parafiscal account of public
earn-marked funds allocated to the protection and development of
the Colombian coffee industry. Fedecafe purchases coffee through
its more than 500 purchase points located throughout the coffee
regions of Colombia.

FEDERAL-MOGUL: Seeks Approval of Interim Compensation Procedures
Federal-Mogul Corporation, and its debtor-affiliates file a
motion requesting that this Court enter an order establishing
certain interim compensation and expense reimbursement
procedures for the professionals retained by order of this Court
in these Chapter 11 Cases and for reimbursement of expenses
incurred by any Committee Members.

James O'Neill, Esq., at Pachulski Stang Ziehl Young & Jones,
P.C., in Wilmington, Delaware, tells the Court that the Debtors
request the establishment of procedures for compensating and
reimbursing Professionals on a monthly basis similar to those
recently established in other large chapter 11 cases in this
District. Mr. O'Neill explains that such an order will
streamline the Professionals' compensation process and enable
the Court and all other parties to more effectively monitor the
Professional fees incurred in the Chapter 11 Cases and avoid
forcing the Professionals to finance the Chapter 11 Cases while
awaiting final approval of their fees and expenses.

Specifically, the Debtors propose that the Professionals may
seek interim compensation and reimbursement of expenses in
accordance with the following procedures:

A. No earlier than the 25th day of each month, each Professional
   seeking interim compensation will file with the Court an
   application, for interim approval and allowance of
   compensation for services rendered and reimbursement of
   expenses incurred during the immediately preceding month and
   serve notice of the Fee Application on:

     1. Federal-Mogul Corp., 26555 Northwestern Highway,
        Southfield, Michigan 48034;

     2. counsel for the Debtors:

         a. Pachulski, Stang, Ziehl, Young & Jones P.C., 919
            North Market Street, 16th Floor, P.O. Box 8705,
            Wilmington, Delaware 19899-8705, Attn: Laura Davis
            Jones, Esq., and

         b. Sidley Austin Brown & Wood, Bank One Plaza, 10 South
            Dearborn, Chicago, Illinois 60603, Attn: Larry J.
            Nyhan, Esq.;

     3. counsel to any Committees appointed by the United States

     4. the United States Trustee, 601 Walnut Street, Curtis
        Center, Suite 950 West, Philadelphia, Pennsylvania

     5. counsel for the agent for the pre-petition lenders:
        Simpson Thacher & Bartlett, 425 Lexington Avenue, New
        York, NY 10017-3954, Attn: Steven M. Fuhrman, Esq.; and

     6. counsel for the agent for the post-petition lenders:
        Bryan Cave LLP, Suite 3600, 211 North Broadway, St.
        Louis, Missouri 63102-2733, Attn: Gregory D. Willard,

B. All Fee Applications shall comply with the Bankruptcy Code,
   the Federal Rules of Bankruptcy Procedure, applicable Third
   Circuit law and the Local Rules of this Court;

C. Each Notice Party will have 20 days after service of a Fee
   Application to object to such Fee Application. If any Notice
   Party objects to a Professional's Fee Application, it must
   file and serve upon the affected Professional and the Notice
   Parties a written objection, which must be filed with the
   Court and received by the affected Professional and the
   Notice Parties on or before the Objection Deadline;

D. Upon the expiration of the Objection Deadline, the retained
   Professional or the Debtors, in the Debtors' discretion, may
   file a certificate of no objection with the Court after
   which the Debtors are authorized to pay each Professional an
   amount equal to the lesser of

    1. 80 percent of the fees and 100 percent of the expenses
       requested in the Fee Application and
    2. 80 percent of the fees and 100 percent of the expenses
       not subject to an Objection;

E. In the event that an Objection is filed, the objecting party
   and the affected Professional may attempt to resolve the
   Objection on a consensual basis. If the parties are unable
   to reach a resolution of the Objection within 20 days after
   service of the Objection, the affected Professional may

    1. file the Objection with the Court, together with a
       request for payment of the difference, if any, between
       the Maximum Interim Amount and the Actual Interim
       Amount made to the affected Professional; or

    2. forego payment of the Incremental Amount until the next
       interim or final fee application hearing, at which time
       the Court will consider and dispose of the Objection if
       requested by the parties.

F. Beginning with the three-month period ending in December 31,
   2001, at three-month intervals or at such other intervals
   convenient to the Court, each of the Professionals must file
   with the Court and serve on the Notice Parties a request for
   interim Court approval and allowance, of the compensation
   and reimbursement of expenses sought in the Fee Applications
   filed during such period. The Interim Fee Application
   Request must include a summary of the Fee Applications that
   are the subject of the request and any other information
   requested by the Court or required by the local rules. Each
   Professional must file its Interim Fee Application Request
   within 45 days after the end of the Interim Fee Period for
   which the request seeks allowance of fees and reimbursement
   of expenses. Each Professional must file its first Interim
   Fee Application Request on or before February 14, 2002, and
   the first Interim Fee Application Request should cover the
   Interim Fee Period from October 1, 2001 through and
   including December 31, 2001. Any Professional that fails to
   file an Interim Fee Application Request when due will be
   ineligible to receive further interim payments of fees or
   expenses under the Compensation Procedures until such time
   as a further Interim Fee Application Request is submitted by
   the Professional.

G. The Debtors shall request that the Court schedule a hearing
   on the Interim Fee Application Requests at least once every
   six months. The Debtors, however, may request a hearing be
   held every three months or at such other intervals as the
   Court deems appropriate.

H. The pendency of an Objection to payment of compensation or
   reimbursement of expenses will not disqualify a Professional
   from the future payment of compensation or reimbursement of
   expenses under the Compensation Procedures.

I. Neither the payment of or the failure to pay, in whole or in
   part, monthly interim compensation and reimbursement of
   expenses under the Compensation Procedures nor the filing of
   or failure to file an Objection will bind any party in
   interest or the Court with respect to the allowance of
   interim or final applications for compensation and
   reimbursement of expenses of Professionals. All fees and
   expenses paid to Professionals under the Compensation
   Procedures are subject to disgorgement until final allowance
   by the Court.

The Debtors further request that each member of any Committee be
permitted to submit statements of expenses and supporting
vouchers to counsel for such Committee, which will collect and
file the Committee Member's requests for reimbursement in
accordance with the Compensation Procedures. The Debtors further
request that the Court limit the notice of Interim Fee
Application Requests and final fee applications and hearings
thereon as follows: the Debtors shall provide notice of
Applications to the Notice Parties and the Debtors shall provide
Hearing Notices to the Notice Parties and all other parties that
have filed a notice of appearance with the Clerk of this Court
and requested notice of pleadings in these Chapter 11 Cases.

Mr. O'Neill submits that providing notice of the Applications
and Hearing Notices in this manner will permit the parties most
active in the Chapter 11 Cases to review and object to the
Professional fees and will save unnecessary duplication and
mailing expenses. The Debtors will include in their monthly
operating reports all payments made to Professionals in
accordance with the Compensation Procedures, detailed so as to
state the amount paid to each of the Professionals. (Federal-
Mogul Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

FINOVA: UST Balks at Reimbursing Steering Committee's Fees
The Steering Committee for a group of bank debt lenders that
held approximately $4,700,000,000 of unsecured debt of Finova
Capital Corporation seeks reimbursement and payment for
reasonable compensation for legal services rendered and actual
and necessary expenses incurred from the Petition Date through
August 21, 2001. The Steering Committee contends that
reimbursement is appropriate because they made a substantial
contribution to the reorganization of the Debtors.

To recall, the Steering Committee was formed in November 2000
for the purpose of engaging in negotiations with the Debtors in
an effort to achieve a consensual workout.  Shearman & Sterling
was retained as counsel to the Steering Committee.  The firm was
heavily involved in the negotiations as well as in advising on
numerous issues pertaining to the Debtors and a possible
restructuring.  Shearman & Sterling also retained
PricewaterhouseCoopers to assist it in rendering advice to the
Steering Committee.

William H. Schorling, Esq., at Klett Rooney Lieber & Schorling
PC, in Wilmington, Delaware, tells the Court that the Steering
Committee, with the assistance of Shearman & Sterling, has
played a major role in the successful reorganization of the
Debtors.  Mr. Schorling reminds Judge Walsh that the Steering
Committee was directly involved in the attack on the "lockup"
provisions of the original Berkadia proposal.  The Steering
Committee was also instrumental in opening up the process to
competing bids in order to maximize recoveries to all creditors,
Mr. Schorling adds.  More importantly, Mr. Schorling emphasizes,
the Steering Committee's efforts were a key factor in achieving
substantial improvements to the plan proposal made at the outset
of these cases and, ultimately, in obtaining creditor support to
the Debtors' Third Amended and Restated Joint Plan of
Reorganization of Debtors Under Chapter 11 of the Bankruptcy

In addition, Mr. Schorling notes, the Steering Committee's
active participation in these proceedings, and in particular its
ability to negotiate and coordinate the resolution of numerous
issues on behalf of a large and otherwise unwieldy constituency
made it possible to achieve these results in the extremely short
time frame imposed by Berkadia.

By this application, the Steering Committee seeks an award by
the Bankruptcy Court of an Allowed Administrative Claim on
account of services rendered and reimbursement of expenses
incurred by Shearman & Sterling from the Petition Date up to the
Effective Date - August 21, 2001.  According to Mr. Schorling,
the Steering Committee specifically seeks reimbursement for
$868,983 of fees and $118,070 of accompanying disbursements for
a total of $987,053.

Mr. Schorling argues that the Bankruptcy Code allows for
reasonable compensation of professional services rendered by an
attorney of an unofficial creditors' committee in making a
substantial contribution in a chapter 11 case.  In this case,
Mr. Schorling asserts that the efforts of the Steering Committee
and Shearman & Sterling were integral to the reorganization's
progress from the proposed Berkadia Plan opposed by all major
creditor constituencies to the confirmation of the consensual
Amended Plan supported by all major creditor constituencies.

Furthermore, Mr. Schorling maintains that the Steering
Committee's efforts during the Debtors reorganization were
designed to benefit not only their own interests but also the
interests of the Debtors' estates generally, in that all
unsecured creditors benefited from the enhance Amended Plan

Mr. Schorling also claims that all expenses incurred by Shearman
& Sterling are actual and necessary in connection with
activities of the Unsecured Creditors' Committee.

Thus, the Steering Committee asks Judge Walsh to enter an order:

  (a) allowing reimbursement of their actual attorney's fees and
      disbursement expenses in the total amount of $987,053; and

  (b) authorizing and directing the Debtors to make immediate
      payment of such expenses.

