TCR_Public/011226.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

          Wednesday, December 26, 2001, Vol. 5, No. 251


360NETWORKS: Canadian Court Extends CCAA Stay for Six Months
ACT MANUFACTURING: S&P Junks Ratings as Bankruptcy Looms
ACT MANUFACTURING: Files for Chapter 11 Reorganization in Mass.
AMRESCO, INC.: NCS I Transaction Closes; Look for Plan in 2002
ANC RENTAL: Wants More Time to File Schedules Until January 13

AGERE SYSTEMS: Appoints H. A. Wagner as New Chairman of Board
AMES DEPT: Lease decision Time Extended Until Confirmation Date
ATCHISON CASTING: Gets Extension of Credit Facility to June 30
BETHLEHEM STEEL: Inks Deal to Sell Asset to Conectiv for $9MM+
BORDEN CHEMICALS: Court Okays Shintech's Bid for Addis Facility

BURLINGTON: Sets First Creditors' Meeting for January 3, 2002
CKE RESTAURANTS: Revenues from Carl's Jr. & Hardee's Fall in Q3
CHIQUITA BRANDS: Retaining Innisfree as Balloting Agent
COMDISCO INC: Glenview Capital Discloses 5.3% Equity Interest
COMDISCO INC: Fiscal Year Ends with $272 Million Net Loss

COMDISCO INC: Final Leasing Business Bids Due by January 7
CONEXANT SYSTEMS: S&P Maintains Watch on Low-B Ratings
CONTIGROUP: S&P Rates Corporate Credit and Sr. Unsecured at BB-
CORAM HEALTHCARE: Judge Walrath Strikes Down 2nd Bad Faith Plan
COVAD: SBC Funding Pact Closes & Company Emerges from Chapter 11

COVANTA ENERGY: Calls on Salomon as Talks with Banks Continue
E.SPIRE: Negotiating for Exit Financing with Undisclosed Lender
ENRON CORP: Blackstone Hired as Debtors' Financial Advisors

ENRON FEDERAL SOLUTIONS: Chapter 11 Case Summary
FACTORY CARD: Chapter 11 Plan Delivers Equity Stake to Creditors
FLEXIINTERNATIONAL SOFTWARE: W.R. Hambrecht Owns 23.1% of Equity
FRIENDLY ICE CREAM: Completes Refinancing of $76MM Bank Facility
GENSCI REGENERATION: Files Chapter 11 Petitions in Santa Ana

HARTMARX: Nature of Exchange Offer Nudges Ratings to Junk Level
HAYES LEMMERZ: Court Okays Insurance Agreement with AFCO Credit
IVC INDUSTRIES: Pursuing Alternative Sources of Financing
INTEGRATED HEALTH: Intends to Reject Cambridge Lease in Indiana
LAM RESEARCH: Initiates 12% Global Workforce Reduction

LOUISIANA-PACIFIC: Completes Credit Refinancing in Canada
MARINER POST-ACUTE: Obtains Eight Extension of Exclusive Periods
MENTERGY LTD: Creditors Agree to Swap $43MM in Debts for Equity
METALS USA: Agrees to Make $400,000 Deposit with IPSCO
MT. SINAI MEDICAL: Fitch Hatchets Rating Down to Low-B Level

NOVO NETWORKS: Nasdaq Appeal Decision Expected in January
NOVO NETWORKS: Disclosure Statement Hearing Set for Jan. 14
OUTSOURCE INTL: Inks Definitive Deal to Sell Assets to Cerberus
PACIFIC GAS: Hearing on Claim Settlement Protocol Tomorrow
POLAROID: Digimarc Completes Acquisition of ID Systems Business

PROVIDIAN FINANCIAL: Fitch Junks Trust Preferred Rating
RANCH 1: Has Until December 30 to File Reorganization Plan
ROYSTER-CLARK: S&P Cuts Corporate Credit Ratings to B+ from BB-
SHILOH INDUSTRIES: S&P Puts BB- Ratings on CreditWatch Negative
STARTEC GLOBAL: Secures Court Approval for DIP Financing

SUNBEAM AMERICAS: Wants Solicitation Period Extended to April 15
TENNECO AUTOMOTIVE: Q4 Charge Excluded from Covenant Calculation
TOUCH AMERICA: Liquidity Concerns Prompt S&P to Junk Ratings
TRITON NETWORK: Double Play Discloses 6.1% Equity Interest
U.S. CAN CORP: Amends Terms Under Credit Agreement

VIDEO UPDATE: Expects Chapter 11 Plan to Take Effect Today
WESTAR FINANCIAL: Files for Reorganization Under Chapter 11
WHEELING-PITTSBURGH: Court Rejects CWVEC's Motion Re Coal Pact
WIND RIVER: S&P Rates $125M Convertible Subordinated Debt at B-
YES CLOTHING: Brings In McKennon Wilson as Independent Auditors

YORK RESEARCH: NAEC Creditors File Involuntary Petition
YORK RESEARCH: Chapter 11 Involuntary Case Summary

* Meetings, Conferences and Seminars


360NETWORKS: Canadian Court Extends CCAA Stay for Six Months
360networks obtained extended protection under Canada's
Companies' Creditors Arrangement Act (CCAA) and additional time
to file a plan of reorganization from the Supreme Court of
British Columbia.  The CCAA stay and 360's time to file a plan
runs through July 2, 2002.  The extension of the order was
supported by the Canadian court-appointed Monitor and the
company's bank lenders.

"This is another encouraging step in our restructuring process,"
said Greg Maffei, president and chief executive officer of
360networks. "This extension, along with a similar extension in
the U.S., allows us to continue operating in North America and
provides us sufficient time to explore all reorganization

On December 19, the United States Bankruptcy Court approved the
six-month extension of a cash collateral order, which allows the
company to operate in the United States through July 1, 2002.

On June 28, 2001, the company and several of its operating
subsidiaries voluntarily filed for protection under the
Companies' Creditors Arrangement Act (CCAA) in the Supreme Court
of British Columbia. Concurrently, the company's principal U.S.
subsidiary, 360networks (USA) inc., and 22 of its affiliates
voluntarily filed for protection under Chapter 11 of the U.S.
Bankruptcy Code in the U.S. Bankruptcy Court for the Southern
District of New York. In October 2001, four operating
subsidiaries that are part of the 360atlantic group of companies
also voluntarily filed for protection in Canada. Insolvency
proceedings for several subsidiaries of the company have been
instituted in Europe and Asia.

360networks offers optical network services to
telecommunications and data communications companies in North
America. The company's optical mesh fiber network spans
approximately 36,000 kilometers (22,000 miles) in the United
States and Canada.  For more information about 360networks,

ACT MANUFACTURING: S&P Junks Ratings as Bankruptcy Looms
Standard & Poor's lowered its corporate credit and senior
secured bank loan ratings on ACT Manufacturing Inc. to double-
'C' from single-'B'-minus and its subordinated note rating to
single-'C' from triple-'C'-plus. Ratings remain on CreditWatch
with negative implications where they were placed on November
19, 2001.

ACT Manufacturing was operating last week under a third limited
waiver to its credit agreement with its domestic bank syndicate,
which expired on December 14, 2001. The domestic bank syndicate
has not agreed to any additional or extended waivers under the
credit agreement, and the company has fully utilized the
available liquidity under the credit agreement. The company's
North American operations have very limited liquidity at this
time. While the company continues to pursue all alternatives, it
has limited options available.

Management announced that it is considering a number of actions,
including additional layoffs at several locations and the
possibility of seeking protection under the federal Bankruptcy
Act, in order to preserve its assets and value. Hudson,
Massachusetts-based ACT provides electronic manufacturing
services, primarily to the telecommunications and networking
markets.  Standard & Poor's will monitor management's actions to
address severe liquidity concerns prior to resolving the
CreditWatch placement.

ACT MANUFACTURING: Files for Chapter 11 Reorganization in Mass.
ACT Manufacturing, Inc. (Nasdaq: ACTM) filed a petition for
reorganization under Chapter 11 of the U.S. Bankruptcy Code in
Bankruptcy Court in Worcester, Massachusetts. The Company's
overseas operations are unaffected by the filing. A hearing is
scheduled for Wednesday, December 26 to authorize up to $9.5
million of temporary Debtor-in-Possession (DIP) financing for
the Company. The Company has received a commitment from lenders
to provide such DIP financing if approved by the court. Friday,
the court authorized the company to use cash collateral until
that time.

The DIP financing involved would satisfy the Company's need for
an immediate infusion of cash during the holidays. The Company
is presently involved in ongoing discussions with its existing
bankers regarding long-term funding. The Company intends to keep
its management team in place, including its recently appointed
Chief Financial Officer, Joseph Driscoll.

After the Company conferred with bankers and financial and legal
experts, it was determined that a reorganization under Chapter
11 is the best way to try to ensure the future of the Company.
This step allows the Company to continue manufacturing
operations, maintain a strong work force, and continue to serve
its customers effectively.

The Company has been adversely impacted by the extremely
negative conditions in the telecommunications and high-end
computing sectors. Numerous steps have been taken in attempts to
restore the Company to profitability, including work force
reductions. The filing of the petition was necessary because the
Company's banks would only continue to fund operations under the
provisions of Chapter 11. The actions which are the subject of
Wednesday's hearing are expected to allow the Company to
continue operations through the current holiday season while
continuing discussions with its bankers to secure permanent
financing. The Company explored other options, but determined
that filing under Chapter 11 was the best course of action for
it's long-term future.

ACT Manufacturing, Inc., headquartered in Hudson, Massachusetts,
provides value-added electronics manufacturing services to
original equipment manufacturers in the networking and
telecommunications, computer and industrial and medical
equipment markets. The Company provides OEMs with complex
printed circuit board assembly primarily utilizing advanced
surface mount technology, electro-mechanical subassembly, total
system assembly and integration, mechanical and molded cable and
harness assembly and other value-added services. The Company has
operations in California, Georgia, Massachusetts, Mississippi,
France, England, Ireland, Mexico, Singapore, Taiwan and

ACT was represented by Richard Mikels and the commercial law
group from Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
and a team from Zolfo Cooper.

AMRESCO, INC.: NCS I Transaction Closes; Look for Plan in 2002
AMRESCO, INC. sold substantially all of its assets, including
the stock of its commercial lending and small business lending
subsidiaries, to NCS I LLC.  The transaction closed
substantially in accordance with the terms of the original Asset
Purchase Agreement, as amended, which was signed on June 29,
2001 and approved by the bankruptcy court on November 14, 2001,
and was subject to certain agreed upon adjustments to the
purchase price related to representations and warranties and
other provisions of the Agreement.

AMRESCO expects to file a plan of reorganization with the
bankruptcy court in the first quarter of 2002 to allow for the
sale of the Company's remaining assets, settlement of escrows
and distribution of cash to creditors.

Certain financial assets originally to be acquired by NCS I LLC
were retained by the Company as well as approximately $27
million of cash.  The cash purchase price paid at closing
(subject to certain post-closing audits and adjustments) was
approximately $97.7 million.  In addition, the buyer delivered a
note in the amount of $5 million against which the buyer can
offset for indemnity claims. Approximately $51.1 million was
paid into escrow at closing to be held pending resolution of
various contingencies.

Concurrent with the sale of the company's assets to NCS I LLC,
Richard L. Cravey, James P. Cotton, Jr., Amy J. Jorgensen, Bruce
W. Schnitzer, Randolph E. Brown and Jonathan S. Pettee resigned
from the company's Board of Directors.  L. Keith Blackwell will
remain as Director and President of AMRESCO.  Both Mr. Brown and
Mr. Pettee also resigned as Chief Executive Officer and Chief
Financial Officer, respectively.

ANC RENTAL: Wants More Time to File Schedules Until January 13
ANC Rental Corporation, and its debtor-affiliates ask the Court
for an additional 30 days -- through January 13, 2002 -- within
which to file their schedules of assets and liabilities,
schedules of current income and expenditures, schedules of
executory contracts and unexpired leases and statements of
financial affairs.

Mark J. Packel, Esq., at Blank Rome Comiskey & McCauley LLP in
Wilmington, Delaware, relates that in order to prepare complete
and accurate Schedules and Statements as required by section 521
of the Bankruptcy Code and Bankruptcy Rule 1007(b), the Debtors
must gather and review numerous documents. This task is
particularly burdensome because the individuals available to
complete the task on behalf of the Debtors must divide their
time between gathering the information necessary to prepare the
Schedules and Statements and managing the Debtors' business

Mr. Packel submits that the Debtors have been working diligently
to gather the necessary information to complete the Schedules
and Statements. However, given the complex nature of the
Debtors' business affairs and the need to continue to operate
the Debtors' businesses while the necessary information is being
compiled, the Debtors cannot complete the preparation of the
Schedules and Statements within the time granted to the Debtors
by this Court, as required by Bankruptcy Rule 1007(c).

Mr. Packel contends that it is important that the Debtors'
Schedules and Statements be complete and accurate, and that they
fully evidence the financial condition of the Debtors as of the
commencement of these chapter 11 cases. The Debtors anticipate
that they will require at least an additional 30 days to gather
the information necessary to complete accurately the Schedules
and Statements. Mr. Packel assures the Court that the Debtors
are prepared to work diligently during the period allotted, and
to either file the Schedules and Statements within the time
authorized by this Court, or to account to this Court on its
progress and to explain the need for further time. Accordingly,
the Debtors request an additional 30 days, to January 13, 2002,
to file the Schedules and Statements, without prejudice to their
right to make further requests for an extension on motion for
cause shown.

Judge Walrath will convene a hearing on thee Debtors' request at
a hearing on January 9, 2002.  By application of Local
Bankruptcy Rule 9006-2, the deadline by which the Debtors must
file their Schedules & Statements is automatically extended
through the conclusion of that hearing. (ANC Rental Bankruptcy
News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-

AGERE SYSTEMS: Appoints H. A. Wagner as New Chairman of Board
Agere Systems (NYSE: AGR.A), the world leader in communications
components, announced that H. A. Wagner, former president and
CEO of Air Products and Chemicals, and current member of the
Agere board of directors, will become Agere's new chairman.
Wagner replaces John Young, who will continue to serve on
Agere's board.

Wagner, 66, has served on Agere's board since its inception at
the time of the company's initial public offering in March 2001.
He is also a director of CIGNA Corporation, United Technologies
Corporation, PACCAR and Arsenal Digital Solutions Worldwide,
Inc., and a trustee of Lehigh University and the Eisenhower
Exchange Fellowships, Inc.

"Harold's deep business experience and foresight have been
invaluable as we managed the business through challenging market
conditions.  As Agere's chairman, he will continue to play a
significant role in strengthening Agere and positioning it for
long-term growth," said John Dickson, president and CEO, Agere
Systems.  "I also want to thank John Young for his leadership in
this pivotal year.  I am pleased that he will serve as a
director of our board until our spin-off from Lucent, and I look
forward to his ongoing counsel."

At the request of Lucent Technologies, the board has also
appointed Henry Schacht, the company's chairman and CEO, and
Frank D'Amelio, Lucent's chief financial officer, to replace the
two existing Lucent representatives, William R. Carapezzi, Jr.,
and Pamela O. Kimmet.  Schacht, D'Amelio and Young will resign
from Agere's board at the time of the company's spin-off.

Lucent has stated that it intends to use the financial results
from the quarter ending March 31, 2002, to meet the financial
covenants to enable it to move forward with Agere's spin-off.

"I am delighted that Henry and Frank are joining the board,"
said Dickson. "Their participation will facilitate a smooth
transition as Agere moves toward becoming a fully independent,
stand-alone company."

