TCR_Public/011210.mbx        T R O U B L E D   C O M P A N Y   R E P O R T E R

           Monday, December 10, 2001, Vol. 5, No. 240


ANC RENTAL: Seeks Approval to Hire Ordinary Course Professionals
ALGOMA STEEL: TSE Suspends Trading As A Result of Proposed Plan
ANACOMP INC: Plan Confirmation Hearing Scheduled for Today
ARCH WIRELESS: Files Voluntary Chapter 11 Petition in Mass.
ARCH WIRELESS: Case Summary & 30 Largest Unsecured Creditors

BMK INC: Court Approves First-Day Orders & $9.4 Million DIP Pact
BETHLEHEM STEEL: Wants More Time to Decide on Unexpired Leases
BURLINGTON INDUSTRIES: Engages Jay Alix as Financial Advisors
BURLINGTON MOTOR: Senior Management Submits Offer to Buy Assets
CHIQUITA BRANDS: Gets Okay to Pay Prepetition Tax Obligations

CIRCLE K: Houlihan's Application Should Have Mentioned Sec. 328
COMDISCO INC: Equity Panel Seeks to Block HP Termination Fee
CRESCENT OPERATING: Shareholders Approve Proposed Restructuring  
CONSECO: Fitch Junks Ratings On Green Tree Trust Certificates
DAN RIVER: S&P Ratchets Low-B and Junk Ratings Down a Notch

DAW TECHNOLOGIES: Appoints Simpson as Finance Manager in Europe
E.SPIRE COMMS: Selling CyberGate Assets to Chairman G.F. Schmitt
ENRON CORP: Obtains Approval to Continue Cash Management System
ENRON: S&P Says Bankruptcy Has Limited Effect on Global CDOs
FEDERAL-MOGUL: Wants Lease Decision Period Extended to April 1

FLEETWOOD: S&P Slashes Ratings on Preferred Securities to D
FLEETWOOD: Commences Offer for Conv. Trust Preferred Securities
HMG WORLDWIDE: Nasdaq Requests More Info About Bankruptcy Filing
HAYES LEMMERZ: Moves to Pay $40MM of Critical Vendor Claims
HAYES LEMMERZ: Receives Court Approval of First-Day Motions

INTEGRATED HEALTH: Rotech Settles with U.S. and HIS Under Plan
LTV CORP: Union Prevents Cold Shutdown of Steelmaking Operations
LTV CORP: Walters, Timbers, and Bricker Resign as Directors
LOEWEN GROUP: Canadian Court Recognizes U.S. Confirmation Order
MCMS INC: Court Approves Substantial Sale of Assets to Plexus

MARINER POST-ACUTE: APS Reaches Deal to Sell Assets to Omnicare
METALS USA: US Trustee Appoints Unsecured Creditors' Committee
METROMEDIA FIBER: Securityholders Commence Resale of Securities
NET2000 COMMS: Fails to Comply with Nasdaq Listing Requirements
NORTHLAND CRANBERRIES: Delays Annual Report Due to Debt Workout

OWENS CORNING: Names Dick Lantz President of Composite Business
OXFORD AUTOMOTIVE: S&P Junks Ratings On Likely Default
PACIFIC GAS: Inks Interest Rate Pacts with Calpine & GWF Power
POLAROID CORP: Schedule Filing Deadline Extended to December 17
RHYTHMS NETCONNECTIONS: Files Plan and Disclosure Statement

SAFETY-KLEEN: Obtains Court Approval to Hire Jefferson Wells
SIMPLIFIED EMPLOYMENT: Files Plan to Emerge from Bankruptcy
STEEL HEDDLE: Has Until January 25 to Decide on Unexpired Leases
SUN HEALTHCARE: Raises Loan to Shared Healthcare by $1.5 Million
TCPI INC: Court Okays Conversion of Bankruptcy Case to Chapter 7

THUNDERMIN: Selling Duck Pond Interest to Repay Queenston Loan
TRI-NATIONAL: Chief Financial Officer Gilbert Fuentes Retires
USG CORP: Gets Go-Signal to Hire Duane Morris as Local Counsel
UNITED AIR LINES: S&P Knocks Senior Unsecured Debt Rating to B
VANGUARD AIRLINES: Nasdaq to Delist Shares Effective Tomorrow

W.R. GRACE: Court Okays Rust Consulting as Debtors' Claims Agent

* BOND PRICING: For the week of December 10 - 14, 2001


ANC RENTAL: Seeks Approval to Hire Ordinary Course Professionals
ANC Rental Corporation, and its debtor-affiliates desire to
continue to employ the Ordinary Course Professionals to render
services to the Debtors' estates similar to those services
rendered prior to the Filing Date. These services include legal
services with regard to specialized areas of the law,
accounting, consulting, lobbying and other matters requiring the
expertise and assistance of professionals.

By motion, the Debtors seek entry of an order, authorizing them
to employ Ordinary Course Professionals, without requiring the
submission of separate retention pleadings for each Ordinary
Course Professional.

The Debtors' propose to organize the Ordinary Course
Professionals into:

A. Tier 1 - consisting of the Debtors' professionals that will
     be required to render services, these professionals include
     law firms and others engaged in lobbying in various states
     and with the federal government, management consultants
     which provide assistance with regard to the Debtors'
     operations, and similar types of professionals; and

B. Tier 2 - consists of the Debtors' various auto liability
     claims and other litigation counsel and others who have
     regularly rendered services to the Debtors and which
     post-Filing Date may be called upon on an "as needed"

Bonnie Glantz Fatell, Esq., at Blank Rome Comisky & MCCauley LLP
in Wilmington, Delaware, relates that the Debtors also seek to
have the right to retain additional Ordinary Course
Professionals from time to time during these cases, as the need
arises. The Debtors propose to file a supplemental list or lists
of such additional Ordinary Course Professionals with the Court
and to serve the list(s) on the Office of the United States
Trustee; counsel for Congress Financial Corporation, as agent
for the lenders under the Borrowing Base Facility; counsel for
Lehman Brothers Inc., as agent for the lenders under the Term
Loan and the Senior Loan Agreement; counsel for Liberty Mutual
Insurance Company, the Debtors' principal surety provider, and
counsel for any statutory committee of unsecured creditors, or
any other committee, once appointed. The Debtors further propose
that if no objections to any such supplemental list are filed
within 15 days after service, the list would be deemed approved
by this Court without the need for a hearing or further order.
In addition, each Ordinary Course Professional, within 30 days
of the entry of an order granting the application for the
engagement of such professional by the Debtors, will serve upon
the Office of the United States Trustee and the Debtors and file
with the Court an affidavit certifying that such professional
does not represent or hold any interest adverse to the Debtors
or their estates with respect to the matter on which such
professional is to be employed.

The Debtors submit that, in light of the additional cost
associated with the preparation of employment applications for
professionals who will receive relatively small fees, it is
impractical and cost inefficient for the Debtors to submit
individual applications and proposed retention orders for each
Ordinary Course Professional. Accordingly, the Debtors request
that this Court dispense with the requirement of individual
employment applications and retention orders with respect to
each Ordinary Course Professional, and that the Debtors be
authorized to retain each Ordinary Course Professional.

Ms. Fatell submits that continuing to employ the Ordinary Course
Professionals, rather than retaining new professionals, will
enable the Debtors to carry out their normal business activities
without the disruption that would result from terminating their
relationships with the Ordinary Course Professionals and
locating and retaining other competent professionals and
familiarizing them with the Debtors' operations. The Debtors
also believe that the relatively low costs of these
professionals warrant streamlined procedures.

The Debtors propose that they be permitted to pay each Ordinary
Course Professional in each tier, without a prior application to
the Court by such professional, 100% of the fees and
disbursements incurred, upon the submission to, and approval by,
the Debtors of an appropriate invoice setting forth in
reasonable detail the nature of the services rendered and
disbursements actually incurred, up to $50,000 per month per
Tier 1 Ordinary Course Professional and $750,000 per month, in
the aggregate, for all Tier 1 Ordinary Course Professionals; and
$25,000 per month per Tier 2 Ordinary Course Professional, and
$250,000 per month, in the aggregate, for all Tier 2 Ordinary
Course Professionals.

Ms. Fatell notes that, while the Debtors are seeking to retain
239 Tier 2 Ordinary Course Professionals, all such professionals
will not actively perform services for the Debtors at any one
time. Therefore, it is anticipated that the fees and
disbursements to be incurred by Tier 2 Ordinary Course
Professionals will not exceed the aggregate amount set forth
above with respect to all Tier 2 Ordinary Course Professionals.
In the event that a Tier 1 Ordinary Course Professional seeks
more than $50,000 per month or a Tier 2 Ordinary Course
Professional seeks more than $25,000 per month, Ms. Fatell
states that the professional will be required to file a fee
application for the full amount of fees.

Although certain of the Ordinary Course Professionals may hold
unsecured claims against the Debtors for prepetition services
rendered to the Debtors, the Debtors do not believe that any of
the Ordinary Course Professionals has or represents an interest
adverse to the Debtors or their estates on the matters for which
they would be employed, and thus, all of the Ordinary Course
Professionals proposed to be retained meet the special counsel
retention requirement of the Bankruptcy Code. (ANC Rental
Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

ALGOMA STEEL: TSE Suspends Trading As A Result of Proposed Plan
Algoma Steel Inc. (TSE: ALG) announced that the Toronto Stock
Exchange has suspended trading in the common shares of the
Company as a result of Algoma Steel's proposed Plan of
Arrangement and Reorganization (the Plan).  Under the Plan,
Algoma Steel's existing common shares are to be cancelled.  The
Company has applied to the Toronto Stock Exchange to list the
new common shares to be issued under the Plan.

Algoma Steel Inc., based in Sault Ste. Marie, Ontario, is
Canada's third largest integrated steel producer.  Revenues are
derived primarily from the manufacture and sale of rolled steel
products including hot and cold rolled sheet and plate.

ANACOMP INC: Plan Confirmation Hearing Scheduled for Today
Anacomp, Inc. (OTC Bulletin Board: ANCO), a leading provider of
document-management and technical services, reported results for
its fourth quarter and fiscal year ended September 30, 2001.  
The Company also said its plan is to emerge from its Chapter 11
debt-restructuring process by the calendar year-end.

"While our revenues, operating results, cash flows and liquidity
were impacted by a number of factors during fiscal 2001, we
succeeded in significantly reducing the Company's net losses.  
We exceeded our cash goals and ended the year with $24.3 million
in cash," said Phil Smoot, President and Chief Executive Officer
of Anacomp.  "We are confident that Anacomp is now positioned
for a return to profitability with continued implementation of
our debt-restructuring, management changes and cost reductions."

The Company has continued without interruption to meet day-to-
day obligations with its suppliers, customers and employees
since filing a voluntary reorganization plan with the U.S.
Bankruptcy Court on October 19, 2001.  A confirmation hearing
for Anacomp's prepackaged reorganization plan is scheduled for
December 10, 2001.  With the Court's approval, the Company will
emerge as a stronger, healthier company by December 31, 2001.

                    Fourth Quarter Results

Fourth quarter net loss was $11.4 million, compared with a net
loss of $41.0 million in the fourth quarter of the prior year.  
Revenues for the fourth quarter were $71.0 million, compared
with $87.6 million in the same period last year.  EBITDA
(earnings from continuing operations before interest, taxes,
depreciation and amortization) for the fourth quarter of fiscal
2001 was $8.2 million, compared with $3.6 million in the year-
ago period.

                       Year-end Results

Net loss for fiscal 2001 was $47.5 million, compared with a
$111.4 million net loss in the prior year.  Revenues for the
twelve months totaled $306.3 million, compared with $383.2
million reported in the same period last year.  The Company met
and exceeded its annual cash plan goals for fiscal 2001, with
EBITDA at $28.4 million, compared with $26.9 million for fiscal

                    Business Unit Results

As of October 1, 2001, Anacomp comprises two business units:  
Document Solutions, which provides document-management
outsourcing services; and Technical Services, which provides
multi-vendor equipment maintenance services, systems and
supplies sales.

Document Solutions' fiscal 2001 digital revenues were $63.3
million worldwide, compared with $71.0 million in the same
period last year, and accounted for 36% of total Document
Solutions revenues for fiscal 2001, compared with 33% last year.  
Revenues from digital offerings are expected to grow
significantly and the Company anticipates that the contribution
from its digital offerings will increase as a percentage of
total revenues.  Combined digital and COM revenues were $177.0
million, compared with $214.1 million in the same period last
year.  Revenues from COM services continued to decline,
following the overall declining trend in the micrographics
market.  Document Solutions' EBITDA was $33.6 million, compared
with $43.5 million a year ago, resulting in EBITDA as a
percentage of total Document Solutions revenues at 19%, compared
with 20% last year.  The Company continues to consider the sale
of all or parts of its European document-management business,
Document Solutions International, as previously announced.

Fiscal 2001 revenues for the Company's former docHarbor business
unit, which was integrated fully into its Document Solutions
business by October 1, 2001, as Web Presentment Services, were
$9.2 million, compared with $4.6 million in fiscal 2000.  EBITDA
for docHarbor was negative $9.0 million, reflecting previous
negative cash flows prior to the integration.  Web Presentment
became a profitable offering for Anacomp in the fourth quarter
of fiscal 2001, and the Company exited the year with a strong
sales pipeline of prospective new orders.

Technical Services revenues worldwide for fiscal 2001 were
$120.2 million, compared with $164.5 million a year ago.  The
decline was primarily due to Anacomp's exit from the
manufacturing business.  Revenues from multi-vendor maintenance
services -- the principal growth area for the Company's
Technical Services business -- were 17% higher than the prior
year and represented 19% of total Technical Services revenues in
fiscal 2001, compared with 12% in fiscal 2000.  The Company
expects this percentage to increase even further in fiscal 2002
as it continues to grow multi-vendor services through OEM
(Original Equipment Manufacturer) partners and VARs (Value Added
Resellers). It also anticipates the dollar growth in multi-
vendor services to exceed the decline in micrographics
maintenance revenues within the next two years. Technical
Services' EBITDA was $31.0 million in fiscal 2001, compared with
$32.1 million in fiscal 2000, resulting in EBITDA as a
percentage of total Technical Services revenues at 26%, compared
with 20% last year.

Anacomp, Inc. is a leading provider of document-management and
technical services.  With global operations backed by more than
30 years of outsourcing experience, Anacomp offers premium
services for virtually any business application.  Anacomp
comprises two business units:  Document Solutions (document-
management outsource services) and Technical Services (multi-
vendor maintenance services, systems and supplies sales).  For
more information, visit Anacomp's web site at

ARCH WIRELESS: Files Voluntary Chapter 11 Petition in Mass.
Arch Wireless, Inc. (OTC Bulletin Board: ARCH) announced that it
has reached an agreement with the majority of its secured
creditors to restructure the company's long-term debt.  
Concurrently, Arch Wireless, Inc., and certain of its
subsidiaries filed a voluntary petition under Chapter 11 of the
U.S. Bankruptcy Code in the U.S. Bankruptcy Court, District of
Massachusetts, Western Division to effect the restructuring.

Arch said the agreement with secured creditors would constitute
the basis of its plan of reorganization, which it expects to
file with the Court by January 15, 2002.  Under terms of the
agreement, AWI would issue equity and Arch Wireless Holdings,
Inc.), the operating subsidiary of AWI, would issue $200 million
principal amount of 10% Senior Secured Notes due 2007 and $100
million principal amount of 12% Senior Subordinated Secured PIK
Notes due 2009 in exchange for all existing debt and equity

Arch said that it expects to operate in the normal course of
business during the reorganization proceeding and that it has
received a $50 million commitment for a debtor-in-possession
financing from a group of banks led by TD Securities (USA), Inc.  
The company also noted that it currently has a cash position of
approximately $50 million, which together with the DIP financing
would provide approximately $100 million of liquidity to fund
ongoing operations, including the payment of post-petition
obligations to trade suppliers.  Arch said it would immediately
file a motion seeking to pay the pre-petition claims of certain
key suppliers.

C. Edward Baker, Jr., chairman and chief executive officer,
said: "We are very pleased to receive the support of Arch's
secured creditors.  Our agreement with them is critical to
completing the restructuring process expeditiously.  This
agreement and our Chapter 11 filing are important, necessary and
prudent first steps for Arch to recapitalize the company,
improve our financial condition and create the opportunity for
long-term growth."  Baker added:  "The filing will afford us
Court protection as we seek the Court's confirmation of our
reorganization plan.  In time we expect to emerge as a
financially sound and stable operating entity and continue to
pursue opportunities in the growing market for two-way messaging
and wireless mobile data."

Arch entities included in the Chapter 11 filing are:  Arch
Wireless, Inc., the parent company; Arch Wireless
Communications, Inc., a wholly owned subsidiary and intermediate
holding company which is the obligor on a portion of the
company's debt; and Arch Wireless Holdings, Inc., a wholly owned
subsidiary and the operating entity through which AWI conducts
the majority of its business.  Certain holders of 12 3/4% Senior
Notes of AWCI had commenced an involuntary case against AWCI
under Chapter 11 on November 9, 2001.

Arch Wireless, Inc., headquartered in Westborough, Mass., is a
leading two-way wireless Internet messaging and mobile
information company with operations throughout the United
States.  The company offers a full range of wireless services to
both business and retail customers, including wireless e- mail,
two-way wireless messaging and mobile data, and paging through
three regional divisions.  Arch provides wireless services to
customers in all 50 states, the District of Columbia, Puerto
Rico, Canada, Mexico and in the Caribbean.  Additional
information on Arch Wireless is available on the Internet at

ARCH WIRELESS: Case Summary & 30 Largest Unsecured Creditors
Lead Debtor: Arch Wireless, Inc.
             1800 West Park Drive
             Suite 250
             Westborough, MA 01581

Bankruptcy Case No.: 01-47330

Debtor affiliates filing separate chapter 11 petitions:

             Entity                             Case No.
             ------                             --------
             Paging Network Canadian Holdings,
             Inc.                               01-47331
             Arch Wireless Holdings, Inc.       01-47332
             Paging Network of Northern
             California, Inc.                   01-47333
             Arch Communications Enterprises
             LLC                                01-47334
             Paging Network, Inc.               01-47335
             ArchTel, Inc.                      01-47336
             Benbow Investments, Inc.           01-47337
             Paging Network of San Francisco,
             Inc.                               01-47338
             MobileMedia Communications, Inc.   01-47339
             Mobile Communications Corp.
             of America                         01-47340
             MobileMedia License Co., LLC       01-47341
             Paging Network International,
             Inc.                               01-47342
             Arch Connecticut Valley, Inc.      01-47343
             Paging Network Finance Corp.       01-47344
             Paging Network of Colorado, Inc.   01-47345
             PageNet, Inc.                      01-47346
             Paging Network of America, Inc.    01-47347
             Paging Network of Michigan, Inc.   01-47348
             PageNet SMR Sub, Inc.              01-47349

Type of Business: Arch Wireless, Inc. through its subsidiaries,
                  is a leading provider of wireless messaging
                  and information services in the United
                  States. Through its local, regional, and
                  national wireless networks. Debtor provides
                  traditional one-way and advanced two-way
                  messaging, including wireless e-mail, and
                  information services to its customers in all
                  50 states and the District of Columbia.