                 United States Trustee Objects

Donald F. Walton, Acting United States Trustee for Region 3,
asserts that the Steering Committee is not a formal committee
approved by the Court in this matter but acted on its own
volition.  Likewise, the retention of counsel - Shearman &
Sterling - for the Steering Committee was never approved and
counsel was never appointed in any capacity by this Court.

According to George M. Conway, Esq., trial attorney for the
United States Trustee, it is doubtful that the Steering
Committee and Shearman & Sterling's activities provided
substantial benefit to the Debtors' estate.

Mr. Conway observes that the Steering Committee's application
contains tasks that may be duplicative of tasks performed by
professionals retained by the Creditors' Committee with the
approval of the Court.  "The Application also contains numerous
entries for the review of documents and telephone calls with
professionals retained by the Creditor's Committee and the
preparation of documents that could have been prepared by
Committee professionals whose retention was approved by the
Court," Mr. Conway notes.

Furthermore, Mr. Conway asserts that the work preformed by the
Applicant was performed in the normal course of their duties to
protect their own interests.

Thus if the Court determines that any reimbursement is
allowable, Mr. Conway maintains that allowance must be limited
to those tasks that provided a substantive benefit to the estate
and are not duplicative of tasks performed by Court approved
professionals. (Finova Bankruptcy News, Issue No. 19; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   

FRUIT OF THE LOOM: Inks 6th Amendment to DIP Financing Facility
Luc A. Despins, Esq., of Milbank, Tweed, Hadley & McCloy, asks
Judge Walsh to approve a sixth amendment to Fruit of the Loom's
DIP Facility Agreement.  Mr. Despins reminds the Court that
Fruit of the Loom has been authorized to borrow up to
$625,000,000, post-petition.  This amount is comprised of a
revolving facility of up to $475,000,000 and a term facility of
$150,000,000.  The revolving credit facility includes
a sublimit of $175,000,000 for letters of credit.

Mr. Despins relates that the effect of Fruit of the Loom's
operational improvements, combined with the disposition of
unprofitable business units, has enabled Fruit of the Loom to
repay the term loan under the DIP Financing Agreement and to
reduce its need for financing.

By the end of the third quarter of 2001, Fruit of the Loom had
completely paid the term loan portion of the DIP Financing
Agreement and had reduced the outstanding amount under the
revolving credit to under $100,000,000, consisting almost
entirely of outstanding letters of credit backing long-term
contingent obligations, such as customs and workers'
compensation.  Therefore, Fruit of the Loom determined to
further reduce the total facility so as to reduce its ongoing
facility fees and related expenses.

This sixth amendment extends the termination of the DIP
Financing Agreement to June 30, 2002 and reduces the amount of
the facility to more accurately reflect Fruit of the Loom's
financing needs.  In particular the sixth amendment:

   (1) deletes the last sentence of the definition of "Borrowing
       Base" in Section 1.1, which reads "Aggregate Revolving
       Loans advanced against Eligible Inventory shall not
       exceed $375,000,000;"

   (2) amends

       (a) the maximum revolver amount, reducing it to
           $150,000,000 from $375,000,000,

       (b) changes the termination date from December 31, 2001,
           to June 30, 2002,

       (c) reduces the amount in the unused letter of credit
           subfacility to $125,000,000 from $175,000,000,

       (d) reduces the amount of the total facility to
           $150,000,000 from $450,000,000 and

       (e) provides that each lender's revolving and total loan
           commitment to be such lender's pro rata share of

   (3) adds two additional capital expenditure measuring
       periods: December 31, 2001 to March 31, 2002 ($30,000,000
       maximum capital expenditures) and December 31, 2001 to
       June 30, 2002 ($50,000,000 maximum capital expenditures);

   (4) adds two additional EBITDAR measuring periods:

                  Period                        Minimum EBITDAR
                  ------                        ---------------
          December 31, 2001 to March 31, 2002     $17,681,000
          December 31, 2001 to June 30, 2002      $62,260,000

An amendment fee will be paid to each lender equal to its pro
rata share of $187,500, and an administration fee of $62,500
will be paid to the Agent.

The letter of credit sublimit under the revolving credit portion
of the facility is reduced to $125,000,000 from a previous
sublimit of $175,000,000.  This reduction is to give effect to
payments made on the term loan through the date of the Amendment
and to reduce the revolving credit to more accurately reflect
Fruit of the Loom's financing needs, reducing fees and interest
payable. (Fruit of the Loom Bankruptcy News, Issue No. 43;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   

GOLDEN BOOKS: Wants Plan Filing Time Extended Further to Jan. 2
GB Holdings Liquidation, Inc. formerly known as Golden Books
Family Entertainment, Inc. asks the U.S. Bankruptcy Court of the
District of Delaware to extend their Exclusive Plan Filing
Period and Exclusive Solicitation Period through January 2, 2002
and March 2, 2002, respectively.

The Debtors have made significant strides toward maximizing the
return to their creditors since the Petition date. The initial
120-day period, and the modest extension authorized by the
October order, would have provided the Debtors with adequate
time to evaluate their remaining assets and liabilities in light
of the Asset Sale if it is not for the Court's recent ruling
against the Warner Bros. Consumer Products license agreements.

Golden Books Family Entertainment, one of the largest children's
books publishers in the U.S., filed for chapter 11 protection on
June 4, 2001 in the U.S. Bankruptcy Court for the District of
Delaware.  Curtis J. Crowther, Esq., at White & Williams,
represents the Debtors in their restructuring efforts.  As of
March 31, 2001, the company had $156,135,000 in assets and
$215,533 in debt.

HASBRO INC: Fitch Rates $225MM Convertible Senior Notes at BB
Fitch assigns a 'BB' rating to Hasbro, Inc.'s new $225 million
2.75% convertible senior notes due 2021. Proceeds from the
issuance are being used to refinance existing debt. At the same
time the company's 'BB+' rated $650 million secured revolving
credit facility and 'BB' rated $1.15 billion existing senior
notes and debentures are affirmed. The Rating Outlook remains
Negative, reflecting ongoing softness in the traditional toy

Hasbro's ratings reflect its strong market position as the
second largest toy and game company and diverse product mix,
with particular strength in games and boys' toys. Key brands
include Pokemon, Tonka and Playskool as well as games such as
Monopoly, Clue and Yahtzee. The rating also considers the
company's weakened financial profile as well as uncertainty
regarding the success of its strategic shift away from licensed
properties and hot toys towards its core brands. Hasbro
announced a restructuring plan to refocus on its core brands and
reduce its reliance on licensed product in late 2000. As part of
the restructuring, Hasbro closed certain domestic offices,
consolidating its toy business, in order to refine its operating
cost structure. In addition, in the third quarter of 2001,
Hasbro announced additional restructurings to shift certain of
its Tiger businesses to the U.S. Toys business. Initial results
from the restructuring appear favorable as operating
profitability (measured by EBITDA/sales) increased to 13.2% in
the first nine months of 2001 from 11.8% in the same period last
year.  However, profitability remains significantly lower than
pre-2000 levels and the ultimate success of these initiatives
remain uncertain.

The softness in the toy business combined with losses stemming
from its Hasbro Interactive and businesses (both now
sold) weakened the company's financial profile significantly in
2000. More recently, weak sales at its Tiger unit have impaired
the recovery in bondholder protection measures anticipated for
2001. Fitch expects the changes being implemented to improve
Hasbro's business profile, but restoration of its credit
measures may take some time.

INACOM CORP: Has Until February 1 to File Chapter 11 Plan
Judge Peter J. Walsh of the U.S. Bankruptcy Court for the
District of Delaware granted Inacom Corp. an extension on their
Exclusive Periods.  The Debtors' exclusive period during which
to file a plan of reorganization is extended through February 1,
2002 and the Company's exclusive period during which to solicit
acceptances of that plan runs through April 2, 2002.

Inacom Corp. filed for Chapter 11 protection on June 16, 2000 in
the U.S. Bankruptcy Court for the District of Delaware. Laura
Davis Jones and Christopher James Lhulier at Pachulski Stang
Ziehl Young & Jones PC represent the Debtors in their
restructuring efforts.

INDYMAC WIRES: Fitch Rates $175 Million Securities at BB+
Fitch, the international rating agency, has assigned its `BB+'
rating to the $175,000,000 IndyMac Capital Trust I Warrants and
Income Redeemable Equity Securities Units (IndyMac WIRES).

Fitch's rating on the IndyMac WIRES reflects the instrument's
structural junior payment priority to all senior obligations of
IndyMac Bancorp, Inc. (IndyMac) and interest deferral provision
of up to five consecutive years.  Each IndyMac WIRES unit
includes a trust preferred security and a warrant to purchase
IndyMac common stock. Each warrant gives the holder the right to
purchase approximately 1.6 shares of IndyMac common stock at any
time prior to the IndyMac WIRES maturity in 2031. The warrants
and the preferred securities may not be called by IndyMac until
November 2006. Proceeds from the offering will be used for
IndyMac capital enhancement and other general corporate
purposes. The Rating Outlook for the IndyMac Wires is Stable.

At this time Fitch affirms the outstanding ratings for IndyMac
and its primary operating subsidiary IndyMac Bank. The ratings
assessment of IndyMac reflects a financial profile that
continues to evolve from its origins as a real estate investment
trust to a thrift holding company and remains dominated by real
estate exposures. Despite considerable structural changes
(IndyMac's formal conversion to a thrift holding company
occurred in July 2000), IndyMac's long time business model of
originating residential mortgages and related products via
electronic and traditional channels remains intact.

This business model has historically produced satisfactory risk-
adjusted profitability measures, and it is our expectation that
within the current economic and yield curve environment that
such returns will continue over the near term. As part of its
conversion approval, the Office of Thrift Supervision (OTS)
required that IndyMac abide by two specific capital conditions.
The OTS requires that IndyMac's core capital ratio be maintained
at a level of 8.00% for its first three years as a depository
institution, while also requiring it to double the risk-based
capital weighting assigned to its subprime loans. IndyMac has
continually met the capital requirements of the OTS since its

     IndyMac Bancorp Inc.

         * Long-term Issuer `BBB-`;
         * Short-term Issuer `F2';
         * Individual `B/C';
         * Support `5';

Rating Outlook Stable.

     IndyMac Bank

         * Long-term Deposits `BBB';
         * Long-term Issuer `BBB-`;
         * Short-term Issuer `F2';
         * Short-term Deposits `F2';
         * Individual `B/C';
         * Support `5'.