Agere Systems is the world's No. 1 provider of components for
communications applications with leadership in optical
components and integrated circuits.  This dual capability
uniquely positions Agere to deliver integrated solutions that
form the building blocks for advanced wired, wireless, and
optical communications networks.  Agere also designs and
manufactures a wide range of semiconductor solutions for
communications-related devices used by consumers such as
cellular phones, modems, and hard disk drives for personal
computers and workstations.  In addition, the company supplies
complete wireless computer networking solutions through the
ORiNOCO product line.  More information about Agere Systems is
available from its Web site at

AMES DEPT: Lease decision Time Extended Until Confirmation Date
Judge Gerber grants the motion and orders that all Objections,
to the extent not withdrawn with particularity on the record or
by a docketed withdrawal, are overruled.  Judge Gerber further
orders that the time within which Ames Department Stores, Inc.,
and its debtor-affiliates may assume or reject the Unexpired
Leases subject to Objections is extended to and including the
date on which an order is entered confirming a chapter 11 plan
for the Debtors; provided, however, that such extension of time
is without prejudice to the right of any of the Debtors'
Objecting Lessors to file an appropriate application with the
Court for a reduction of such time consistent with the balance
of this Order, upon prior notice to the Debtors, the statutory
creditors' committee appointed in the Debtors' cases, and the
United States Trustee, and any such application shall be heard
on an expedited basis subject to the Court's availability. (AMES
Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

ATCHISON CASTING: Gets Extension of Credit Facility to June 30
Atchison Casting Corporation (NYSE: FDY) entered into an
amendment and extension of its North American revolving credit
facility with its senior lenders until June 30, 2002.  The
Company had previously entered a Forbearance Agreement with its
lenders, which was set to expire this week.

The Twelfth Amendment and Forbearance Agreement consists of a
$75.5 million revolving credit facility, decreasing to $72.5
million on January 31, 2002 and to $70.5 million on March 31,
2002.  Asset sales and tax refunds will be used to reduce
indebtedness.  Secured by substantially all of the Company's
North American assets, loans under this credit facility will
bear interest at prime plus 2.0%.  A new covenant regarding
operating cash flow (minimum cumulative earnings before
interest, taxes, amortization and depreciation) has also been

"This extension will alleviate the uncertainty felt by some of
our suppliers, and allow management to focus more on
operations," said Hugh H. Aiken, CEO.

Previously the Company announced that its U.K. subsidiary,
Atchison Casting UK Limited ("ACUK"), entered a new, three year,
facility of up to 25 million British pounds (approximately $35
million U.S.), subject to certain eligibility calculations, with
Burdale Financial Limited, an affiliate of Congress Financial
Corporation.  ACUK is the parent of Sheffield Forgemasters Group
Limited, the parent company of the Company's UK operations.

ACC produces iron, steel and non-ferrous castings for a wide
variety of equipment, capital goods and consumer markets.

As of September 30, 2001, the company's liquidity is strained
with total current assets of $151,859,000 as opposed to total
current liabilities of $196,317,000.

BETHLEHEM STEEL: Inks Deal to Sell Asset to Conectiv for $9MM+
Bethlehem Steel Corporation owns a 1,800-acre plot of land
located partly in Bethlehem, Pennsylvania and partly in Lower
Saucon Township, Pennsylvania upon which it operated a steel
plant.  George A. Davis, Esq., at Weil, Gotshal & Manges LLP, in
New York, relates that as a result of the plant's closure, the
land on which the vacant plant is located has not been used
since 1998.  Since that time, Mr. Davis tells Judge Lifland, the
Debtors have been engaged in redeveloping and marketing the
property for sale.

As part of the redevelopment, Mr. Davis says, the property is
divided into two subsections -- Bethlehem Works and Bethlehem
Commerce Center.  Bethlehem Works (approximately 200 acres) is
comprised of a commercial entertainment facility, while
Bethlehem Commerce Center (1,600 acres) is being marketed for
sale as a light industrial park development.  In January 1999,
Mr. Davis recounts, the Debtors engaged The Enterprise
Development Company as consultants to assist in developing,
marketing, and selling the Bethlehem Commerce Center property.
Enterprise's fee arrangement consists of a fixed monthly fee of
$37,500 plus expenses for the duration of the development
project with no additional compensation for each completed sale
transaction, Mr. Davis notes.

On June 22, 2001, the Debtors and Conectiv Mid-Merit, Inc.
entered into a Purchase and Sale Agreement providing for the
sale of 60 acres of phase I of the Bethlehem Commerce Center,
certain easements and Nitrogen Oxide Emission Reduction Credits.
According to Mr. Davis, the parties later entered into an
Amended and Restated Purchase and Sale Agreement, dated November
26, 2001, for which the Debtors seek the Court's approval.

Mr. Davis informs Judge Lifland that the aggregate purchase
price for the property is $9,562,798.  Mr. Davis contends that
this is fair and reasonable based upon the Debtors' assessment
of the property's condition, and as evidenced by a lack of other
offers. According to Mr. Davis, Conectiv intends to develop,
permit, and construct on the real estate a gas turbine combined-
cycled-fired electric generating facility fueled by natural gas
and low sulfur petroleum distillate, together with ancillary
facilities.  The real estate is conducive to development as an
electric generating plant, Mr. Davis claims, because of its:

   (i) access to electric transmission lines,

  (ii) proximity to a river necessary for cooling and discharge,

(iii) access to a major natural gas pipeline, and

  (iv) access to a major oil pipeline.

Mr. Davis tells the Court that Conectiv is uniquely situated to
take advantage of this site for such purpose in that:

     (i) Conectiv has acquired a favorable "queue position" with
         respect to interconnection with the PJM transmission
         system serving the Pennsylvania-New Jersey-Maryland
         region, and

    (ii) Conectiv has previously applied for, and is expected to
         receive in the very near future, the regulatory permits
         required for construction of the proposed power plant.

As a result of these attributes, and Conectiv's commitment to
build a power plant in Bethlehem, Pennsylvania, Mr. Davis says
maintains that the proposed purchase price is substantially in
excess of what the Debtors believed they would otherwise be able
to receive for the property.

Mr. Davis outlines the principal terms of the Agreement:

The Property:         Real Estate, Easements, and Emission
                       Reduction Credits. The real estate is a
                       total of 60 acres of land, most of which
                       is located in Bethlehem, Pennsylvania
                       (approximately 45 acres) and the rest in
                       Lower Saucon Township, Pennsylvania
                       (approximately 15 acres).  The easements
                       consist of a Water Withdrawal and Utility
                       Easement, a River Discharge and Utility
                       Easement, a Gas and Oil Pipeline Easement,
                       and a Stormwater Easement.  The Emission
                       Reduction Credits are 600 tons of nitrogen
                       oxide "emission reduction credits" which
                       have been approved by and registered with
                       the Pennsylvania Department of
                       Environmental Protection, and which are
                       existing, valid and not scheduled to
                       expire prior to December 31, 2004.

Pre-Closing Payments: The Option Payment of $100,000 that CES
                       paid to the Debtors pursuant to the Letter
                       of Intent, the First Installment Payment
                       of $75,000 that Conectiv paid to the
                       Debtors upon execution of the original
                       agreement, and the Special Extension
                       Payment as defined in the original

Purchase Price:       $9,562,798 to be allocated thus:

                       (a) Real Estate & Easements - $5,312,798;

                       (b) Non-Real Estate Rights & Services -
                           $3,000,000; and

                       (c) Emission Reduction Credits -

Closing:              Closing shall be held on the earlier of:

                        (i) a date (as determined by the parties)
                            within 30 days after the date on
                            which all conditions precedent to
                            closing have been either satisfied or
                            waived; or

                       (ii) the latest closing date.

                       The latest closing date shall be the
                       earlier of:

                        (i) 10 business days following the date
                            on which the Bankruptcy Court enters
                            an order approving and authorizing
                            the Debtors' entry into the Agreement
                            and the consummation of the
                            transactions contemplated by the
                            original agreement, as amended
                            (provided that all other conditions
                            precedent to Conectiv's obligations
                            to settle have been either satisfied
                            or waived); or

                       (ii) January 31, 2002.

                       At Closing, the amount actually paid by
                       Conectiv or CES as the Option Payment and
                       the First Installment Payment shall be
                       credited against the Purchase Price.

The Agreement represents substantial value to the Debtors'
estates as it provides for favorable terms for the disposition
of an asset that has been historically unprofitable, Mr. Davis

Moreover, Mr. Davis assures Judge Lifland that the terms and
conditions of the Agreement were negotiated by Conectiv and the
Debtors at arm's length and in good faith.  Conectiv does not
hold any interest in any of the Debtors and is not otherwise
affiliated with the Debtors or their officers or directors, Mr.
Davis notes.  Accordingly, the Debtors request that the Court
determine Conectiv to be acting in good faith and entitled to
the provisions of a good faith purchaser under the Bankruptcy

Furthermore, the Debtors submit that it is appropriate that the
property be sold free and clear of liens, claims, and
encumbrances except for permitted exceptions, with any such
liens, claims, or encumbrances to attach to the net sale
proceeds.  According to Mr. Davis, the property is to be sold at
or above fair market value, and so the holders of any liens can
be compelled to accept money in satisfaction of their liens.
(Bethlehem Bankruptcy News, Issue No. 7; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

BORDEN CHEMICALS: Court Okays Shintech's Bid for Addis Facility
Borden Chemicals and Plastics Operating Limited Partnership
(BCP) announced that the U.S. Bankruptcy Court for the District
of Delaware has approved the bid by Shintech Louisiana, LLC
(Shintech) to acquire the assets at BCP's polyvinyl chloride
(PVC) plant in Addis, Louisiana.  Shintech will pay $38 million
to acquire the Addis plant, property and equipment and an
additional sum to be determined for the value of inventory and
certain accounts receivable.

On December 4, BCP announced that it had executed an asset
purchase agreement with Shintech to acquire the Addis assets and
operations, pending court approval. BCP expects to conclude the
sale transaction on or about February 1, 2002.

"We are very pleased to have reached this stage in the Addis
sale," said Mark J. Schneider, president and chief executive
officer, BCP Management, Inc. (BCPM), the general partner of
BCP. "We believe in the long-term prospects of the PVC business
and certainly in the value of the Addis plant, and Shintech
clearly does as well. I again want to thank the employees at
Addis for their understanding and continued hard work during
this period of uncertainty."

As previously announced, BCP and its advisors have been
exploring strategic alternatives, including a potential merger,
joint venture or asset sales, for any or all of its three
facilities. Schneider said that discussions with interested
parties continue concerning the Geismar, La., and Illiopolis,
Ill., plants.

Shintech is a wholly owned subsidiary of Shintech Inc., a
leading U.S. producer of PVC resins with headquarters in Houston
and plants in Freeport, Texas, and Addis, La. Shintech Inc. is a
wholly owned subsidiary of Tokyo-based Shin-Etsu Chemical Co.,
Ltd., the world's largest producer of PVC, with plants in the
U.S., Asia and Europe.

           Court approves interim Secondary DIP Facility

The court Thursday also granted interim approval of up to
$5 million in postpetition loans under the secondary debtor-in-
possession credit facility to be provided by BCPM. A final
hearing on the full $10 million available under the Facility is
scheduled for January 16, 2002. The Facility is unsecured.
Proceeds from the Facility will be used for working capital.

"Although our challenges have been significant, we have
succeeded in continuing to operate all three plants while moving
forward on the restructuring and asset sale process," said
Schneider. "The liquidity provided by this Facility will allow
BCP to continue to pursue various options in an orderly manner."

BCP and its subsidiary, BCP Finance Corporation, filed voluntary
petitions for protection under Chapter 11 of the U.S. Bankruptcy
Code in the United States Bankruptcy Court for the District of
Delaware on April 3, 2001. BCPM and Borden Chemicals and
Plastics Limited Partnership (BCPLP), the limited partner of
BCP, were not included in the Chapter 11 filings. (Two other
separate and distinct entities, Borden, Inc., and its
subsidiary, Borden Chemical, Inc., are not related to the

BURLINGTON: Sets First Creditors' Meeting for January 3, 2002
The United States Trustee for Region 3 will convene a general
meeting of Burlington Industries' Creditors pursuant to 11
U.S.C. Sec. 341(a) on January 3, 2002, 10:30 a.m., at the
Wyndham Hotel, 700 King Street, Salon D, Wilmington, Delaware

All creditors are invited, but not required, to attend.  This
Official Meeting of Creditors offers the one opportunity in a
bankruptcy proceeding for creditors to question a responsible
office of the Debtor under oath about the company's financial
affairs and operations that would be of interest to the general
body of creditors.  The U.S. Trustee does not permit this
meeting to be used as a substitute for examinations properly
taken pursuant to Rule 2004 of the Federal Rules of Bankruptcy
Procedure.  Additionally, corporate officers testifying at these
meetings generally are well prepared and are cautious not to
disclose any material non-public information not already
disclosed in SEC filings and court pleadings. (Burlington
Bankruptcy News, Issue No. 4; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

CKE RESTAURANTS: Revenues from Carl's Jr. & Hardee's Fall in Q3
CKE Restaurants, Inc. and subsidiaries is comprised of the
worldwide operations of Carl's Jr. and Hardee's.  During the
current third quarter, the Company sold four restaurants to
franchisees and opened one. Carl's Jr. franchisees and licensees
opened four new restaurants, acquired four from the Company and
closed two. As of November 5, 2001, the Carl's Jr. system
consisted of 441 company-operated restaurants, 490 franchised
restaurants and 40 international restaurants, for a system total
of 971 Carl's Jr. restaurants.

Revenue from company-operated Carl's Jr. restaurants decreased
$22.0 million, or 15.5%, to $120.6 million for the 12-week
period ended November 5, 2001, and decreased $74.0 million, or
15.5%, to $402.6 million for the 40-week period ended November
5, 2001, when compared to the prior year comparable periods. The
decrease in revenue for both time periods is due primarily to
the sale of company-operated restaurants to franchisees, as well
as the closure of company-operated restaurants. While revenue
from company-operated restaurants are down, net franchising
income in both the 12- and 40-week periods has increased
approximately 50% in the current fiscal year for Carl's Jr. This
is attributable primarily to an increase in the number of
franchisee-operated restaurants. Same-store sales for company-
operated Carl's Jr. restaurants increased 6.1% in the current
quarter and Carl's Jr. company-operated restaurant average unit
volumes were $1.175 million for the trailing thirteen periods
ended November 5, 2001, and the average check for the third
quarter was $5.13 as compared to $4.77 in the comparable period
of the prior fiscal year.

A majority of CKE's Carl's Jr. restaurants have a contract with
Enron Corp. to purchase electricity at a fixed cost through
2003. Enron filed for bankruptcy in December, 2001. While CKE
has not yet been notified by Enron that the contract will be
rejected, the Company does believe its costs will rise, possibly
by as much as $3.0 million per year.

During the current quarter, in the Hardee chain, CKE acquired
four restaurants from franchisees, sold 11 to franchisees and
closed two restaurants. Hardee's franchisees and licensees
opened four new restaurants, acquired 11 restaurants from the
Company and closed 37. As of November 5, 2001, the Hardee's
system consisted of 751 company-operated restaurants, 1,564
franchised restaurants and 142 international restaurants, for a
system total of 2,457 Hardee's restaurants.

Revenue from company-operated Hardee's restaurants decreased
$49.1 million, or 26.2%, to $139.0 million for the 12-week
period ended November 5, 2001, and $222.2 million, or 31.3%, to
$486.2 million for the 40-week period ended November 5, 2001,
when compared to the prior year comparable periods. The decrease
in revenue for both time periods is due primarily to the sale of
company-operated restaurants to franchisees, as well as the
closure of company-operated restaurants. Net franchising income
increased $1.1 million, or 9.3%, during the third quarter 2002,
as compared to the prior fiscal year. This increase is due
primarily to a settlement fee received as a result of the early
termination of a franchise agreement. For the 40-week period,
net franchising income decreased $4.5 million, or 12.6%, as
compared to the prior fiscal year. This decrease is due
primarily to the decreased revenue at Hardee's equipment
division as a result of the slowdown in remodel activity by the
franchisees. Same-store sales for company-operated Hardee's
restaurants increased 0.9% in the current quarter and Hardee's
company-operated restaurant average unit volumes were $741,000
for the trailing thirteen periods ended November 5, 2001, and
the average check for the third quarter was $3.74 as compared to
$4.08 in the comparable period of the prior fiscal year.