Chapter 11 Petition Date: December 6, 2001

Court: District of Massachusetts (Worcester)

Judge: Henry J. Boroff

Debtors' Counsel: Mark N. Polebaum, Esq.
                  Hale & Dorr LLP
                  60 State Street
                  Boston, MA 02109

Total Assets: $696,449,000

Total Debts: $2,163,053,000

Debtor's 30 Largest Consolidated Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
The Bank of New York        Public Bond Debt      $147,000,000
Indenture Trustee
Loretta Lundberg
5 Pann Plaza, 13th Floor
New York, NY 10001
Tel: 212 896 7259
Fax: 212 328 7302

U.S. Bank Trust National    Public Bond Debt      $130,000,000
U.S. Bank Trust Center
SPFT 0210
180 East Fifth Street
5th Floor
St. Paul, MN 55101
Tel: 651 244 0713
Fax: 651 244 0711

The Bank of New York        Public Bond Debt      $113,000,000
Indenture Trustee
Loretta Lundberg
5 Penn Plaza, 13th Floor
New York, NY 10001
Tel: 212 896 7251
Fax: 212 328 7302

Motorola                    Trade                   $9,119,729
Sharon Slahor
Personal Communications
1500 Gateway Boulevard
Boynton Beach
FL 33426-8292
Tel: 561 739 2982
Fax: 413 683 3604

MCI                         Trade                   $5,387,145
Frank Hickson
525 W. Monro
FL 7 Mailroom (FNB Chicago)
Chicago, IL 60661
Tel: 917 590 6035
Fax: 972 633 3492

AT&T                        Trade                   $2,299,731
Rosemary Wilkie
55 Corporate Drive
Bridgewater, NJ 08807
Tel: 972 778 4600
Fax: 972 778 4482

So WestBell                 Trade                   $1,670,924
Kendal Showalter
Acct. Manager
One Bell Center
Room 2900
Dallas, TX 75202
Tel: 214 571 7330
Fax: 214 745 7819

Verizon                     Trade                   $1,279,670
Ann Luberda
1095 Avenue of the Americas
37th Floor
New York, NY 10036
Tel: 703 351 3800
Fax: 703 351 3656

Quorum Office               Trade                   $1,278,165
Investors LP  
Jack McJunkin Jr.
14911 Quorum Drive
Dallas, TX 75240
Tel: 972 725 3400
Fax: 972 235 3060

The Bank of New York        Public Bond Debt          $940,000
Indenture Trustee
Loretta Lundberg
5 Penn Plaza, 13th Floor
New York, NY 10001
Tel: 212 896 7259
Fax: 212 328 7302

EDS Corp.                   Trade                     $928,670
Rosie Sammon
ARCCA H4-2D-33
5400 Legacy Dr.
Plano, TX 75024
Tel: 972 605 7332
Fax: 972 605 5739

Sprint-Cen                  Trade                     $875,221
Carrie Johnson
Major Acct. Manager
2330 Shawnee Mission Parkway
Westwood, KS 75040
Tel: 927 405 1676
Fax: 972 405 144

Global Crossing             Trade                     $741,213
Julie Boyle
180 South Clinto
Rochester, NY 14646
Tel: 603 421 9998
Fax: 781 938 0329

TMP Worldwide Inc.          Trade                     $568,333
Sandy Reed
47 Perimeter Circle
Atlanta, GA 30346
Tel: 770 290 0035
Fax: 770 551 5946

Hewlett Packard Company     Trade                     $417,611
Jennifer Leach
300 Hanover St.
Palo Alto, CA 94304-1185
Tel: 650 857 1501
Fax: 650 857 5518

BellSouth                   Trade                     $307,891
David Frolio
General Counsel
675 W. Peachtree Street,
N.E. Suite 4300
Atlanta, GA 30375
Tel: 800 676 9304
Fax: 904 350 4321

Gillespie Organization,     Trade                     $285,110
Jay Zirovtowski
3450 Princeton Pike
Lawrenceville, NJ 08648
Tel: 609 450 1241
Fax: 609 895 0222

Experian Marketing          Trade                     $266,755
Linda Querrey
955 American Lane
Schaumburgh, IL 60173
Tel: 847,517,5600
Fax: 847,517,5888

Bowne of Boston, Inc.       Trade                    $263,782
Steve Kagan
411 D Street
Boston, MA 2210
Tel: 617 646 3717
Fax: 617 542 5790

Merritt Properties LLC      Trade                    $220,347

Go America                  Trade                    $215,539

Pickholz Tweedy & Co.       Trade                    $201,579

Chubb Group of Insurance    Trade                    $190,663

Cingular Interactive LP     Trade                    $190,329

Iris Properties Assoc. LP   Trade                    $185,967

Time Warner                 Trade                    $181,254

Positive Communications,    Trade                    $128,869

Citicapital Relocation      Trade                    $127,553

OnSite Commercial           Trade                    $120,907

Access Technologies/        Trade                    $116,044
Po Computer resources

BMK INC: Court Approves First-Day Orders & $9.4 Million DIP Pact
BMK Inc., a leading distributor of merchandise from cosmetics to
pet supplies to many of the nation's top supermarkets and
drugstores, said that it had received Court approval for a
series of first-day orders that should allow the Company to
continue its business without interruption during its voluntary
reorganization under Chapter 11 of the United States Bankruptcy

The Court gave approval, among other things, for the Company to
pay employee wages, salaries and benefits, to continue its
standard customer practices and to use its $9.4 million in
debtor-in-possession (DIP) financing to fund operations during
the Chapter 11 process.

"We are very pleased by the Court's prompt action," said BMK
Chief Executive Officer Richard Craig. "This means that we will
be able to meet our obligations going forward to our employees,
customers and suppliers. Our day-to-day business should be able
to continue uninterrupted, and we will be able to provide the
same high quality of service and dedication that customers have
come to expect from BMK."

Mr. Craig added that BMK has been in contact with many of its
major suppliers and customers, who have indicated that they will
support the Company during the restructuring process.

BMK and seven of its affiliates filed Chapter 11 petitions on
December 3 in the U.S. Bankruptcy Court for the Central District
of California in Los Angeles. The cases were assigned to Judge
Alan Ahart.

BMK has retained the respected financial advisory firm of
Houlihan Lokey Howard & Zukin Capital of Los Angeles to assist
in finding the right financial alternatives.

"This is a great Company with an excellent employee base and an
outstanding customer base," said Mr. Craig. "We are looking for
a partner who understands and is willing to invest in our
business and believes in its potential."

BMK, with revenues last year of $400 million, is the nation's
largest full-service distributor of general merchandise, serving
44 states and most major grocery and drug chains in United
States. Its U.S. operations are comprised of three divisions.
The Western operations do business primarily as The Berton
Company and Advantage Merchandising, both of California, and
Wasatch Service & Supply of Utah. BMK's Central U.S. operations,
which also serve East Coast customers, primarily conduct
business as Nationmark Merchandising & Distribution of Texas,
Jacks Service Company of Oklahoma and M.W. Kasch of Wisconsin.
The West and Central U.S. operations focus on general
merchandise. BMK's Somody subsidiary in southern Minnesota
focuses on specialty products. Nationwide, the company has
approximately 1,900 full-time and 500 part-time employees.

BETHLEHEM STEEL: Wants More Time to Decide on Unexpired Leases
As of Petition Date, Bethlehem Steel Corporation, and its
debtor-affiliates are parties to 37 unexpired leases of
nonresidential property.  Of the 37, 24 leases relate to
regional sales offices operated by the Debtors.  The remaining
13 leases are subleases to third parties, leases used for
storage facilities, leases for office space, ground leases, and
leases for a railroad track and a security gate.

According to Jeffrey L. Tanenbaum, Esq., at Weil, Gotshal &
Manges, LLP, in New York, New York, the unexpired leases are for
properties owned by approximately 34 different lessors.  "The
Debtors intend to pay post-petition rent obligations under the
Unexpired Leases as they become due," Mr. Tanenbaum assures
Judge Lifland.

Mr. Tanenbaum asserts that the Unexpired Leases are valuable
assets of the Debtors' estates and are integral to the continued
operation of the Debtors' businesses.  For example, Mr.
Tanenbaum explains, the Debtors' sales offices are a crucial
part of their continued operations as it is through these
offices that the Debtors are able to arrange for the sale of
their products nationwide.

The 60-day period specified in section 365(d)(4) of the
Bankruptcy Code is too short a time for the Debtors to make
reasoned decisions as to the unexpired leases, Mr. Tanenbaum
tells the Court.  However, Mr. Tanenbaum notes, the Debtors do
not want to forfeit their right to assume any Unexpired Lease or
be compelled to assume all such Unexpired Leases to avoid

By motion, the Debtors request the Court to extend the date
by which they must assume or reject the Unexpired Leases to the
earlier of:

  (a) September 16, 2002, and

  (b) the date on which an order is entered confirming a chapter
      11 plan in these cases, without prejudice to:

      (x) their right to seek a further extension, after notice
          and a hearing, with respect to particular Unexpired
          Leases, and

      (y) the right of any lessor to request that the extension
          be shortened with respect to a particular Unexpired

In case the relief requested is not granted as of the December
12, 2001 hearing, the Debtors request the entry of a bridge
order to prevent the expiration of the Debtors' existing period
to assume or reject the Unexpired Leases pending the disposition
of this motion. (Bethlehem Bankruptcy News, Issue No. 6;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

BURLINGTON INDUSTRIES: Engages Jay Alix as Financial Advisors
Burlington Industries, Inc., and its debtor-affiliates ask Judge
Walsh's permission to retain and employ Jay Alix & Associates as
their financial advisors in these chapter 11 cases.

To persuade the Court to grant their request, John D. Englar,
Burlington's Senior Vice President for Corporate Development and
Law, outlines the firm's qualifications.  Mr. Englar notes that
Jay Alix specializes in financial advisory work in corporate
restructuring and distressed situations.  This is evidenced by
the firm's retention as financial advisors to numerous
nationally prominent restructurings and reorganizations of Fruit
of the Loom, Regal Cinemas, Finova Capital Corporation, LTV
Steel Company, National Car Rental System, Oxford Health Plans,
and Pittsburgh-Canfield Corporation, Mr. Englar states.

Another compelling reason to employ Jay Alix is the firm's
familiarity with the Debtors' businesses and financial affairs,
Mr. Englar continues.  Prior to the Petition Date, Mr. Englar
relates that the Debtors engaged Jay Alix to perform various
restructuring-related activities.  "This enabled the firm's
professionals to work closely with the Debtors' executive
management, financial staff, operational management and other
professionals," Mr. Englar tells the Court.  As a result, Mr.
Englar says, Jay Alix became well acquainted with the Debtors'
financial restructuring needs.

Subject to the Court's approval, the Debtors expect Jay Alix and
Associates to render these financial advisory services:

  (a) assist management with the development and evaluation of
      various restructuring alternatives, as well as the
      development of overall strategic and business plans;

  (b) assist the Debtors in developing and monitoring a 13-week
      cash flow forecast and 12-month cash flow model to enable
      on-time information related to liquidity;

  (c) assist management in obtaining and negotiating debtor-in-
      possession financing;

  (d) assist with the development of the Debtors' communications
      plans and related documents as requested by the Debtors;

  (e) assist the Debtors and their legal counsel and other
      advisors in the evaluation of compensation related issues,
      including retention plans;

  (f) assist with ongoing negotiations with the secured lenders,
      vendors, bondholders, and any statutory committees
      appointed in these chapter 11 cases and interact with
      their advisors;

  (g) analyze cash enhancement opportunities, including
      assisting with cost reduction improvement initiatives;

  (h) assist the Debtors in developing valuations for individual
      businesses, assets and for the Debtors;

  (i) review the Debtors' information systems capabilities and
      make recommendations regarding cost savings and downsizing

  (j) assist the Debtors with the analysis and negotiation of
      the divestiture of any non-core assets or business lines;

  (k) assist with the preparation of the regular reports
      required by the Court;

  (l) assist with providing testimony before the Court on
      matters that are within Jay Alix & Associates' area of

  (m) assist the Debtors in other business and financial aspects
      of their chapter 11 case, including, development of a
      disclosure statement and plan of reorganization;

  (n) assist the Debtors with preparation of the schedules and
      statements of financial affairs;

  (o) assist the Debtors in claims settlement and analysis;

  (p) assist in the identification and negotiation of exit
      financing in an appropriate amount; and

  (q) assist with such other matters as may be mutually agreed
      upon that fall within Jay Alix & Associates' expertise.

Mr. Englar assures that Court that the Debtors will ensure that
the Jay Alix & Associates will not duplicate services that the
other professionals are providing to the Debtors.

Pursuant to the Engagement Letter, Jay Alix & Associates will:

  (1) charge for its professional services rendered to the
      Debtors in these chapter 11 cases on an hourly basis in
      accordance with its ordinary and customary hourly rates in
      effect of the date services are rendered; and

  (2) seek reimbursement of actual and necessary out-of-pocket

As of November 9, 2001, the firm's hourly rates for its
professionals are:

                Position              Rate
                --------              ----
                Principal          $500 - 620
                Senior Associate    385 - 495
                Associate           285 - 375
                Accountants and     200 - 280

These billing rates are revised on January 1 each year.  Any
increase will be applicable to the Engagement Letter.

Furthermore, Mr. Englar informs Judge Walsh that Jay Alix
intends to charge a one-time success fee of $3,500,000, less the
full amount of the Retainers, on these terms:

  (a) the Success Fee shall be due and payable upon:

       (i) confirmation of a plan of reorganization, or

      (ii) completion of one or more transactions that result in
           the transfer of more than 50% of the pro forma
           revenues or operating assets of the Debtors'
           consolidated businesses to another unrelated entity
           or entities; and

  (b) if neither of the conditions have been completed within 18
      months of the effective date of the Engagement Letter,
      then beginning in the 19th month, the Success Fee shall be
      reduced by $100,000 per month.  The Success Fee, however,
      shall not be reduced below $2,500,000.

Moreover, Mr. Englar remarks, the Engagement Letter also
provides that the Debtors will indemnify, hold harmless and
defend Jay Alix & Associates and its principals, employees and
agents under certain circumstances.  According to Mr. Englar,
the firm has agreed to waive the Indemnification Agreement with
respect to pre-petition and post-petition services.

Either party may terminate the Engagement Letter and the
Debtors' retention of Jay Alix & Associates at any time with or
without cause, Mr. Englar tells the Court.  However, Mr. Englar
makes it clear that notwithstanding the termination of Jay Alix
& Associates' engagement:

  (1) the provisions relating to the payment of fees and
      expenses accrued though the date of termination, the
      confidentiality provisions of the Engagement Letter and
      Jay Alix's obligations upon termination of the Engagement
      Letter will survive any such termination; and

  (2) unless the Debtors have terminated the Engagement Letter
      for cause and subject to the Court's approval at the
      conclusion of the cases, Jay Alix will be entitled to
      $2,500,000 of the Success Fee in the event that a plan of
      reorganization is confirmed 12 months from the date of the
      termination of the Engagement Letter.

If a dispute arises between the parties and the parties are
unable to agree on a mutually satisfactory resolution within 30
days, Mr. Englar notes that the Engagement Letter also provides
that either party may require the matter to be settled by
binding arbitration and the arbitration shall occur using the
rules and procedures of the American Arbitration Association.  
But Jay Alix emphasizes that the arbitration provision in the
Engagement Letter shall apply only to the extent that the United
States Bankruptcy Court for the District of Delaware, or the
United States District Court for the District of Delaware if the
reference is withdrawn, does not retain jurisdiction over a
controversy or claim.

Over four months ago, Mr. Englar informs Judge Walsh, the
Debtors paid $250,000 to Jay Alix & Associates as a retainer for
services rendered or to be rendered by the firm and for
reimbursement of the firm's expenses.  Just a week ago, Mr.
Englar continues, the Debtors paid an additional retainer of
$500,000 to the firm.  As of the Petition Date, Mr. Englar says,
all of the Retainers remained unapplied.  Out of an abundance of
caution, Mr. Englar adds, the firm will not apply any portion
for the Retainers as payment for its fees and expenses incurred
after the Petition Date, except pursuant to an order of the

In addition, Mr. Englar discloses that the Debtors made these
payments to Jay Alix & Associates during the year immediately
preceding the Petition Date:

           Payment Date         Payment Amount
           ------------         --------------
           September 11, 2001     $ 88,010
           October 5, 2001         133,073
           October 10, 2001         81,647
           October 25, 2001        142,108
           October 31, 2001        258,210
           November 8, 2001        119,644
           November 13, 2001       136,177
           November 13, 2001        73,736
           November 14, 2001        50,360
           November 14, 2001        84,177

Accordingly, including the Retainers, Mr. Englar calculates that
the Debtors made payments to the firm aggregating approximately
$1,917,142 during the year immediately preceding the Petition
Date on account of fees and expenses incurred by Jay Alix &
Associates on matters relating to the Debtors.  The Debtors made
these payments using their operating cash, Mr. Englar tells the

Douglas C. Werking, a principal of Jay Alix & Associates,
assures Judge Walsh that the firm is not employed by, and has
not been employed by, any entity other than the Debtors in
matters related to these chapter 11 cases.  In addition, Mr.
Werking notes, the Debtors do not owe the firm any amount for
services performed prior to the Petition Date.