INTEGRATED HEALTH: Selling Litho Stock for $42.5MM or More
In line with its business strategy and to generate additional
working capital, Integrated Health Services, Inc., and its
debtor-affiliates seek to sell Litho Group, Inc., a wholly owned
subsidiary of IHS and a non-debtor corporation organized under
the laws of Delaware. After a lengthy process of exploring
options, valuation, and marketing involving solicitation,
discussions and review, the parties proceeded to negotiate and
execute a Stock Purchase Agreement among the Debtors, Litho and
HealthTronics Surgical Services, Inc., providing for the sale of
the Litho Stock to HealthTronics at a purchase price of
$42,500,000 which may be adjusted upward or downward depending
on the balance sheet at closing, subject to Court approval and
subject to higher and better offers. By separate motion, the
Debtors sought and obtained the Court's authorization of terms
and procedures to govern the submission of competing bids for
the Litho Stock (the Bidding Procedures) including, if
necessary, the occurrence of an auction. Pursuant to the Court's
Procedures Order, an auction will be held at the offices of Kaye
Scholer LLP on December 3, 2001 at 10:00 a.m, subject to change.
On December 6, 2001 Judge Walrath will convene a Sale Hearing on
the Approval Motion to decide on the final outcome of the
proposed sale. The Sale Hearing may be adjourned.

Deadline for responses or objections, if any, to the Approval
Motion is 4:00 p.m. on November 28, 2001, provided however that
in the event a Qualified Bid is submitted and HealthTronics is
not the prevailing party at the auction, counsel for Louisiana
Lithotript, Inc. shall be permitted to file with the Bankruptcy
Court and serve on each party on the Core Service List a
supplemental response or objection to the relief requested in
the motion by noon on December 5, 2001.

By the Sale Motion, the Debtors seek the entry by the Court of
an order, to be entered at the conclusion of the Sale Hearing
and the Auction (the "Approval Order"), inter alia, (i)
authorizing and approving the Stock Purchase Agreement, (ii)
authorizing the sale of the Litho Stock to HealthTronics, free
and clear of all liens, claims and encumbrances, in accordance
with the Stock Purchase Agreement, or to the successful bidder,
if any, at the Auction, and (iii) authorizing the Debtors to
consummate all transactions related to the above.

Litho is essentially a holding company, the primary assets of
which consist of the stock of various subsidiaries holding
interests in nine lithotripsy partnerships, one lithotripsy
limited liability company, a wholly-owned lithotripsy
partnership, a wholly-owned lithotripter maintenance company, a
wholly-owned management company and two partnerships that
provide prostrate treatment services. Lithotripsy is a
noninvasive medical procedure for the treatment of kidney
stones. Litho's holdings principally provide lithotripsy
services to approximately 150 hospitals and surgery centers in
13 states.

Since the Filing Date, the Debtors, with the assistance of their
financial advisor and investment banker, UBS Warburg LLC, have
been exploring various restructuring options including the
potential sale of certain non-core assets and businesses which
could be divested in order to maximize the value of the Debtors'
estates. As a result, the Debtors determined to divest of 100%
of the issued and outstanding capital stock of Litho.

At the instruction of the Debtors, UBS Warburg assessed the
value of Litho and developed and implemented a marketing plan
with respect to the sale of the Litho Stock on the Debtors'

UBS Warburg and the Debtors identified 29 potential buyers. At
the direction of the Debtors and the Committee, UBS Warburg
contacted these 29 potential buyers in April 2001. Of these, 16
indicated an interest in pursuing a transaction. Afte
discussions, eight of the 16 potential buyers gave preliminary
indications of interest.  Seven met the criteria established by
the Debtors, the Committee, and UBS Warburg with resepct to
likelihood of closing and the terms of purchase proposed. These
seven potential buyers attended management presentations and
commenced due diligence. By August 1, 2001, UBS Warburg received
five acquisition proposals for the Litho Stock. The Debtors
decided to pursue further discussions with three of the five
potential buyers and held meetings with each such prospective
buyer, IHS, UBS Warburg, and the Committee's financial advisor,
Arthur Andersen, to assess each buyer's proposal. After getting
further financial and legal due diligence, by September 7, 2001,
each of the three potential buyers had submitted a revised
acquisition proposal. The Debtors, after consultation with UBS
Warburg and Arthur Andersen, ultimately selected a proposal from
HealthTronics. Further negotiations then culminated in the
execution of the Stock Purchase Agreement.

The Stock Purchase Agreement includes the following principal

The Parties. The parties are (i) IHS, as Seller, (ii) Litho, and
(iii) HealthTronics, as Buyer.

The property to be sold to the Buyer pursuant to the Stock
Purchase Agreement is the Litho Stock, which consists of
100% of the issued and outstanding capital stock of Litho.

The total consideration for the Litho Stock is $42,500,000 (the
"Purchase Price") in cash, subject to upward or downward
adjustment based on the difference between the amount of Working
Capital reflected on the Closing Balance Sheet and the July 31,
2001 Balance Sheet.

Deposit. The Buyer has delivered to an Escrow Agent a $2,000,000
Earnest Money Deposit, which shall be applied toward the
Purchase Price at Closing, or, under certain circumstances,
shall be distributed to either the Buyer or the Seller, in
accordance with the provisions of the Stock Purchase Agreement.

Indemnification: holdback escrow. The Stock Purchase Agreement
contains customary representations and warranties by the Buyer
and the Seller. At the Closing, the Seller will deliver to an
escrow agent $4,000,000 to be held as security for the Seller's
indemnification obligations for any breach of representations
and warranties. The escrow fund shall be distributed to the
Seller on the earlier of (x) the first anniversary of the
Closing Date and (y) the date a plan of reorganization on behalf
of Seller is confirmed by the Bankruptcy Court, but in no event
prior to June 30, 2002, provided that no claim for
indemnification has been asserted by the Buyer. The Seller's
maximum aggregate liability for any breach of its
representations and warranties is $4,000,000.

Higher and Better Offers. The Stock Purchase Agreement is
subject to the submission by third parties of higher and better
offers for the purchase of the Litho Stock.

The Debtors submit that the sale of the Litho Stock to the Buyer
is "under a plan" within the meaning of section 1146(c) of the
Bankruptcy Code and therefore should be exempt from the
imposition of any stamp or similar tax because consummation of a
sale of the Litho Stock to the successful bidder at the Auction
is clearly essential to the preparation and consummation of a
chapter 11 plan in the Debtors' cases. It is anticipated that
the proceeds will ultimately be used to maximize the value of
the estates as working capital and/or to be distributed to
creditors under a plan.

Although the Debtors do not believe that any liens or claims
exist, in an abundance of caution and, to the extent claims or
liens are asserted, the Debtors request that the Court find in
the Approval Order that the sale of the Litho Stock is free and
clear of all liens against the stock of any of the direct or
indirect subsidiaries of Litho, as well as any guaranty claims
against Litho or any of the Litho Subsidiaries arising from
prepetition indebtedness owed by IHS.

The Debtors believe that the proposed sale is in the best
interests of Debtors, their creditors and their estates for the
benefits this will bring. Further, the Debtors submit that the
Stock Purchase Agreement was negotiated at arm's-length and the
Buyer's proposal as contained in the Stock Purchase Agreement
represents the highest and best offer at this stage. The
marketing efforts undertaken by UBS Warburg when coupled with
the auction process will maximize the value realized from the
sale of the Litho Stock, the Debtors represent.

The Debtors request that the Court specifically find in the
Approval Order that the Debtors may sell the Litho Stock without
the consent of the partners or members of the partnerships and
the limited liability company, respectively, in which Litho's
wholly-owned subsidiaries hold interests. The Debtors tell the
Court that because Litho is a holding company which wholly owns
various corporations, which in turn hold interests in
lithotripsy partnerships and a limited liability company, Litho
is not a party to any contractual agreements with the limited
partners or members of the underlying partnerships or limited
liability company, respectively and the proposed sale does not
require the consent of the partnerships, the partners thereof or
the limited liability company or the members thereof. However,
the Debtors anticipate that certain partners and/or members may
take the position that the sale of the Litho Stock would require
their consent, and that a sale without their consent would give
rise to claims against Litho and/or IHS. Because the outcome of
any such objection could affect the Debtors' business judgment,
the Debtors request that the Court dispose of any such objection
prior to the commencement of the Auction and Hearing.
(Integrated Health Bankruptcy News, Issue No. 22; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   

KMART CORP: Incurs Loss of $127MM on $8BB Sales in Third Quarter
Kmart Corporation (NYSE: KM) announced that for the 13-week
quarter ended October 31, 2001, net sales were $8.019 billion, a
decrease of 2.2% from $8.199 billion for the 13-week period
ended October 25, 2000.  As previously reported, same-store
sales decreased 1.5% in the third quarter of fiscal 2001.  The
Company reported a net loss of $224 million for the 13-week
quarter ended October 31, 2001, versus a net loss of $67 million
for the 13-week period ended October 25, 2000.  Excluding non-
comparable items, primarily related to the charge of
restructuring the supply chain operations, the Company's net
loss was $127 million for the third quarter of 2001.

"We continue to work at fixing our core business by being in-
stock, pricing competitively and providing an excellent shopping
experience for Kmart customers.  We have made considerable
progress in all of these areas but have a lot more work to do.  
During this past quarter, we completed all of our store resets,
launched BlueLight Always everyday low pricing for our frequency
categories and installed self-checkout registers in more than
1,000 stores," said Chuck Conaway, Chairman and CEO of Kmart
Corporation.  "We are committed to our long-term strategy to be
the authority for Mom focusing on her two most emotional
purchases by providing her value pricing on her everyday needs
and a quality selection for her home and children's needs.  We
are focused on eliminating Kmart's liabilities and building a
bridge of trust with Mom so that she can rely on us day in and
day out."

Gross margin for the third quarter of 2001 was 20.6% of sales,
compared to 20.5% last year, excluding non-comparable items.  
The increase in gross margin is due to lower food and consumable
distribution costs under the Company's arrangement with Fleming
and the reduction of shrink, which offset the increase in sales
of high frequency categories, which carry a lower margin rate.  
In addition, the reductions in promotional and clearance
markdowns offset the price reductions attributable to the
BlueLight Always program. Selling, general and administrative
expense as a percentage of sales, was 21.6% in the third quarter
of 2001 versus 20.8% in the same quarter in 2000, excluding non-
comparable items.  The increase was due primarily to additional
investment in store labor that Kmart committed to last year to
enhance customer service.

The third quarter 2001 results include a charge of $148 million
($94 million after tax) related to the restructuring of certain
aspects of Kmart's supply chain operations.  This restructuring
program focuses on the supply chain infrastructure, including
the reconfiguration of the distribution center network and
implementation of new operating software across the supply

For the third quarter, Kmart opened two supercenters and two
discount stores, closed four discount stores and converted ten
discount stores into supercenters.  As of October 31, 2001,
Kmart operated 2,113 stores compared to 2,163 stores last year.