Consolidated net loss for the Company was $ 1,731 for the twelve
week period ended November 5, 2001, while net loss in the
comparable period of 2000 was $29,429.  Consolidated net loss
for the forty week period ended November 5, 2001 was $75,647 and
for the forty week period ended November 6, 2000 consolidated
net loss was $45,810.

                               *  *  *

As reported in the Troubled Company Reporter on Nov. 1, 2001,
Standard & Poor's junked CKE Restaurant's subordinated debt
rating, and at the same time, affirmed low-B corporate credit
and senior secured bank loan ratings.  The rating agency cited
that the company's credit protection measures were weak, with
EBITDA coverage of interest expense only 1.5 times, and leverage
was high, with total debt to EBITDA at 3.6x. CKE had $67 million
available under the bank loan as of Aug. 13, 2001.

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

CHIQUITA BRANDS: Retaining Innisfree as Balloting Agent
The thousands of creditors and other parties in interest
involved in the chapter 11 case of Chiquita Brands
International, Inc., and its debtor-affiliates may impose heavy
administrative and other burdens on the Debtor and its estate,
particularly, as the Debtor seeks to confirm the Plan.  To
relieve the Debtor's estate of these burdens, the Debtor
proposes to engage Innisfree M&A Incorporated as its balloting
and tabulation agent.

Robert W. Olson, Senior Vice President of Chiquita Brands
International, Inc., relates that Innisfree is one of the
country's premier chapter 11 administrators with experience in
ballot distribution, proxy tabulation, contests for control and
corporate governance.  By appointing Innisfree as the Balloting
Agent, Mr. Olson claims, the Debtor's estate -- its creditors,
particularly -- will benefit from Innisfree's significant
experience and the efficient and cost-effective methods that
Innisfree has developed.  This is particularly true in light of
Innisfree's extensive experience with European securities
balloting issues, which will arise in this chapter 11 case, Mr.
Olson adds.

The Debtor will look to Innisfree to provide these services:

   (a) acts as tabulation and balloting agent that will include
       the following:

         (i) print ballots including the printing of creditor and
             shareholder specific ballots;

        (ii) prepare voting reports by plan class, creditor or
             shareholder and amount for review and approval by
             the Debtor and its counsel;

       (iii) coordinate, with the Debtor's notice and claims
             agent, the mailing of ballots, the disclosure
             statement and the Plan to all voting and non-voting
             parties and provide an affidavit of service of the
             same, if necessary;

        (iv) establish a toll-free "800" number to receive
             questions regarding voting on the plan; and

         (v) solicit and receive ballots, inspect ballots for
             conformity to voting procedures, date stamp and
             number ballots consecutively and tabulate and
             certify the results;

   (b) comply with applicable federal, state, municipal, and
       local statutes, ordinances, rules, regulations, orders and
       other requirements;

   (c) provide temporary employees to tabulate ballots, as
       necessary; and

   (d) provide such other balloting and tabulation services as
       the Debtor may request during the pendency of this chapter
       11 case.

According to Mr. Olson, the Debtor will compensate Innisfree for
services rendered upon the submission of monthly invoices by
Innisfree to the Debtor summarizing, in reasonable detail, the
services for which compensation is sought.

Jane Sullivan, on behalf of Innisfree, assures Judge Aug that

   (a) is a "disinterested person" within the meaning of the
       Bankruptcy Code;

   (b) holds no interest adverse to the Debtor or its estate for
       the matters for which Innisfree is to be employed; and

   (c) has no connection to the Debtor, its creditors or its
       related parties.

Swayed by the Debtor's arguments, Judge Aug grants the
application. (Chiquita Bankruptcy News, Issue No. 3; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

COMDISCO INC: Glenview Capital Discloses 5.3% Equity Interest
Glenview Capital Management, LLC beneficially owns 8,065,400
shares of the common stock of Comdisco Inc., which represents
5.3% of the aggregate outstanding shares of that class. Glenview
Capital Management, LLC has sole power to vote or direct the
vote for the entire holding and has sole power to dispose of or
direct the disposal of the entire holding.

Comdisco gets more than two-thirds of its sales from leasing
PCs, workstations, servers, and other equipment used in the
electronics, laboratory, communications, and industrial
automation fields. The company had been shifting its focus
toward its information technology services business, but it
instead has agreed to sell the unit to Hewlett-Packard. At the
same time, Comdisco is reorganizing under Chapter 11 bankruptcy
protection. Former CEO Nicholas Pontikes, son of Comdisco
founder Kenneth Pontikes, controls family trusts that own 25% of

COMDISCO INC: Fiscal Year Ends with $272 Million Net Loss
For the fourth quarter, Comdisco, Inc., (NYSE:CDO) reports a
loss from continuing operations of $119 million.  These results
exclude its Availability Solutions business, which has been
recorded as a discontinued operation following the sale of the
business to SunGard (NYSE:SDS) on November 15, 2001.  The
current period loss resulted primarily from additions to the
allowance for credit losses, lower contribution from the
company's equipment remarketing efforts and reduced equity-
related gains from Comdisco's Ventures business.

Overall, the company had a net loss for the fourth quarter of
$142 million.  Total revenue for the quarter was $509 million.

For the year ended September 30, 2001, Comdisco reports a loss
from continuing operations of $211 million.  Overall, the net
loss for the year was $272 million.  Total revenue for the
twelve months was $2.7 billion -- down $700 million from a year

As announced on November 15, 2001, Comdisco completed the sale
of its Availability Solutions business to Wayne, PA-based
SunGard for $825 million in cash, plus approximately $25 million
paid for working capital received in excess of agreed-upon
levels, as part of its restructuring efforts following its
Chapter 11 filing. Included in the transaction were Comdisco's
U.S.-based Availability Solutions unit and related operations in
the U.K., Canada and France. Including the proceeds from this
sale, Comdisco's cash position exceeded $1.4 billion as of
November 15, 2001.

Comdisco, Inc. and 50 domestic U.S. subsidiaries filed voluntary
petitions for relief under Chapter 11 of the U.S. Bankruptcy
Code in the U.S. Bankruptcy Court for the Northern District of
Illinois on July 16, 2001. The filing allows the company to
provide for an orderly sale of some of its businesses, while
resolving short-term liquidity issues and enabling the company
to reorganize on a sound financial basis to support its
continuing businesses.

Comdisco's operations located outside of the United States were
not included in the Chapter 11 reorganization cases. All of
Comdisco's businesses, including those that filed for Chapter
11, are conducting normal operations. Comdisco is continuing to
pursue other strategic alternatives to create value for its
stakeholders, including the restructuring of its businesses. The
company has targeted emergence from Chapter 11 during the first
half of 2002.

Comdisco -- provides technology
services worldwide to help its customers maximize technology
functionality and predictability, while freeing them from the
complexity of managing their technology. The Rosemont (IL)
company offers leasing and other financial management services
to key vertical industries, including semiconductor
manufacturing and electronic assembly, healthcare,
telecommunications, pharmaceutical and biotechnology. Through
its Ventures division, Comdisco provides equipment leasing and
other financing and services to venture capital-backed

COMDISCO INC: Final Leasing Business Bids Due by January 7
Judge Barliant's entered an order continuing the sale hearing
for certain of Comdisco, Inc.'s (NYSE: CDO) Leasing businesses
to January 24, 2002.  According to the procedures previously
approved by the Court, all bids for the Leasing businesses must
stay open until January 31, 2002.

As part of its restructuring efforts, Comdisco has been
conducting a sales evaluation procedure for its Leasing
businesses, including a Court-supervised auction process that
concluded on November 30, 2001. The company indicated that,
based on the bids received during the auction process, it is not
presently inclined to accept any offers submitted to date, and
that greater value may be achieved through reorganization rather
than sale of the Leasing businesses. The company said that after
consultation with the creditors' and equity committees and prior
to making any final decision, Comdisco is offering all qualified
bidders a final opportunity to submit sealed bids by January 7,
2002. A conforming amendment to the bidding procedures will be
filed and served on all qualified bidders.

CONEXANT SYSTEMS: S&P Maintains Watch on Low-B Ratings
Standard & Poor's single-'B'-plus corporate credit and single-
'B'-minus subordinated debt rating on Conexant Systems Inc.
remain on CreditWatch with negative implications, following the
company's announcement that it plans to split itself into three
companies over time and that it expects to bolster its balance
sheet by $300 million within the next six months.

Newport Beach, California-based Conexant plans to merge its
wireless business with unrated Alpha Industries Inc. The merged
company, which includes Conexant's Gallium-Arsenide wafer-
processing plant, will provide radio-frequency solutions for
mobile communications applications. The transaction is expected
to be completed in the second calendar quarter of 2002. Conexant
expects subsequently to separate its Internet infrastructure
business, known as Mindspeed Technologies, into an independent
company when business and market conditions permit. When this
second transaction is complete, Conexant will focus exclusively
on broadband access applications.

Separately, Conexant reported that consolidated revenues for the
December 2001 quarter should increase about 10% from the $201
million reported for the September 2001 period. Wireless growth
is expected to be about 35% sequentially in December, while
broadband is expected to expand 3%-5% sequentially. The Internet
infrastructure business will decline sequentially. The company
expects further consolidated growth in the March 2002 quarter.
Still, operating performance remains far below the company's
peak revenues of $561 million, reached in the September 2000

As part of the Alpha agreement, Conexant will sell its Mexicali,
Mexico, assembly and test facility to New Alpha for $150
million. Separately, Conexant expects to receive a $150 million
refund of a manufacturing-services deposit from a wafer foundry
in about six months.

Standard & Poor's will review core Conexant's business profile,
profitability, and capital structure before resolving the

CONTIGROUP: S&P Rates Corporate Credit and Sr. Unsecured at BB-
Standard & Poor's revised its outlook on ContiGroup Cos. Inc. to
positive from stable. At the same time, Standard & Poor's
affirmed its double-`B'-minus corporate credit and senior
unsecured debt ratings on the company.

The outlook revision recognizes the company's ongoing
improvement in its financial profile. Operating performance in
the firm's three major meat businesses has resulted in
meaningful improvement in profitability and cash flow measures.

The ratings on privately held ContiGroup Cos. reflect its
position as an integrated agribusiness firm operating in the
competitive, highly variable, and commodity-based meat
production and processing industries. The company has major
positions in beef, poultry, and hog production and processing in
the U.S. The firm also has positions in feed and flour milling
internationally, as well as in liquid petroleum gas

Over the last several years, the firm has divested its
commodities marketing group, animal nutrition division, and
certain other non-core operations to concentrate on its
vertically integrated, valued-added meat production and
processing businesses. The counter-cyclicality of the different
protein operations has resulted in fairly stable operating
results, to date. However, key to the rating will be
ContiGroup's ability to manage through the downturn in these
proteins' cycles. Over the intermediate term, Standard
& Poor's expects ContiGroup to invest in its various protein
operations through acquisitions, joint ventures, and strategic
alliances to augment its position as a value-added producer.

With the divestiture of the commodity merchandising group and
other non-core businesses, ContiGroup has substantially
delevered its balance sheet. Conti's financial measures are
strong for the rating, but are appropriate given the firm's
below-average business risk profile in the highly volatile
meat processing industry. Credit protection measures will likely
weaken somewhat at the bottom of the cycles associated with the
meat processing industries.

                         Outlook: Positive

The outlook reflects Standard & Poor's expectations that
ContiGroup will maintain its market positions and will continue
to pursue a prudent investment strategy. The ratings could be
raised over the intermediate term, if the company is able to
maintain a fairly strong financial profile even through a
downturn in the meat production and processing cycles.

CORAM HEALTHCARE: Judge Walrath Strikes Down 2nd Bad Faith Plan
Coram Healthcare Corporation (OTCBB:CRHEQ) and Coram, Inc.,
reported on Christmas Eve that Judge Mary Walrath of the U.S.
Bankruptcy Court for the District of Delaware on December 21
denied confirmation of their Second Joint Plan of Reorganization
in their ongoing Chapter 11 cases.

Judge Walrath concluded that a disclosed, ongoing business
relationship between Coram's President, Chairman and CEO and one
of the Company's lenders constituted a continuing conflict of
interest that precluded the necessary finding that the plan was
proposed in good faith.

In October, 2000, the Company's first plan was distributed for a
vote among unsecured creditors and was accepted.  At a December
21, 2000, Confirmation Hearing, Judge Walrath held that the plan
would not be confirmed.  Judge Walrath found that an undisclosed
relationship between Cerberus and Coram management, brought to
light by the Equity Committee, tainted the plan process.

Coram's Second Joint Plan of Reorganization was based on the
recommendations of former New York City Comptroller and
bankruptcy expert Harrison J. Goldin. His firm, Goldin
Associates, LLC (Goldin), including Goldin's outside legal
counsel, was retained as an independent restructuring advisor by
the Special Committee with the Court's approval. Following
several months of investigation of the conflict, Goldin reported
among other findings that Coram's CEO had "worked diligently and
effectively to stabilize Coram's operations and improve its
financial performance, a goal shared by the Noteholders and the
Stockholders."  Mr. Goldin also testified at the Confirmation
Hearing that he believed the Second Joint Plan was submitted in
good faith.

The Company is evaluating appropriate "next steps," and while
there can be no assurances, it believes that a fair and
equitable resolution of the bankruptcy can be achieved.

Coram filed voluntary petitions under Chapter 11 of the U.S.
Bankruptcy Code on August 8, 2000 with the support of the
lenders holding Coram, Inc.'s principal debt. The Company's
operating subsidiaries have continued to maintain normal patient
services and business operations, paying trade creditors
currently throughout the process.

Denver-based Coram Healthcare, through its subsidiaries,
including all branch offices, is a national leader in providing
specialty infusion therapies and support for clinical trials,
medical product development and medical informatics.

COVAD: SBC Funding Pact Closes & Company Emerges from Chapter 11
Covad Communications (OTCBB:COVD) exited from bankruptcy last
week, eliminating $1.4 billion of high-yield and convertible
bondholder debt by paying bondholders the pre-negotiated amount
called for under the Company's Chapter 11 Plan confirmed on
December 13, 2001, by the US Bankruptcy Court for the District
of Delaware.

In addition, Covad received funding from the previously
announced transactions with SBC Communications Inc. (NYSE:SBC),
which include a loan and the restructuring of a resale and
marketing agreement. These agreements have a combined value of
$150 million. The court's approval of the reorganization plan
was one of the conditions for completing those transactions. The
funding from SBC is expected to provide the capital Covad will
need to finance its growth to cash flow positive operations,
which is targeted in the second half of 2003.

Covad eliminated $1.4 billion in debt by paying its bondholders
the court-approved combination of cash and 15 percent ownership
of the company. Covad paid $257 million, or $0.19 on the dollar
of face amount or accreted bond value, plus approximately $13
million in previously restricted cash as previously approved by
the court. Covad also issued approximately 35 million shares of
common stock to the bondholders and approximately 9 million
shares of common stock to settle class action lawsuits and other
claims in accordance with the court's order confirming Covad's
plan of reorganization. Pre-existing shareholders will retain
approximately 80 percent of the company.

"Major steps have been completed in the revitalization of
Covad," said Charles E. Hoffman, Covad president and CEO. "A
year ago, Covad refocused the company to accommodate the change
in capital markets and began reducing expenses. We have now
finished restructuring our balance sheet, are fully-funded and
essentially debt free. We are focused on refining our business
plans to continue to innovate with new services, strengthening
our distribution channels, maintaining quality service and
financial discipline and keeping the customer at the center of
what we do."