Mr. Werking also advises the Court that Jay Alix & Associates
has provided services, and will likely continue to provide
services, to certain creditors of the Debtors and various other
parties adverse to the Debtors in matters unrelated to these
chapter 11 cases.  In fact, Mr. Werking relates that the firm
has undertaken a detailed search to determine, and to disclose,
whether it is providing or has provided services to any
significant creditors, equity security holders, insiders or
other parties-in-interest in such unrelated matters.  Since Jay
Alix & Associates provide services in connection with numerous
cases, proceedings and transactions, Mr. Werking explains, these
unrelated matters involve numerous attorneys, financial advisors
and creditors, some of which may be claimants or parties with
actual or potential interests in these cases or may represent
such parties.

Because Jay Alix & Associates has over a hundred employees, Mr.
Werking admits, it is possible that some of their employees may
hold securities of the Debtors or interests in mutual funds or
other investment vehicles that may own the Debtors' securities.

"Despite the efforts to identify and disclose Jay Alix &
Associates' connections with parties-in-interest in these cases,
because the Debtors are a large enterprise with thousands of
creditors and other relationships, the firm is unable to state
with certainty that every client relationship or other
connection has been disclosed," Mr. Werking notes.  In this
regard, Mr. Werking assures Judge Walsh that the firm will file
a supplemental disclosure with the Court is the firm discovers
additional information that requires disclosure.

"But as far as I know," Mr. Werking says, "neither I, nor Jay
Alix & Associates, nor any of its principals, employees, agents
or affiliates, holds nor represents any interest adverse to the
Debtors or their respective estates in the matters for which it
is supposed to be retained".  Mr. Werking asserts that the firm
is a "disinterested person" as defined in section 101(14) of the
Bankruptcy Code. (Burlington Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   

BURLINGTON MOTOR: Senior Management Submits Offer to Buy Assets
Thomas F. Grojean, Chairman and Chief Executive Officer, and
Terry A. Wallace, President and Chief Operating Officer, of
Burlington Motor Carriers are pleased to announce that senior
executives of the company intend to submit an offer to purchase
certain assets and substantially all of the business of the
Burlington Motor Carriers within the next sixty days.

"We feel the opportunity to acquire a sound operating business
with a healthier balance sheet, a roster of great customers, and
a dedicated, hard-working team of associates is a worthy
investment of time and capital. We have already begun
discussions with potential equity partners to invest along side
the management team and we have procured the services of Mr.
Thomas Eckerle from the firm of Henderson, Daily, Withrow &
DeVoe in Indianapolis to provide legal counsel through this
process," said Mr. Grojean.

Burlington Motor Carriers operates nearly 2000 power units and
5000 trailers throughout North America. The company was ranked
#18 in revenues among the top 20 largest truckload van carriers
in the United States in 2000. At the time it filed for
protection under the U.S. Bankruptcy Code in July 2001, the
Company's operating performance placed it at the midpoint of
publicly traded truckload carriers.

It has an extensive presence in Mexico with offices in Monterrey
and Mexico City supported by a full operations facility in
Laredo, TX. In addition to its longhaul fleet, Burlington Motor
Carriers also provides regional services through fleets based in
Atlanta and Chicago.

According to Mr. Wallace, "The unique blend of expertise and
product offerings within this company make it well-positioned
for growth and development in the years to come and will appeal
to the investment community. We are now seeing the success
associated with the efforts of the new leadership team the
company has recently assembled. We also see a dramatic upside to
this enterprise -- the status of Burlington Motor Carriers, the
industry and the overall economy provide an opportune time to
make this investment. This team has developed an excellent
service offering that is clearly bringing value to a strong
customer base - evidenced most by the fact the Company has
actually grown with its top 25 customers subsequent to filing
Chapter 11 in July."

CHIQUITA BRANDS: Gets Okay to Pay Prepetition Tax Obligations
Chiquita Brands International, Inc., and its debtor-affiliates
incurs use taxes, sales taxes, withholding taxes, income taxes,
property taxes, franchise taxes and other taxes payable to
various state and federal taxing authorities.  Robert W. Olson,
Senior Vice President, General Counsel and Secretary of Chiquita
Brands International, relates that the Taxes are paid over to
the various Authorities on a periodic basis, typically monthly
or annually.

As of the Petition Date, Mr. Olson tells the Court that the
Debtor has paid, when due, all Taxes owed to the Authorities.
However, Mr. Olson notes, certain Taxes - which relate to pre-
petition periods - will not become due until after the Petition

The Debtor estimates that the total amount of such Taxes
relating to pre-petition periods owing to the various
Authorities is approximately $3,100,000.  Of this amount, Mr.
Olson states, $2,400,000 is the estimated federal income taxes
for 2001.  According to Mr. Olson, these amounts represent an
ordinary course obligation of the Debtor.

Furthermore, the Debtor believes that some, if not all, of the
Authorities will audit the Debtor if the Taxes are not paid in
the ordinary course.  "Such audits would unnecessarily divert
the Debtor's attention away from the reorganization process,"
Mr. Olson complains.  Mr. Olson also notes that most of the
Taxes will likely be considered priority claims under the
Bankruptcy Code.

Accordingly, the Debtor sought and obtained Judge Aug's
permission to pay such Taxes to the relevant Authorities in the
ordinary course of business, as such payments become due.
(Chiquita Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   

CIRCLE K: Houlihan's Application Should Have Mentioned Sec. 328
The United States Court of Appeals for the Ninth Circuit handed
down a decision on The Circle K Corporation's on-going 6-year
challenge to professional fees billed by Houlihan, Lokey, Howard
& Zulkin when the firm served as financial advisor and
investment banker for the Official Committee of Bondholders in
Circle K's chapter 11 cases.  

Christopher H. Bayley and Lori A. Schmig, at Snell & Wilmer
L.L.P., represent Circle K and Thomas J. Salerno, Donald A. Wall
and Jordan A. Kroop, at Squire, Sanders & Dempsey L.L.P.,
represent HLHZ.  

Circuit Judge Fisher delivered the Ninth Circuit's to-be-
published Opinion:


     This appeal presents the question of how a professional
employed in the course of a Chapter 11 bankruptcy proceeding
can be assured that its fees will be reviewed under the
standards of 11 U.S.C. Sec. 328, rather than Sec. 330.  Section
328(a) permits a professional to have the terms and conditions
of its employment pre-approved by the bankruptcy court, such
that the bankruptcy court may alter the agreed-upon compensation
only "if such terms and conditions prove to have been
improvident in light of developments not capable of being
anticipated at the time of the fixing of such terms and
conditions." {n1}  In the absence of preapproval under Sec. 328,
fees are reviewed at the conclusion of the bankruptcy proceeding
under a reasonableness standard pursuant to 11 U.S.C. Sec.

     We hold that unless a professional's retention application
unambiguously specifies that it seeks approval under Sec. 328,
it is subject to review under Sec. 330. As a matter of good
practice, the bankruptcy court's retention order should likewise
specifically confirm that the retention has been approved
pursuant to Sec. 328 so as to avoid any ambiguity. The absence
of such a specific reference in the bankruptcy court's order,
however, would not of itself automatically override the
retention application's invocation of Sec. 328. {n2}

               Factual and Procedural Background

     The Circle K Corporation filed a voluntary petition for
relief under Chapter 11 of the Bankruptcy Code, 11 U.S.C. Sec.  
101 et seq., in May 1990. In July, the Official Debentures
Committee ("Bondholder Committee") sought approval from the
bankruptcy court to retain Houlihan, Lokey, Howard & Zukin as
its financial advisor.  In the Retention Application, the
Bondholder Committee requested authority "to enter into a letter
agreement dated as of July 12, 1990 establishing the terms and
conditions of HLHZ's engagement by the Committee" and attached
the Retainer Agreement as an exhibit.  The Retainer Agreement
specified that Houlihan Lokey would be "paid . . . a fee of
$100,000 per month . . . plus reasonable out-of-pocket
expenses."  The Retainer Agreement acknowledged that it was
"subject to the approval of the Court, which the Committee will
promptly use its best efforts to obtain."  The Retention
Application also stated that Houlihan Lokey would be paid
$100,000 per month and that "[a]ll fees so paid remain subject
to subsequent Bankruptcy Court approval in a final fee
application to be submitted to the Court."  Neither the
Retention Application nor the Retainer Agreement explicitly
mentioned Sec. 328.  

     The bankruptcy court subsequently authorized the Bondholder
Committee and the Unsecured Creditors Committee to retain
Houlihan Lokey. The court order provided that:

          the Debtors are authorized to pay [Houlihan Lokey]
          the amount of $100,000 per month and reimburse
          expenses as set forth in the Application and Retainer
          Agreement subject to review by the court in a final
          fee application to be submitted by [Houlihan Lokey]
          on notice pursuant to relevant provisions of the
          Bankruptcy Code.

The Retention Order did not mention Sec. 328 or Sec. 330.

     Houlihan Lokey submitted a First Amended Final Fee
Application in August 1995. {n3}  The bankruptcy court assessed
the reasonableness of Houlihan Lokey's fees and expenses under
11 U.S.C. Sec. 330 and entered orders granting one-half of
Houlihan Lokey's requested fees and costs and denying the other

     On appeal, the district court determined that Houlihan
Lokey had been employed pursuant to Sec. 328, reversed the
bankruptcy court's ruling and remanded the case "to award
Houlihan the fees requested unless the bankruptcy court finds
that the terms and conditions of its fee agreement are
`improvident in light of developments not capable of being
anticipated at the time of the fixing of the terms and
conditions'" -- the standard of review under Sec. 328.  After
Circle K's unsuccessful interlocutory appeal to this Circuit,
{n4} the bankruptcy court entered an order granting Houlihan
Lokey the full amount of fees and costs requested, as well as
interest and attorney's fees.  Circle K appealed to the district
court, which denied Circle K's appeal and affirmed the
bankruptcy court.  Circle K timely appealed to this Court.

                      Standard of Review

     We review de novo a district court's decision on an appeal
from a bankruptcy court. We also review de novo the bankruptcy
court's original decision of the applicable statutory provision,
and its decision to review Houlihan Lokey's fees for
reasonableness under 11 U.S.C. Sec. 330. See Friedman Enters. v.
B.U.M. Int'l, Inc. (In re B.U.M. Int'l Inc.), 229 F.3d 824, 827-
28 (9th Cir. 2000); see also Pitrat v. Reimers (In re Reimers),
972 F.2d 1127, 1128 (9th Cir. 1992).


     We must decide whether Houlihan Lokey was retained pursuant
to 11 U.S.C. Sec. 328, such that the bankruptcy court was not
permitted to engage in a Sec. 330 reasonableness inquiry. We
conclude that because the retention application did not
unambiguously specify that Sec. 328 governed, Sec. 330 review
was appropriate.

     The facts of this case are similar to those in our recent
decision In re B.U.M. Int'l.  There, the bankruptcy court
approved a professional's employment agreement, which provided
for a flat monthly fee as well as a contingency fee. The
retention application failed to cite Sec. 328, and the
bankruptcy court's retention order stated that "all fees and
costs of Friedman are subject to Court approval." In re B.U.M.
Int'l, 229 F.3d at 826.  When the professional applied to
collect its fees, the bankruptcy court conducted a Sec. 330
inquiry and denied the contingency fees altogether.  Id. at 827.
This Court affirmed, holding that the bankruptcy court had only
conditionally approved the employment application and that Sec.
330 review was therefore appropriate. Id. at 829-30.

     Here, even though the Bondholder Committee sought prior
approval from the bankruptcy court to enter into a flat monthly
fee arrangement with Houlihan Lokey, the Retention Application
did not specifically refer to Sec. 328 and it provided that "all
fees so paid remain subject to subsequent Bankruptcy Court
approval in a final fee application to be submitted to the
Court."  (Emphasis added.)  The Retention Order also made no
reference to either Sec. 328 or Sec. 330.  Finally, the
bankruptcy court authorized the Bondholder Committee to pay
Houlihan Lokey $100,000 per month, "subject to review by the
court in a final fee application to be submitted by [Houlihan
Lokey]. . . ."  (Emphasis added.)  Therefore, we conclude that
the bankruptcy court only conditionally approved Houlihan
Lokey's retention and that Sec. 328 does not apply. The
bankruptcy court was originally correct to review Houlihan
Lokey's fees for reasonableness under Sec. 330.

     Our conclusion is bolstered by the bankruptcy court's
stated belief that it had not unconditionally approved Houlihan
Lokey's fees under   328. In its original order denying
Houlihan Lokey half of its requested fees and expenses, the
bankruptcy court refused to apply   328. On remand, as it
carried out its instructions from the district court, the
bankruptcy court explicitly stated that its intent had been to
approve a retention on the basis of Sec. 330, not Sec. 328.

     Moreover, another professional involved in this same
bankruptcy proceeding, Merrill Lynch, did explicitly specify
Sec. 328 in its retention application.  The bankruptcy court in
its retention order stated that the debtors were empowered to
pay Merrill Lynch "without further court order; provided,
however, that all such payments of compensation and
reimbursement of expenses by Debtors to Merrill Lynch shall be
subject to the right of the Bankruptcy Court under 11 U.S.C.
Sec. 328(a) to review such payments."  In contrast to Houlihan
Lokey, Merrill Lynch properly invoked Sec. 328 and the
bankruptcy court acknowledged that fact.

     We respectfully disagree with the Fifth Circuit's decision
in Donaldson Lufkin & Jenrette Sec. Corp. v. Nat'l Gypsum
Co. (In re Nat'l Gypsum Co.), 123 F.3d 861 (5th Cir. 1997).  
There the court held that a professional had been employed
pursuant to Sec. 328 even though Sec. 328 was not specified in
the retention application and the bankruptcy court's order
stated that "[t]he Court retains the right to consider and
approve the reasonableness and amount of DLJ's fees on both an
interim and final basis."  Id. at 862.  In this Circuit, unless
a professional is unambiguously employed pursuant to Sec. 328,
its professional fees will be reviewed for reasonableness under
Sec. 330.  To ensure that Sec. 328 governs the review of a
professional's fees, a professional must invoke the section
explicitly in the retention application.  Preferably, the
retention order would specify that section as well. {n5}


     In this case, Houlihan Lokey failed unambiguously to invoke
Sec. 328 in its Retention Application, and the bankruptcy
court's Retention Order did not mention Sec. 328 or otherwise
make clear that Sec. 328 applied. Therefore, Sec. 330 review was
appropriate.  We reverse the district court's decision and
remand the case with instructions to grant Houlihan Lokey's
fees and expenses in accordance with the bankruptcy court's
Sec. 330 assessment.


     {n1} "The trustee . . . with the court's approval, may
employ or authorize the employment of a professional person
under section 327 or 1103 of this title, as the case may be, on
any reasonable terms and conditions of employment, including on
a retainer, on an hourly basis, or on a contingent fee basis.
Notwithstanding such terms and conditions, the court may
allow compensation different from the compensation provided
under such terms and conditions after the conclusion of such
employment, if such terms and conditions prove to have been
improvident in light of developments not capable of being
anticipated at the time of the fixing of such terms and
conditions." 11 U.S.C. Sec. 328(a).

     In contrast, Section 330 provides that the bankruptcy court
"may award to a trustee, an examiner, a professional person
employed under section 327 or 1103 -- (A) reasonable  
compensation for actual, necessary services rendered by the
trustee, examiner, professional person, or attorney and by
any paraprofessional person employed by any such person; and (B)
reimbursement for actual, necessary expenses." 11 U.S.C. Sec.
330(a)(1).  Section 328 permits a professional to avoid 11
U.S.C. Sec. 330, which specifies the procedure to compensate a
professional at the conclusion of the bankruptcy proceeding.

     (n2) Of course, a bankruptcy court is not compelled to
accept a professional's employment under Sec. 328 merely because
the application cites that statutory provision.  The bankruptcy
court is free to make clear that it is only conditionally
approving the professional's retention, such that Sec. 330 is
applicable. Our point is merely that if a professional's  
retention application cites Sec. 328 and the bankruptcy court's
order otherwise makes clear that the retention has been approved
pursuant to Sec. 328, we will consider Sec. 328 to apply even if
the retention order does not specifically reference that

     (n3) Houlihan Lokey submitted its first Final Fee
Application "pursuant to Sections 327 and 330," rather than
pursuant to Sec. 328.  In its First Amended Final Fee
Application, Houlihan Lokey stated that the applicable legal
standard of review was that of Sec. 328. Circle K contends that,
because Houlihan Lokey cited Sec. 330 in its first Final Fee
Application, it should be judicially estopped from now arguing
that Sec. 328 applies.  We need not resolve this issue in light
of the ruling that Sec. 328 does not apply.

     {n4} We dismissed Circle K's appeal for lack of

     {n5} Once again, we encourage bankruptcy courts to identify
clearly which statutory provision applies to a professional's
retention.  Of course, failure to cite either Sec. 330 or Sec.
328 is not fatal, as the context of the retention order should
ordinarily make clear which provision is applicable.

COMDISCO INC: Equity Panel Seeks to Block HP Termination Fee
The Official Committee of Equity Security Holders of Comdisco,
Inc., and its debtor-affiliates asks Judge Barliant to preclude
the payment of any termination fee and expense reimbursement to
Hewlett-Packard Company.

Carmen H. Lonstein, Esq., at Bell, Boyd & Lloyd LLC, in Chicago,
Illinois, reminds Judge Barliant that he ruled from the bench at
the Availability Solutions Sale Hearing that Hewlett-Packard was
not a good faith purchaser because of its eleventh-hour low-ball
bidding.  A bidder who was declared not to be a good faith
purchaser, the Committee contends, should be precluded from
receiving a break-up fee in bankruptcy. (Comdisco Bankruptcy
News, Issue No. 16; Bankruptcy Creditors' Service, Inc.,

CRESCENT OPERATING: Shareholders Approve Proposed Restructuring  
Crescent Operating, Inc, (OTCBB:COPI.OB) announced the results
of its Annual Meeting of Stockholders, held December 6, 2001.

The Company's stockholders approved each item submitted to them
for vote at the Annual Meeting as described in the Company's
proxy statement for the meeting, including certain major
interrelated and mutually dependent asset sale, restructuring
and financing transactions submitted as parts of a single
proposal. The other proposals approved by the Company's
stockholders were the election of Richard E. Rainwater and
Anthony E. Frank to new three-year terms on the Company's Board
of Directors and ratification of the appointment of Ernst &
Young LLP as the Company's independent auditors for the fiscal
year ending December 31, 2001.