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

KNOWLEDGE HOUSE: Creditors Okay Proposal Under BIA in Canada
Knowledge House Inc. (TSE:KHI) announced that its unsecured
creditors have approved the proposal by the company filed on
October 26, 2001 under the Bankruptcy and Insolvency Act
(Canada). At the meeting, which took place in Halifax at
approximately 6:00PM local time Monday, 78% of the unsecured
creditors representing 76.7% of the indebtedness voted in favor
of the proposal.

Under the terms of the proposal, preferred creditors of KHI,
including employees, will receive Class A preferred shares of
KHI in exchange for their claims, on the basis of one share per
dollar of debt proven. Other unsecured creditors of KHI will
receive Class B preferred shares of KHI in exchange for their
claims, on the basis of one share per dollar of debt proven. It
is expected that approximately $2 million to $3 million in
unsecured debt will be converted to Class A preferred shares or
Class B preferred shares pursuant to the proposal.

The Class A and Class B preferred shares are each 4% cumulative
preferred shares, redeemable at the option of KHI and
convertible at the option of the holder into common shares of
KHI at the then-current market price of KHI common shares, after
two years in the case of the Class A preferred shares and after
four years in the case of the Class B preferred shares. Class A
preferred shares have priority over the Class B preferred
shares. Claims of secured creditors are unaffected by the

The creditors' meeting to vote on the proposal had originally
been scheduled for November 22, 2001, but had been adjourned on
two occasions to consider, among other things, a secured
creditor claim on behalf of the Royal Bank of Canada that had
not been contemplated by the company or its Trustee, Ernst &
Young Inc. at the time of the proposal. Royal Bank, which is
owed between $400,000 and $500,000 by KHI under a guarantee of
indebtedness of a subsidiary, is claiming a secured interest
under a 1988 assignment of books debts instrument. KHI disputes
the validity of the security.

The proposal remains subject to court, shareholder and other
required regulatory approvals. Post proposal, KHI will need to
secure additional financing in order to resume operations. The
company has received an expression of interest from another
Canadian education company in licensing and other possible
transactions in relation to its intellectual property and in a
potential future business combination.

KHI ceased operations on September 13, 2001 due to a lack of
available financing. At that time all employees were terminated.
KHI filed a Notice of Intention to make a proposal to creditors
on September 25, 2001. While under the protection of the
Bankruptcy and Insolvency Act, the company has been engaged in a
process of disposing of its excess equipment and capital assets
and protecting its intellectual property consisting principally
of educational programs and related software. The Board of
Directors has remained in place but the employment of all
officers, other than the Chair and CEO, have been terminated.
Dan Potter, Chair and CEO, has continued to provide services to
the company without compensation in order to complete the
proposal process.

KHI held its third quarter Board Meeting Tuesday and will be
releasing its financial results tomorrow for the quarter and the
nine months ended September 30, 2001. The company will report no
revenue in the third quarter and will have significant losses,
including losses resulting from write-downs of investments in
subsidiaries and other assets, including goodwill.

Before its cessation of operation, KHI designed collaborative
problem- based learning programs and provided related services
for secondary and post- secondary education, transition to work
and corporate markets.

LTV CORP: Committee Reaches Deal with USWA on Labor Pact Changes
The United Steelworkers of America (USWA) and the Official
Unsecured Creditors Committee of LTV Steel, the nominal owners
of the company (OTC Bulletin Board: LTVCQ), reached agreement on
changes to the recently-negotiated Modified Labor Agreement
(MLA) that Steelworkers President Leo W. Gerard said he is
"confident will satisfy the concerns of lenders and clear the
way for the Emergency Steel Loan Guarantee Board to certify the
$250-million loan needed to save LTV."

Gerard said the Union is hopeful that the changes to the MLA,
which include some $150 million in additional contributions --
proportionately allocated to both salaried and hourly workers --
will win certification of the loan and save the LTV from what he
termed "the considerable damage done by top management's
premature and reckless decision to file for a shutdown while
this agreement was still being negotiated.

"Our Union and the Creditors Committee have worked diligently
from day one," Gerard said, "to create a cooperative environment
in order to save LTV's steelmaking operations.  At every turn
since LTV's bankruptcy filing last December, the current
management has proved destructively contentious and divisive.  
They've repeatedly threatened to devastate the lives of our
members, tens of thousands of retirees, and the communities they
work and live in."

"Their filing for a shutdown last week," said USWA District 1
Director David McCall, "was the most outrageous and damaging
example of their recklessness.  By their actions, they've shown
that they'd rather sacrifice the living standards and well-being
of 85,000 steelworkers and steelworker retirees and their
dependents than fight to save the company they've paid
themselves millions in retention bonuses to run."

Gerard said, "We are left no choice but to call for the current
management to be replaced with leadership who will cooperate
with us and the Creditors in working to secure certification of
the $250-million loan by the Emergency Steel Loan Guarantee
Board.  With 26 of the nation's leading steel companies having
already gone into bankruptcy, all of us have known for some time
that only action by the federal government will save this
company and the American steel industry."

The USWA said that details of the new five-year agreement would
not be released until it had been submitted to its membership at
LTV for a ratification vote.  However, the Union said that the
additional contributions beyond those made in the August MLA
include some wage cuts, deferred wage increases, additional
efficiencies to be wrung from health care costs, and accelerated
use by LTV of the Union-negotiated Voluntary Employee Benefit
Association (VEBA) funds.

In turn, the LTV steelworkers' share of stock ownership would
increase to 35%, once the company returns to profitability, in
addition to a 20% share of operating profits.

The Union is expected to seek a ratification vote as soon as
possible and, assuming ratification of the agreement, will join
the Creditors Committee and hopefully a new LTV management in
pressing for certification of the $250-million loan essential
for saving the company.

LERNOUT & HAUSPIE: Court Approves Sale of Assets to Dictaphone
Finding that time is of the essence in this sale, that
Dictaphone has not acted in any manner which would permit
avoidance of the sale, and that the consideration to be paid
constitutes reasonably equivalent value and fair consideration,
Judge Wizmur gives up trying to satisfy everyone by
conditionally approving the transfer of assets and licensing of
technology from the L&H Parties - N.V. and Holdings - to
Dictaphone. She enters her Order approving the sale on the terms
and conditions as stated in the Motion.  The language requested
by AllVoice is included in the Order.

In addition, the Debtors requested an amendment to the Asset
Purchase Agreement creating certain reserves and
indemnifications between the Debtors in light of the reservation
of rights granted to AllVoice and, presumably, in light of the
$54 million in patent infringement claims asserted against the
Debtors by AllVoice in its Proofs of Claim. The reserves and
indemnifications relating to AllVoice total $1.5 million.  
(L&H/Dictaphone Bankruptcy News, Issue No. 15; Bankruptcy
Creditors' Service, Inc., 609/392-0900)  

METALS USA: Court Allows Payment of Employee Wages & Benefits
Metals USA, Inc., and its debtor-affiliates seek an order
authorizing the payment of their prepetition employee
obligations, including:

A. Compensation Obligations - Debtors estimate that their
   obligations to salaried employees for accrued & unpaid
   wages & salaries aggregate approximately $7,733,332.88, and
   which the Debtors intend to continue paying. Debtors employ
   about 4,000 employees in various businesses approximately
   75% make less than $18 per hour. Amounts to be paid per
   employee will not exceed the $4,650 priority claim

B. Temporary Employee Obligations - Debtors utilize various
   temporary agencies to fill gaps in their labor force.
   Workers from these agencies are not employees of the
   Debtors, and thus not compensated through payroll accounts
   rather, Debtors pay agencies for these services. Debtors
   estimate that unpaid obligations pertaining to these
   services is about $208,000, representing payment for 200
   employees within 90 days prior to petition date.

C. Independent Contractor Obligations - Debtors employ numerous
   independent contractors providing various necessary
   services, and payment to which varies according to the
   terms of the agreements. Debtors estimate that accrued and
   unpaid pre-petition obligations to independent contractors
   amount to $160,751.25.

D. Employee Benefits Obligations - Debtors have established
   various employee benefit plans including medical and health
   insurance, life insurance, dental insurance, disability
   benefits, vacation pay, sick time, personal days, holiday
   pay, leave of absence, 401(k) plan, incentive compensation,
   tuition reimbursement, temporary housing and other similar
   benefits. Debtors estimate accrued & unpaid employee
   benefits amount to $946,613.19 plus monthly aggregate
   amount of $1,893,226.37. Without these benefits, Debtors
   will be at substantial disadvantage in providing
   competitive compensation packages and assurances of future

E. Reimbursement Obligations - Debtors customarily reimburse
   employees who incur a variety of business expenses in the
   ordinary course of performing their duties on behalf of the
   Debtors, including travel, meals and other related
   expenses. Debtors estimate that obligations for expense
   reimbursements made to employees aggregate approximately

F. Worker's Compensation Program Obligations - Payment of any
   claims against the Worker's Compensation Programs which
   arose pre-petition is essential to the continued operation
   of the Debtors' business. Average monthly claims is
   $116,888 and Debtors estimate that accrued and unpaid
   claims are approximately $58,444.

G. Dishonored Employee Check Obligations - Debtors seek
   authority to exercise heir discretion to issue new post-
   petition checks or electronic fund transfers on account of
   their pre-petition employee obligations which are dishonored.
   Debtors cannot predict how large dishonored check
   obligations will be.

The Debtors seek authority to pay these employee obligations
because the continued the continued employment and sustained
morale of their employees is critical to their successful

Jonathan C. Bolton, Esq., at Fulbright & Jaworski LLP in
Houston, Texas, contends that payment of these obligations at
this time is appropriate, because virtually all of the employee
obligations that arose pre-petition constitute priority claims
that must be paid in full under a plan of reorganization. Taxing
authorities also hold a priority claim for payment of trust fund
and taxes, and money payable for trust fund taxes are not
property of a debtor's estate. Mr. Bolton adds that payment of
all pre-petition obligations is in the best interest of the
Debtors, their creditors and all parties-in-interest, and will
enable the Debtors to continue to operate their businesses
economically and effectively without disruption. The reason for
this is that the Debtors' employees are vital to their
reorganization and deterioration of employee morale at this time
would have a devastating impact on the Debtors and their ability
to reorganize.

Mr. Bolton also points out that Workers Compensation is
mandatory under state laws and very important in an industry
like the Debtors' where there is substantial metals fabrication.
The Debtors cannot afford to have their workers worrying whether
their claims will be paid if they get hurt. Mr. Bolton asserts
that it is essential to the continued operation of the Debtors'
businesses that all claims related to Workers' Compensation
Program be paid on a timely basis because the risk that eligible
claimants will not receive payments for employee-related
injuries will have an adverse effect on the financial well-being
and morale of the Debtors' employees and their willingness to
continue working for the Debtors.

                        * * *

Finding the relief requested necessary and in the best interest
of the Debtors, their creditors and all parties-in-interest,
Judge Greeendyke grants the Debtors' motion.