Covad Communications Group, Inc.'s operating companies, which
provide DSL services to customers, were not included in the
court-supervised proceeding and continued to operate in the
ordinary course of business without any court imposed
restrictions throughout the approximately four month process.
Covad Communications Group, Inc. filed for reorganization on
August 15, 2001.

The new agreement with SBC will not increase the company's
ownership in Covad, which is currently at approximately five
percent. The agreement allows SBC to offer a more diverse
portfolio of DSL products to customers inside and outside SBC's
traditional 13-state region.

Covad is the leading national broadband service provider of
high-speed Internet and network access utilizing Digital
Subscriber Line (DSL) technology. It offers DSL, IP and dial-up
services through Internet Service Providers, telecommunications
carriers, enterprises, affinity groups and PC OEMs to small and
medium-sized businesses and home users. Covad services are
currently available across the United States in 94 of the top
Metropolitan Statistical Areas (MSAs). Covad's network currently
covers more than 40 million homes and business and reaches
approximately 40 to 45 percent of all US homes and businesses.
Corporate headquarters is located at 3420 Central Expressway,
Santa Clara, CA 95051. Telephone: 1-888-GO-COVAD. Web Site:

COVANTA ENERGY: Calls on Salomon as Talks with Banks Continue
Covanta Energy Corporation (NYSE:COV) says it is in the process
of conducting a comprehensive review of its strategic options to
maximize shareholder value. Salomon Smith Barney is assisting
management and the Board of Directors in the review.

Scott Mackin, CEO and a member of the Board, said, "The Board is
very pleased with the Company's strong operational performance
in its core energy business. However, given the Company's size,
limited current cash availability and the complexity of its
overall corporate structure, which includes some remaining non-
energy aviation and entertainment assets, it is incumbent on us
to conduct this analysis and review."

Delays in payment of remaining California energy receivables and
in the sale of aviation and entertainment assets continue to
adversely affect Covanta's ability to meet required cash flows
under its master credit facility. The Company believes it will
be unable to access the capital markets in the immediate future
due to market conditions as they relate to energy companies.

As previously stated, the Company is discussing with its banks
the need for covenant waivers and access to short term
liquidity. Although its banks are willing to provide the
required waivers through January 2002, they have not at this
time agreed to provide additional liquidity. The Company
believes that it has sufficient liquidity to continue immediate
operations and is considering various options to supplement its
operating cash. The Company will continue to discuss these
issues with its banks in conjunction with its review of
strategic alternatives.

Covanta Energy Corporation is an internationally recognized
designer, developer, owner and operator of power generation
projects and provider of related infrastructure services. The
Company's independent power business develops, structures, owns,
operates and maintains projects that generate power for sale to
utilities and industrial users worldwide. Its waste-to-energy
facilities convert municipal solid waste into energy for
numerous communities, predominantly in the United States. The
Company also offers single-source design/build/operate
capabilities for water and wastewater treatment infrastructures.
Additional information about Covanta can be obtained via the
Internet at http://www.covantaenergy.comor through the
Company's automated information system at 866-COVANTA.

Debtor: Dialpad Communications, Inc.
         2953 Bunker Hill Ln.#400
         Santa Clara, CA 95054

Bankruptcy Case No.: 01-56147

Chapter 11 Petition Date: December 19, 2001

Court: Northern District of California (San Jose)

Judge: Marilyn Morgan

Debtor's Counsel: Penn Ayers Butler, Esq.
                   Law Offices of Brooks and Raub
                   721 Colorado Ave. #101
                   Palo Alto, CA 94303-3913
                   Tel: 650-321-1400

E.SPIRE: Negotiating for Exit Financing with Undisclosed Lender
e.spire(R) Communications, Inc. (OTC Pinksheets: ESPIQ) says
that its Board of Directors has authorized e.spire management to
begin negotiations with creditor constituencies on a term sheet
received from an undisclosed lender for exit financing.

e.spire filed a voluntary petition for Chapter 11 protection
with the U.S. Bankruptcy Court for the District of Delaware on
March 22 of this year. With a term sheet in hand, e.spire can
now begin final negotiations with its creditors and prepare a
plan of reorganization.

"With a viable term sheet on the table, we are a step closer to
emerging from Chapter 11," said e.spire Chairman George F.
Schmitt. "We will now approach our creditors with a proposed
plan of reorganization and work out the details."

e.spire expects to sign a term sheet and file its plan of
reorganization with the Court within 60 days.

e.spire Communications, Inc. is an 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: Blackstone Hired as Debtors' Financial Advisors
Enron Corporation, and its debtor-affiliates are in the process
of formulating their year business plan.  According to Brian S.
Rosen, Esq., at Weil, Gotshal & Manges LLP, in New York, a
reorganization plan will be promulgated in conjunction with the
business plan process.  Mr. Rosen tells Judge Gonzalez that the
plan will require analysis of enterprise valuation, debt
capacity, and the types of equity securities to be issued as
part of that reorganization plan. Thus, Mr. Rosen relates, the
Debtors have concluded that they require the services of a
financial advisor in order to fulfill their fiduciary duty and
explore all options available, thereby maximizing value.

The Debtors have selected The Blackstone Group, L.P. as their
financial advisors because of the firm's recognized expertise in
providing financial advisory services in financially distressed
situations, including advising debtors, creditors and other
constituencies in chapter 11 proceedings and serving as
investment bankers in numerous such cases.  Moreover, Mr. Rosen
recounts, the Debtors retained Blackstone pre-petition to assist
in the evaluation of strategic alternatives.  Thus, Mr. Rosen
points out, Blackstone has become familiar with the Debtors'
operations and is both well qualified and uniquely able to
represent the Debtors as financial advisors in connection with
such matters in a cost-effective and efficient manner.

According to Mr. Rosen, the Debtors have negotiated the terms of
an engagement letter, which sets forth the services that
Blackstone will provide to the Debtors, as well as the manner in
which Blackstone will be compensated for their services.

Specifically, Mr. Rosen details, the Debtors will look to Rosen

     (a) Assist in the evaluation of the Debtors' businesses and

     (b) Assist in the development of the Debtors' long-term
         business plan;

     (c) Assist in the development of financial data and
         presentations to the Debtors' Boards of Directors,
         various creditors, any official committees formed in a
         Chapter 11 proceeding, and other third parties;

     (d) Analyze the Debtors' financial liquidity and evaluate
         alternatives to improve such liquidity;

     (e) Analyze various restructuring scenarios and the
         potential impact of these scenarios on the value of the
         Debtors and the recoveries of those stakeholders
         impacted by the Restructuring;

     (f) Provide strategic advice with regard to restructuring or
         refinancing the Debtors' Obligations;

     (g) Evaluate the Debtors' debt capacity and alternative
         capital structures;

     (h) Participate in negotiations among the Debtors and their
         creditors, suppliers, lessors and other interested
         parties with respect to any of the transactions
         contemplated in the Blackstone Agreement;

     (i) Value securities offered by the Debtors in connection
         with a restructuring;

     (j) Advise the Debtors and negotiate with lenders with
         respect to potential waivers or amendments of various
         credit facilities;

     (k) Assist in the arranging of Financings (including a DIP
         Financing), including identifying potential sources of
         capital, assisting in the due diligence process, and
         negotiating the terms of any proposed Financing, as

     (l) Assist the Debtors in evaluating and executing both a
         Trading Transaction and a Merger Transaction, including
         identifying potential buyers or parties in interest,
         assisting in the due diligence process, and negotiating
         the terms of any proposed Trading Transaction or Merger
         Transaction, as requested;

     (m) Provide testimony in any Chapter 11 case concerning any
         of the subjects encompassed by Blackstone's financial
         advisory services, if appropriate and as required;

     (n) Assist and advise the Debtors concerning the terms,
         conditions and impact of any transaction proposed by
         Blackstone; and

     (o) Provide such other advisory services as are customarily
         provided in connection with the analysis and negotiation
         of any transactions.

Prior to the Petition Date, Mr. Rosen relates, the Debtors paid
Blackstone approximately $1,300,000 for pre-petition services
rendered and related expenses.  As of the Petition Date, Mr.
Rosen notes, approximately $25,000 of the retainer remained for
application to services provided to the Debtors post-petition.

For its services in these chapter 11 cases (incorporating
defined terms included in a yet-to-be-made-public Engagement
Letter dated November 24, 2001), Enron agrees to pay Blackstone:

     (a) a $350,000 Monthly Advisory Fee;

     (b) 1.0% of the aggregate value of the Consideration paid on
         consummation of any Trading Transaction, subject to a
         $10,000,000 floor and subject to a $35,000,000 cap;

     (c) a $35,000,000 transaction fee on consummation of any
         Merger Transaction;

     (d) 1.0% of the aggregate consideration paid on consummation
         of any divestiture of specific assets or subsidiaries;

     (e) 0.5% of the total facility size of any Debt Financing
         arranged by Blackstone -- excluding the $1.5 billion DIP
         Facility being arranged by JPMorgan Chase and Citicorp;

     (f) 3.0% of the gross proceeds to Enron from any new Equity
         Financing Transaction; and

     (g) 0.25% of the face amount of all restructured obligations
         under a plan of reorganization, subject to a $35,000,000

Steven Zelin, a partner of Blackstone, assures the Court that
Blackstone has no connection with, and holds no interest adverse
to, the Debtors, their estates, their creditors, or any other
party in interest herein, or their respective attorneys, in the
matters for which Blackstone is proposed to be retained, except

     (i) prior to the commencement of the Debtors' cases,
         Blackstone rendered financial advisory services to the
         Debtors, and

    (ii) Blackstone may have provided consulting services, and
         may continue to provide consulting services, to certain
         of the Debtors' creditors or other parties in interest
         in matters unrelated to the Debtors' chapter 11 cases.

"In my opinion," Mr. Zelin says, "this has no bearing on the
services for which Blackstone is to be retained in these cases."
(Enron Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

Debtor: Enron Energy Information Solutions, Inc
         1400 Smith Street
         Houston, TX 77002
         a.k.a. OmniComp., Inc.
         a.k.a. Enron OmniComp, Inc.

Bankruptcy Case No.: 01-16429-ajg

Type of Business: The Debtor develops and markets software used
                   to track electricity usage.

Chapter 11 Petition Date: December 21, 2001

Court: Southern District of New York (Manhattan)

Judge: Arthur J. Gonzalez

Debtor's Counsel: Melanie Gray, Esq.
                   Weil, Gotshal & Manges LLP
                   700 Louisiana, Suite 1600
                   Houston, Texas 77002
                   Telephone: (713) 546-5000


                   Brian S. Rosen, Esq.
                   Weil, Gotshal & Manges LLP
                   767 Fifth Avenue
                   New York, New York 10153
                   Telephone: (212) 310-8000

Total Assets: $ 12,864,399

Total Debts: $ 13,159,587

ENRON FEDERAL SOLUTIONS: Chapter 11 Case Summary
Debtor: Enron Federal Solutions, Inc.
         1400 Smith Street
         Houston, TX 77002

Bankruptcy Case No.: 01-16431-ajg

Type of Business: The Debtor is involved in energy management,
                   consulting and related services for the
                   federal government.

Chapter 11 Petition Date: December 21, 2001

Court: Southern District of New York (Manhattan)

Judge: Arthur J. Gonzalez

Debtor's Counsel: Melanie Gray, Esq.
                   Weil, Gotshal & Manges LLP
                   700 Louisiana, Suite 1600
                   Houston, Texas 77002
                   Telephone: (713) 546-5000


                   Brian S. Rosen, Esq.
                   Weil, Gotshal & Manges LLP
                   767 Fifth Avenue
                   New York, New York 10153
                   Telephone: (212) 310-8000

Total Assets: $19,469,044

Total Debts: $18,446,958

FACTORY CARD: Chapter 11 Plan Delivers Equity Stake to Creditors
Factory Card Outlet Corp., filed a plan of reorganization with
the U.S. Bankruptcy Court on December 19, 2001, based on an
agreement that it had reached with the Creditors' Committee
appointed in its Chapter 11 case.  Under the terms of the plan,
upon its emergence from Chapter 11, most general unsecured
creditors would share receipt of at least 92.5% of the common
stock of the Reorganized Company and cash distributions of $1.0
million.  In addition, creditors would receive $2.6 million
three years from emergence, subject to certain prepayment
provisions.  Subject to approval of the plan by creditors and
stockholders, holders of the Company's outstanding stock would
receive 2.5 percent of the common stock of the Reorganized
Company and warrants to purchase an additional 2.5 percent of
the common stock of the Reorganized Company.

Under the terms of the plan certain trade vendors will convert a
portion of their post-petition trade payables aggregating $3.13
million to a convertible note and provide favorable trade terms.

"The agreement reflects the confidence the vendor community has
in our dedicated associates, who have achieved a dramatic
turnaround," said Chairman, Chief Executive Officer and
President, William E. Freeman.  He added, "We are excited that
the Company will be emerging from bankruptcy and be able to
focus its full attentions on efforts to build on our

Factory Card Outlet operates 173 company-owned retail stores, in
20 states, offering a vast assortment of party supplies,
greeting cards, gift-wrap and other special occasion merchandise
at everyday value prices.  On March 23, 1999, the company filed
a petition for reorganization under Chapter 11 of Title 11 of
the United States Code and is currently operating as a debtor in

FLEXIINTERNATIONAL SOFTWARE: W.R. Hambrecht Owns 23.1% of Equity
According to FlexiInternational Software, there were 17,784,181
shares of common stock  outstanding as of September 30, 2001.
The W.R. Hambrecht + LLC currently directly owns 4,116,711
shares of FlexiInternational's common stock, representing 23.1%
of the outstanding  common stock.  Mr. William R. Hambrecht
directly owns 616,962 shares of common stock of the Company.
Mr. Hambrecht, as the sole Manager of the LLC, has indirect
beneficial ownership of the 4,116,711 shares of common stock
owned by the LLC. Mr. Hambrecht also has a 15.3% ownership
interest in W.R. Hambrecht + Co., which owns 100% of the LLC.
Accordingly, Mr. Hambrecht disclaims beneficial ownership of all
shares of FlexiInternational held by the LLC  other than with
respect to 629,856 shares representing his proportionate
ownership interest in the LLC.

The LLC, WRH, and Mr. Hambrecht each have shared voting power
and dispositive power over the 4,116,711 shares of common stock
held by the LLC.

The acquisitions of common stock by the LLC were made as long-
term investments of the LLC or in connection with its role as a
market maker of FlexiInternational Software.

FlexiInternational Software, Inc. is a leading designer,
developer and marketer of Internet based financial and
accounting software and services. As of June 30, 2001, the
company's balance sheet is upside-down with total shareholders'
equity deficit of about $2 million.

FRIENDLY ICE CREAM: Completes Refinancing of $76MM Bank Facility
Friendly Ice Cream Corporation (AMEX: FRN) announced the
successful completion of its financial restructuring plan. The
restructuring involves the refinancing of the Company's $76
million existing bank credit facility, which includes the
revolving credit loan, term loans and letters of credit, and the
repurchase of approximately $21 million in aggregate principle
amount of its 10 1/2% Senior Notes due 2007.

The Company's new financing consists of three principal

     (1) $55 million in long-term mortgage financing with GE
         Capital Franchise Finance Corporation which will be
         secured by 75 of the Company's restaurants,

     (2) $34.5 million in financing from a sale and leaseback
         arrangement with a real estate investment trust
         involving 45 of the Company's restaurants and

     (3) a $30 million three year revolving credit facility of
         which up to $20 million will be available to support
         commercial letters of credit with the remainder
         available to provide working capital and for other
         corporate needs.

Fleet Bank leads the revolving credit facility transaction and
will serve as agent.