The receipt of stockholder approval of the Restructuring
Proposal satisfies one of several conditions to the closing of
the transactions included in the Restructuring Proposal. As
disclosed in the Company's proxy statement for the Annual
Meeting and again in its quarterly report on Form 10-Q filed
November 14, 2001, Crescent Machinery is currently in payment
default on certain major loans from commercial lending
institutions. Among the other conditions to the closing of the
transactions included in the Restructuring Proposal is the
consent of Crescent Machinery's secured lenders, including those
institutions. Crescent Machinery is currently negotiating with
these lenders regarding these defaults and the possible
restructuring of the loans. The differences in the positions of
the lenders and Crescent Machinery are significant and, as a
result, management is not optimistic that an agreement will be
reached with these lenders. Without the consent of the lenders,
it is unlikely that the Restructuring Proposal will be
consummated. Any failure by the Company to consummate the
transactions included in the Restructuring Proposal would
greatly impair the Company's prospects to continue to operate as
a going concern.

CONSECO: Fitch Junks Ratings On Green Tree Trust Certificates
Fitch downgrades certain limited guaranty classes of Conseco
Finance Corp.'s Green Tree recreational, equipment and consumer
trusts to 'CCC' from `B' and removes them from Rating Watch
Negative. This action follows Fitch's downgrade of Conseco
Finance Corp.'s (Conseco) senior debt rating to 'CCC' from 'B'
on November 21, 2001. To date, the ratings on the affected
securities have reflected the financial strength of Conseco
(formerly Green Tree Financial Corp.) as guarantor. However, the
certificates are also supported by monthly excess interest off
the assets, which, in certain transactions, is sufficient to
maintain a rating above the 'CCC' rating of the company.

The downgraded securities are:

   Green Tree Financial Corp. and Conseco Finance Corp.

Recreational, equipment and consumer contracts certificates:

    * Series 1998-B asset-backed certificates, class B-2,
      downgraded to 'CCC' from `B' off Rating Watch Negative;

    * Series 1998-C asset-backed certificates, class B-2,
      downgraded to 'CCC' from 'B' off Rating Watch Negative;

    * Series 1999-A asset-backed certificates, class B-2,
      downgraded to 'CCC' from 'B' off Rating Watch Negative.

The following transactions' ratings remain on Rating Watch

     Green Tree Financial Corp. and Conseco Finance Corp.

Recreational, equipment and consumer contracts certificates:

    * Series 1996-B asset-backed certificates, rated `B', Rating
      Watch Negative;

    * Series 1996-C asset-backed certificates, rated `B', Rating
      Watch Negative;

    * Series 1996-D asset-backed certificates, rated `B', Rating
      Watch Negative;

    * Series 1997-A asset-backed certificates, rated `B', Rating
      Watch Negative;

    * Series 1997-B certificates, class B, rated `B', Rating
      Watch Negative;

    * Series 1997-C certificates, class B, rated `B', Rating
      Watch Negative;

    * Series 1997-D asset-backed certificates rated `B', Rating
      Watch Negative;

    * Series 1998-A certificates, class B-C, rated `B', Rating
      Watch Negative;

    * Series 1998-A certificates, class B-H, rated `B', Rating
      Watch Negative.

Should asset performance deteriorate further than expected, the
ratings on these classes may be lowered.

According to DebtTraders, Conseco Inc. 10.500% bonds due in 2004
(CNC8) trade in the low 50s. For real-time bond pricing, see

DAN RIVER: S&P Ratchets Low-B and Junk Ratings Down a Notch
Standard & Poor's lowered its long-term corporate credit rating
on Dan River Inc. to single-'B'-minus from single-'B'. At the
same time, the subordinated debt rating was lowered to triple-
'C' from triple-'C'-plus. The ratings are also placed on
CreditWatch with negative implications.

Total rated debt is about $120 million.

The rating actions reflect Standard & Poor's concerns regarding
Dan River's liquidity, continued difficult operating conditions,
and weak financial performance. The company is in the process of
negotiating an amendment to its bank facility due to covenant
violations. Although the bank group has granted a waiver through
Dec. 10, 2001, the revolving credit facility is currently frozen
at $120 million. Furthermore, Dan River's operating results
through the third quarter ended Sept. 30, 2001 continued to be
weak as a result of softness at retail, higher promotional
activity, and production curtailments to reduce inventory levels
that led to continued margin pressures across all of its
business lines. Resolution of the CreditWatch status will depend
on Dan River's ability to improve its liquidity position by
amending its credit facilities, and its ability to improve its
operating results and credit protection measures.

Dan River is a leading manufacturer and marketer of textile
products for the home fashions and apparel fabric markets.

DAW TECHNOLOGIES: Appoints Simpson as Finance Manager in Europe
Daw Technologies, Inc. (Nasdaq: DAWK, DAWKE), a leader in the
design, engineering and installation of ultra-clean
manufacturing environments, announced the appointment of Norman
Simpson as finance manager for the company's European operations
headquartered in Livingston, Scotland.

The company also announced that its business continues
notwithstanding its present efforts to reconcile several general
ledger accounts relating to its European operations and to
complete and file with the Securities and Exchange Commission
its quarterly report for the three-month period ended September
30, 2001.

Simpson, who joined the company in October, is a chartered
accountant who trained with Touche Ross in the United Kingdom,
and who has also gained a distinction in commercial law at
Glasgow University in Scotland.  Prior to joining Daw, Simpson
was director of finance and corporate secretary for a major U.K.
construction company.

"Norman adds the depth and expertise needed at this critical
time by our European operations," said B.J. Mendenhall, Daw's
chief financial officer. "Norman has been instrumental in the
company's investigation of the recently disclosed accounting
issues that have involved the European operations.  He has also
been a vital part of remedying the situation and will play a key
role in formulating and implementing the policies and procedures
necessary to assure that similar problems do not reoccur."

"Our financial team in both the U.S. and the U.K. has been
working very closely with our current and previous auditors to
bring this situation into focus as quickly as possible," said
Michael J. Shea, president of Daw.  "We believe we have
identified the source of the accounting problems in the U.K.
office, and we anticipate being able to provide a full report to
all interested parties and make our delayed SEC filing in the
near future."

Daw announced on November 19 that it was unable to file its
financial results for the third quarter of 2001 in a timely
manner because it had been unable to reconcile several general
ledger accounts relating to its European branch office
operations.  According to the company, the difficulty in
reconciling these accounts related to the complexities involved
in operating a multinational construction company, particularly
the effects of fluctuating foreign currencies on contracts in
progress and on project revenue and costs.

Daw further announced on November 27 that it had received a
delisting notice from Nasdaq, and Nasdaq halted trading in Daw
stock on November 20. The company has appealed Nasdaq's
delisting notice, and company executives are scheduled to meet
with Nasdaq representatives on December 20 in Washington, D.C.

"At the same time that we are dealing with this important issue,
business continues apace at Daw Technologies," Shea said.  "For
example, we continue to secure new contracts and are building
"best-in-class" ultra-clean manufacturing environments for our
clients worldwide.  We are also finding success as we continue
our efforts to diversify and broaden our products, markets and
geographic mix.

"Although the recently discovered accounting issues are serious,
they have not negatively impacted our ability to do what we do
best -- engineer, design, manufacture, install and service ultra
-- clean manufacturing environments the world over.  Management
is confident that the company will continue to move forward as
one of the leading companies in the cleanroom industry despite
any setback that may be created by these accounting issues."

Daw Technologies, Inc. provides ultra-clean manufacturing
environments for customers throughout the world, and specializes
in the design, engineering and installation of cleanroom and
mini-environment systems that meet stringent semiconductor and
pharmaceutical manufacturing requirements.  The company also
provides contract manufacturing and specialized painting
services on an OEM (original equipment manufacturer) basis for
various customers.  For further information, visit the company
on the Internet at or call 801-977-3100.

E.SPIRE COMMS: Selling CyberGate Assets to Chairman G.F. Schmitt
e.spire Communications, Inc. (OTC Pinksheets: ESPIQ) announced
that it has signed an agreement to sell its Florida-based
Internet subsidiary, CyberGate, Inc., to e.spire Chairman George
F. Schmitt. To accomplish the sale, it has filed a motion with
the U.S. Bankruptcy Court for the District of Delaware
requesting expedited approval of sale procedures, which include
a procedure for the submission of competitive bids and the
scheduling of an auction and a hearing to consider approval of
the sale.

"e.spire wants to sell CyberGate and I have decided to buy it
because I think it is a valuable asset and an excellent
investment," said Schmitt.

e.spire's Board of Directors recommended approval of the deal,
which will add up to $15.5 million in cash to e.spire's cash
reserves. This additional cash will be important as negotiations
of exit financing continue and a business plan is finalized for
emergence from Chapter 11 bankruptcy protection, for which the
company voluntarily filed on March 22 of this year.

"George will continue to run e.spire," said Bradley E. Sparks,
e.spire Chief Financial Officer. "Tomas V. Mikaelsson will
remain as President of CyberGate and continue to manage day-to-
day operations. No major operational changes are planned at this

CyberGate is a wholly owned subsidiary of e.spire
Communications, Inc., headquartered in Fort Lauderdale, FL.
CyberGate's subsidiary, ValueWeb, offers a comprehensive line of
shared and dedicated Web hosting, colocation, and related
managed services. Featuring state-of-the-art facility and
network infrastructure, e-commerce, and Web design applications,
ValueWeb provides its customers with turnkey resources for
enhancing their Web sites' effectiveness in the marketplace. Now
hosting more than 120,000 domains for customers in more than 136
countries, ValueWeb is one of the largest Web hosting companies
in the world.

e.spire Communications, Inc. is a leading integrated
communications provider, offering traditional local and long
distance, dedicated Internet access, and advanced data
solutions, including ATM and frame relay. e.spire also provides
Web hosting, dedicated server, and colocation services through
its Internet subsidiary, CyberGate, Inc., and its subsidiary
ValueWeb. e.spire's subsidiary, ACSI Network Technologies, Inc.,
provides third parties, including other communications concerns,
municipalities, and corporations, with turnkey fiber-optic
design, construction, and project management expertise. More
information about e.spire is available at e.spire's Web site,  

ENRON CORP: Obtains Approval to Continue Cash Management System
Historically, Enron Corporation's United States Companies
managed cash through two primary banks: Bank of America and
Citibank, according to Martin J. Bienenstock, Esq., at Weil,
Gotshal & Manges.  But just recently, Mr. Bienenstock tells the
Court, the Debtors have begun all processes necessary to close
each of the Enron Companies' accounts maintained at Bank of
America and are opening check collection accounts at JPMorgan
Chase Bank.

Mr. Bienenstock explains that the Enron Companies' JPMorgan
Chase Bank accounts and lockboxes are primarily collection
accounts while the Enron Companies' Citibank accounts are
primarily used for wire, check and automated clearing house

In conjunction with the closing of the Bank of America accounts,
Mr. Bienenstock relates, Enron's customers have been given
instructions to remit wire transfers to accounts at Citibank
established for each business unit.  "This change prevents funds
received late in any day from being unavailable for use or
inefficiently invested," Mr. Bienenstock notes.

Cleared funds, available at the JPMorgan Accounts for each Enron
Company, are transferred from the Debtors' JPMorgan
concentration account to the Debtors' Citibank concentration
account based on the available balance in all grouped accounts,
Mr. Bienenstock continues.  At the end of each day, Mr.
Bienenstock notes, JPMorgan Chase Bank transfers any cash in the
JPMorgan Accounts into the Debtors' concentration account.  
"Funds from these accounts are automatically transferred to such
Debtors' account at JPMorgan Chase Bank," Mr. Bienenstock
informs Judge Gonzalez.

On the other hand, Mr. Bienenstock notes, each business unit has
established a cash services account at Citibank.  In order to:

  (i) maintain a more efficient process for the disbursement and
      investment of cash,

(ii) reduce administrative expenses,

(iii) maintain accurate information regarding receipts, account
      balances and disbursements, and

(iv) ensure compliance with the Debtors' accounting and
      disbursement control procedures,

Mr. Bienenstock explains that the Debtors' accounting system
directs payment orders from each Enron Company to the designated
account.  In addition, Mr. Bienenstock says, Citibank's system
automatically debits these cash services accounts for checks and
automated clearing house transfers to be cleared each day.  At
the end of each day, Mr. Bienenstock continues, amounts required
to fund disbursement accounts for wire transfers and checks, or
amounts representing net funds collected, are automatically
debited or credited, as the case may be, from the Debtors'
Citibank concentration account.  "Wire payments are interfaced
directly from the Debtors' systems to Citibank, and check files
are sent for printing to Citibank Delaware and The Moore Store,
an outsourced service provider," Mr. Bienenstock states.

A few days before the Petition Date, the Debtors asked Citibank
to temporarily suspend the automated funding processes.  But
now, the Debtors seek to reinstate these automated funding

In addition, Mr. Bienenstock relates, the Enron Companies also
maintain a separate, centralized payroll account in the name of
Enron Corp.  Moreover, Mr. Bienenstock says, Enron Corp. funds
employee services accounts, such as medical accounts,
prescription drug accounts, etc.

The United States Trustee generally requires a debtor in
possession to close all pre-petition bank accounts and open new
debtor in possession bank accounts.  In addition, the U.S.
Trustee may require a debtor in possession to maintain separate
accounts for cash collateral and taxes.  However, Mr.
Bienenstock notes that in complex chapter 11 cases, courts often
waive these requirements, recognizing that such requirements are
often impractical in such cases.

The Debtors contend that a similar waiver is appropriate in
these chapter 11 cases.  "The Debtors' cash management system,
of which the JPMorgan Accounts and Citibank Accounts are an
integral part, provides an efficient and secure means of
managing and disbursing cash for the Enron Companies' operations
on a daily basis," Mr. Bienenstock observes.  If the Debtors are
forced to close each of the JPMorgan Accounts and Citibank
Accounts and to open new accounts, Mr. Bienenstock argues, it
could unnecessarily impair the Debtors' business operations and
disrupt the Debtors' cash management system.  Worse, Mr.
Bienenstock says, it could hinder the operation of the Debtors'
businesses during the critical initial stages of their chapter
11 cases.

According to Mr. Bienenstock, the Debtors' centralized cash
management system is beneficial to the Debtors, their estates
and creditors because it enables the Debtors to reduce the
administrative expenses involved in moving funds, to maintain
more accurate information regarding receipts, account balances
and disbursements, to maintain a more efficient process for the
investment of cash, and to ensure compliance with the Debtors'
accounting and disbursement control procedures.

By motion, the Debtors sought and obtained authority to:

  (a) maintain and continue to use any or all of their existing
      JPMorgan Accounts and Citibank Accounts in the names and
      with the account numbers existing immediately prior to
      their chapter 11 cases; provided, however, that the
      Debtors reserve the right to close some or all of their
      pre-petition bank accounts and open new debtor in
      possession accounts;

  (b) deposit funds in and withdraw funds from any such accounts
      by all usual means including, but not limited to, checks,
      wire transfers, automated clearinghouse transfers,
      electronic funds transfers and other debits; and

  (c) treat their pre-petition bank accounts (and any accounts
      opened post-petition) for all purposes as debtor in
      possession accounts.

Furthermore, the Debtors ask Judge Gonzalez to authorize and
direct all banks with which the Debtors maintains bank accounts
to continue to maintain, service and administer such accounts,
except that such banks shall not be authorized to honor any
check issued or dated prior to the Petition Date absent an order
of this Court.

Moreover, the Debtors request that the Court authorize them to
continue to utilize their existing cash management system
including, without limitation, waiving any requirement that the
Debtors establish separate accounts for cash collateral and/or
tax payments and authorizing the payment of any costs or
expenses associated with the maintenance of the cash management
system. (Enron Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

ENRON: S&P Says Bankruptcy Has Limited Effect on Global CDOs
Standard & Poor's said that the recent bankruptcy of Enron Corp.
(Enron) would have only a limited impact on the performance of
its rated cash flow CDO transactions, and, in and of itself, is
unlikely to result in the lowering of the ratings assigned to
these transactions.  This is in contrast to rated synthetic CDO
transactions, where a significant number of deals have been
subject to negative rating action as a result of the Enron

Standard & Poor's has reviewed the collateral pools of its
globally rated cash flow CDO transactions and arrived at the
following conclusions:

     -- Eleven arbitrage CBO and CLO transactions collateralized
primarily by high-yield bonds or leveraged loans had exposure to
Enron obligations. The average exposure to Enron for these deals
was approximately 0.65% of the par value of the collateral pool,
with the highest single exposure among the deals at 0.91%. Given
that CBO and CLO transactions collateralized primarily by
speculative grade assets are structured with equity tranches of
8% to 10%, exposures to defaults of these sizes should not in
and of themselves cause instability in the ratings assigned to
the senior tranches, unless a transaction's performance was
already under stress prior to the Enron bankruptcy.

     -- Four arbitrage CBO transactions collateralized primarily
by investment-grade bonds (investment-grade CBOs) had exposure
to obligations issued by Enron. The average exposure to Enron
for these four deals was approximately 1.00% of total par, with
the highest single exposure at 1.15%. Since investment-grade CBO
transactions, with a typical equity tranche sized at 4%, are
more highly levered than CDO transactions collateralized by
speculative grade assets, the exposure to Enron is therefore of
greater concern in these transactions. However, all four of
these transactions have performed strongly to date, and no
volatility due solely to Enron exposure is expected within the
ratings assigned by Standard & Poor's to the senior tranches in
these transactions.

     -- A review of Standard & Poor's balance sheet CLO
transactions worldwide showed that several had exposure to
obligations issued by Enron, with the highest single exposure at
approximately 1.39% of the collateral pool. However, a complete
picture of the balance sheet CLO transactions is not yet
available because some of the domestic U.S. master trust CLO
transactions are blind pools, meaning that the names of the
obligors within the collateral pools are confidential and are
not routinely disclosed to participants in the transaction
outside of the issuing bank. The exposure to obligations issued
by Enron for these transactions has not been immediately
assessable. Standard & Poor's will continue to work with the
issuing banks for these transactions to evaluate the extent of
the master trust CLO transactions' exposure to Enron (if any),
and to assess the impact of any exposures upon the transactions.