Judge Greendyke also authorizes the Debtors to make immediate
payment of those amount of employee obligations which accrued
pre-petition, including Compensation Obligations; Temporary
Obligations; Independent Contractor Obligations, provided that
these independent contractors are under contract with the
Debtors going forward; Employee Benefits Obligations, including
only medical and health insurance, life insurance, dental
insurance, and disability benefits, with payment of other types
of employee benefits to be considered on November 12, 2001;
Workers' Compensation Obligations, excluding payment and
resolution of future claims; and Dishonored Employee Check
Obligations up to a maximum of $4,650 per employee. (Metals USA
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

NEW YORK REGIONAL RAIL: Feldman Replaces Ehrlich as Auditors
In reporting to the SEC on its restated financial statements for
the years ended December 31, 1998 and December 31, 1999, New
York Regional Rail Corporation indicates that it has incurred
substantial losses since it was formed. Also the Company expects
to continue to incur losses until such time, if ever, as it
earns net income. Management says it has taken many steps to
improve profitability and increase revenues. Such steps include
the acquisition of JST, which has increased gross profit. In
addition the Company has reduced outstanding liabilities
substantially which has in turn reduced interest expense. The
Company has also made efforts to reduce administrative expenses
by the reduction of its workforce and has reduced operating
costs by better utilization of manpower and equipment and other
expense reductions.

Effective June 8, 2000 the Company retained Feldman Sherb
Horowitz & Co., P.C. to act as the Company's independent
certified public accountants. In this regard Feldman/Sherb
replaced Schneider Ehrlich & Associates, LLP, which resigned on
June 1, 2000. Schneider/Ehrlich audited the Company's financial
statements for the years ended December 31, 1997 and 1998. The
report of Schneider/Ehrlich for these years was qualified with
respect to uncertainty as to the Company's ability to continue
as a going  concern. As a result of a judgment entered against
the Company prior to December 31, 1998, the Company's financial
statements were restated to reflect an increase in liabilities
and an increase in retained earnings deficit for the same

The Company is part of the national railroad system and holds a
Surface Transportation Board certificate of convenience and
necessity for the movement of rail freight by rail barge across
the New York City harbor. The Company exchanges rail cars with
the Canadian Pacific ("CP"), Norfolk Southern ("NS") and CSX
Transportation ("CSX") railroads in New Jersey. In Brooklyn, the
Company interchanges freight with the New York and Atlantic
Railroad ("NYA").

NOBLE CHINA: Seeks Options to Meet Operating & Debt Obligations
Noble China Inc. (TSE: NMO) reported net sales of $8.8 million
and a net income of $0.3 million for the three months ended
September 30, 2001 compared to net sales of $10.5 million and
net income, before write-offs of $18.2 million, of $0.8 million
for the third quarter in 2000. The write-offs in the prior year
period included the write down of the amount due from a related
party, a provision for loss on a legal claim and amortization of
goodwill. Sales declined 16.2% and net income 66.3% for the
third quarter in 2001 compared to the third quarter in 2000.

During the nine months ended September 30, 2001, net sales were
$27.7 million and the net loss was $2.9 million. During the nine
months ended September 30, 2000, net sales were $38.7 million
and net income $3.4 million, before write-offs. Sales declined
28.4% and a net loss was incurred in the nine-month period
compared to the prior year period.

The sales decline over the past number of years continued but at
a slower rate and at the end of the quarter sales were
marginally higher than the same period in the prior year.
Competitive conditions continued to be difficult for premium
beer sales in China. Sales in the fourth quarter of 2001 may
demonstrate whether the decline has been further slowed.

The facilities restructuring into Blue Ribbon Enterprises,
encompassing production, sales, marketing and administration was
completed during the quarter and our share of the severance cost
for the 583 employees that retired or were laid-off has already
been more than recovered from labor cost savings as most of the
costs associated with the restructuring were absorbed by the
partners in China.

This major achievement, in the context of the Chinese market,
with a one third reduction of the work force through retirements
or lay-offs, is a significant milestone in the development of
the business. Blue Ribbon Enterprises is now expected to be more
efficient and effective in its production, distribution,
marketing and sales operations. Although we have seen only
limited positive results in the third quarter, we are hopeful
that recent changes made in management and the sales
organization will further stabilize the business and lead to
improvements in marketplace performance.

                         Legal Matters

The Company continues to be distracted and affected by legal
actions in China and in Canada. The legal cases require
considerable administrative time and legal defense costs are a
significant ongoing expense.

In 1998 Lei Kat Cheong's brother obtained a judgement against
the Company from the Guangdong Shenzhen Intermediate People's
Court for funds purportedly advanced to Zhaoqing Blue Ribbon
Brewery Noble Ltd. in 1993-4.  In March 2001, to satisfy this
judgement, the Court transferred RMB 30.0 million from the bank
account of Zhaoqing Noble Brewery to the Shenzhen Court. These
funds have been disbursed to Lei Kat Cheong's brother and
although efforts continue to address this case, the likelihood
of recovery is remote. This amount was written off in fiscal
year 2000.

The Shandong Provincial High Court, Shandong Province, PRC, has
advised Noble China Inc. that the Court intends to hear a
lawsuit filed by China Coast Property Development Ltd. against
Noble China Inc. and Shandong Noble Brewery Ltd. China Coast
Property Development Ltd. is a company associated with Noble
China Inc.'s former Chairman Lei Kat Cheong.

The suit claims that Noble China Inc. failed to pay China Coast
Property Development Ltd. for the transfer of the 70% interest
in Shandong Shouguang Brewery Co. Ltd. to Noble China Inc. in
1994. The claim is for RMB53.2 million (approximately CDN$9.7

The Company has been advised by the City of Shouguang that
Shandong Noble Brewery Ltd., as a result of insolvency, sold the
brewery in 2000 and the sale proceeds were applied against
obligations of the brewery. Noble China Inc. maintains that it
fulfilled its responsibilities in the 1994 transaction and has
retained legal counsel in China to represent the Company.

The Company was advised on November 18, 2001 that India
Breweries Inc., an Ontario incorporated company, and Stephen
Judge had filed a lawsuit against the Company claiming that a
merger of Noble China Inc. with India Breweries Inc., that
allegedly was negotiated and agreed to in February 1997, was not
concluded due to Noble China Inc.'s failure to fulfill its
obligations.  India Breweries claims to have brewing interests
in India and Stephen Judge claims to have been its principal
shareholder in 1997. The suit seeks damages in excess of $250

Legal counsel and management are reviewing the statement of
claim and the Company's records pertaining to the alleged
agreement. While our review is incomplete at this time, the
Company believes that the claim of India Breweries and Stephen
Judge is completely without merit and this action will be
vigorously defended.

                Liquidity and Capital Resources

The most serious problem the Company continues to face is
funding to finance its corporate activities and interest on the
subordinated convertible debentures. The next interest payment
is due November 30, 2001, in the amount of CDN$1.35 million.

The liquidity problem is related to difficulties in securing
approval by the PRC Foreign Exchange Authority, for currency
exchange to enable remittance of dividends to Canada by Zhaoqing
Blue Ribbon Brewery Noble Limited. To date exchange to permit
remittance of the balance of the 1999 dividend, in the amount of
RMB14.5 million (CDN$2.9 million) has not yet received approval.
In addition to the balance of the 1999 dividend, remittance of
Noble China's share of the dividend for 2000, in amount of RMB
45.3 million (approximately CDN$9.0 million) is also dependent
upon PRC Foreign Exchange Authority approval.

The Company, with assistance from Canadian Government
representatives in China and our Chinese partners in the brewery
joint venture, has exerted every effort to resolve issues with
the PRC Foreign Exchange Authority. The difficulties with
authorities in China have now been determined to relate to
recently identified technical irregularities in transactions
between the Company and the joint venture at its inception in
1993-4. A plan has been worked out to correct this roadblock and
while there can be no guarantee, management is hopeful that
exchange will be made available to the Company in the very near
future which will permit the resumption of dividend remittances.

Due to the inability to date to remit its funds from China, it
has become necessary for the Company Directors' and Management
to review alternatives should the Company be unable to meet its
financial commitments in the event of insolvency.

                      Looking Forward

Difficulties in the market for premium beer sales are not
expected to change and competitive pressures will not abate in
the near term. In addition, the renewed attack from Lei Kat
Cheong in Shandong Province and the lawsuit filed this week by
India Breweries are further distractions for the business that
must be addressed.

Blue Ribbon Enterprises is in an uncertain period following the
extensive changes made in the organization. There can be no
assurance that the new management and restructured sales
organization will successfully arrest sales volume declines in
the near term. However, we are hopeful that, in time the new
management in China, with a renewed energy and emphasis on the
marketplace, will be able to reestablish sales momentum.

Despite successful efforts to combine the resources of Zhaoqing
Blue Ribbon Brewery Noble Ltd., Zhaoqing Blue Ribbon Highworth
Brewery Ltd. and Blue Ribbon Marketing Company Ltd. into Blue
Ribbon Enterprises, there can be no assurance that the Company
will be able to return to meaningful levels of profitability in
the near future.

The Company remains totally dependent on profit distributions
from its joint venture in China to pay interest and corporate
expenses. The joint venture in China has suffered a difficult
setback in the market and the prospects for a short-term
turnaround and future profits are uncertain. The recently
filed lawsuits are also of considerable concern and outcomes
will not be known for some time. Further, even while the
prospects for future profit distributions from China remain
unclear, if the PRC Foreign Exchange Authority continues,
despite the recent tentative resolution of difficulties, not to
approve remittances to Canada needed to fund corporate
obligations, the Company will soon face insolvency.

PDC INNOVATIVE: Seeking Financial Options to Continue Operations
P.D.C. Innovative Industries, Inc. has a limited history of
operations.  Since its inception in September 1994, P.D.C. has
engaged principally in the development of its products,  
including the Hypo-Pro, which has not yet been approved for sale
in the United States.  P.D.C. currently has no source of
operating revenue and has incurred net operating losses since
its inception through September 30, 2001 of approximately
$3,749,249.  Such losses have resulted  principally from costs
associated with research and development and from general and
administrative costs associated with P.D.C.'s operations.  
P.D.C. expects operating losses will continue until at least
approximately the second quarter of 2002 due principally to the
anticipated expenses associated with the planned
commercialization of the Hypo-Pro and other  activities.

P.D.C. has received an opinion from its auditors for the fiscal
year December 31, 2000  stating that the fact that P.D.C. has
suffered substantial losses and has yet to generate an internal
cash flow raises substantial doubt about P.D.C.'s ability to
continue as a going concern.  This opinion may have an adverse
effect on P.D.C.'s ability to raise additional funds.