The refinancing has improved the Company's financial profile by
reducing total debt by approximately $30 million and by
extending the average life of the Company's debt. The combined
impact of these transactions is expected to generate a one-time
after-tax benefit of approximately $0.7 million, or $0.09 per
share, to be recorded in the fourth quarter of fiscal 2001.

Paul Hoagland, Chief Financial Officer, stated, "We are pleased
at the response of our bondholders to the tender offer that
allowed us to complete the refinancing plan. Compared with the
bank credit facility that we replaced, the new financing
facilities better accommodate our strategic business plan."

Bank of America Securities (BAS) was the Company's exclusive
dealer manager and solicitation agent on the tender offer.
Earlier this week, the Company announced the results of its
"Dutch Auction" tender offer for a portion of its outstanding 10
1/2% Senior Notes due 2007, which expired December 14, 2001 as
scheduled. A total of $21,273,000 principal amount of notes
tendered was accepted by the Company at a price of $800 per

Friendly Ice Cream Corporation currently has operations in 17
states composed of 393 company restaurants, 161 franchised
restaurants and 6 franchised cafes with a high concentration in
the Northeast. Friendly's offers its customers a unique dining
experience by serving a variety of high-quality, reasonably-
priced breakfast, lunch and dinner items, as well as its
signature frozen desserts, in a fun neighborhood setting.
Additional information on Friendly Ice Cream Corporation can be
found on the Company's website

GENSCI REGENERATION: Files Chapter 11 Petitions in Santa Ana
GenSci Regeneration Sciences Inc. (Toronto: GNS) and its
subsidiary, GenSci OrthoBiologics, Inc., filed for protection
under Chapter 11 of the U.S. Bankruptcy Code with the United
States Bankruptcy Court in Santa Ana, California.

Both GenSci companies have elected to take this action as a
result of the recent verdicts in the patent litigation
proceedings, discussed in our recent press releases.  Chapter 11
of the U.S. Bankruptcy Code will allow the companies to continue
business operations during the appeal process, while developing
a Plan of Reorganization as required in such proceedings.

"The Company has approached this decision taking into account
the interests of shareholders and creditors.  The reorganization
process will allow us the opportunity to appeal the verdict
while maintaining normal business operations and bringing our
new technologies to market," said Douglass Watson, President and
Chief Executive Officer.

GenSci Regeneration Sciences Inc., through its subsidiaries, is
focused on developing novel approaches to bone repair and
regeneration, encouraging minimally invasive procedures by
reducing the need for autograft surgical procedures, improving
recuperation and rehabilitation, reducing patient morbidity and
infection rates, and post-operative complications.  GenSci,
through its subsidiaries designs, develops, manufactures, and
markets biotechnology products in the areas of orthopedics,
neurosurgery, and oral maxillofacial surgery.

HARTMARX: Nature of Exchange Offer Nudges Ratings to Junk Level
Standard & Poor's lowered its single-'B'-plus corporate credit
rating on Hartmarx Corp. to double-'C', and its single-'B'-minus
subordinated debt rating to single-'C'. The ratings remain on
CreditWatch with negative implications.

About $178 million in total debt was outstanding as of August
31, 2001.

The rating action follows the company's recent announcement that
it has initiated an exchange offer for its subordinated notes
maturing on January 15, 2002. According to its 8-K filing, if
Hartmarx is unsuccessful in completing the exchange or obtaining
additional financing, the company would need to restructure its
debt through negotiations or seek bankruptcy protection.
Standard & Poor's would consider the completion of the exchange
to be tantamount to a default.

Standard & Poor's expects to meet with management in the near
term to discuss the company's operating and financing

Hartmarx is a leading U.S. manufacturer of men's tailored
clothing. The company owns and licenses a portfolio of well
known brands, including Hart Schaffner & Marx, Hickey-Freeman,
Tommy Hilfiger, and Kenneth Cole, among others.

HAYES LEMMERZ: Court Okays Insurance Agreement with AFCO Credit
Hayes Lemmerz International, Inc., and its debtor-affiliates
sought and obtained an interim order authorizing them to enter
into two insurance premium financing agreements with AFCO Credit

Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP in
Wilmington, Delaware, relates that in the normal course of
business, the Debtors maintain various types of insurance,
including policies for property, general liability, crime, and
umbrella liability. In order to defray the high initial cost of
premiums for new policies of insurance for the Debtors with
respect to property insurance, general liability insurance,
crime and umbrella and excess umbrella policies, which the
Debtors obtained in the ordinary course of business in the
exercise of their business judgment, the Debtors have negotiated
two proposed insurance premium financing agreements with AFCO.
Pursuant to the Finance Agreements, AFCO will finance premiums
under the New Policies.

Mr. Chehi contends that maintenance of property, general
liability, crime and umbrella liability coverages such as the
coverages provided by the New Policies is essential to the
Debtors' continued operations. The terms of the New Policies are
similar to those typically found in insurance policies
maintained by corporate entities, which are similar in size and
nature to the Debtors. Specifically, the New Policies provide
coverage for the Debtors' property, general liability, crime and
umbrella liability coverage liabilities that the Debtors may
incur during the operation of there businesses. The aggregate
amount of the premiums payable with respect to the New Policies
is $5,083,036.

Pursuant to the Finance Agreements, Mr. Chehi explains that AFCO
will pay the aggregate amount of the premiums for the New
Policies in full. In return, the Debtors are required to pay to
AFCO down payments totally $1,016,607 and nine monthly
installments each in the total amount of $458,679.80. Mr. Chehi
adds that the Monthly Installments are due on the first day of
each month and were scheduled to commence prior to the Petition
Date, on December 1, 2001. The Finance Agreements provide for an
interest rate of 3.63% with respect to the amounts financed

Despite their best efforts to obtain unsecured credit with
respect to insurance premium financing, Mr. Chehi claims that
the Debtors were unable to obtain such credit. Accordingly,
pursuant to the terms of the Finance Agreements, the amount
financed would be secured by all unearned and returned premiums
resulting from reduction or cancellation of the coverage under
the New Policies.  In addition, pursuant to the Finance
Agreements, the Debtors would be required to grant AFCO a power
of attorney to effect cancellation of the New Policies and
collect the unearned premiums should the Debtors default under
the terms of the Finance Agreements. However, Mr. Chehi notes
that AFCO will not be able to exercise such power of attorney

A. it has provided the Debtors the notice and cure period
    required by applicable state statute and

B. the Debtors have failed to cure any default within such

Mr. Chehi contends that the terms provided by AFCO under the
Finance Agreements were more favorable than other terms the
Debtors were able to obtain. The New Policies will provide the
Debtors with property, general liability, crime and umbrella
liability coverage, which are all typically carried by
corporations and are necessary to avoid unexpected losses which
may disrupt a company's cash flows. Thus, Mr. Chehi concludes
that obtaining such coverage is critical to the continued
operation of the Debtors and essential for the Debtors'
reorganization efforts.

Mr. Chehi also points out that the cost of funds under the
Finance Agreement is lower than under the Debtors' proposed
post-petition financing arrangement with the proposed post-
petition lenders. Accordingly, it is more beneficial for the
Debtors to finance the Policies through AFCO than to borrow
under the DIP Agreement to purchase the New Policies. Although
the DIP Agreement restricts the creation and existence of any
liens upon the Debtors' property, Mr. Chehi assures the Court
that the Debtors have provided counsel for the lenders under the
DIP Agreement with a copy of the Finance Agreement and believe
such lenders will consent to the authority the Debtors seek
pursuant to the Motion. The Debtors have determined that
financing the premiums to be paid under the New Policies enables
the Debtors to maintain critical insurance coverage while
preserving their available cash.

Judge Walrath directs the Debtors to serve notice of this Motion
and the entry of the interim order on the U.S. Trustee, the
Debtors' top 50 unsecured creditors, and all parties that have
filed requests for notices within 5 business days after December
6, 2001. Such notice shall provide that any objections to the
relief requested in the Motion or granted in the Order must be
filed within 20 days from the date hereof. Judge Walrath further
rules that if an objection is timely filed and served prior to
the Objection Deadline, such objection will be set for hearing
at the next regularly-scheduled omnibus hearing in these cases.
In the event that no objection to the Motion or Order is timely
filed and served, the Debtors propose that the Order be deemed a
final order, as of the day following the Objection Deadline,
without further notice or a hearing. (Hayes Lemmerz Bankruptcy
News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-

IVC INDUSTRIES: Pursuing Alternative Sources of Financing
IVC Industries, Inc.'s net loss for the quarter ended October
31, 2001 was $1,825 versus a net loss of $1,075 for the quarter
ended October 31, 2000.

Net sales for the quarter ended October 31, 2001 were $15,350 as
compared to $15,828 in the prior year's quarter, a decrease of
$478 or 3.0%. This reduction was primarily attributable to a
decrease in contract manufacturing and branded sales to existing
customers due to the softness in the overall market for
vitamins, herbs and supplements, and increased price and product
competition from competitors.

The Company has been pursuing, among other initiatives; i)
obtaining alternative sources of financing, ii) seeking
additional sales opportunities within its core business, iii)
seeking new sales opportunities through non-traditional channels
of distribution, iv) reducing expenses to a level that would
provide the Company with sufficient cash flows to meet its
obligations, v) merger or sale of the Company, and or vi) a
combination of any of the foregoing.

On September 21, 2001, the Company signed a non-binding letter
of intent with Innovations for it to acquire all of the
outstanding stock of the Company. As contemplated by the letter
of intent, each shareholder of the Company would receive from
Innovations $2.50 cash for each share of the Company common
stock held by such shareholder, except that certain of the
Company's principal shareholders would receive either cash,
restricted shares of common stock of Innovations or a
combination thereof, valued at $2.50 for each share of the
Company's common stock held by such shareholders.

Innovations was a majority-owned subsidiary of Inverness.
Inverness had agreed to be acquired by Johnson & Johnson. As
part of the acquisition by Johnson & Johnson, Inverness plans to
restructure its operations so that its women's health,
nutritional supplements and clinical diagnostics businesses are
held by Innovations. On November 21, 2001 Inverness merged with
Johnson and Johnson and Innovations was then split-off from
Inverness as a separate, publicly-owned company based in
Waltham, Massachusetts.

The acquisition of the Company by Innovations is subject to a
number of conditions, including negotiation of a definitive
acquisition agreement, approval by Innovations' and the
Company's boards of directors, approval by the Company's
shareholders, modification of loan agreements with the Company's
pincipal lender, and satisfactory due diligence. The letter of
intent is non-binding, and there can be no assurance that the
Company will be able to reach a definitive agreement with
Innovations, or that even if it does enter into a definitive
agreement with Innovations, that Innovations will complete the
acquisition of the Company or that it will acquire the Company
on the terms described in the letter of intent.

Four shareholders of the Company holding approximately 42% of
the Company's outstanding common stock have entered into voting
agreements with Innovations. The voting agreements require these
shareholders to vote all of the shares of the Company common
stock they own in favor of the acquisition of the Company by
Innovations and against any competing proposal. The voting
agreements expire on January 19, 2002 if the Company and
Innovations have not entered into a definitive acquisition
agreement by that date.

If IVC cannot achieve any of the foregoing, it has said that it
may need to modify its business objectives or reduce or cease
certain or all of its operations.

INTEGRATED HEALTH: Intends to Reject Cambridge Lease in Indiana
Integrated Health Services, Inc., and its debtor-affiliates,
including Cambridge Group of Indiana, Inc. (the Tenant), move
the Court pursuant to Sections 105(a), 365(a) and (g)(1),
502(b)(6) and (g) of the Bankruptcy Code and Rules 6006 and 9014
of the Bankruptcy Rules, for entry of an order authorizing the
Cambridge Tenant to reject its lease with Mediplex of Indiana,
Inc. (the Cambridge Landlord), dated as of June 27, 1991 (the
Cambridge Lease), related to non-residential real property and
improvements, located in Marion County, Indiana, consisting of
the skilled nursing facility known as the Cambridge Healthcare

The Cambridge Facility's year 2002 pro-forma EBITDAR was
$596,143. After payment of rent in the amount of $1,777,787,
however, the Facility would have pro-forma EBITDA of negative
$581,644. Thus, the Cambridge Facility clearly strains the
resources of the Debtors' estates. Moreover, in light of the
magnitude of the negative EBITDA for this Facility, Debtors
believe that it is not feasible to bring this Facility into
profitability by means of rent concessions or any other means.

Accordingly, consistent with their reorganization strategy, the
Debtors seek Court authorization to reject the Lease pursuant to
section 365 of the Bankruptcy Code.

                   Limited Opposition of Mediplex

Mediplex of Indiana, Inc. (landlord) reminds the Court that, to
cease or winddown operations would create a severe health risk
to the residents of the Facility, and would be a violation of
the Debtors' statutory duty to operate its business in
accordance with applicable non-bankruptcy laws.

Mediplex suggest that, as a condition to rejection of the Lease,
the Debtors be required to continue operations for a period of
five months after the effective date of a settlement and
transition agreement with Mediplex or its designee or until a
new approved licensed operator can be put into place.

Mediplex notes that, under Indiana regulations, the Department
must approve any new or replacement licensee for the Facility,
and Mediplex is not such a licensee. Under Indiana regulations,
abandonment of the Facility by the Debtors before a new approved
licensed operator is put in place would be a violation of
Indiana state law, and thus a violation of federal law. Based on
an inquiry to the Department, Mediplex cautions that if the
Debtors seek to reject the Lease without a replacement licensed
operator (which Mediplex is not) or to take other action which
jeopardizes the health and safety of the Facility's residents,
the Department would consider such action to be a criminal act
of abandonment and would ask the Indiana State Attorney General
to seek to enjoin the action.

Mediplex reckons that any orderly transition of the operation of
a skilled nursing and subacute care facility requires several
months, and, as Debtor itself has stated, requires complex
negotiations not only with the affected landlord, but also with
the Health Care Financing Administration, the Department of
Justice and the relevant state Medicaid agency concerning, among
other things, the treatment of claims and liabilities under the
provider agreements impacted by the Debtors' decision.

Resolution such as the one proposed here by Mediplex is not
without precedent, even in the IHS cases, Mediplex reminds the
Court. To reduce any burden to the estate, Mediplex is willing
to make a reasonable adjustment in the rent during any such
transition period.

Mediplex also requests that the Rejection Claims Deadline be
extended to the 60th day, instead of the 30th day, after service
upon Mediplex of the notice of entry of an order authorizing
rejection because the calculation of the potential damages which
would result from the rejection of the Lease is complex, and not
immediately ascertainable. (Integrated Health Bankruptcy News,
Issue No. 24; Bankruptcy Creditors' Service, Inc., 609/392-0900)

LAM RESEARCH: Initiates 12% Global Workforce Reduction
Lam Research Corporation (Nasdaq:LRCX) announced it is reducing
its global work force by approximately 12 percent. Approximately
400 employees are being affected. The company will record a
restructuring charge against financial results for the quarter
ending December 2001.

"We made this difficult decision to address the current market
environment and size our operations accordingly," stated James
W. Bagley, Lam's chairman and chief executive officer. While our
near-term expectations about the business environment have not
changed, the decline in the last two quarters was greater than
we anticipated and required today's actions. We remain committed
to investing in research and development activities and believe
that our strong product position will enable the company to
demonstrate solid market share growth when the industry
recovers," Bagley concluded.

In a separate announcement released Thursday, the Company has
agreed to settle all outstanding patent litigation with Varian
Semiconductor Associates. Lam has agreed to pay Varian $20
million and to issue a warrant for the purchase of 2 million
shares of Lam common stock, exercisable through December 2005 at
a price of $21.30 per share. $5 million is payable upon signing
for licensed use of the patents during 2001 with the warrant
covering licensed use of the patents in 2000 and earlier.
Quarterly payments totaling the balance of $15 million will be
paid over the next 3 years for future licensed use over the
remaining life of the patents.