In contrast to the impact of the Enron bankruptcy on cash flow
CDO transactions, the impact of the bankruptcy on synthetic CDO
transactions is expected to be much more prevalent and lead to a
significant number of negative rating actions. This is because
synthetic CDOs are collateralized by investment-grade assets,
many have material exposure to Enron obligations, and because
the synthetic CDOs are highly leveraged.

FEDERAL-MOGUL: Wants Lease Decision Period Extended to April 1
Federal-Mogul Corporation, and its debtor-affiliates request the
entry of an order granting a 4-month extension of the sixty-day
period to assume or reject non-residential real property leases
through and including April 1, 2002. Such an extension would be
subject to and without prejudice to the rights of the Debtors to
request a further extension of the time to assume or reject the
Real Property Leases.

James O'Neill, Esq., at Pachulski Stang Ziehl Young & Jones
P.C., in Wilmington, Delaware, informs the Court that since the
Petition Date, the Debtors' management and professionals have
been consumed with obtaining interim and final approval of the
first day motions including the debtor in possession financing
facility; responding to information requests and concerns of the
Committees and various creditor constituencies; and handling the
typical business emergencies that occur immediately following
the commencement of a chapter 11 case of a large operating
company.  As a result, the 60-Day Period has not provided a
sufficient amount of time for the Debtors to determine whether
to assume or reject the approximately 90 Real Property Leases,
other than the leases for which the Debtors have concurrently
filed a motion to reject.

Pending the Debtors' election to assume or reject the Real
Property Leases, Mr. O'Neill assures the Court that the Debtors
will perform all of their obligations arising from and after the
Petition Date in a timely fashion, including payment of post-
petition rent due, as required by section 365(d)(3) of the
Bankruptcy Code. As a result, there should be little or no
prejudice to the Lessors as a result of the requested extension.

Given the importance of the Real Property Leases to the Debtors'
ongoing operations and the voluminous number of leases at issue,
the Debtors propose that the deadlines for making these
decisions be extended through April 1, 2002. The Debtors submit
that the time period extended should be granted subject to and
without prejudice to the rights of the Debtors to request a
further extension of the time to assume or reject any Real
Properly Leases. (Federal-Mogul Bankruptcy News, Issue No. 7;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

FLEETWOOD: S&P Slashes Ratings on Preferred Securities to D
Standard & Poor's lowered its corporate credit rating on
Fleetwood Enterprises Inc. to double-'B'-minus. At the same time
the rating on Fleetwood Capital Trust is lowered to 'D'. Both
ratings are removed from CreditWatch, where they were placed on
March 1, 2001. The outlook remains negative.

The lowered corporate credit rating reflects a materially
weakened business position, due to the continued, very
competitive industry conditions for both of Fleetwood's major
business segments. In addition, Fleetwood's financial profile
remains constrained, as reflected by the granting of security to
the company's bank lenders and the recent discontinuation and
deferral of the company's common and preferred dividends,

This established manufactured housing and recreational vehicle
manufacturer has taken a number of important steps over the past
six months to materially realign its operations and management
infrastructure, improve its product offering, and shore up its
external liquidity position. However, given current industry
conditions and uncertain near-term economic prospects, it is not
likely that debt-protection measures will return to historically
strong levels in the near to intermediate term. In addition, the
company recently had to obtain covenant relief from its banks
due to recently lowered second-quarter earnings guidance.

Standard & Poor's earlier downgrade and CreditWatch placement
were prompted by a sizeable loss in the third quarter related to
goodwill impairment charges and very weak performance within the
retail manufactured housing and recreational vehicle businesses.
The losses also tripped a debt covenant related to an $80
million senior note private placement. The fourth quarter
produced further weakened operating results for both retail
manufactured housing and recreational vehicle segments.
Including the large impairment charges (which reflected close to
70% of the goodwill related to the company's ill-timed retail
expansion), Fleetwood's total reported earnings for the fiscal
year ended April 2001 swung to a $283 million loss from an $83
million profit the prior year. Leverage increased to 61%, and
only the company's wholesale manufactured housing business was
operating profitably.

In late July, the company did successfully put in place a
longer-term bank financing, which enabled the full repayment of
the senior notes, although the bank lenders became fully secured
by most of the company's assets. The

$190 million secured revolver is due in 2004, and a $30 million
secured term loan is due in 2003. In addition, Fleetwood entered
into a new, yet smaller fully secured $45 million floor plan
financing agreement with Conseco. While the company's first
quarter results (for the period ended July 31) were weak, it
appeared that the company was moving toward a break-even
operating position for the coming second quarter (ended Oct.
28). However, materially altered consumer confidence post Sept.
11 has negatively impacted demand for the company's recreational
vehicle products. In addition, a longer recession than had been
expected could further exacerbate stubbornly weak fundamentals
within the struggling manufactured housing industry.

In light of revised expectations for a likely second quarter
loss, management recently announced that it would elect to defer
the quarterly distribution on its 6% convertible trust preferred
securities, and will also discontinue paying common dividends
(which had been cut just about one year ago to roughly four
cents/share). This move will conserve an additional

$5.6 million in cash per quarter. The company has also recently
announced the commencement of an exchange offer on the existing
convertible trust preferred securities and an additional offer
of new convertible trust preferred securities for cash. The new
9.75% convertible trust preferred securities due in February
2013, may be exchanged for up to $86.25 million in aggregate
liquidation amount of the existing 6% convertible trust
preferreds due in February 2028. The exchange offer will expire
on Jan. 4, 2002.

                    Outlook: Negative

The outlook remains negative given prospects for continued weak
performance within both of Fleetwood's primary businesses.
Financial flexibility has been bolstered by the new financing
arrangements, and the omitted/deferred dividends will improve
internal liquidity. However, until it is clear that operating
losses have reached a trough, Fleetwood's corporate credit
rating will be vulnerable to further downgrades.

          Ratings Lowered And Removed From Creditwatch

          Issue                              To        From

     Fleetwood Enterprises Inc.
            Corporate credit rating          BB-       BB+
     Fleetwood Capital Trust
            Preferred securities             D         B+

FLEETWOOD: Commences Offer for Conv. Trust Preferred Securities
Fleetwood Enterprises, Inc. (NYSE: FLE), the nation's largest
manufacturer of recreational vehicles and a leading producer and
retailer of manufactured housing, announced the commencement of
an exchange offer for its existing convertible trust preferred
securities and an additional offer of new convertible trust
preferred securities for cash.  The new 9.75% convertible trust
preferred securities due February 15, 2013, of Fleetwood Capital
Trust II may be exchanged for up to $86.25 million in aggregate
liquidation amount of Fleetwood Capital Trust's outstanding 6%
convertible trust preferred securities due February 15, 2028
(CUSIP No. 399072407).

Pursuant to the exchange offer, holders can elect to exchange
their old securities for new securities.  Holders will receive
$20 in liquidation amount of new securities for each $50 in
liquidation amount of their old securities. Payment obligations
under the new securities will be subordinated to the Company's
payment obligations under its senior debt but will rank senior
to its obligations under the old securities that remain
outstanding after completion of the exchange offer.

No more than $34.5 million in aggregate liquidation amount of
new securities will be issued in exchange for old securities.  
If more than $86.25 million in aggregate liquidation amount of
old securities are validly tendered in the exchange offer, the
Company will accept old securities for exchange on a pro rata

In conjunction with the exchange offer, Fleetwood is also
offering investors the right to purchase up to an aggregate of
$50 million in liquidation amount of additional new securities
for cash pursuant to the cash offering.  The cash offering is
not conditioned upon a minimum number of new securities being
sold in the cash offering nor upon consummation of the exchange

The exchange offer will expire at 5:00 p.m., New York City time,
on January 4, 2002, unless the Company extends the offer.  The
cash offering may close earlier than the exchange offer.

Holders must tender their old securities on or prior to the
expiration date in order to receive new securities.  The
exchange offer is subject to the satisfaction of specified
conditions, including receipt of valid tenders from holders of
at least $50 million in aggregate liquidation amount of old
securities, and the receipt of proceeds in the cash offering of
an amount equal to at least 31% of the aggregate liquidation
amount of old securities tendered and accepted in the exchange

The complete terms of the exchange offer and cash offering are
contained in the preliminary prospectus and exchange offer
documents dated December 5, 2001.

Fleetwood Enterprises has filed a Registration Statement with
the Securities and Exchange Commission on Forms S-3 and S-4, and
has also filed a Schedule TO.  The Registration Statement and
the preliminary prospectus and exchange offer documents
contained in the Registration Statement contain important
information about Fleetwood, the exchange offer, the cash
offering, and related matters.  Security holders and potential
investors are urged to read the Registration Statement and the
preliminary prospectus and exchange offer documents, the
Schedule TO and any other relevant documents filed by Fleetwood
Enterprises with the SEC.  These and any other relevant
documents can be accessed for free through the Website
maintained by the SEC at  In addition, these  
documents are available free of charge by contacting the
Information Agent for the offer, D.F. King & Co., at (800) 290-

The Registration Statement has not yet become effective.  The
new securities may not be sold in the cash offering until the
Registration Statement is declared effective, and although
holders of the old securities may tender their old securities,
tenders in the exchange offer may not be accepted prior to the
expiration time of the exchange offer.  This press release shall
not constitute an offer to sell or an offer to buy nor shall
there be any sale of the new securities in any state in which
such offer, solicitation or sale would be unlawful.

HMG WORLDWIDE: Nasdaq Requests More Info About Bankruptcy Filing
HMG Worldwide Corporation (NASDAQ: HMGC) a world class in-store
marketing company, announced that on November 28, 2001 the
Company received a second request from NASDAQ stating the need
for the Company to submit certain information regarding the
Company's recent filing for protection under Chapter 11 of the
U.S. Bankruptcy Code as set forth in Market Place Rule
4330(a)(l) and 4330(a)(3), and therefore, that its securities
are subject to delisting from the NASDAQ Small Cap Market.

The Company has requested an oral hearing before a NASDAQ
Listing Qualifications Panel to review the Staff Determination.
A hearing date has not been set. The Company intends to present
its plan for regaining compliance with the continued listing
requirements. However, there can be no assurance that the Panel
will grant the Company's request for waiver and continued
listing after the hearing.

In the event the Panel determines to delist the Company's common
stock, the Company will not be notified until the delisting has
become effective.

Headquartered in New York City, HMG Worldwide Corporation has
spent the past 35 years committed to creating in-store
merchandising programs for many of the world's largest consumer
goods manufacturers and retailers, including Walgreens, CVS,
Wal-Mart, Kmart, Target, Home Depot, Lowes, Procter & Gamble,
Nestle, Chanel, Krispy Kreme, Bristol-Meyers Squibb, Sony,
Microsoft, Just For Feet, Sara Lee Foods, L'eggs (invented
original 'egg' displays), Pillsbury, and many others. Through
the unique integration of point-of-purchase marketing services
and traditional and digital design services, HMG provides its
clients with insights, solutions and opportunities that create
results wherever purchase decisions are made.

For more information, please visit the Company's Web site at

HAYES LEMMERZ: Moves to Pay $40MM of Critical Vendor Claims
Prior to the Petition Date, Hayes Lemmerz International, Inc.,
and its debtor-affiliates implemented certain internal
procedures designed to limit the Debtors' expenditures. In the
weeks leading up to the Petition Date, Kenneth A. Hiltz, Hayes
Lemmerz's Chief Financial Officer and Chief Restructuring
Officer, relates, the Debtors attempted to pay, to the greatest
extent possible, only those vendors that the Debtors believed
are or would be critical to a restructuring.

By Motion, the Debtors ask the Bankruptcy Court for authority to
pay up to $40,000,000 of Critical Vendor Claims. This amount,
Mr. Hiltz notes, represents less than 1.5% of the Debtors' total
liabilities as of the Petition Date.  Mr. Hiltz is convinced
that these payments are necessary to ensure that the Debtors
continue receiving adequate amounts of trade credit on a
postpetition basis.

Mr. Hiltz explains that the Company's Management did thorough
review of their accounts payable and their list of prepetition
vendors to identify those vendors who are essential to  
operations.  In determining the amount of claims the Debtors are
seeking to pay, the Debtors consulted with the controllers of
each of their facilities and others throughout the Debtors'
management and purchasing operations to identify those creditors
that are most essential to the Debtors' operations.  Decisions
about which vendors are or aren't critical focused on four

      (a) whether the vendor in question was a "sole-source"
          vendor; that is, whether the Debtors could readily
          obtain the vendor's product elsewhere,

      (b) whether certain quality control requirements of the
          Debtors' OE customers prevent the Debtors from looking
          to alternative sources for a vendor's products,

      (c) whether the Debtors receive advantageous pricing or
          other terms from a vendor such that replacing such
          vendor postpetition would result in significantly
          higher costs to the Debtors, and

      (d) whether a vendor might be forced to cease business
          operations in the event its prepetition claim against
          the Debtors was not paid within a short time after the
          Petition Date.

After evaluating the information received in response to these
inquiries, the Debtors estimated the amount necessary to pay to
ensure the continued supply of critical goods and services,
taking into account whether the failure to pay a Critical
Vendor's claims would result in the Critical Vendor terminating
its provision of goods and services to the Debtors and what
portion of the Critical Vendor's claims would need to be paid in
order to induce it to continue providing goods and/or services
to the Debtors.  The $40,000,000 Critical Vendor Claims Cap
represents this estimated amount.

In order to ensure the future supply of critical goods and
services, the Debtors propose to condition the payment of
Critical Vendor Claims on the agreement of individual Critical
Vendors to continue supplying goods and services to the Debtors
on the trade terms that such Critical Vendor provided goods and
services to the Debtors on a historical basis prior to
the Petition Date, or such other favorable trade practices and
programs that are at least as favorable to the Debtors as those
in effect during such time.

If a vendor does not continue to extend Customary Trade Terms
following the payment of a Critical Vendor Claim, the Debtors
propose that:

       (a) any payment made to such vendor on account of a
           Critical Vendor Claim be deemed to be a postpetition
           transfer recoverable by the Debtors in cash upon
           written request without giving effect to any rights
           of setoff, claims, provision for payment of
           reclamation or trust fund claims, or otherwise and

       (b) upon recovery by the Debtors, any such Critical
           Vendor Claim shall be reinstated as a prepetition
           claim as if the payment had not been made.

Some of the Critical Vendors also may have obtained mechanics'
liens, possessory liens, or other, similar state law trade liens
on the Debtors' assets, based upon Critical Vendor Claims
held by such vendors. As a further condition of receiving
payment on a Critical Vendor Claim, the Debtors propose that a
Critical Vendor must agree to take whatever action is necessary
to remove the Trade Lien.

J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom,
makes it clear to the Court that the Debtors seek authority to
make Critical Vendor Payments.  They do not ask the Court to
direct or require them to make any specific payments.  All
payments to Critical Vendors will be based on the reasonable
exercise of the Debtors' business judgment.

Mr. Ivester stresses that the Debtors believe payment of
Critical Vendor Claims is necessary to effect their successful
reorganization in these cases.  If this Motion is not granted,
the Critical Vendors are likely to discontinue providing goods
to the Debtors on Customary Trade Terms, effectively reducing
the amount of credit available to the Debtors.  Moreover, the
Debtors believe that certain of the Critical Vendors might cease
to do business with the Debtors altogether, resulting in the
Debtors' inability to obtain certain essential goods and
services and forcing the Debtors to incur higher costs.  That
actions would be harmful -- if not devastating -- to the
Debtors, their estates and creditors.

Mr. Hiltz tells the Court that the Company's $40 million request
has far-reaching consequences if it is not approved:

      "I believe that a failure by the Debtors to ship their
products to a given OE customer at the required time would cause
significant disruption to the entire supply chain involving the
Debtors and such customer, with resulting effects throughout the

      "If, for example, the Debtors failed to provide wheels
needed for the manufacture of a particular automobile, that OE
customer's assembly plants with respect to that automobile could
shut down. Additionally, the shutdown of the OE customer's auto
assembly plants would possibly lead to a shutdown of the plants
of other suppliers of components for the automobile in question
because the suppliers would not be able to deliver their
production output.

      "The magnitude of a significant impairment of the Debtors'
production could be felt throughout the world. In the automotive
sector, the Debtors are a sole-source provider of a critical
component of practically every vehicle produced in the United
States. In the heavy-duty sector, the Debtors supply critical
parts for as much as 80% of the products made by such customers.
Furthermore, the Debtors supply a majority of the major OE
companies worldwide. To put the situation in perspective, if the
Debtors were unable to ship product for an extended period, as a
result of failure to obtain the goods or services necessary to
the manufacture of their products, almost every major OE
manufacturer in the Americas and many of those in Europe may
suffer a shutdown of their manufacturing facilities. The
economic consequences of a shutdown of the Debtors' production
facilities would thus be severe and global, with repercussions
for the Debtors, their customers, and the economy generally.

      "In addition to macro-economic repercussions, I believe
that a shutdown of the Debtors' manufacturing facilities would
essentially kill any chance of a successful reorganization;
indeed, even the mere threat of a shutdown could lead to
disastrous consequences.  If it appears that the Debtors will be
unable to meet their customers' requirements due to a disruption
in the Debtors' manufacturing operations, I think it is likely
that the OE customers will seek a less risky source for the
parts they require, whether or not such a disruption
actually occurs.

      "In my opinion, in light of the bankruptcy filing, it
is imperative that the Debtors make a strong statement to
customers -- by paying critical vendors -- that the Debtors will
be able to supply product on time as usual.  Such a payment will
further help to ensure that the Debtors are able to sustain a
sales level necessary to fund a reorganization plan," Mr. Hiltz
says. (Hayes Lemmerz Bankruptcy News, Issue No. 1; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

HAYES LEMMERZ: Receives Court Approval of First-Day Motions
Hayes Lemmerz International, Inc., (NYSE: HAZ) a leading global
supplier of automotive and commercial highway wheels, brakes,
powertrain, suspension, structural and other lightweight
components, announced that it had received court approval to,
among other things, pay pre-petition and post-petition employee
wages and salaries during its voluntary restructuring under
Chapter 11.

The court also granted the Company approval to use up to $45
million of its $200 million debtor-in-possession (DIP) financing
on an interim basis to continue operations, pay employees, and
purchase goods and services going forward during the
restructuring period.  Hayes Lemmerz had previously received
commitments for its DIP financing from a group of its lenders
led by CIBC World Markets Corp.  The final hearing on the DIP
financing has been set for January 4, 2002.