P.D.C. needs additional capital to fund its operations, and is
seeking to obtain additional  capital through debt or equity
financing, and collaborative licensing or other arrangements
with strategic partners.  If additional funds are raised by
issuing equity securities,  further dilution to existing
stockholders will result, and future investors may be granted
rights superior to those of existing stockholders.  There is no
assurance that additional financing will be available when
needed, or if available, will be available on acceptable  terms.  
Insufficient funds may prevent P.D.C. from implementing its
business strategy and  will require P.D.C. to further delay, may
require P.D.C. to license to third parties rights to
commercialize products or technologies that P.D.C. would
otherwise seek to develop itself, or to scale back or eliminate
its other operations.

PILLOWTEX CORP: Intends to Assume Supply Agreements with Wellman
Under 2 supply agreements dated 1998, Pillowtex Management
Services Company, one of the Debtors, agreed to purchase, and
Wellman, Inc. agreed to supply, specified minimum quantities of
certain branded and unbranded polyester fiber.  The 1998
agreements expired on December 31, 2000, Michael G. Wilson,
Esq., at Morris, Nichols, Arsht & Tunnell, in Wilmington,
Delaware, reports.

To replace the 1998 agreements, Mr. Wilson continues, Pillowtex
Management and Wellman entered into 2 new supply agreements for
polyester fiber dated September 2000, which are set two expire
on December 31, 2001.  Mr. Wilson informs the Court that, as of
the Petition Date, Pillowtex Management owed Wellman
approximately $1,700,000 for polyester fiber delivered under the
1998 agreements.  Pillowtex Management negotiated with Wellman
terms under which Wellman would provide credit during the
bankruptcy, and Wellman agreed to provide 10-day terms.

Maintaining polyester-supply contracts with Wellman is in the
best interests of the Debtors' estate and creditors, Mr. Wilson
tells Judge Robinson.  Accordingly, Mr. Wilson relates,
Pillowtex Management has negotiated an arrangement modifying the
2000 Agreements, which are set forth in an Addendum to each
agreement.  Mr. Wilson mentions some of the material terms of
the Addenda:

    (i) The term for each of the 2000 Agreements is extended
        through December 31, 2002.

   (ii) The pricing will be reduced by either $0.01 or $0.03 per
        pound, depending on the type of fiber, which will result
        in an approximate savings to Pillowtex Management of at
        least $1,000,000 over the term of the agreements.

  (iii) Wellman will provide Pillowtex Management with 45-day
        credit terms.

   (iv) Pillowtex Management will pay the pre-petition balance
        over 6 months.

    (v) The 2000 Agreements will be assumed.

By this motion, Pillowtex Management seeks an order authorizing
it to assume the 2000 Agreements, as modified by the Addenda,
and pay the pre-petition balance related thereto.

Mr. Wilson maintains that assuming the 2000 Agreements and
paying the pre-petition balance is essential to the success of
the Debtors' operations and is in the best interests of the
Debtors' estate and creditors.

Wellman is 1 of only 3 companies in the United States that
currently produce and supply the type of polyester fiber used in
the Debtors' manufacturing operations, Mr. Wilson explains.
According to Mr. Wilson, the 2 other potential domestic
suppliers sell their product for a significantly higher price,
and neither are viable long-term suppliers of the polyester
fiber.  Wellman is the only viable supplier of the polyester
fiber capable of providing the quality and reliable shipping
essential to the success of the Debtors' manufacturing
operations, Mr. Wilson claims.

If Wellman stops supply the Debtors once the 2000 Agreements
expired at the end of this year, Mr. Wilson says, the Debtors'
operations could be significantly disrupted or impaired.  Mr.
Wilson adds that although Pillowtex Management must pay the pre-
petition balance in order to extend its relationship with
Wellman, a significant portion of the pre-petition balance will
be recouped through more favorable pricing under the Addenda
than currently exists under the 2000 Agreements.  Furthermore,
Mr. Wilson notes that the Addenda will improve Pillowtex
Management's current credit terms, increasing the 10-day credit
terms to 45-day terms. (Pillowtex Bankruptcy News, Issue No. 17;
Bankruptcy Creditors' Service, Inc., 609/392-0900)    

POLAROID CORP: Gets Approval to Retain Skadden, Arps as Counsel
After due deliberation, Judge Walsh authorizes Polaroid
Corporation, and its debtor-affiliates to employ and retain the
Skadden, Arps law firm under a general retainer, nunc pro tunc
to the Petition Date.  The Court further authorizes Skadden,
Arps to apply the Initial Retainer to pay any fees, charges and
disbursements relating to services rendered to the Debtors prior
to the Petition Date that remain unpaid.  

Moreover, Judge Walsh directs Skadden, Arps to add and hold the
remaining portion of the Initial Retainer as the Final Retainer
for application to fees, charges and disbursements relating to
services rendered subsequent to the Petition Date as may be
further ordered by the Court. (Polaroid Bankruptcy News, Issue
No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900)

SOUTHWEST SUPERMARKETS: Completes Planned Asset Sale to Bashas'
F&D Reports says that at an auction last week, Bashas'
(Chandler, AZ) completed its planned purchase of the assets and
real estate leases of 22 stores in Arizona from Southwest
Supermarkets, DIP (Phoenix, AZ).  Even though Bashas' was the
only formal bidder, the total purchase price was $9.0 million,
or $1.5 million more than its "stalking horse" bid.

Beginning in December, the report says, Bashas' plans to start
renovating and converting the stores (six in Tucson and 16 in
Phoenix) to its Food City banner at a pace of at least two per
week.  The entire process is scheduled to be completed by
March 1.

According to F&D, Bashas', reportedly, was not interested in
Southwest's remaining ten stores because they were too close to
some of its existing locations.  As a result, these stores will
go dark.  With the sale to Bashas', which is self-distributing,
and the closure of its remaining store base, Southwest's
existing supplier, Fleming (Lewisville, TX), is expected to lose
upwards of $130.0 million in annual revenues.

SPORTS AUTHORITY: Third Quarter Sales Drop to $304 Million
The Sports Authority, Inc. (NYSE:TSA), the nation's largest
full-line sporting goods retailer, reported that in the
seasonally soft third quarter ended November 3, 2001, the
Company recorded a net loss of $4.5 million. In the comparable
period of the prior year, the Company recorded a net loss of
$4.6 million.

Sales for the quarter were $304.8 million versus $331.9 million
last year. In line with the Company's previously communicated
expectations, comparable store sales declined 4.5%. Sales trends
had been improving prior to September 11, but comparable store
sales dropped approximately 17% the week of the terrorist
attack. Subsequently, comparable store sales for the remainder
of the third quarter returned to the negative mid-single digits.

Commenting on third quarter sales trends, Marty Hanaka, Chairman
and Chief Executive Officer, stated: "In addition to the soft
economy compounded by the terrorist attacks, we also cycled
against last year's strong sales from the scooter fad and Major
League Baseball's Subway World Series. Comparable store sales
excluding scooters and the Subway Series declined by less than
one percent."

Gross profits decreased $6.5 million, but as a percent of sales
increased 30 basis points to 27.3% from 27.0% last year.
Selling, general and administrative expenses were well
controlled, decreasing $4.0 million when compared with the third
quarter last year. Interest expense decreased 46.0% or $2.3

As previously announced, third quarter ending inventories were
modestly higher than last year due to the earlier receipt of
certain holiday merchandise in order to optimize the Company's
distribution facilities and store operations. During the
quarter, The Sports Authority also retired its 5 1/4%
Subordinated Convertible Notes, completed the $44.7 million
sale/leaseback of 10 stores and issued its inaugural catalog.

Hanaka concluded: "Achieving a bottom line performance equal to
last year's in these challenging times is indicative of the
substantial improvements our turnaround initiatives have had on
the productivity of our business model. While the uncertain
economy may prove challenging in the short-term, we are managing
the business for consistent long-term profitability. I am
pleased with the progress we have made so far."

                    Fourth Quarter Outlook

In light of the current economic uncertainty, potential results
for the fourth quarter ending February 2, 2002 are difficult to
estimate. If current fourth quarter comparable store sales
trends continue (a low single digit decrease), The Sports
Authority believes that it can achieve fourth quarter earnings
per share from continuing operations of approximately $0.35 to

The Sports Authority, Inc. is the nation's largest full-line
sporting goods retailer, operating 198 stores in 32 states. The
Company's e-tailing website,  
is operated by Global Sports Interactive, Inc. under a license
and e-commerce agreement. In addition, an 8.4% Company-owned
joint venture with AEON Co., Ltd. operates 33 "The Sports
Authority" stores in Japan under a licensing agreement. The
Sports Authority is a proud sponsor of the Boys & Girls Clubs of

                         *  *  *

The July 17, 2001, edition of the Troubled Company Reporter
related that Standard & Poor's affirmed its single-B corporate
credit and senior secured bank loan ratings and its triple-C-
plus subordinated debt rating on The Sports Authority Inc. and
at the same time, revised its outlook to stable from negative.

The ratings on TSA continue to reflect high debt leverage, thin
cash flow protection measures, and intense competition in the
sporting goods retailing industry. These risks are somewhat
mitigated by the company's leading position in the sporting
goods industry.

SUNBEAM: Confirmation of 2nd Amended Plan Adjourned to March 19
The hearing on confirmation of Sunbeam Corporation's Second
Amended Plan of Reorganization Under Chapter 11 of the
Bankruptcy Code, and its debtor subsidiaries' Second Amended
Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy
Code, both dated April 26, 2001, scheduled to commence on
December 4, 2001 at 10:00 a.m. (EST), has been adjourned to
March 19, 2002 at 10:00 a.m. (EST).  

The Adjourned Hearing will be held before Honorable Arthur J.
Gonzalez, United States Bankruptcy Judge, in Room 523 of the
United States Bankruptcy Court for the Southern District of New
York, One Bowling Green, New York, New York.  In connection with
the Adjourned Hearing, the Debtor has extended the deadline to
vote on the Plans.  All persons and entities entitled to vote on
the Plans must deliver their ballots by mail, hand delivery or
overnight courier so as to be received by the Balloting Agent no
later than February 28, 2002 at 4:00 p.m.(EST).

Weil, Gotshal & Manges serves as legal counsel to Sunbeam in its
chapter 11 cases.  

TOUCH AMERICA: S&P Lowers Ratings Citing Weak Liquidity Position
Standard & Poor's lowered its corporate credit rating on Touch
America Inc. to single-'B'-minus from double-'B'-minus and
lowered its senior secured bank loan rating to single-'B'-minus
from double-'B'. The ratings remain on CreditWatch with negative
implications, where they were placed August 31, 2001.

The secured bank loan rating is the same as the corporate credit
rating due to the significant decline in the valuation of
competitive local exchange assets (CLEC). Under a default
scenario simulated by Standard & Poor's, it is uncertain if the
valuation of the CLEC assets would be sufficient to result in
full recovery of the bank facility.