In connection with the above settlement, Lam will record a
special charge of approximately $42 million: $20 million for the
cash payment and a non-cash charge of $22 million, which
represents the imputed value of the warrants at $21.30 per
share. The charge will be reflected in the quarter ending
December 2001. The Company will file a registration statement
with the Securities and Exchange Commission for resale of the
warrant shares by Varian.

Lam Research Corporation is a leading supplier of wafer
fabrication equipment and services to the world's semiconductor
industry. Lam's common stock trades on the Nasdaq National
Market under the symbol LRCX. The Company's World Wide Web
address is

LOUISIANA-PACIFIC: Completes Credit Refinancing in Canada
Louisiana-Pacific Corporation (LP) (NYSE:LPX) announced the
completion of a Canadian credit facility with Royal Bank of
Canada for its Canadian operation, LP Canada Ltd.

The agreement executed today provides C$25 million in revolving
credit for general business purposes and a C$35 million credit
line to cover cash management and foreign exchange transactions.

"This is the final piece of the financial restructuring
announced in November and provides liquidity for our operations
in Canada," said Curtis Stevens, LP's chief financial officer.
"We would like to thank the Royal Bank of Canada, also a key
participant in our U.S. facility, for bringing this financing to
a successful conclusion."

The Canadian financing has a term of one year and includes
covenants reflective of those incorporated in the U.S. credit
facility, along with a current ratio test.

LP is a premier supplier of building materials, delivering
innovative, high-quality commodity and specialty products to its
retail, wholesale, homebuilding and industrial customers. Visit
LP's web site at:

MARINER POST-ACUTE: Obtains Eight Extension of Exclusive Periods
Mariner Post-Acute Network, Inc. Debtors sought and obtained
from Judge Walrath a further extension of the Exclusivity Period
during which they may file a plan of reorganization to and
including January 24, 2002, and if a plan is filed within such
time, extending the Exclusive Period to solicit acceptances of
the Plan to and including March 25, 2002.

On top of progress in reorganization in other areas, the Debtors
draw the Court's attention to their negotiations with principal
creditor constituencies regarding the terms of a plan of
reorganization. These negotiations resulted in the Debtors'
entry into a Memorandum of Understanding (the MOU) which was
supported by the MPAN Committee and the MHG Committee. The
Debtors note that the MOU provided a framework by which MPAN
Debtors and the Mariner Health Debtors, and their respective
principal senior secured creditors could reach consensus on a
plan although they contend that the MOU dictate the terms of a

After the Court declined to approve the MOU, the Debtors and
their principal creditor constituencies began actively
negotiating the terms of a plan of reorganization that will
incorporate the terms of the MOU and provide for fair and
equitable treatment of all creditors. (Such a Plan has now been

The Debtors believe that the requested extension of the
Exclusivity Periods will enable these negotiations to be
completed and a plan that is supported by all creditor
constituencies to be proposed. (Mariner Bankruptcy News, Issue
No. 21; Bankruptcy Creditors' Service, Inc., 609/392-0900)

MENTERGY LTD: Creditors Agree to Swap $43MM in Debts for Equity
Mentergy, Ltd. (Nasdaq: MNTE), the leading global provider of
blended e-Learning solutions, announced that its Shareholders
approved a one-for-four reverse stock split, effective date of
which is December 24, 2001.  The new CUSIP number for Mentergy
shares shall be: M69466205.

The shareholders of Mentergy also approved the refinancing
agreement pursuant to which current creditors agreed to convert
approximately $43.4 million of debt into equity.  As part of the
agreement, certain principal shareholders will make additional
equity investments of an aggregate of $2.85 million in cash.

The agreement remains subject to court, governmental and other
approvals. Mentergy expects to close the transactions
contemplated by the agreement as soon as possible after receipt
of such approvals.

Mentergy, Ltd. (Nasdaq: MNTE), formerly Gilat Communications,
Ltd. (Nasdaq: GICOF), is a global e-Learning company, providing
e-Learning products, consulting, and courseware development
services for large enterprises.  With over 21 years of expertise
in the learning industry, Mentergy assists businesses worldwide
to make a cost-effective shift from traditional learning to a
blended e-Learning approach.  Mentergy Ltd.'s North American
operations comprise of the Allen Communication Learning Services
division and the LearnLinc Live e-Learning division (Mentergy,
Inc.), in addition to John Bryce Training in Israel and Europe
(Aris Education), and a global sales and marketing operation
that includes Mentergy Europe. For additional information, see

Mentergy is a trademark and LearnLinc is a registered trademark
of Mentergy, Ltd.  All other brand names, product names, or
trademarks belong to their respective holders.

METALS USA: Agrees to Make $400,000 Deposit with IPSCO
Metals USA, Inc., and its debtor-affiliates file this emergency
motion for the approval of its adequate protection stipulation
with IPSCO Steel Inc., a critical vendor of steel in sheet and
pipe products in order to continue meeting the demands of their

Zack A. Clement, Esq., at Fulbright & Jaworski LLP in Houston,
Texas, tells the court the emergency motion is in response to
the demand for adequate protection by IPSCO. An inventory
agreement was entered into by both parties on June 7, 2001 for
IPSCO to sell certain of its steel in sheet (including rolled
steel plates and rolled steel strip cut-to-length plate and
steel strip, coiled steel plate and strip and discreet plate)
and pipe products (including steel line pipe and casing and pipe
couplings).   Mr. Clement explains that these products are
shipped to the Debtors' distribution centers for storage in a
yard warehouse. Debtors negotiate the sale of specific items to
customers the specific sale of specific IPSCO product items to
their customers, at which time the products are purchased by the
Debtors from IPSCO.

Mr. Clement informs the Court that IPSCO has already made it
known to the Debtors it will not resume deliveries until its
interests are adequately protected with the Debtors' Chapter 11

The salient terms of the stipulation are that:

A. Debtors shall deposit $400,000 with IPSCO, which amount shall
    be held by IPSCO and applied to amounts owed to IPSCO for
    post-petition purchases of IPSCO products only if the
    Debtors fail to timely remit payment to IPSCO;

B. the Debtors will remit to IPSCO on the first business day of
    the week, payment for IPSCO products purchased by the
    Debtors during the prior week;

C. If the Debtors fails to timely remit payment for purchases of
    IPSCO products, they shall be precluded from further sales
    of existing IPSCO and following 48 hours notice to the
    debtors, the Official Committee of Unsecured Creditors and
    the Bank Group, and the Debtors failure to immediately cure
    any default, IPSCO may apply the deposit against the unpaid
    balance for post-petition purchases of IPSCO products by
    the Debtors;

D. IPSCO would receive a first priority lien on its products
    delivered to the Debtors under the Agreement which lien
    shall remain in effect until the specific products are sold
    to third parties.

Mr. Clement adds that the Debtors are also barred from making
purchases beyond $400,000 in a given week without approval from
the Company and payment of purchases will be made on the first
business day of the following week. In the same stipulation, the
Debtors and IPSCO agreed to use the first-in first-out inventory
methodology to determine which IPSCO product has been purchased.

                      Bank of America Objects

R. Michael Farquhar, Esq., at Winstead Sechrest & Minick P.C. in
Dallas, Texas, informs the Court that Bank of America, as Agent
for the Lender Group, objects to one of the components of the
relief sought in the Motion and would request a provision for or
clarification of at least three issues in any Order granting the
relief requested. The points to be clarified are:

A. The stipulation's attempt to grant IPSCO a first priority
    lien on the proceeds is overreaching. Initially, the Debtors
    are using the Bank's cash collateral based on the issuance of
    replacement liens on any cash collateral expended. IPSCO
    cannot be allowed to usurp that scheme to become pari passu
    or to prime the Bank's liens on proceeds. In addition,
    granting IPSCO a lien on proceeds together with providing a
    $400,000 deposit covering a week's sales amounts to double
    protection which is both unnecessary and unwarranted. Bank
    of America requests that such provision be stricken.

B. Bank of America further requests that any Order include a
    provision requiring Debtors to physically segregate IPSCO
    products from Debtors' other products. That provision
    should further provide that no ISCO products may be
    included by the Debtors when calculating the Bank's
    adequate protection.

C. Any order relating to the Stipulation include a provision
    requiring IPSCO to seek authority from the Court prior to
    offsetting any amounts allegedly due IPSCO against the
    $400,000 deposit. (Metals USA Bankruptcy News, Issue No. 4;
    Bankruptcy Creditors' Service, Inc., 609/392-0900)

MT. SINAI MEDICAL: Fitch Hatchets Rating Down to Low-B Level
Fitch has downgraded its rating on the Mount Sinai Medical
Center of Florida's (Mount Sinai) approximately $275 million
outstanding bonds to 'BB' from 'BBB+'. In addition, the bonds
will be removed from Rating Watch Negative. The Rating Outlook
is Negative. This is the most severe rating action Fitch has
taken on a health care bond issue.

The rating downgrade is due to several factors including the
extremely poor fiscal 2001 operating results (almost four times
below original projections) which resulted in the dismissal of
the Chief Executive Officer and Chief Financial Officer, and a
decline in unrestricted liquidity. The new projection for fiscal
2002 is a $32.5 million operating loss (before infusion of $30
million from the Mount Sinai Medical Center Foundation (the
Foundation)) which is approximately 12 times worse than the
original projected loss of $2.5 million. Fitch expects that
Mount Sinai will have a technical rate covenant violations in
2001, and based on projections Mt. Sinai should cover actual
debt service in 2002 1.6 times with no technical rate covenant
violation. However, coverage of maximum annual debt service
coverage is expected to be below 1.0x.

In October 2001, in reaction to the mounting losses the board
replaced the Chief Executive Officer and Chief Financial Officer
and retained Deloitte and Touche LLP to initially assist with
patient accounts management. Through the ten months ended Oct.
31, 2001 Mount Sinai lost $34.7 million from operations, and is
projected to lose $59.7 million from operations, which contrasts
with original projections of a $7.5 million loss from
operations. Furthermore Mount Sinai's liquidity position
including unrestricted funds available through the Foundation
through the 10 months ended Oct. 31, 2001 has dropped 17.4% to
$57 million from approximately $69 million in fiscal year 2000.

The Negative Rating Outlook reflects concern that the turnaround
plan outlined by Mount Sinai is aggressive. It includes several
initiatives that are expected to result in $27.5 million in
savings in 2002. The Foundation will be transferring $30 million
to Mount Sinai in the first and second quarters of fiscal 2002.
Fitch continues to view Mount Sinai's market position as the
only provider on Miami Beach as its primary strength.
Furthermore, Fitch notes an additional $84.4 million of
restricted bonds funds that can be used to retire outstanding
indebtedness. Fitch will monitor the financial situation on an
ongoing basis to determine Mount Sinai's progress towards its
stated goals.

Mount Sinai is a two-campus health care provider with 979
licensed beds (780 staffed) in Miami Beach, Florida.

Outstanding Debt:

      -- $92,125,000 City of Miami Beach Health Facilities
Authority, hospital revenue bonds, series 2001A (Mount Sinai
Medical Center of Florida Project);

      -- $30,430,000 City of Miami Beach Health Facilities
Authority, hospital revenue bonds, series 2001B (Mount Sinai
Medical Center of Florida Project);

      -- $70,640,000 City of Miami Beach Health Facilities
Authority, hospital revenue bonds, series 2001C (Mount Sinai
Medical Center of Florida Project);

      -- $98,000,000 City of Miami Beach Health Facilities
Authority, hospital revenue bonds, series 1998 (Mount Sinai
Medical Center of Florida Project).

NOVO NETWORKS: Nasdaq Appeal Decision Expected in January
On December 13, 2001, Novo Networks, Inc. (Nasdaq:NVNW) attended
a hearing before the Nasdaq Listing Qualifications Panel to
appeal a Nasdaq Staff Determination that the Company's
securities should be delisted from the Nasdaq National Market.
The Company originally filed its appeal on October 30, 2001,
which temporarily stayed the delisting pending the Panel's
decision. The Company expects to receive a final decision by
mid-January. There is no assurance the Panel will grant the
Company's request for continued listing or that the Company's
securities will trade publicly in the future. Should the
Company's securities cease to trade on Nasdaq, the Company
believes that other trading venues will be available and is
investigating such alternatives. However, the Company observes
that any such alternative trading venue is likely to adversely
affect the ability or willingness of investors to purchase the
Company's common stock, as well as the market liquidity of the
Company's securities.

NOVO NETWORKS: Disclosure Statement Hearing Set for Jan. 14
Certain of Novo Networks, Inc.'s (Nasdaq:NVNW) operating
subsidiaries -- including Novo Networks Operating Corp., AxisTel
Communications, Inc. and e.Volve Technology Group, Inc. -- filed
voluntary petitions for protection under Chapter 11 of the U.S.
Bankruptcy Code last Summer.  A hearing with the U.S. Bankruptcy
Court for the District of Delaware to approve the subsidiaries'
disclosure statement has been postponed until January 14, 2002.
The plan confirmation hearing is now expected to take place in
late February of 2002.

In addition, due to a contractual dispute, Novo's subsidiaries
are no longer terminating traffic for Qwest Communications over
their telecommunications network.  Novo doesn't know if its
subsidiaries will successfully resolve the dispute with Qwest or
secure new customers.

OUTSOURCE INTL: Inks Definitive Deal to Sell Assets to Cerberus
Outsource International, Inc. (OTC Bulletin Board: OSIX), a
leading national provider of human resource services focusing on
the flexible industrial staffing market, announced that it has
signed a definitive Purchase Agreement to sell substantially all
of the assets of Outsource and its subsidiaries to Cerberus
Outsource SPV LLC.  The Purchaser is affiliated with Cerberus
Capital Management and, in addition, Ableco Finance LLC, one of
Outsource's principal senior secured lenders.

The aggregate purchase price payable by Purchaser includes:

      (a) the refinancing and assumption by Purchaser of up to
$39.5 million of the outstanding indebtedness due under
Outsource's Senior Credit Facilities;

      (b) the assumption of certain other specified liabilities
of Outsource set forth in the Purchase Agreement; and a cash
payment to Outsource of up to $750,000 to the extent necessary
to cause Outsource's available cash to equal approximately $1.85
million after giving effect to the transaction.  The Purchaser
is contributing $6 million of new capital to the transaction, of
which approximately $5 million will be available for working

On June 11, 2001, Outsource International, Inc. along with
certain of its subsidiaries, filed a voluntary petition under
Chapter 11 of the U.S. Bankruptcy Code to restructure the
Company's debts.  Outsource is currently operating as a debtor-
in-possession pursuant to its Chapter 11 bankruptcy filing
currently pending before the United States Bankruptcy Court for
the Central District of California.  As contemplated in the
Purchase Agreement, Outsource will seek approval of the
Bankruptcy Court to conduct an auction whereby higher and better
offers to purchase the business may be considered. The closing
under the Purchase Agreement will be effectuated pursuant to a
Sale Order filed with the Bankruptcy Court and is subject to
completion of the auction and other conditions set forth in the
Purchase Agreement.  The proceeds from the sale will be
distributed to Outsource's creditors under the oversight and
procedures of the Bankruptcy Court.  In view of the Company's
total liabilities, if a transaction is consummated on the terms
set forth in the Purchase Agreement or similar alternative
transaction, no amounts will ultimately be available for
distribution to Outsource's common shareholders.

Outsource International, Inc., through its Tandem Staffing
division, is a national provider of human resource services
focusing on the flexible industrial staffing market.  Tandem
Staffing partners with its service workers and industrial
employers to provide flexible workforce solutions to maximize
client production and profitability.  With 124 offices
nationwide, Tandem Staffing services approximately 3,000
industrial clients on a daily basis with over 18,000 temporary

PACIFIC GAS: Hearing on Claim Settlement Protocol Tomorrow
Approximately 12,800 claims have been filed against Pacific Gas
and Electric Company, and its debtor-affiliates as of December,
2001. The vast majority of the claims (approximately 80.5 %)
were filed in an amount less than $100,000. PG&E anticipates
that the claims resolution process will be time-consuming and
require a great deal of effort on the part of its business and
legal teams, as well as outside counsel.