In a related decision, the Court approved the Company's motion
to pay certain pre-petition amounts owed to freight transporters
in the normal course of business.

As announced December 5, 2001, to reduce its debt and
restructure its balance sheet Hayes Lemmerz, its direct and
indirect domestic subsidiaries and one subsidiary in Nuevo
Laredo, Mexico filed voluntary petitions for reorganization
under Chapter 11.  No international operations, other than Nuevo
Laredo, are included in the Chapter 11 filings.

Hayes Lemmerz Chairman and Chief Executive Officer Curtis
Clawson said he was pleased with the court's approval of its
"first-day" orders and interim DIP financing.

"We fully anticipate that the combination of DIP financing and
positive cash flow from our businesses will provide adequate
funding for our post-petition supplier and employee obligations
and business investments," said Mr. Clawson.

"Our customers have expressed their support of our action and
pledged their commitment to us as a valued supplier.  In fact,
we are being invited to bid on new business, in recognition that
the Chapter 11 process will make us a stronger and more
competitive supplier.  Similarly, our major vendors have
expressed a willingness to continue to do business with us on
normal terms going forward," Mr. Clawson said.

Employee wages and salaries will continue as before.  The
Company expects no job losses or facility closures as a direct
result of the filings.  All suppliers will be paid on normal
terms for goods furnished and services provided after the filing

The Chapter 11 petitions were filed in the U.S. Bankruptcy Court
for the District of Delaware, in Wilmington.  The case was
assigned to the Honorable Mary F. Walrath.  The case number is

More information about Hayes Lemmerz is available on the
Internet at

Hayes Lemmerz International, Inc. is one of the world's leading
global suppliers of automotive and commercial highway wheels,
brakes, powertrain, suspension, structural and other lightweight
components.  The Company has 46 facilities and 3 joint ventures
and 14,000 employees worldwide.  Of the total, 22 plants in the
United States and one plant in Nuevo Laredo, Mexico are included
in the Chapter 11 filings.

INTEGRATED HEALTH: Rotech Settles with U.S. and HIS Under Plan
Rotech's Plan of Reorganization incorporates two significant
settlements under Bankruptcy Rule 9019: the first, with the
United States, and the second, with the Integrated Health
Services, Inc.'s Debtors. Entry of the Confirmation Order will
constitute a finding that these compromises and settlements are
in the best interests of the Rotech Debtors, are fair,
equitable, and reasonable, and are made in good faith in
accordance with Bankruptcy Rule 9019.

           I. Settlement with the Federal Government

The United States Government filed a $48 million Claim against
Rotech which constitutes alleged damages of $16 million which it
then trebled (the Prepetition United States Claim). The Rotech
Debtors dispute the Claim, and the allowability of a trebled
damage claim.

In an effort to compromise the Prepetition United States Claim
and other issues, including certain administrative claims which
arose after the Commencement Date, the Rotech Debtors and the
Department of Justice have negotiated an agreement in principle
for the settlement of claims relating to, among other things,
the United States Government's Claim arising from payments made
to certain of Rotech's facilities engaged in the durable medical
equipment business, including, without limitation, claims
arising from the government's investigation of certain
activities of the Rotech Debtors in Montana prior to the
commencement of the Chapter 11 cases.

Pursuant to the terms of the settlement agreement, the federal
government would receive on the Effective Date a payment of $17
million in Cash, in full settlement and satisfaction of the
United States Claims, which include the Prepetition United
States Claims as well as certain postpetition administrative

The parties to the settlement agreement are Rotech and certain
affiliates, the Department of Justice and the Office of
Inspector General for the Department of Health and Human

The Department of Justice will provide a release of all
administrative and civil monetary claims under the False Claims
Act, Civil Monetary Penalties Law, Program Fraud Civil Remedies,
common law theories of payment by mistake, unjust enrichment,
breach of contract, and fraud for the covered conduct in the
agreement. The United States Government will provide a release
of its permissive administrative remedies for the covered
conduct in the settlement agreement.

The Rotech Debtors intend to finalize and file the United States
Settlement Agreement with the Plan Supplement on or before the
commencement of the period for solicitation of votes to accept
or reject the Plan.

                 II. IHS-Rotech Settlement

The Rotech Debtors and the IHS Debtors have agreed to fully and
finally satisfy their Claims against each other by an allocation
of $45 million in Cash to be distributed to Rotech on the
Effective Date or as soon thereafter as practicable, subject to
adjustment based on a formula contained in the settlement
agreement, and the remainder of the Debtors' collective cash on
hand (estimated to be approximately $40 million on the Effective
Date) to be retained by IHS.

The Rotech Debtors and IHS Debtors will release all intercompany
Claims against each other such that

(a) the IHS Debtors release their prepetition claims against the
    Rotech Debtors which aggregate approximately $495 million;

(b) the Rotech Debtors release their Administrative Expense
    Claims against the IHS Debtors aggregating approximately $79

For purposes of calculating (b), the collective reorganization
administrative expenses incurred by the IHS Debtors and Rotech
Debtors during the Chapter 11 cases have been allocated as

(1) fees of professionals working on a single IHS business line
    are charged to such business line;

(2) costs not allocable to a single IHS business are allocated
    based on a percentage of revenues of each operating unit;

(3) costs relating to specific IHS business lines such as
    severance or retention payments are charged to such business

The holders of the Senior Lender Claims will agree to reduce
their claims in the IHS Reorganization Cases by $1 billion on
account of the estimated value to be received by them under the
Plan. The IHS-Rotech Settlement also contains provisions
relating to the IHS Debtors' use of the sale proceeds of their
lithotripsy division. A copy of the IHS-Rotech Settlement
Agreement will be included in the Plan Supplement. (Integrated
Health Bankruptcy News, Issue No. 23; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   

LTV CORP: Union Prevents Cold Shutdown of Steelmaking Operations
The United Steelworkers of America (USWA), with unusually strong
bipartisan support from elected leaders throughout Ohio and
Indiana, succeeded in forging an agreement with the Unsecured
Creditors Committee of LTV and its Debtor in Possession (DIP)
lenders to keep the company's integrated steel facilities in
"hot idle" for nearly three months and extended for two weeks
the fight to win certification of a $250-million loan from the
Emergency Steel Loan Guarantee Board.

Under the agreement, LTV's coke plants must also be put on a
slow coking cycle for three weeks while the $250-million loan is
being pursued.

Federal bankruptcy court Judge William Bodoh was expected to
sign the agreement on Friday.  The agreement obligates the
company to report on the progress in securing financing by
December 19, at which time the judge will determine whether or
not the effort to save LTV can continue or asset sales should go
forward.  A hearing on the company's 1113 petition to terminate
the Union's contract has also been stayed until December 19.

USWA President Leo W. Gerard said that "the window of
opportunity that we and our allies have secured should be viewed
by the Emergency Loan Guarantee Board as a call to arms.  We're
going to send Steelworkers to Washington to urge Congress to
demand that the Loan Board live up to the spirit of the Byrd
Bill, instead of imposing regulations on the American steel
industry that are tougher than the ones that were used to
certify the Export-Import Bank's financing of a steel mill in

Earlier this year the Export-Import Bank authorized $18-million
of taxpayer money to help finance construction of a new steel
mill in China.

"Our Union's tenacity," said David McCall, Director of the
USWA's Ohio- based District 1, "and the unrelenting support of
elected officials at every level of the city, state and the
federal government have given our members and the communities
they live in a ray of hope for saving a company whose
steelmaking capacity has been systematically undermined by its
top management."

McCall said that the powerful support given the USWA's cause by
Democrats Dennis Kucinich, Stephanie Tubbs-Jones, Mayor Mike
White and Mayor-elect

Jane Campbell was joined in court Wednesday by Republican
Congressman Steven LaTourette, who McCall said stunned observers
by testifying that he would reverse his vote in support of the
stimulus package recently passed by the House of Representatives
if it did not include relief for the American steel industry.

McCall also noted that Ohio's Republican Governor Bob Taft and
Indiana Democrat Governor Frank O'Bannon have been "powerful
allies in our fight to save LTV."

Gerard, citing the breadth of bi-partisan opposition to
liquidating steelmaking operations at LTV, asked, "When is the
Emergency Loan Guarantee Board going to realize that, as a
government agency, it has a responsibility to save the
livelihoods of 6,000 American working families and over 70,000
retirees above the narrow interests of a handful of banks?"

The banks offering the Byrd financing have indicated that they
are ready to make the loan, once the Board certifies the

The agreement reached Thursday involves numerous exceptions to
the Asset Protection Plan that LTV management filed with the
court, a plan that was otherwise accepted by Judge Bodoh.  In
addition to extending a hot idle, it grants the Union the right
to designate a consultant charged with securing the federally-
guaranteed financing authorized by the Byrd Bill, and requires
LTV management to give the consultant their full support and

The hot idle will remain in force until February 28, 2002, and
may be extended until March 15, if a firm buyer for the
integrated facilities can be certified and if President Bush
extends the time allotted for implementing the Section 201 trade
remedies that will be recommended Friday by the International
Trade Commission (ITC).

The Union also succeeded in winning significant protections
through December 19 for its members, protections that LTV's top
management had attempted to wipe out in its Asset Protection
Plan, including:

     -- Protection of their right to perform all bargaining unit

     -- The right to Supplemental Unemployment Benefit (SUB) pay           
        for any workers who may be laid off;

     -- Full health care coverage;

     -- Payment of retiree health benefits through use of the
        Voluntary Employee Benefit Association (VEBA) fund.

"We may obviously be on life support," McCall said, "but we're
going to fight like hell as long as we've got breath."

LTV CORP: Walters, Timbers, and Bricker Resign as Directors
Farah M. Walters, Stephen B. Timbers and William H. Bricker have
resigned as directors of The LTV Corporation. The Company
indicates that the resignations were not related to any
disagreement with The LTV Corporation on any matters relating to
The LTV Corporation's operations, policies or practices.

LOEWEN GROUP: Canadian Court Recognizes U.S. Confirmation Order
The Loewen Group Inc., announced that the Ontario Superior Court
of Justice has recognized the confirmation order relating to its
Fourth Amended Plan of Reorganization that was granted earlier
this week by the United States Bankruptcy Court for the District
of Delaware. With recognition of the confirmation order in
Canada, obtained at a hearing held Friday, the Company is on
track to emerge as Alderwoods Group Inc., on January 2, 2002,
subject to certain conditions of the effective date.

Paul Houston, President and Chief Executive Officer, said: "The
favourable outcome of [Fri]day's Ontario court hearing clears
one of the final hurdles to our emergence. We are delighted with
the events of this week, and are very much looking forward to
our new beginning as Alderwoods Group."

Alderwoods Group will be North America's second largest funeral
services provider. It will be registered in the District of
Delaware and derive approximately 90 percent of its revenue from
its U.S. operations. The company will operate through offices in
Cincinnati, Toronto and Vancouver, and approximately 920 funeral
home and 275 cemetery locations in the United States, Canada and
the United Kingdom. Its team of 10,000 dedicated professionals
will pursue a strategy focused on providing excellent service to
customer families, service that delivers an experience of total
care and convenience.

MCMS INC: Court Approves Substantial Sale of Assets to Plexus
MCMS, Inc., announced that the U.S. Bankruptcy Court for the
District of Delaware granted final approval of the sale of
substantially all of the operating assets of MCMS and certain
stock to Plexus Corp. Plexus Corp. is a leading provider of
design, manufacturing and testing services to the electronics
industry with headquarters in Neenah, Wisconsin.

Plexus emerged as the successful bidder in an auction to sell
the assets of MCMS through competitive bidding procedures under
Section 363 of the U.S. Bankruptcy Code. The court approved the
agreement on December 4, 2001 and the sale is expected to close
in early January 2002.

Under the agreement, Plexus will pay MCMS approximately $45
million (subject to certain adjustments and the assumption of
certain liabilities) and will acquire the operating assets of
MCMS and the stock of MCMS International, Inc. (other than the
stock of entities related to MCMS's Mexico operations), whereby
Plexus will acquire MCMS's foreign operations located in
Malaysia and China. The proceeds from the sale transaction and
certain other assets retained by MCMS will be used to discharge
liabilities and satisfy creditors' claims in the Chapter 11
cases of MCMS and its U.S. subsidiaries.

Rick Rowe, Chief Executive Officer of MCMS, said, "We are very
pleased to have received Court approval of the transaction that
will allow Plexus to acquire MCMS's business operations. Because
of Plexus's reputation and market presence, I believe this
transaction will provide great opportunities for MCMS's
customers, employees and suppliers. The sale of the MCMS
business will allow customers to continue to be served. Through
this process, we have been able to obtain maximum value for
MCMS. The sale is a significant step toward providing a better
recovery for creditors."

As previously announced, on September 18, 2001, MCMS and its two
U.S. subsidiaries filed voluntary petitions for relief under
Chapter 11 of the U.S. Bankruptcy Code in the United States
Bankruptcy Court for the District of Delaware in Wilmington to
implement a sale of substantially all of their operating assets.

MCMS, Inc. is a global leading provider of advanced electronics
manufacturing services to original equipment manufacturers who
primarily serve the data communications, telecommunications, and
computer/memory module industries. MCMS targets customers that
are technology leaders in rapidly growing markets, such as
Internet infrastructure, wireless communications and optical
networking, that have complex manufacturing service requirements
and that seek to form long-term relationships with their
electronics manufacturing service providers. We offer a broad
range of electronics manufacturing services, including pre-
production engineering and product design support, prototyping,
supply chain management, manufacturing and testing of printed
circuit board assemblies, full system assembly, end-order
fulfillment and after-sales product support. We deliver this
broad range of services through operations in Nampa, Idaho;
Durham, North Carolina; Penang, Malaysia; Xiamen, China;
Monterrey, Mexico; and San Jose, California. MCMS information is
available by visiting the company's Web site at

MARINER POST-ACUTE: APS Reaches Deal to Sell Assets to Omnicare
Omnicare, Inc. (NYSE: OCR) announced that it has executed a
definitive agreement to acquire substantially all of the assets
which comprise the pharmaceutical business of American
Pharmaceutical Services, Inc. and other related entities,
wholly-owned subsidiaries of Mariner Post-Acute Network  or
Mariner Health Group.  Combined, MPAN and MHG represent one of
the nation's largest providers of post-acute healthcare
services, primarily through the operation of skilled nursing
facilities.  The purchase price is comprised of $97 million in
cash at closing plus $18 million in deferred payments contingent
upon performance.  Omnicare was the successful bidder in an
auction process established as part of the bankruptcy
proceedings of MHG and MPAN, and the sale of these assets to
Omnicare has been approved by order of the United States
Bankruptcy Court for the District of Delaware.

The consummation of the transaction is subject to the expiration
of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 and the satisfaction of certain other
conditions.  It is expected that the transaction will close in
early 2002.  Given the economies of scale and cost synergies
anticipated from the acquisition, it will be accretive to
Omnicare's diluted per share earnings in 2002 and beyond.

APS, headquartered in Naperville, Illinois, provides
professional pharmacy and related consulting services to
approximately 60,000 residents of skilled nursing and assisted
living facilities.  It also provides respiratory and Medicare
Part B services for residents of long-term care facilities.  APS
serves these residents through its network of 32 pharmacies in
15 states.  The APS assets and business to be acquired are
expected to generate revenues of approximately $240 million for
the twelve months ended December 31, 2002.

"We are very pleased to add APS to our organization as we know
it to be a very high quality and well-regarded provider of
pharmacy services.  Its addition to Omnicare offers a number of
important benefits," said Joel F. Gemunder, President and Chief
Executive Officer.  "Among them is the opportunity to realize
economies of scale.  Additionally, we can bring Omnicare's
advanced clinical programs, including our proprietary drug
formulary, the Omnicare Geriatric Pharmaceutical Care
Guidelines, and our health management programs to APS'
operations, which will enhance services provided to APS' client
facilities and residents served."

Omnicare, based in Covington, Kentucky, is a leading geriatric
pharmaceutical care company.  Currently serving more than
655,000 residents in 8,600 long term care facilities, in 43
states, Omnicare is the nation's largest provider of
professional pharmacy, related consulting and data management
services for skilled nursing, assisted living and other
institutional healthcare providers.  Omnicare also provides
clinical research services for the pharmaceutical and
biotechnology industries in 27 countries worldwide.  Omnicare's
total revenues are currently running at an annual rate in excess
of $2 billion.

METALS USA: US Trustee Appoints Unsecured Creditors' Committee
Pursuant to Sec. 11 U.S.C. Sec. 1102(a) and 1102(b)(1), the
United States Trustee appoints these nine creditors to serve on
one Joint Committee of Unsecured Bondholders and Creditors in
the chapter 11 cases of Metals USA, Inc., and its debtor-

A. The Bank of New York
    Attn: Gary Bush, Vice-President
    5 Penn Plaza, 13th Floor, New York, New York 10001
    Phone: (212) 896-7260     Fax: (212) 328-7302

B. Merrill Lynch Corporate Bond High Income Fund
    Attn: Mike Brown
    800 Scudders Mill Rd., Plainsboro, New Jersey 08536
    Phone: (609) 282-3001     Fax: (609) 282-2940

C. CSFB Global Opportunities Advisers LLC
    Attn: Robert J. Chaves
    11 Madison Ave., 16th Floor, New York, New York 10010
    Phone: (212) 325-1610     Fax: (212) 325-1610

D. Zurich Scudder Investments, Inc.
    222 South Riverside Plaza, Chicago, Illinois 60606
    Phone: (312) 537-1001     Fax: (312) 537-8335

E. Triton Partners LLC
    Attn: Michael Sollott
    565 5th Ave., New York, New York 10017
    Phone: (201) 792-2176     Fax: (212) 792-2171

F. Nucor
    Attn: Jim Frias
    Charlotte, North Carolina 28211
    Phone: (704) 365-1321     Fax: (704) 362-4208

G. National Steel Corporation
    Attn: Brian C. Brown
    4100 Edison Lake Parkway, Mishawaka, Indiana 46545
    Phone: (212) 896-7260     Fax: (212) 328-7302

H. TXI Caparral Steel
    Attn: Rudy Urban
    300 Ward Road, Midlothian, Texas 76065
    Phone: (972) 779-8081     Fax: (972) 775-3627

I. AK Steel Corporation
    Attn: J.N. (Sonny) Bach
    703 Curtis St., Middletown, Ohio 45043
    Phone: (513) 425-2741     Fax: (513) 425-5958
(Metals USA Bankruptcy News, Issue No. 3; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

METROMEDIA FIBER: Securityholders Commence Resale of Securities
Metromedia Fiber Network released a prospectus relating to the
resale by selling securityholders of:

    - an aggregate of 1,376,853,742 shares of Company class A
      common stock;

    - warrants to purchase 335,546,952 shares of Company class A
      common stock, exercisable at a price of $0.53875 per

    - $50,000,000 aggregate principal amount of Company 8.5%
      senior secured convertible notes, which are convertible
      into 92,807,425 shares of Company class A common stock at
      a conversion price of $0.53875 per share;

    - $500,000,000 aggregate principal amount of Company 6.15%
      series A convertible subordinated notes, which are
      convertible into 166,666,667 shares of Company class A
      common stock at a conversion price of $3.00 per share; and

    - $475,281,000 aggregate principal amount of Company 6.15%
      series B convertible subordinated notes, which are
      convertible into 27,957,706 shares of Company class A
      common stock at a conversion price of $17.00 per share.