Touch America is the telecommunications subsidiary of The
Montana Power Co. Montana Power Co. will complete its transition
to a telecommunications company on the completion of the sale of
its utility business to NorthWestern Corp. Approval of the sale
by the state public utility commission is anticipated by January
31, 2002.

The downgrade is due to the company's weakened liquidity
position since the second quarter of 2001 and its inability to
give revenue and earnings guidance for the fourth quarter of
2001 and the full year of 2002. Moreover, Touch America was not
in compliance with financial covenants under its bank credit
facility in the third quarter of 2001 and received a 30-day
waiver.  The waiver is conditional on Montana Power Co. repaying
to Entech Inc., its wholly owned subsidiary, at least $25
million of an intercompany loan. The proceeds of this repayment
will be remitted to Touch America.

However, in addition to the $25 million, Touch America needs $15
million to support its operating needs through January 31, 2001.
The company is in discussions with the banks to try to obtain
the additional $15 million.  Furthermore, the company is
anticipating receiving regulatory approval of the sale of its
utility business to NorthWestern Corp. by January 31, 2001.
Proceeds from the sale will be used to pay down debt and support
the company's business plan. Any delay in receipt of these
proceeds will have an adverse affect on the company's liquidity
position, resulting in a downgrade.

As of September 30, 2001, total debt outstanding was about $254

In the third quarter of 2001, revenue and EBITDA were lower than
anticipated due to the economic slowdown, price declines,
billing disputes with Qwest Communications International Inc.,
and higher network costs. Revenue grew only 3% compared with the
second quarter of 2001, while EBITDA declined to about $8
million from $15 million in the second quarter. The company is
expected to improve EBITDA margins by transitioning more traffic
on-net, controlling costs, and aggressively pursuing the large
enterprise data market.

Standard & Poor's will resolve the CreditWatch on the resolution
of the company's liquidity issue and completion of the utility
business sale.

TOUCHSTONE SOFTWARE: Weighing Options to Source New Financing
TouchStone Software Corporation and subsidiaries markets, and
supports a line of computer problem-solving utility software and
supporting products which simplify personal computer
installation, support, and maintenance. TouchStone operates from
one location in the United States. The Company markets its
products, domestically and internationally, directly to original
equipment manufacturers and end users, primarily located in the
United States.

As part of a continued reorganization plan, the Company reviewed
its entity structure during 2000 and created three new
subsidiaries., Inc. (a New Hampshire Corporation),
was created to serve as an operating company to facilitate the
sale and distribution of the Company's products and services;
TouchStone Investments, Inc. ("TSC") (a New Hampshire
corporation) and TSC Investments, LLC (the "LLC") (a New
Hampshire Limited Liability company) were created as part of the
Company's plan to strike strategic alliances with internet-based
companies by making minority investments in them. and TouchStone Investments, Inc. are wholly owned
subsidiaries. The Company, through TouchStone Investments, Inc.,
owns an 80% interest in TSC Investments, LLC, the remainder of
which is owned jointly by the Company's President and Chief
Executive Officer, Pierre Narath and Vice President, Jason Raza.

TSC Investments, LLC was capitalized with a 5 year promissory
note from the Company in which the Company agreed to loan TSC
Investments, LLC up to $4,000,000 to be used to make strategic
investments in internet-based companies. Terms of the loan call
for interest to accrue at the rate of 12% per annum, with
scheduled repayments set to begin in January 2002.

The Company has suffered recurring operating losses, has an
accumulated deficit of $19,186,883 at June 30, 2001, and is
largely dependent on its investment portfolio to fund projected
future operating losses, and accordingly, is subject to a number
of risks. Principally among these risks are marketing of its
products and services which are susceptible to competition from
other companies and the volatility in the value of the Company's
investment portfolio on which it is dependent to fund its short
term operating cash deficits. These factors, among others, raise
substantial doubt about the Company's ability to continue as a
going concern at June 30, 2001.

In order to meet its cash requirements for the next twelve
months, management continues to make operational changes
reducing expenses wherever possible. Management expects to
liquidate marketable securities classified as available-for-sale
as needed. Additional sources of financing, including additional
private debt or equity capital are being explored, while seeking
merger candidates with whom the Company has substantial

US AIRWAYS: Stephen Wolf Replaces Rakesh Gangwal as CEO & Pres.
DebtTraders reports that on Tuesday, the president and chief
executive of US Airways Group, Rakesh Gangwal, unexpectedly

The report says that Mr. Gangwal joined the firm in 1996 and has
served as chief executive for the past three years. According to
the Company, Mr. Gangwal has left US Airways to pursue a career
in venture capital.

Chairman Stephen Wolf will assume both positions.

In the third quarter, US Airways Group lost $766 million. The US
Airways Group Inc. 9.625% Bond due 2003 was last quoted at a
price of 81.0, says DebtTraders analyst, Daniel Fan (852-2537-
4111) and Blythe Berselli (1-212-247-5300).

US MINERAL: Seeks to Extend Exclusive Periods to May 25, 2002
United States Mineral Products, doing business as Isolatek
International, asks the US Bankruptcy Court for the District of
Delaware to grant an extension of its Exclusive Periods.

The Debtor wants its exclusive period during which to file a
plan extended through March 25, 2002 and asks that it retain the
exclusive right to solicit acceptances of that plan through May
25, 2002.

The Debtor says that it has been active and diligent in
resolving important issues in this Chapter 11 case. This Chapter
11 case involves approximately 165,000 asbestos-related claims
which will need to be dealt with in order to prepare and
effectuate a plan.  Considering the strength of the Debtor's
core business, the Debtor says that it is believable enough that
it will be able to file a viable plan of reorganization in due
course as the procedure for addressing the asbestos-related
claims becomes more developed.

United States Mineral Products filed for Chapter 11 protection
on June 23, 2001.  Aaron A. Garber, David M. Fournier and David
B. Stratton at Pepper Hamilton LLP represent the Debtor in its
restructuring efforts.

UNITED NATIONAL BANCORP: Fitch Affirms Low-B Ratings on Trust 1
Fitch, the international rating agency, has affirmed the Long-
term, Short-term, Individual, and Support ratings of United
National Bancorp (UNBJ) at 'BBB-', 'F2', 'B/C', and '5',
respectively. The Rating Outlook remains Stable. UNB Capital
Trust I (trust preferred securities) is rated 'BB+'.

This action reflects the announcement that UNBJ is to acquire
Phillipsburg-NJ based Vista Bancorp, Inc. (VBNJ), the holding
company for Vista Bank, N.A. With about $699 million in assets,
including $424 million in loans and $587 million in deposits,
VBNJ operates through a network of 16 offices in Western New
Jersey and Eastern Pennsylvania. The acquisition, valued at
approximately $151 million in cash (25%) and stock (75%), will
be accounted as a purchase and is expected to be completed by
April 30, 2002. UNBJ will issue trust preferred securities of
$30 million to support the acquisition.

The transaction will strengthen UNBJ's franchise in
demographically attractive Hunterdon and Warren counties, expand
its footprint into Eastern Pennsylvania (Lehigh and Northampton
counties), increase core-funding, and provide opportunities to
grow assets under management. Additionally, management expects
the merger to generate $6.4 million (pre-tax) in cost savings
with 85% to be realized in 2002 and the remainder in 2003. Most
of the cost savings will be achieved through outsourcing of
VBNJ's back-office operations. Branch consolidation will be
minimal as only one branch appears redundant. UNBJ expects to
incur fairly significant restructuring charges of about $9.1
million ($13 million pre-tax) including $1.2 million in
additional loan loss provisions. While VBNJ has a substantial
consumer loan portfolio, the combined loan mix is expected to
remain dominated by commercial and residential mortgage lending.
Pro-forma asset quality indicators are anticipated to be
relatively unchanged. The goodwill generated by the purchase
will reduce tangible equity ratios but they are expected to
remain at levels consistent with UNBJ's ratings. VBNJ's profile
matches well with UNBJ's banking style and should facilitate the
merger. That said, we will continue to monitor the integration
progress and UNBJ's financial posture.

WARNACO GROUP: Taps Keen Realty to Sell Murfreesboro Facility
Warnaco Inc., the New York based apparel manufacturer/retailer,
retained Keen Realty, LLC to assist the company in the
disposition of certain of its real estate assets, including the
marketing of a 234,000 square foot manufacturing / distribution
facility in Murfreesboro, TN.  The facility is expandable up to
305,000 square feet, which may be subdivided, and includes
11,100 freestanding office/retail building. Keen Realty is a
real estate firm specializing in selling excess assets and
restructuring retail real estate and lease portfolios. The firm
is also marketing 65 acres of vacant land in Duncansville, PA
and 37 retail leaseholds nationwide for Warnaco, who filed for
protection under Chapter 11 of the Bankruptcy Code on June 11,

"The Murfreesboro facility is well located in central Tennessee,
just 35 miles from Nashville and 100 miles from Chattanooga",
said Craig Fox, Keen Realty's Vice President. "In addition, the
flexibility and expandability of the building makes it suitable
for any number of different uses/users. We are encouraging
prospective purchasers to put in their bids immediately as
offers are now being considered."

For over 15 years, Keen Consultants, LLC has had extensive
experience solving complex problems and evaluating and selling
real estate, leases and businesses in bankruptcies, workouts and
restructurings. Keen Consultants, a leader in identifying
strategic investors and partners for businesses, has consulted
with over 130 clients nationwide, evaluated and disposed of over
165,000,000 square feet of properties, and repositioned nearly
9,000 stores across the country.

Companies that the firm has advised include: Northern
Reflections, Edison Bros., Cosmetic Center, Long John Silver,
Caldor, Citibank, N.A. (Ames Dept. Stores), Cumberland Farms,
Fayva Shoe, Herman's Sporting Goods, K-Mart, Merry-Go-Round
Stores, Neiman Marcus, Petrie Retail Inc., and Woodward &
Lothrop. Most recently Keen has sold over $125 million of excess
properties for Family Golf Centers, $80 million of excess
properties for Service Merchandise, raised approximately $5
million for Filene's Basement, $4 million for CODA/Jeans West,
and raised $5.5 million for Learningsmith Inc. In addition to
Warnaco, other current clients include: Cosmetics Plus,
Footstar, Cooker Restaurant Corp., Matlack Truck Systems, Inc.,
Anamet Industrial and Graham Field Health Products.