Therefore, PG&E seeks the Court's approval to settle certain
pre-petition claims, prior to the effective date of the Plan of
Reorganization, without the burden and expense of seeking review
by the Committee and other parties in interest, and without
Bankruptcy Court approval of each proposed settlement.

In particular, PG&E seeks authority to the following claims:

(1) any claim where the proposed allowed amount of such claim is
     $100,000 or less; and

(2) any claim where the proposed allowed amount exceeds $100,000
     but is no more than $5 million, and is the lesser of

     (a) 110% of the amount of such claim as scheduled in PG&E's
         Schedules, and

     (b) $500,000 more than the amount of such claim as set forth
         on the Schedules.

     For purposes of this determination, any claim which is not
     scheduled, or is scheduled as disputed, contingent or
     unliquidated, would be treated as a claim scheduled in the
     amount of $0.

To the extent any proposed settlement does not meet the criteria
set forth above, PG&E proposes to provide written notice of such
proposed settlement to the Committee. If the Committee objects
to the proposed settlement by written notice to PG&E's
bankruptcy counsel within ten calendar days after the
Committee's receipt of PG&E's notice, PG&E will not proceed to
enter into such proposed settlement without bringing a motion
for approval of the proposed settlement on at least twenty days'
written notice to the Committee and the United States Trustee
and obtaining a Court order thereon.

With respect to any settlement which would result in an allowed
claim in excess of $5 million, PG&E will not enter into and
consummate any such settlement without first bringing a motion
for approval of such settlement on at least 20 days' notice to
the Special Notice List as defined in the Case Management Order
and obtaining an order on such motion. Written objections or
responses to any such motion for approval of a settlement will
be required to be filed 5 calendar days prior the hearing on the

PG&E will submit status reports to the Committee on not less
than a monthly basis, listing those claims which have been
settled and the agreed allowed amount of each such claim.
Further, PG&E will file with the Court each written stipulation
entered into by PG&E settling any claim, and serve copies on
counsel for the Committee and the Unites States Trustee.

PG&E tells the Court that the claims settlement authority
requested will benefit the estate by (i) reducing professional
fees and other costs, (ii) providing flexibility to
expeditiously resolve claims, and (iii) facilitating the
efficient administration of the estate. Moreover, such relief
will also benefit the Committee and the Court, PG&E represents.

Absent the relief sought, PG&E would be required to seek the
Court's approval of all claim settlements, regardless of the
amount of the settlement. Rule 9019(a) would also require prior
notice and opportunity for hearing to all interested parties
before approval of a settlement or compromise.

PG&E has obtained the approval of the Committee for the
settlement authorizations sought by the Motion.

PG&E requests that the Court utilize its authority under Rule
9019(b) of the Federal Rules of Bankruptcy Procedure to approve
the settlement authority requested by this Motion.

Hearing on this motion will be conducted on December 27, 2001 at
1:30 p.m. (Pacific Gas Bankruptcy News, Issue No. 18; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

POLAROID CORP: Judge Walsh Okays DrKW as Financial Advisor
After reviewing Polaroid Corporation's application, Judge Walsh
authorizes the Debtors to retain Dresdner Kleinwort Wasserstein
as its Financial Advisor and Investment Banker, nunc pro tunc to
the date the Company filed for chapter 11 protection.

The Court modifies paragraph 6 of the May Engagement Letter and
paragraph 8 of the October Engagement Letter by deleting and
replacing it with:

   (a) [New Paragraph 6] Independence - Wasserstein Perella is
       not an employee or agent of the Company or any other party
       and is not authorized to bind the Company. The advice
       (oral or written) rendered by Wasserstein Perella pursuant
       to this agreement is intended solely for the benefit and
       use of the Board of Directors and senior management of the
       Company in considering the matters to which this agreement
       relates, and the Company agrees that such advice may not
       be relied upon by any other person, used for any other
       purpose or reproduced, disseminated, quoted or referred to
       at any time, in any manner or for any purpose, (except as
       required by law) nor shall any public references to
       Wasserstein Perella be made by the Company, without the
       prior written consent of Wasserstein Perella.

   (b) [New Paragraph 8] Independence - Dresdner Kleinwort is not
       an employee or agent of the Company or any other party and
       is not authorized to bind the Company. The advice (oral or
       written) rendered by Dresdner Kleinwort pursuant to this
       agreement is intended solely for the benefit and use of
       the Board of Directors of the Company in considering the
       matters to which this agreement relates, and the Company
       agrees that such advice may not be relied upon by any
       other person or entity, used for any other purpose or
       reproduced, disseminated, quoted or referred to at any
       time, in any manner for any purpose, nor shall any public
       references to Dresdner Kleinwort be made by the Company,
       without the prior written consent of Dresdner Kleinwort.

In addition, Judge Walsh approves the fees to be paid to
Dresdner Kleinwort pursuant to the terms of the Engagement
Letter, and the indemnification provisions contained therein.
The fees shall be subject to the standard of review provided in
section 328(a) of the Bankruptcy Code and not subject to any
other standard of review under section 330 of the Bankruptcy
Code, Judge Walsh emphasizes.

Accordingly, the Court states that Dresdner Kleinwort shall seek
compensation and expenses pursuant to sections 330 and 331 of
the Bankruptcy Code, the Bankruptcy Rules, and the rules and
orders of this Court.

Judge Walsh approves the indemnification provisions of the
Engagement Letter subject to these conditions:

   (a) subject to the provisions of subparagraph (c) infra, the
       Debtor is authorized to indemnify, and shall indemnify
       Dresdner Kleinwort in accordance with the Engagement
       Letter for any claim arising from, related to or in
       connection with the services provided for in the
       Engagement Letter, but not for any claim arising from,
       related to, or in connection with Dresdner Kleinwort's
       post-petition performance of any other services unless
       such post-petition services and indemnification are
       approved by the Court;

   (b) notwithstanding any provisions of the Engagement Letter to
       the contrary, the Debtor shall have no obligation to
       indemnify Dresdner Kleinwort or provide contribution or
       reimbursement to Dresdner Kleinwort for any claim or
       expense that is either

         (i) judicially determined (the determination having
             become final) to have arisen solely front Dresdner
             Kleinwort's gross negligence or willful misconduct,

        (ii) settled prior to a judicial determination as to
             Dresdner Kleinwort's gross negligence or willful
             misconduct, but determined by the Court, after
             notice and a hearing pursuant to subparagraph (c)
             infra, to be a claim or expense for which Dresdner
             Kleinwort should not receive indemnity, contribution
             or reimbursement under the terms of the Engagement
             Letter; and

   (c) if, before the earlier of:

         (i) the entry of an order confirming a chapter 11 plan
             in this case (that order having become a final order
             no longer subject to appeal), and

        (ii) the entry of an order closing this chapter 11 case,
        Dresdner Kleinwort believes that it is entitled to the
        payment of any amounts by the Debtors on account of the
        Debtors' indemnification, contribution and/or
        reimbursement obligations under the Engagement Letter (as
        modified by this Order), including without limitation the
        advancement of defense costs, Dresdner Kleinwort must
        file an application therefor in this Court, and the
        Debtors may not pay any such amounts to Dresdner
        Kleinwort before the entry of an order by this Court
        approving the payment. This subparagraph (c) is intended
        only to specify the period of time during which the Court
        shall have jurisdiction over any request for fees and
        expenses by Dresdner Kleinwort for indemnification,
        contribution or reimbursement and is not intended to
        limit the duration of the Debtors' obligation to
        indemnify Dresdner Kleinwort.

Furthermore, Judge Walsh rules that notwithstanding any
provision of the Engagement Letter or the October Engagement
Letter, neither Dresdner Kleinwort nor its affiliates shall
engage in the unsolicited purchase or sale of any securities of
the Company on behalf of any insider of the Company, Dresdner
Kleinwort or its affiliates. (Polaroid Bankruptcy News, Issue
No. 7; Bankruptcy Creditors' Service, Inc., 609/392-0900)

POLAROID: Digimarc Completes Acquisition of ID Systems Business
Digimarc Corporation (Nasdaq:DMRC), the world leader in digital
watermarking solutions, announced that it has completed the
transaction to acquire Polaroid Corporation's ID Systems
business, headquartered in Bedford, Massachusetts.

The Polaroid ID Systems business has been renamed Digimarc ID
Systems. It produces 60 million secure personal identity cards
per year, including the drivers licenses of 37 U.S. states and
other government identification documents around the world. The
purchase price for the acquisition was $56.5 million in cash
plus the assumption of certain liabilities and expenses. The ID
Systems business employs approximately 300 people, generates in
excess of $50 million in annual revenues, and is expected to be
profitable on a pro forma standalone basis.

Digimarc was announced as the winning bidder for the ID Systems
business in an auction conducted by Polaroid Corporation and
other related debtor parties on November 30 and December 1,
2001. Sale procedures were subsequently approved by the United
States Bankruptcy Court for the District of Delaware, the
parties entered into a definitive agreement for the purchase of
the assets, and applicable waiting periods pursuant to the Hart
Scott Rodino antitrust review provisions were subject to early

"We are very pleased to announce the close of the sale of the
Polaroid ID Systems business to Digimarc. Our new ID Systems
business is committed to delivering the highest quality services
and products to our nation's Departments of Motor Vehicles and
other national and international issuing authorities," said
Bruce Davis, CEO, Digimarc. "The addition of Digimarc ID Systems
to our business will contribute significantly to Digimarc's
revenues, improve cash flow, and accelerate our progress toward
profitability. Strategically, we believe that the skill,
experience, and expertise of the ID Systems business employees,
and the company's technological leadership in secure ID card
design, manufacturing, and systems integration will broaden and
enrich our product offerings and technology portfolio."

"We are delighted to be a part of Digimarc and look forward to
working together to take secure government identity documents to
the next level in security and effectiveness," said John Munday,
president, Digimarc ID Systems. "This is a synergistic
relationship that will usher in a new era of exciting
opportunities for our customers as we combine document,
biometrics, imaging and data processing technologies to build ID
systems that benefit our customers. In addition, our employees
are looking forward to the opportunities that a technically
innovative environment like Digimarc ID Systems offers."

Davis continued, "We intend to apply our patented digital
watermarking technology to enhance the security and usefulness
of drivers licenses and other products produced by our new ID
Systems business, to enhance the value and competitive
differentiation of ID Systems' products and to substantially
advance the adoption of digital watermark applications."

Digimarc ID Systems will be headquartered in Bedford, Mass.,
with a second facility located in Fort Wayne, Ind.

Digimarc will conduct a conference call Tuesday, January 22
beginning at 2 p.m. PST/5 p.m. EST to discuss the transaction,
provide guidance on the financial impact of the acquisition and
to answer any questions. Bruce Davis, Digimarc CEO; Paul
Gifford, Digimarc president and COO; and E.K. Ranjit, Digimarc
CFO, will host the call.

The call will be available live by Web cast in the following

The live Web cast and audio archive will be accessible on the
Digimarc Website at: http://www.digimarc.comor via
http://www.streetevents.comfor one week following the live

Please access the Website at least fifteen minutes prior to the
start of the call to download and install any necessary audio

Digimarc Corp. (Nasdaq:DMRC), based in Tualatin, Ore., is the
world leader in digital watermarking solutions. Digimarc's
patented digital watermarking technology is used in a range of
solutions for brand protection, brand management and security
applications. The technology allows digital data to be embedded
imperceptibly in traditional and digital media content including
photographic or artistic images, movies, music, packaging,
printed materials, promotional items, value documents, tickets
and holograms, among others. The company continues to build a
pervasive new communications platform by developing an
increasing array of diverse product offerings. These offerings
benefit a broad range of consumers, corporations and government
institutions, enhancing the protection of copyrights, the
security of value documents and the management of media and
fostering integrated marketing and e-commerce for many goods and
services. Digimarc's leading customers include creative
professionals, major media companies and central banks.

As of immediately prior to the closing of the sale to Digimarc,
Polaroid ID Systems produced driver licenses in 37 U.S. states
and digital drivers licenses in states including Oregon,
California, Texas, Georgia and West Virginia. Internationally,
Polaroid ID Systems produced identification documents for
governments in countries around the world, including Brazil, the
United Kingdom, the Philippines, Russia and China.

Digimarc has more than 270 pending and 37 issued U.S. patents.
Digimarc's vision is to have its watermarking technology become
a standard feature of all media content. Please go to
http://www.digimarc.comfor more company information.

                          *   *   *

DebtTraders reports that Polaroid Corporation's 11.500% bonds
due on February 15, 2006 (PRD3) (an issue in default) are
trading between 9.5 and 10.25. For real-time bond pricing, see

PROVIDIAN FINANCIAL: Fitch Junks Trust Preferred Rating
Fitch has lowered the senior rating of Providian Financial Corp
(Providian) to 'B+' from 'BB-' and trust preferred rating to
'CCC+' from 'B'.

The ratings for Providian National Bank (PNB) remain unchanged.
The ratings for both entities have been placed on Rating Watch
Negative. A complete list of affected ratings is detailed below.
Rating Watch Negative denotes Fitch's view that ratings may be
maintained at current levels or lowered upon further review.

Fitch's downgrade of the holding company ratings reflects that
unsecured creditors have less asset protection as liquidity at
the holding company has diminished greater than anticipated.
Fitch does recognize that near-term obligations of Providian
will likely be met, however, longer term prospects will depend
on the financial strength of the overall enterprise. There is
approximately $851 million of senior debt issued out of the
holding company, through the issuance of two convertible note

The Rating Watch designation signifies Fitch's concern
surrounding the completion of certain restructuring objectives,
namely asset sales, to improve the company's financial profile.
Providian continues its efforts to sell international operations
in the U.K. and Argentina and is working to structure a possible
sale of approximately $3 billion of ``High Risk' receivables and
while the sale of the High Risk portfolio would likely limit
future exposure to this portfolio, Fitch believes that a sale of
these receivables would require a significant discount and
result in a sizable loss for the company.

The Rating Watch also reflects the continued challenges facing
the company's liquidity profile as access to its traditional
funding sources remains constrained. Fitch would expect that
resolution of the Rating Watch would follow the progress of
certain strategic objectives expected to be completed during the
first quarter 2002. Failure to implement the necessary
restructuring initiatives could further impair the ratings of
Providian and PNB.

         Ratings lowered and placed on Rating Watch Negative

      Providian Financial Corp.

           --  Senior debt to 'B+' from 'BB-';
           --  Subordinated debt to 'B-' from 'B';
           --  Individual to 'D/E' from 'D'

      Providian Capital I

           --  Trust preferred to 'CCC+' from 'B'.

              Ratings placed on Rating Watch Negative

      Providian Financial Corp.

           --  Short-term 'B'.

      Providian National Bank

           --  Long-term deposits 'BB';
           --  Short-term deposits 'B';
           --  Senior debt 'BB-';
           --  Subordinated debt 'B';
           --  Individual 'D'.

RANCH 1: Has Until December 30 to File Reorganization Plan
Judge Arthur Gonzales of the U.S. Bankruptcy Court for the
Southern District of New York issued an order extending Ranch*1,
Inc.'s Exclusive Periods to file a Plan of Reorganization and
solicit votes of that plan through December 30, 2001 and
February 28, 2002, respectively.

The Court says that the Debtors' request for an extension in the
advancement of their agreements with the Committee and with RI
Franchise regarding the proposed Plan and Term Sheet will
facilitate a consensual reorganization of the Debtors.