Metromedia will not receive any proceeds from the sale of its
securities by the selling securityholders. However, the Company
may receive cash consideration in connection with the exercise
of the warrants.

Metromedia Fiber Network class A common stock is quoted on The
Nasdaq National Market under the symbol "MFNX." On November 28,
2001, the closing sale price of its class A common stock on The
Nasdaq National Market was $0.68.

NET2000 COMMS: Fails to Comply with Nasdaq Listing Requirements
Competitive broadband telecommunications services provider
Net2000 Communications, Inc., (NASDAQ:NTKKQ) announced that the
company received a Nasdaq Staff Determination on December 5,
2001, indicating that the company has failed to comply with the
requirements for continued listing on The Nasdaq National

Nasdaq has determined to delist the company's securities from
the Nasdaq National Market at the opening of business on
December 13, 2001. Nasdaq's determination follows Net2000's
voluntary filing for Chapter 11 bankruptcy protection on
November 16, 2001.

The trading of Net2000's stock was halted by Nasdaq on November
16, 2001, at the last trading price of $0.20.

Founded in 1993, Net2000 is an innovative provider of broadband
voice and data telecommunications services. Net2000 provides
businesses with quality local, long distance, data, interactive
video and Internet services delivered over a single broadband
connection and conveniently billed on a single invoice.

The company now operates sales offices in Baltimore, MD,
Norfolk, VA, Richmond, VA and Washington, DC and network
facilities in nine markets.

For more information, visit the Net2000 website at:

NORTHLAND CRANBERRIES: Delays Annual Report Due to Debt Workout
On November 6, 2001, Northland Cranberries, Inc. consummated a
debt and equity restructuring through the exchange by the
members of Northland's then current bank group of approximately
$153.8 million of total outstanding revolving credit agreement
indebtedness for a total of approximately $38.4 million in cash,
as well as by Northland's issuance of revised debt obligations
in the total principal amount of approximately $25.7 million and
newly-issued shares of common stock representing a total of 7.5%
of Northland's fully-diluted common shares to the certain bank
group members which decided to continue as lenders to Northland.
The debt restructuring occurred pursuant to an agreement for the
assignment and assumption by Sun Northland, LLC, an affiliate of
Sun Capital Partners, Boca Raton, Florida, of a portion of
Northland's bank group indebtedness.

The debt restructuring resulted in the forgiveness of
approximately $81.5 million (for financial reporting purposes)
of Northland's outstanding indebtedness (or approximately $89.7
million of the aggregate principal and interest due the former
bank group as of the date of consummation of the transaction).
Financing for the debt restructuring, and for additional
working capital availability to Northland, was provided by
Foothill Capital Corporation and Ableco Finance, LLC. Foothill
and Ableco provided Northland with $20 million in term loan
financing and a new $30 million revolving credit facility. As
part of the consideration to Foothill and Ableco to provide the
new credit facilities to Northland, Foothill and Ableco received
warrants to purchase up to a total of 5% of Northland's fully-
diluted common shares at an exercise price equal to one cent per
share. Northland's equity restructuring was accomplished through
an investment of $7 million of equity capital into Northland by
Sun Northland, LLC, an affiliate of Sun Capital Partners,
together with the assignment of Sun Northland's rights to
Northland's cancelled bank debt, in exchange for Class A common
shares, a newly-created series of convertible, voting preferred
stock and a second newly-created series of preferred stock,
which together represent 77.5% of Northland's fully-diluted
common shares.

As a result of the significant impacts of the Restructuring on
Northland's debt and equity capital structure and on its
consolidated financial statements as of and for the year ended
August 31, 2001, and the significant resources devoted by
management to negotiating and consummating the Restructuring,
Northland was unable to complete and compile its annual
consolidated financial statements or file its Annual Report on
Form 10-K for the year ended August 31, 2001 within the
prescribed time period without unreasonable effort and expense.
Consequently, those reports will be delayed in their filing.

OWENS CORNING: Names Dick Lantz President of Composite Business
Owens Corning (NYSE: OWC) announced that Dick Lantz has been
named president of the company's global Composite Solutions
business, a new operating unit that combines Owens Corning's
Roofing Solutions and Composites Systems businesses and accounts
for more than 25 percent of the company's sales.

"This integration will enable us to take advantage of our
capabilities and technologies in both businesses to provide more
value-added systems and solutions to our customers," said Dave
Brown, Owens Corning's chief operating officer.  "Dick's
experience and dedication to customer service will be integral
to the continued success of this business in a very competitive
global marketplace."

Mr. Lantz succeeds Heinz-J. Otto, who has led the Composites
Systems business since 1996.  Mr. Otto has decided to further
his career outside of Owens Corning.

"Heinz has led our one truly global business for five years,"
said Mr. Brown.  "He and his team have generated consistent,
positive results even in an uncertain global economy. We will
miss his leadership and commitment to the business and
composites industry, and wish him the best for the future," he

In this new role, Mr. Lantz will lead a combined business unit
with approximately $1.4 billion in annual sales.

"There are some natural synergies in this combination," said
Mr. Lantz. "These operations have traditionally served some of
the same customers, and we will now have the ability to increase
the value we can offer them through enhanced product offerings
and service capabilities.

"Both of these businesses are industry leaders in technology
and customer service. This is an exciting opportunity to
leverage areas of technological expertise to develop new systems
and solutions for a number of new global markets," Mr. Lantz

Mr. Lantz joined Owens Corning as a sales representative in
1974, and has held numerous leadership positions within the
company including vice president of marketing, Roofing and
Asphalt; business development manager, Roofing and Asphalt;
manager of Roofing Systems and Field Technical Services; and
market development manager of Commercial Roofing Systems.

In 1996, he was named vice president, marketing and sales
support, Building Materials Sales and Distribution - North
America. In 1997, he was named vice president, marketing,
Insulation Division. In 1998, Mr. Lantz was named president,
System Thinking Sales and Distribution. Last year, he was named
president of the Roofing Solutions business.

Mr. Lantz is a 1974 graduate of Indiana University. He is a
member of the Corporate Executive Board Sales Executive Council
as well as the Dean's Advisory Council for the Kelly School of
Business at Indiana University.

Mr. Otto joined Owens Corning in 1996 as corporate vice
president and president, Composites Systems Business. Prior to
coming to Owens Corning, he served as a member of the executive
board and head of the European region at Swiss-based Landis &
Gyr, where he played a key role in the company's culture change
program. Prior to that, he participated in key management
functions at the General Electric Company. (Owens Corning
Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   

OXFORD AUTOMOTIVE: S&P Junks Ratings On Likely Default
Standard & Poor's lowered its ratings on Oxford Automotive Inc.
At the same time, the ratings remain on CreditWatch with
negative implications, where they were placed Oct. 2, 2001.

The rating actions reflect Standard & Poor's belief that there
is an identifiable risk that Oxford could default on its debt
obligations within a year. This view is based on Oxford's
significant deterioration in operating results; extremely tight
liquidity; high debt leverage; and the likelihood that the
company will face continued pressure on earnings and cash flow
over the near term.

Oxford is a Tier I supplier of engineered metal components,
assemblies, and modules for the original equipment automotive
industry. Core products include closure systems, suspension
systems, and complex structural subsystems. In fiscal year 2001
(fiscal year end is March 31), Oxford generated $824 million in

Oxford's operating performance has deteriorated during the past
year due to the weakening in North American automotive demand
and increased costs associated with the launch of new business.
This has led to a significant reduction in financial flexibility
in the past year. At Sept. 30, 2001, the company had no
borrowing availability under its bank lines and about $31.6
million in cash. (This compares with $64 million in cash and $18
million of availability under bank lines at March 31, 2001.)
Debt to EBITDA is currently estimated to be about 10 times.

Recent earnings pressures have led to covenant issues. In its
10Q for the quarter ended Sept. 30, 2001, Oxford reported that
it had temporarily amended its credit agreement to eliminate the
September financial covenants. The temporary amendment was due
to expire on Nov. 15, 2001. The amendment has been extended
until Dec. 7, 2001. Oxford has stated that it hopes to secure a
permanent amendment by the end of the year.

Standard & Poor's will monitor the progress of bank negotiations
and the company's near-term operating outlook and financing
requirements. Oxford has a $10 million interest payment due on
Dec. 15, 2001, associated with its 10.125% notes. Should the
company fail to successfully amend its credit agreements or meet
upcoming debt service requirements, ratings will be lowered.

         Ratings Lowered, Still On CreditWatch Negative

     Oxford Automotive Inc.               To        From
       Corporate credit rating            CCC+      B
       Senior secured debt                CCC+      B
       Subordinated debt                  CCC-      CCC+

PACIFIC GAS: Inks Interest Rate Pacts with Calpine & GWF Power
Pacific Gas and Electric Company announced it has reached an
agreement with Calpine Corporation and GWF Power Systems to set
a five percent interest rate for their pre-petition debt.

In July, the utility assumed more than 130 of its Qualifying
Facility (QF) contracts and agreed to negotiate an appropriate
interest rate with the QFs.

The settlement with Calpine and GWF Power Systems allows Pacific
Gas and Electric Company to make monthly principal and interest
payments beginning on December 31, 2001, for the next 12 months.

Pacific Gas and Electric Company said "it believes today's
agreement with Calpine and GWF can serve as a framework for
discussions with other QFs.  This ensures our customers will
continue to have a reliable source of power at competitive

The utility has 13 Calpine QF contracts that provide a total of
450 megawatts of delivered power.  The pre-petition amount owed
to Calpine was approximately $265 million.

GWF Power Systems delivers about 125 megawatts through its 7
contracts with the company, and was owed $61.7 million.

These agreements are subject to Bankruptcy Court approval.  
Pacific Gas and Electric Company has about 300 QF contracts,
which provide about 2,400 megawatts on an annual basis.  When it
filed for Chapter 11 on April 6, the utility owed approximately
$1 billion to its QFs.

POLAROID CORP: Schedule Filing Deadline Extended to December 17
The deadline for Polaroid Corporation, and its debtor-affiliates
to file their schedules of assets and liabilities, and
statements of financial affairs now falls on December 17, 2001.
(Polaroid Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

RHYTHMS NETCONNECTIONS: Files Plan and Disclosure Statement
Rhythms NetConnections Inc. along with its debtor subsidiaries,
filed their Joint Plan of Liquidation and a Disclosure Statement
in support of that plan with the U.S. Bankruptcy Court for the
Southern District of New York.  For a full-text copy of the
Plan, go to

The Joint Liquidation Plan proposes a liquidation of the
Debtors' estates, conversion of all of the Debtors' assets to
cash and the distribution of the net proceeds to their creditors
and equity holders respectively.  

The Court will convene a hearing to consider the adequacy of the
information contained in the Debtors' disclosure statement on
January 8, 2001.  Shortly thereafter, the Disclosure Statement
will be transmitted to creditors and creditors will be asked to
vote for or against the plan.  

Rhythms NetConnections provides Internet access and remote
network connections using high-speed digital subscriber line
(DSL) technology.  It filed for Chapter 11 protection on August
1, 2001, in the U.S. Bankruptcy Court for the Southern District
of New York.  Paul M. Basta, Esq., at Weil Gotshal & Manges,
represents the company in its restructuring efforts.  When
Rhythms NetConnections filed for protection from its creditors,
it listed $698,527,000 in assets and $847,207,000 in debt.

SAFETY-KLEEN: Obtains Court Approval to Hire Jefferson Wells
Safety-Kleen Corporation, and its debtor-affiliates obtained
from Judge Peter Walsh the authority to employ, nunc pro tunc to
September 27, 2001, Jefferson Wells International, inc., to
provide accounting, tax and internal audit implementation and
support services.  

JWI will render accounting, tax and internal audit
implementation and support services, including, but not limited

       (a) Review and assess data currently collected and
defined by Safety-Kleen's Accounting Procedure and Control
Initiative effort;

       (b) Design and implement required process modifications
to improve accuracy, efficiency and offset risk;

       (c) Design and implement required controls, monitoring,
and internal audit functions to ensure continued efficiency and
risk management;

       (d) Review standard costing systems and methodology
utilized by branch support groups including, the machine
manufacturing plant, solvent recycling plants, and oil re-
refining plants;

       (e) Provide analysis and recommendations to branch
accounting allocation of overhead costs such as disposal,
transportation, warehousing, and corporate;

       (f) Provide analysis and recommendations to increase the
integrity of overall data including the areas of chart of
accounts, pay-roll recording, intercompany accounts, and branch

       (g) Make available from time to time, as requested by the
Debtors, professionals to assist with various accounting and
tax-related support needs of the Debtors; and

       (h) Provide ongoing internal audit services as requested
by the Debtors' management. (Safety-Kleen Bankruptcy News, Issue
No. 23; Bankruptcy Creditors' Service, Inc., 609/392-0900)    

SIMPLIFIED EMPLOYMENT: Files Plan to Emerge from Bankruptcy
Simplified Employment Services (SES) appeared in US District
Bankruptcy Court Thursday to present a plan to come out of
Chapter 11 Bankruptcy.  The company filed for reorganization on
July 9 and was at that time within hours of shutting down

The plan calls for the payment of more than $30 million to
creditors with major payments to the government for taxes.  The
unique reorganization plan also calls for employee stock
ownership.  When the plan is approved, it will create the first
professional employer organization in the nation with partial
ownership by the employees.

Unsecured creditors, who are often left out of reorganization
plans, will also benefit as future stockholders of the company
along with the employees.

Joseph J. Whall, who was appointed CEO of the company on July 9,
said he believes the plan is fair to all parties involved in the
dramatic turnaround at SES.  Mr. Whall said the company today is
a solid business, providing a valuable service, employing people
and paying all its taxes.

Mr. Whall has implemented a federally approved corporate
compliance program and strict financial controls to segregate
all client funds.  Under the new system every dollar is closely
monitored with detailed audit procedures.

SES reports that nearly $10,000,000 in new business has been
added and many former clients have returned since the
reorganization began.

STEEL HEDDLE: Has Until January 25 to Decide on Unexpired Leases
The U.S. Bankruptcy Court for the District of Delaware extended
Steel Heddle Group, Inc.'s deadline within which it must decide
whether to assume, assume and assign, or reject its unexpired
nonresidential real property leases through January 25, 2002.

Steel Heddle Group, Inc., a pioneer and innovator in weaving
machine accessories for 103 years, filed for Chapter 11
protection on August 28, 2001 in the Delaware Bankruptcy Court.  
Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young &
Jones, represents the Debtors in their restructuring effort. In
its schedules of assets and liabilities filed last September 25,
2001, the company listed $0 in assets and $126,812,645 in debt.  
As of July, Steel Heddle Group and its bankrupt affiliates
reported $64,300,000 in assets and $176,000,000 in debt.

SUN HEALTHCARE: Raises Loan to Shared Healthcare by $1.5 Million
Sun Healthcare Group, Inc., and its debtor-affiliates seek the
Court's authority to increase the amount of the short-term loan
to Shared Healthcare Systems, Inc. by $1,500,000.

Under the terms of the original Line-of-Credit Facility, Russell
C. Silberglied, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, notes, the Debtors were authorized to
provide a line of credit of up to $1,500,000.  The terms of the
Amended Line-of-Credit Facility are substantially similar to the
original Line-of-Credit Facility, Mr. Silberglied relates.  The
salient terms of the Amended Line-of-Credit Facility are:

Term:           The amounts advanced under the Amended
                Line-of-Credit Facility are payable on demand of
                the Debtors at any time, but no later than
                August 27, 2004.

Purpose:        Proceeds of the Amended Line-of-Credit Facility
                are used solely to provide working capital from
                time to time for Shared Healthcare and for other
                general corporate purposes.

Security:       All amounts owing under the terms of the Amended
                Line-of-Credit Facility are secured by:

                  (i) a first priority perfected security
                      interest in certain assets owned by Shared
                      Healthcare, including, without limitation,
                      accounts, inventory, equipment, investment
                      property, instruments, chattel paper,
                      contracts, patents, copyrights, trademarks
                      and other general intangibles;

                 (ii) a second priority perfected security
                      interest in Shared Healthcare's real
                      property located at 1601 R Avenue,
                      Anacortes, Washington; and

                (iii) a first priority perfected security
                      interest in Shared Healthcare's real
                      property located on the south side of 4th
                      Street between Commercial Avenue and Q
                      Avenue in Anacortes, Washington.

Interest:      The Debtors receive interest on the amounts
               loaned to Shared Healthcare at the end of each
               relevant interest period. The interest rate is
               equal to 8.6% during the period from the closing
               date up to and including August 27, 2002, 9.6%
               during the period from August 28, 2002 up to and
               including August 27, 2003, and 10.6'% during
               the period from August 28, 2003 up to and
               including August 27, 2004. During the
               continuance of an event of default, the amounts
               owed to the Debtors will bear interest at an
               additional 2% percent per year.

Conditions to
Closing:       The Amended Line-of-Credit Facility contains
               conditions to closing customarily found in
               similar financings and other conditions deemed
               by the Debtors to be appropriate to the specific
               transaction, including, without limitation:
               execution and delivery by Shared Healthcare of
               warrants to purchase a number of shares of
               common stock of Shared Healthcare at an exercise
               price equal to the lesser of:

                 (i) the most recent exercise price of options
                     granted under Shared Healthcare's 1997
                     Stock Option Plan, and

                (ii) $0.15 per share.