For more information regarding the sale of the Warnaco
properties, please contact Keen Realty, LLC, 60 Cutter Mill
Road, Suite 407, Great Neck, NY 11021, Telephone: 516-482-2700,
Fax: 516-482-5764, e-mail:, Attn: Craig
Fox. (Warnaco Bankruptcy News, Issue No. 14; Bankruptcy
Creditors' Service, Inc., 609/392-0900)  

WESTERN WIRELESS: S&P Revises Outlook and Affirms Low-B Ratings
Standard & Poor's revised its outlook on U.S.-based wireless
operator Western Wireless Corp. to negative from stable.

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

The outlook revision is based on a decline in the company's
domestic operating cash flow that, combined with increased cash
losses in its international operations, have severely
deteriorated consolidated credit protection and profitability

The ratings on Western Wireless continue to be supported by the
company's strong market position in its rural service areas and
the relatively low wireless penetration rate in its territories.
These factors are partially offset by the increased competitive
environment and continuing cash flow losses in its international

Western Wireless's service territory consists of cellular
markets covering close to 10 million population equivalents
(pops) in 20 contiguous states in the Great Plains and the Rocky
Mountains. The majority of these markets are rural or low-
density urban, with competition limited to two or three
additional players. The penetration in Western Wireless's
markets is estimated to be significantly below the national
average of 44%, providing the company with significant growth
opportunities. In the third quarter of 2001, the company had
1,157,700 subscribers. In addition, Western Wireless
has expanded internationally, and the company now owns wireless
licenses in 10 foreign countries, with a controlling stake in
Ireland, Austria, Iceland, Bolivia, Ghana, and Haiti.

Revenue growth has resulted from the rapid expansion of Western
Wireless International's (WWI) operations, which represented 22%
of total revenues in the third quarter of 2001, and to a lesser
extent from the increase in its domestic subscriber base.
Nonetheless, operating cash flow measures have been under
pressure due to higher cost per gross addition (CPGA), declining
monthly average revenue per user (ARPU) and roaming revenues,
and the cash losses in WWI.

The high costs of converting its domestic subscribers to its
CDMA and TDMA platforms from analog, and overall higher cost to
acquire and maintain subscribers have resulted in a 4% decline
in the company's domestic EBITDA, compared with the same period
in 2000, despite billing, long distance, and roaming cost
savings achieved in 2001. While migration costs are expected to
decrease in the near term, CPGA should remain higher than
historical levels, reflecting greater competition in about one-
third of the company's territory.

In the third quarter of 2001, Western Wireless reported a 9%
year-over-year decline in domestic ARPU, mainly as a result of
the loss of high-usage subscribers during the first two quarters
of 2001 that were affected by systems blockage of its analog
network. The recently upgraded systems have improved service
quality and helped to reduce monthly churn to 2.5% in the third
quarter from 2.6% in the second quarter. However, churn is
higher than historical levels of about 2%.

In addition, Western Wireless's new roaming agreements with
major partners, which took effect in the third quarter of 2001,
have resulted in significant rate decline in service territories
that contribute about 30% of its total roaming revenues. As a
result, roaming revenues for the quarter declined by 4% from the
same period in 2000.

The consolidation of its recently acquired Austrian subsidiary
tele.rim in the company's third quarter results has also
negatively impacted consolidated EBITDA. In the third quarter of
2001, EBITDA decreased to $49.7 million from $86.0 million in
the same period in 2000, with the margin dropping to 17% from
39%. Debt services measures have likewise deteriorated, with
EBITDA interest coverage declining to 1.2 times from 2.0x, and
debt to trailing 12-months' EBITDA jumping to 7.5x in the same
period. Because the two largest international operations in
Ireland and Austria are still reporting EBITDA losses, cash flow
and credit measures are expected to continue to suffer in 2002.
Financial flexibility derives from $480 million under its credit
facility and a diversified portfolio of international assets.

                       Outlook: Negative

While domestic operations still post healthy results, operating
cash flow is under pressure due to increased competition and
declining roaming rates. An improvement in cash flow measures in
the domestic operations is critical to offset the risks and cash
flow losses of its start-up and high-growth international
operations. The continuing migration of domestic subscriber to
digital is expected to produce favorable results in subscriber
take-up and retention, as well as in ARPU trends. If cash flow
measures do not significantly improve in the short term, the
ratings are likely to be lowered within 12 months.

XETEL CORP: Reaches Accord to Collect Payment Due from Tellabs
XeTel Corporation (Nasdaq:XTEL), a comprehensive electronics,
manufacturing and engineering solution provider, reported that
it has settled its previously disclosed lawsuit against Tellabs
Inc., and Tellabs Operations, Inc., to collect payment due to
XeTel Corporation for inventories purchased on behalf of Tellabs
for its recently discontinued Salix product line.

Angelo DeCaro Jr., President and CEO, commented, "Although the
terms of the agreement state that the settlement remains
confidential, it will substantially improve our liquidity in the
near term. We continue to work actively through arbitration to
recover additional inventory liability owed to us by Ericsson,
Inc." Mr. DeCaro concluded by saying, "Our restructuring
activities have taken hold and we continue to focus on returning
XeTel to profitable operations as soon as possible."

Founded in 1984, XeTel Corporation is ranked among the top 50
electronics manufacturing services industry providers in North
America. The company provides highly customized and
comprehensive electronics manufacturing, engineering and supply
chain solutions to Fortune 500 and emerging original equipment
manufacturers primarily in the networking, computer and
telecommunications industries. XeTel provides advanced design
and prototype services, manufactures sophisticated surface mount
assemblies and supplies turnkey solutions to original equipment
manufacturers. Incorporating its design and prototype services,
assembly capabilities, together with materials and supply base
management, advanced testing, systems integration and order
fulfillment services; XeTel provides total solutions for its
customers. XeTel employs over 300 people and is headquartered in
Austin, Texas with manufacturing services operations in Austin
and Dallas, Texas.

For more information, visit XeTel's web site at

                           *   *   *

As reported in the Nov. 16, 2001 edition of the Troubled Company
Reporter, XeTel is currently in discussions with its lenders,
landlords, and equipment lessors to restructure the company's
obligations to improve its liquidity position.

ZILOG INC: Key Bondholders Agree to Back Recapitalization Plan
ZiLOG, Inc., the Extreme Connectivity Company, announced it has
reached an agreement in principle with certain key holders of
its Senior Secured Notes to support the company's plan to
recapitalize ZiLOG. These bondholders hold more than 60 percent
of the senior debt outstanding. Under the proposed
recapitalization plan, ZiLOG's bondholders would exchange their
$280 million in notes for equity, plus a $30 million non-
recourse note.

"We have made significant progress in returning ZiLOG to full
financial health," said Jim Thorburn, ZiLOG's Chief Executive
Officer. "We have a cash flow positive business and on approval
of this plan we will substantially strengthen our balance sheet,
with the elimination of our senior notes.

"This agreement in principle demonstrates strong support from
key bondholders by giving us maximum financial flexibility to
reinvest in the business, compete for new design wins and
strengthen our market position as we navigate through this
industry down cycle."

Thorburn, who rejoined the company in March, has spearheaded a
broad scale restructuring at ZiLOG, which has included
refocusing the business on core products, rationalizing its
manufacturing and reducing its operating costs overall. These
cost savings are projected to amount to $50 million on an
annualized basis.

For the third quarter of 2001, ZiLOG reported $6.6 million of
EBITDA on revenues of $42.7 million. The company also reported
26 percent growth in bookings from Q2 to Q3 and a book-to-bill
ratio of 1.1 for the quarter, indicating the rate of new orders
exceeded the rate of shipments for the first time this year.

"Our results indicate we are clearly on the right track,
particularly in comparison to most other companies in the
semiconductor industry," Thorburn concluded.

ZiLOG intends to launch an exchange offer in which all holders
of its notes will be offered the opportunity to exchange their
notes for shares of ZiLOG common stock, plus a pro rata share of
the $30 million non-recourse note. The exchange offer, which for
tax and other legal reasons the company intends to complete
through a prepackaged Chapter 11 filing, is not expected to have
any adverse affect on its day-to-day operations or on its
ability to provide a full range of products and services to its
customers or pay its suppliers on normal terms.

Once the parties have agreed upon and executed definitive
documentation, a pre-packaged plan would be submitted and
acceptances of the prepackaged plan would be solicited from
bondholders as part of the exchange offer before the filing of
the Chapter 11 petition. Implementation of the plan would depend
on the receipt of acceptances from holders of at least two-
thirds of the outstanding principal amount and a majority in
number of holders voting on the plan.

ZiLOG, Inc. designs, manufactures and markets semiconductor
micro-logic devices for the communications and embedded control
markets. Headquartered in Campbell, Calif., ZiLOG employs
approximately 900 people worldwide. ZiLOG maintains design
centers in Campbell; Austin, Texas; Ft. Worth, Texas; Nampa,
Idaho; Seattle, Wash.; and Bangalore, India, a worldwide
customer service center in Austin, advanced manufacturing in
Nampa and test operations in Manila, Philippines.

* DebtTraders Real-Time Bond Pricing

Issuer               Coupon   Maturity   Bid - Ask Weekly change
------               ------   --------   --------- -------------  
Crown Cork & Seal     7.125%  due 2002    55 - 57        -2
Federal-Mogul         7.5%    due 2004    12 - 14        +1
Finova Group          7.5%    due 2009    35 - 37        -1
Freeport-McMoran      7.5%    due 2006    70 - 73        +1
Global Crossing Hldgs 9.5%    due 2009    16 - 17        -3
Globalstar            11.375% due 2004     7 -  9         0
Levi Strauss & Co     11.625% due 2008    83 - 85        +7
Lucent Technologies   6.45%   due 2029    68 - 70         0
Polaroid Corporation  6.75%   due 2002   7.5 - 8.5        0
Terra Industries      10.5%   due 2005    77 - 80        +4
Westpoint Stevens     7.875%  due 2005    32 - 35         0
Xerox Corporation     8.0%    due 2027    51 - 53        +1

Bond pricing, appearing in each Thursday's edition of the TCR,is
provided by DebtTraders in New York. DebtTraders is a
specialist in global high yield securities, providing clients
unparalleled services in the identification, assessment, and
sourcing of attractive high yield debt investments. For more
information on institutional services, contact Scott Johnson
at 1-212-247-5300. To view our research and find out about
private client accounts, contact Peter Fitzpatrick at
1-212-247-3800. Real-time pricing available at


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

Bond pricing, appearing in each Thursday's edition of the TCR,
is provided by DebtTraders in New York. DebtTraders is a
specialist in global high yield securities, providing clients
unparalleled services in the identification, assessment, and
sourcing of attractive high yield debt investments. For more
information on institutional services, contact Scott Johnson at
1-212-247-5300. To view our research and find out about private
client accounts, contact Peter Fitzpatrick at 1-212-247-3800.
Real-time pricing available at

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

The TCR subscription rate is $575 for 6 months delivered via e-
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                     *** End of Transmission ***