                The warrants shall be exercisable for 10% of the
                outstanding shares of common stock on a fully
                diluted basis plus an additional number of
                shares to be determined based upon the average
                outstanding principal balance of the
                Line-of-Credit Facility at the end of each
                one-year period subsequent to the closing date.
                These conditions to closing will extend to the
                Amended Credit Facility.

Events of
Default:       The Amended Line-of-Credit Facility contains
               events of default customarily found in loan
               agreements for similar financings, including,
               without limitation: failure to make payments
               when due; defaults under other indebtedness; any
               increase in the salaries or other compensation
               of any of the executive officers of Shared
               Healthcare without the express prior
               authorization and approval of the Shared
               Healthcare Board of Directors; any material
               violation of the Price Protection provision of
               the Information System Services Agreement, dated
               as of July 1, 1999, between Shared Healthcare
               and SunDance Rehabilitation Corporation; and any
               delay in excess of 90 days from the scheduled
               delivery date in the delivery of the Orcas
               medical records and accounting program by Shared
               Healthcare to the Debtors.

Indemnification: Shared Healthcare shall indemnify and hold
                harmless the Debtors and each of the Debtors'
                respective officers, directors, employees,
                agents, advisors, attorneys and representatives
                of each from and against any and all claims,
                damages, losses, liabilities and expenses
                arising out of or in connection with or by
                reason of the Amended Line-of-Credit Facility,
                the loan documentation or any of the
                transactions contemplated thereby.

Mr. Silberglied contends that providing an additional $1,500,000
of available funds under the Amended Line-of-Credit Facility to
Shared Healthcare is within the Debtors' sound business
judgment. "The Debtors are just protecting their long-term
investment, considering they have a large equity stake (70%) in
Shared Healthcare," Mr. Silberglied notes.  According to Mr.
Silberglied, Shared Healthcare has been unsuccessful in raising
additional capital from any other sources, including the owners
of the remaining capital in Shared Healthcare who are employees
lacking sufficient resources to provide funding in meaningful

Without an additional $1,500,000 in available funds provided by
the Amended Line-of-Credit Facility, Mr. Silberglied says,
Shared Healthcare will be unable to fund operations through
completion and deployment of the Orcas software.  Mr.
Silberglied relates that Shared Healthcare is already in the
final stages of production of its Orcas software, which remains
on target to be deployed in the first quarter of 2002.  "The
Debtors and Shared Healthcare believe that the additional
$1,500,000, together with other initiatives, will be sufficient
to fund operations through deployment of the Orcas software,"
Mr.  Silberglied notes.

Mr. Silberglied reminds the Court that the Debtors are the
beneficiaries of a price protection provision with Shared
Healthcare, whereby the Debtors enjoy the most favored pricing
for Shared Healthcare products or services of any Shared
Healthcare customer for comparable services.

Moreover, Mr. Silberglied assures the Court that in the event
Shared Healthcare is unable to repay the loan on a timely basis,
the Debtors will be secured creditors of Shared Healthcare who
can collect to the extent of their collateral.

Mr. Silberglied also relates that the Debtors have obtained
consent for increasing the availability of funds under the
Amended Line-of-Credit Facility from their post-petition lenders
under the Revolving Credit and Guaranty Agreement, as amended on
April 23, 2001, as well as consent from the statutory creditors'
committee in these chapter 11 cases. (Sun Healthcare Bankruptcy
News, Issue No. 27; Bankruptcy Creditors' Service, Inc.,

TCPI INC: Court Okays Conversion of Bankruptcy Case to Chapter 7
By order docketed November 6, 2001, upon a Motion to Convert
existing Case No. 01-24937-BKC-RBR from Chapter 11 to 7, United
States Bankruptcy Judge Raymond B. Ray of the United States
Bankruptcy Court for the Southern District of Florida ordered
the conversion of TCPI, Inc.'s pending Chapter 11 case to
Chapter 7 of the Bankruptcy Code.  Upon the conversion, the
Office of the United States Trustee appointed James S. Feltman
of Arthur Anderson, LLP as Chapter 7 Trustee.  As previously
reported, on July 3, 2001, TCPI, Inc. (OTC Bulletin Board:
TCPIE), filed a voluntary bankruptcy petition in the United
States Bankruptcy Court, Southern District of Florida, Fort
Lauderdale Division, Case No. 01-24937-BKC-RBR.

THUNDERMIN: Selling Duck Pond Interest to Repay Queenston Loan
Thundermin Resources Inc., (THR:TSE) has signed a purchase and
sale agreement with Aur Resources Inc., regarding the sale to
Aur of its 50% interest in the Duck Pond copper-zinc-silver-gold
project located in central Newfoundland approximately 30 kms
southeast of the town of Buchans. Aur has signed a similar
agreement with Thundermin's 50% joint venture partner, Queenston
Mining Inc.

The purchase price payable to Thundermin for its 50% interest in
the Duck Pond property is $2,100,000 in cash and the tender to
Thundermin of Aur's existing 11,209,968 shares of Thundermin
valued, for the purposes of the transaction, at $900,000.

Thundermin's interest in the Duck Pond property is held pursuant
to an underlying agreement with Noranda Mining and Exploration
Inc. The transaction with Aur, which is to be completed on or
before April 1, 2002, is subject to the approval of The Toronto
Stock Exchange and of Thundermin's shareholders (other than Aur)
and the obtaining of an order from the Ontario Securities
Commission permitting the tender to Thundermin of Aur's
Thundermin shares as part of the purchase price payable.
Queenston has agreed, as a condition of its agreement with Aur,
to extend the time for the repayment of Thundermin's $1,500,000
loan to Queenston to the closing date of the transaction.

Prior to Thundermin obtaining the approval from its shareholders
(other than Aur) of the agreement with Aur, expected to be in
late February or early March, Thundermin retains the right to
receive, evaluate and respond to unsolicited offers from third
parties with respect to the sale of its interest in the Duck
Pond property. Thundermin has the right to accept, in preference
to Aur's offer, with Queenston's approval, any third party offer
with a value greater than $3,150,000 for Thundermin's interest.
In addition, Thundermin holds the first right of refusal with
respect to Queenston's 50% interest in the property.

Given the current difficult financing environment facing
Thundermin and other junior exploration companies, the proposed
sale by Thundermin of its Duck Pond property interest is the
only available solution to the immediate financial difficulties
of Thundermin. In particular, absent the extension for the
repayment of Thundermin's $1,500,000 loan from Queenston granted
in connection with the proposed sale, such loan would be
repayable immediately and Thundermin has insufficient funds for
such purpose. Failure to repay such loan when due entitles
Queenston to exercise its creditors rights to obtain repayment,
including the potential petitioning of Thundermin into

The 10,923 hectare Duck Pond property hosts two high grade,
copper-zinc-silver-gold deposits, Duck Pond and Boundary. In May
2001, MRDI Canada completed a bankable feasibility study on the
Duck Pond project that outlined a mine planned tonnage of 5.5 Mt
grading 3.3% Cu, 5.8% Zn, 0.9% Pb, 50 g/t Ag and 0.8 g/t Au. The
feasibility study contemplates a 1,500 t/d mining operation with
a 10.2 year mine life that would produce 32 million pounds of
copper, 60 million pounds of zinc, 400,000 ounces of silver and
2,100 ounces of gold annually. Thundermin is the operator of the
Duck Pond joint venture.

Upon completion of the sale of its 50% interest in the Duck Pond
property to Aur and the settlement of its $1,500,000 debt to
Queenston, Thundermin will have no debt, approximately
$1,665,000 in working capital, including Thundermin's 3,048,000
shares (11%) of Queenston, and 28,379,645 shares outstanding.
Thundermin's main property interests will include an approximate
30% interest in 38 mineral properties covering 76,500 hectares
in the Flin Flon, Snow Lake, Lynn Lake and Hanson Lake areas of
Manitoba and Saskatchewan and a 30% interest in the 1,079
hectare Linda-McKayseff and Rod properties in the Snow Lake area
of Manitoba. Aur, the project operator, has proposed exploration
programs for certain of these properties for the 2002 field
season and Thundermin is currently considering its participation
in such programs. In addition, Thundermin is searching for new,
top quality base metal and gold projects in Canada.

TRI-NATIONAL: Chief Financial Officer Gilbert Fuentes Retires
Chief Financial Officer of Tri-National, Gilbert Fuentes has
elected to retire just prior to his 70th birthday.  Mr. Fuentes
originally signed on as CFO and Treasurer with the Company for a
five-year contract, which is now completed.

Mr. Fuentes has been a valuable addition to the management team
for the last five years and he will be sorely missed as an every
day participant. He will, however, continue to consult on an as
needed basis, until a replacement can be determined.  He has
also agreed to help train his replacement once an individual has
been identified and accepted the position.  With the Company's
current state of affairs, it is not anticipated that the search
will begin immediately.

Mr. Fuentes has decided to return to his native country to
pursue his many hobbies and spend more time with family in

Tri-National Development Corp. is a multi-faceted real estate
development, sales and management company. The company filed
voluntary Chapter 11 petition on October 23, 2001 in the U.S.
Bankruptcy Court for the Southern District of California in San

USG CORP: Gets Go-Signal to Hire Duane Morris as Local Counsel
Judge Newsome approves the engagement of Duane, Morris &
Heckscher, LLP, as local counsel to the Official Committee of
Unsecured Creditors of USG Corporation.

Duane Morris will provide professional services, including but
not limited to:

      - providing legal advice with respect to the Committee's
        rights, powers and duties in these cases;

      - prepare on behalf of the Committee all necessary
        applications, answers, responses, objections, forms of
        orders, reports and other legal papers;

      - represent the Committee in matters involving contests
        with the Debtors and other parties of interest;

      - assist the Committee in its investigation and analysis
        of the Debtors and the operations of the Debtor's
        business; and

      - perform all other legal services for the Committee which
        may be necessary and proper in these cases. (USG
        Bankruptcy News, Issue No. 13; Bankruptcy Creditors'  
        Service, Inc., 609/392-0900)

UNITED AIR LINES: S&P Knocks Senior Unsecured Debt Rating to B
Standard & Poor's downgraded its senior unsecured debt ratings
for United Air Lines Inc. to 'single-B' from 'double-B-minus',
reflecting reduced asset protection for unsecured creditors and
application of revised criteria for "notching" down of such debt
ratings based on the proportion of secured debt in a company's
capital structure.

The ratings remain on CreditWatch with negative implications.

The rating actions do not indicate a changed estimate of default
risk, but rather poorer prospects for recovery on senior
unsecured obligations if the affected airlines was to become
insolvent. Accordingly, no corporate credit ratings or other
types of debt are affected; airport revenue bonds, though
often senior unsecured debt in a legal sense, are related to a
specific airport facility that has value in a bankruptcy
reorganization, and ratings of such bonds are not affected. Bank
loan ratings are affected where those facilities are unsecured.

Airlines worldwide increasingly rely on aircraft and other
asset-backed financings, rather than unsecured debt, to finance
capital expenditures, a trend that accelerated since the Sept.
11 terrorist attacks in the U.S. and resulting damage to airline
revenues. Although such instruments, particularly enhanced
equipment trust certificates in the U.S., have cost advantages,
they have encumbered, either through leases or secured debt a
substantial proportion of the asset base of many airlines (those
shown below have Standard & Poor's senior unsecured debt
ratings; figures shown are estimated as of Sept. 30, 2001, for
all but Japan Air Lines Co. Ltd., which is the fiscal year ended
March 31, 2001; in some cases subsequent secured debt and lease
transactions are included as well in the calculation): Airlines
with senior unsecured debt ratings: Secured debt and leases %
total owned and leased assets Qantas Airways Ltd. 18% Southwest
Airlines Co. 28% Japan Airlines Co. Ltd. 29% Delta Air Lines
Inc. 36% Air Canada 37% AMR Corp. 44% AmTran Holdings Inc. 47%
British Airways PLC 50% Northwest Airlines Corp. 50% UAL Corp.
53% Continental Airlines Inc. 68% America West Holdings Inc. 69%

In addition, Standard & Poor's criteria for rating senior
unsecured debt have been revised to incorporate more directly
the effect of leases on asset protection for unsecured
creditors. The criteria recognize that certain industries,
because of the ease of financing their revenue assets, can carry
higher proportions of secured debt and leases and the criteria
accordingly allow for higher thresholds before notching down of
senior unsecured debt is warranted due to reduced asset
protection for those creditors. Still, the high and rising
proportions of secured debt and leases at many airlines indicate
that a distinction between the corporate credit rating and  
senior unsecured debt rating is justified. Standard & Poor's has
not defined specific, separate thresholds for airlines, but
examines asset protection based on their individual
characteristics and relative to industry norms and standard
notching criteria. Speculative-grade companies can have their
senior unsecured debt rated one or two notches below the
corporate credit rating, depending on the proportion of secured
debt and leases, while investment-grade companies can have their
senior unsecured debt rated at most one notch below the
corporate credit rating.

The sharp deterioration in airline financial performance since
Sept. 11 has increased reliance on secured debt as the principal
form of airline debt funding. Even Southwest Airlines, the
highest rated airline, used enhanced equipment trust
certificates (EETC), the company's first, in October. Excepting
Southwest, all U.S. airlines that had unsecured bank revolving
credit facilities have either provided collateral to the banks
or are repaying borrowings. Although the federal loan guarantee
program may provide unsecured loans for some U.S. airlines (the
exact terms of the borrowings will vary from case to case and
remain to be determined), most borrowing is expected to take the
form of leases or secured debt for the foreseeable future.
Accordingly, senior unsecured creditors are likely to continue
to be in a disadvantaged position as regards asset protection at
many airlines due to the relatively high proportion of secured
debt and leases on their balance sheets.

               Senior Unsecured Debt Rating Lowered;
                   Remain On CreditWatch Negative

                                                   To      From

United Air Lines Inc. (BB-/Watch Neg/--)       B       BB-

DebtTraders reports that United Air Lines' 10.250% bonds due
2021 (UAL1) trade between 77 and 80. For real-time bond pricing,

VANGUARD AIRLINES: Nasdaq to Delist Shares Effective Tomorrow
Vanguard Airlines, Inc. (Nasdaq: VNGD) has received notification
from the Nasdaq Stock Market that the Company's common stock
will be delisted from Nasdaq at the opening of business on
December 11, 2001.

As the Company previously reported, Nasdaq notified Vanguard its
stock was subject to delisting due to the Company failing to
meet Nasdaq's minimum market capitalization requirements.  
Vanguard requested, but was denied, a deferral of Nasdaq's
action to allow the Company time to implement a restructuring
plan and seek federal loan guarantee assistance under the Air
Transportation System and Stabilization Act. Vanguard is
focusing all its efforts on implementing its restructuring plan
and seeking federal loan guarantee assistance and, accordingly,
has determined not to appeal Nasdaq's determination.

Vanguard Airlines, Kansas City's Hometown Airline, provides
convenient all-jet service to 15 cities nationwide: Atlanta,
Austin, Buffalo/Niagara Falls, Chicago-Midway, Colorado Springs
(beginning Dec. 20) Dallas/Ft. Worth, Denver, Fort Lauderdale
(beginning Dec. 10), Kansas City, Las Vegas, Los Angeles, New
Orleans, New York-LaGuardia, Pittsburgh and San Francisco. The
airline offers low fares with no advance-purchase requirements,
advanced seat assignment and extra legroom on all flights with a
fleet of eight Boeing 737s and five Boeing MD-80-series
aircraft, which feature SkyBox? Business Class service. For more
information or to make reservations online, visit Vanguard's Web
site at

W.R. GRACE: Court Okays Rust Consulting as Debtors' Claims Agent
Judge Farnan approves W. R. Grace & Co.'s application seeking
authority to retain Rust Consulting, Inc., as the official
claims handling agent for these estates, charged with the
recordation and maintenance of proofs of claim.

The activities of the Claims Handling Agent as an agent of the
Court will include, but are not limited to, the following:

      (a) Receipt of proof of claim forms mailed directly to the
          Claims Handling Agent's controlled post office box;

      (b) Periodic collection of proof of claim forms filed with
          this Court;

      (c) Date stamp each proof of claim form with date received
          by the Claims Handling Agent;

      (d) Assign a unique claim number to each proof of claim
          form received for tracking purposes;

      (e) Storage of all original filed proofs of claim; and

      (f) Generate a claims register containing a numeric
          listing of filed proof of claim forms including
          claimant name, address, dollar amount and claims
          status information.

The activities of the Claims Handling Agent as an agent of the
Debtors will include, but are not limited to, the following:

       (a) Providing direct notice and mailing proof of claim
           packets to all known claimants and entities;

       (b) Responsibility for providing proof of claim packets
           to all known claimant requests for information
           received through the Debtors' 800 number telephone
           information services;

       (c) Analysis and capture of data included in the proof of
           claim form through computer scanning and imputing

       (d) Transfer data and images to all parties-in-interest;

       (e) Data storage; and

       (f) Other such activities that may arise during the
           approval and implementation of the bar date
           notification procedure.

Rust shall undertake any other actions and procedures that may
be reasonably required in connection with the administration and
organization of proofs of claim in the Chapter 11 cases. (W.R.
Grace Bankruptcy News, Issue No. 15; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

* BOND PRICING: For the week of December 10 - 14, 2001
Following are indicated prices for selected issues:

Amresco 9 7/8 '05              26 - 28 (f)
Asia Pulp & Paper 11 3/4 '05   26 - 28 (f)
AMR 9 '12                      92 - 94
Bethlehem Steel 10 3/8 '03     10 - 12 (f)
Chiquita 9 5/8 '04             80 - 82 (f)
Conseco 9 '06                  48 - 50
Enron 9 5/8 '03                22 - 24 (f)
Global Crossing 9 1/8 '04      12 - 13
Level III 9 1/8 '04            51 - 53
McCleod 11 3/8 '09             20 - 24
NWA 8.70 '07                   80 - 82
Owens Corning 7 1/2 '05        32 - 34 (f)
Revlon 8 5/8 '08               48 - 50
Royal Carribean 7 1/4 '18      78 - 82
Trump AC 11 1/4 '06            62 - 64
USG 9 1/4 '01                  74 - 76 (f)
Westpoint 7 3/4 '05            31 - 33
Xerox 5 1/4 '03                90 - 92


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
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contained herein is obtained from sources believed to be
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                     *** End of Transmission ***