Ranch*1, Inc., along with its subsidiaries, own, operate,
franchise and license upscale quick-service restaurants that
specialize in fresh-grilled skinless, boneless chicken breast
sandwiches, fries and a variety of freshly prepared healthy menu
elections. The Company filed for chapter 11 protection on June
3, 2001 in the U.S. Bankruptcy Court for the Southern District
of New York. Alan J. Brody, Esq. at Buchanan Ingersoll
represents the Debtors in their restructuring effort. When the
Company filed for protection from its creditors, it listed
$6,817,423 in assets and $12,381,680 in liabilities.

ROYSTER-CLARK: S&P Cuts Corporate Credit Ratings to B+ from BB-
Standard & Poor's lowered its long-term corporate credit rating
on Royster-Clark Inc. to single-'B'-plus from double-'B'-minus.
The rating on Royster-Clark's senior secured credit facility,
maturing in 2004, is lowered to single-'B'-plus from double-'B'-
minus and the rating on the company's $200 million of first
mortgage bonds due 2009 is lowered to single-'B' from single-
'B'-plus. The ratings are removed from CreditWatch where they
were placed on August 18, 2000.

The outlook is stable.

The downgrade reflects the challenging operating environment for
agricultural-inputs, which has resulted in weak operating
performance and the related impact on Royster-Clark's financial
measures. Although the management team has taken steps to
improve operating performance by closing underperforming retail
locations and improving working capital management, Standard &
Poor's does not expect credit protection measures will improve
to their previous levels over the near-term.

The ratings reflect Royster-Clark's highly leveraged financial
profile and its participation in a highly cyclical and seasonal,
commodity-based industry, offset by a defendable market share in
its operating region.

Royster-Clark is a leading regional supplier of crop production
inputs and services to farmers focusing on the East, South and
Midwest regions of the U.S. Through its retail network, the
company provides one-stop shopping for farmers' production needs
and related services. Royster-Clark's Rainbow division and
nitrogen manufacturing unit blends and manufactures both
commodity and value-added fertilizer products. These businesses
are sensitive to volatility in raw material costs, primarily
natural gas.

Recent results have been negatively impacted by a number of
factors including: a depressed market for nitrogen products
because of extremely high prices in early 2001, extremely wet
weather during the key spring planting season, and changes in
farmers' buying practices because of extremely low commodity
prices. Management has taken steps to improve performance by
closing underperforming retail stores, and by improving
working capital management. Inventory levels have been reduced
by about $43 million from the September 30, 2000 quarter, which
should position the firm well for the key spring planting

Financial measures are weak with EBITDA to interest of about 1.5
times, EBITDA margin of about 6.0%, and total debt to EBITDA of
about 6.0x for the last 12 months ended September 30, 2001.
Still Royster-Clark's balance sheet is quite liquid, and the
company's bank facility provides sufficient resources for its
highly seasonal working capital needs.

                           Outlook: Stable

Standard & Poor's expects that Royster-Clark will maintain its
leading regional market position and that the financial profile
will improve modestly over the intermediate term. However,
should credit measures continue to remain weak for the ratings,
the outlook could be revised to negative.

DebtTraders reports that Royster-Clark Inc.'s 10.250% bonds due
on April 1, 2009 (ROYSTER1) trade in the low 60s. See for
real-time bond pricing.

SHILOH INDUSTRIES: S&P Puts BB- Ratings on CreditWatch Negative
Standard & Poor's placed its ratings on Shiloh Industries Inc.
on CreditWatch with negative implications.

The rating actions reflect Standard & Poor's increasing concern
over the company's near-term operating outlook and financial

Shiloh produces blanks, stamped components, and modular
assemblies primarily for the North American automotive and
heavy-duty truck industry. The company also performs
intermediate steel processing for steel producers. The ratings
reflect the company's diversified revenue and customer base, and
its full-service capabilities in the steel processing, blanking,
and stamping business, offset by a leveraged capital structure
and exposure to cyclical and competitive markets.

Shiloh's operating results have come under pressure in recent
quarters due to softness in its end markets. To address the
industry challenges, the company has been undertaking various
strategic actions to improve operating results and financial
flexibility, including the sale of certain assets. The
ratings are based on the assumption that these actions will lead
to improved operating results in the next year, with debt to
EBITDA falling to the 4 times area. However, given the
likelihood of intensifying industry pressures during the coming
year, it is not clear whether Shiloh will be able to achieve the
expected improvement. Debt to EBITDA is currently estimated to
be close to 6x.

Shiloh has limited flexibility for dealing with a period of
extended industry pressures. In May 2001, Shiloh amended its
revolving credit facility. At July 31, 2001, the company was in
compliance with covenants and had $72 million in borrowing
capacity under its bank lines. With the continued softening in
Shiloh's end markets in recent months and the prospect of
continuing end-market weakness, Standard & Poor's believes that
Shiloh could face increased liquidity pressures and possible
covenant issues.

Standard & Poor's will assess Shiloh's financing and investment
requirements, sources of liquidity, and earnings and cash
generating potential over the near to intermediate term. If it
appears that credit protection measures will remain below
previously expected levels or that the company will face
increased liquidity pressures, the ratings are likely to
be lowered.

Although Shiloh is 56%-owned by MTD Products Inc., a private
company, Shiloh operates as a stand-alone entity. In addition,
the ratings reflect Shiloh's financial and business profile on a
stand-alone basis due to its lack of strategic importance to
MTD, the arm's-length relationship between the two companies,
Shiloh's independent capitalization, and separate bank

               Ratings Placed on CreditWatch Negative

      Shiloh Industries Inc.
        Corporate credit rating          BB-
        Senior secured                   BB-

STARTEC GLOBAL: Secures Court Approval for DIP Financing
Startec Global Communications Corporation (OTC Bulletin Board:
STGC.OB) announced that the U.S. Bankruptcy Court for the
District of Maryland, Greenbelt Division, approved a debtor-in-
possession financing facility.

The DIP financing includes an initial draw down of $6.5 million
for use as working capital during the restructuring process. "We
are very fortunate to have received full cooperation from both
our senior lenders," said Ram Mukunda, Startec President and
CEO. "This DIP financing gives us the working capital we need to
chart a course for successful restructuring. We hope to submit
to the Court a restructuring plan endorsed by all parties as
soon as possible," he said.

Startec Global Communications is a facilities-based provider of
Internet Protocol communication services, including voice, data
and Internet access. Startec markets its services to ethnic
residential communities located in major metropolitan areas, and
to enterprises, international long-distance carriers and
Internet service providers transacting business in the world's
emerging economies.  The Company, through its subsidiaries,
provides services through a flexible network of owned and leased
facilities, operating and termination agreements, and resale
arrangements. The Company has an extensive network of IP
gateways, domestic switches, and ownership in undersea fiber-
optic cables.

SUNBEAM AMERICAS: Wants Solicitation Period Extended to April 15
Sunbeam Americas Holdings, Ltd. asks the U.S. Bankruptcy Court
for the Southern District of New York for a third extension of
their Exclusive Solicitation Period through April 15, 2002.

The Debtors assert that the size and scope of their operations
place heavy demands on their management and personnel. The
Debtors are one of the largest manufacturers of durable
household and outdoor leisure consumer products in the United
States. The Debtors have several thousand creditors, thousands
of employees and many executory contracts which are being
reviewed and analyzed.

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

TENNECO AUTOMOTIVE: Q4 Charge Excluded from Covenant Calculation
Tenneco Automotive (NYSE: TEN) announced that the company has
received approval from its board of directors to begin
implementing the first phase of a company-wide initiative to
optimize its global manufacturing, distribution, and logistics

"Our goal is to better manage our operating costs worldwide in
order to help strengthen the company's competitiveness and
profitability," said Mark P. Frissora, chairman and CEO, Tenneco
Automotive.  "The objectives of this and future phases are to
maximize our capacity utilization by leaning out and redesigning
our manufacturing facilities, and to improve our distribution
efficiency worldwide."

Actions related to this initiative may include consolidating
operations, transferring operations between facilities,
rearranging operational flow within specific plants, and
increasing standardization among processes and products.
Tenneco Automotive will record charges totaling $32 million in
the fourth quarter of 2001 to cover the cost of the first phase
actions, which are expected to generate $29 million in
annualized savings starting in 2004.  The fourth quarter charge
will be excluded from the company's debt covenant calculations
as negotiated with the company's senior lenders.  The company
expects to incur additional costs during 2002 related to these
first phase actions that could range between $10 million and $15
million.  Future phases, which still need to be finalized, will
require approval by the company's board of directors and will
likely require senior lender approval as well.

"This effort is a part of our ongoing strategy to align our
businesses with current and future market needs.  We have taken
a clean sheet approach in evaluating how we operate, and are
making fundamental changes that will enable our employees to
serve our customers more effectively," said Frissora.  "With a
global infrastructure already in place, this initiative will
help us take the next step of standardizing our processes and
products on a worldwide basis."

The company will carry out all activities, including workforce
reductions, that may occur as a result of this initiative in
compliance with all applicable legal and contractual
requirements, including informing and consulting with workers'
councils, union representatives, and others.  Any Tenneco
Automotive employees affected by restructuring activities will
be eligible for severance benefits in accordance with applicable
policies of Tenneco Automotive, as well as applicable collective
bargaining agreements and domestic legal requirements and

The goal of this initiative is to build on the strategy the
company has already implemented to improve its long-term
profitability.  Since becoming an independent company in
November 1999, Tenneco Automotive has made significant progress
in generating cash and paying down debt, largely through working
capital and SGA&E improvements, as well as through implementing
a process approach to managing its businesses.

Tenneco Automotive is a $3.5 billion manufacturing company with
headquarters in Lake Forest, Illinois and 22,000 employees
worldwide.  Tenneco Automotive is one of the world's largest
producers and marketers of ride control and exhaust systems and
products, which are sold under the Monroe and Walker global
brand names.  Among its products are Sensa-Trac and Monroe
Reflex shocks and struts, Rancho shock absorbers, Walker Quiet-
Flow mufflers and DynoMax performance exhaust products, and
Monroe Clevite vibration control components.

As reported in the Troubled Company Reporter (October 12
Edition), Fitch downgraded Tenneco Automotive Inc.'s senior
secured bank debt from 'BB-' to 'B+', subordinated debt from 'B'
to 'B-' and changes the Rating Outlook from Stable to Negative.

In addition, the report said that Fitch expected that both North
American and European OE light vehicle production levels will be
negatively impacted by a global economic slowdown. In the
context of a slowing OE market, Tenneco's financial profile
limits much financial flexibility.  At June 30, 2001, Tenneco
had $1.38 billion in long-term debt and $0.21 billion of short-
term debt, or a total of $1.59 billion in debt outstanding.
Following its re-amendment to relax some of the financial
covenants, Tenneco was in full compliance per the March 2001 re-
amended bank agreement at June 30, 2001.  Fitch expects that
Tenneco will be able to comply with bank covenants through the
rest of 2001. In addition to $70 million in cash at June 30,
2001, liquidity is afforded through a $500 million credit
revolver, which matures November 2005. As of June 30, 2001, $87
million was drawn under this facility.

DebtTraders reports that Tenneco Automotive Inc.'s 11.625% bonds
due on October 15, 2009 (TENCO1) are trading between 48 and 50.
for real-time bond pricing.

TOUCH AMERICA: Liquidity Concerns Prompt S&P to Junk Ratings
Standard & Poor's lowered its corporate credit and senior
secured bank loan ratings on Touch America Inc. to triple-'C'-
plus from single-'B'-minus. The ratings remain on CreditWatch
with negative implications where they were placed August 31,

Touch America is the telecommunications subsidiary of Montana
Power Co. Montana Power plans to complete the transition to a
telecommunications company on the sale of its utility business
to NorthWestern Corp. Approval of the sale by the Montana Public
Service Commission (PSC) is pending. An order is expected by
January 31, 2002.

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

The downgrade reflects Standard & Poor's heightened concerns
regarding Touch America's liquidity position and the pending
approval of the utility business sale by the Montana PSC.
Although on December 14, 2001, the company received waivers for
financial covenants on its senior secured bank credit facility
through February 15, 2002, additional borrowings can only be
made with the consent of the lenders. In addition, the bank
facility was reduced to $278 million from $308 million and only
$24 million is available.  Borrowings under this bank facility
of about $15 million and repayment of an intercompany loan of
$25 million from Montana Power were to be used to fund Touch
America's operating needs through January 31, 2002, until the
utility business sale was completed.

Furthermore, the dollar amount of previously anticipated
proceeds from the sale of the utility business may be in
jeopardy due to the possibility that Montana Power may be
required to share some of the profit with ratepayers. The sale
price of the utility business to NorthWestern is for about $600
million in cash and $488 million in assumed debt. Proceeds of
the sale are expected to be used to pay down debt and grow the
telecom business. Revenue and EBITDA have been impacted by the
economic slowdown, pricing pressures, billing disputes with
Qwest Communications International Inc., and higher network
costs. EBITDA declined to about $8 million in the third quarter
of 2001 from $15 million in the second quarter.

The ratings remain on CreditWatch because any delay in the
approval of the utility business sale would adversely impact
Touch America's viability.

TRITON NETWORK: Double Play Discloses 6.1% Equity Interest
Double Play Partners Limited Partnership beneficially own
2,137,200 shares of the common stock of Triton Network Systems,
Inc., which represents 6.1% of the class outstanding.  Double
Play has sole power to vote or direct the vote, and to dispose
or to direct the disposition of the entire amount held.

Triton Network, which is in the process of liquidating, made
broadband wireless equipment for consecutive-point networks.
Triton's units, for which it claimed reliability equal to fiber-
optic networks and higher than point-to-point wireless networks,
consisted of a transmitter, receiver, modem, and network card
and were based around microchip technology licensed from
Lockheed Martin. Triton sold its equipment directly to service
providers and equipment makers. Struggling with the downturn in
the networking and telecommunications markets and failing to
find a buyer for the company, Triton is liquidating its assets,
winding down operations, and closing its doors.

U.S. CAN CORP: Amends Terms Under Credit Agreement
U.S. Can expects fourth quarter results to be significantly
lower than the fourth quarter 2000. The primary drivers of the
lower results are a combination of pricing concessions granted
earlier in the year, a delay in the U.K. restructuring program
(originally expected to begin in mid-2001) and manufacturing
inefficiencies resulting from inventory reduction programs by
our customers.  Customer efforts to reduce inventory levels have
resulted in a temporary imbalance between production and
shipments as our distribution channels adjust through the
elimination of excess inventory. The Company is beginning to
experience a rebound in sales volume levels in domestic aerosol,
but the effects of pricing concessions granted earlier in the
year continue to negatively impact operating margins.

On December 18, 2001 the Company amended its Credit Agreement.
The amendment includes the addition of a new $20.0 million term
loan which under certain circumstances may be required to be
purchased by the Company's majority stockholder. The proceeds
from this facility will be used to provide ongoing liquidity to
the business, and to fund restructuring efforts. The amendment
provides for, among other things(1) an increase to pricing on
the spread in our existing bank credit facilities by 50 basis
points, (2) revised covenants to reflect current and expected
operating results, and (3) a change in the maturity date to
January 2006.

The Company has identified several restructuring opportunities
that will result in a fourth quarter charge.  The projects
identified are expected to positively impact results, realign
operations and reduce facility overhead. As part of the
restructuring program, the Company has announced its intentions
to close its Southall England facility and move those operations
to its Merthyr Tydfil Wales location and other locations in
Continental Europe.  The Company has entered into an agreement
to sell the Southall facility, with the intention to use the
proceeds to fund the UK restructuring program.  The Company
anticipates that this project will take several months to
implement, but will, when completed, restore the UK to
historical levels of profitability.

U.S. Can Corporation is a leading manufacturer of steel
containers for personal care, household, automotive, paint and
industrial products in the United States and Europe, as well as
plastic containers in the United States and food cans in Europe.

VIDEO UPDATE: Expects Chapter 11 Plan to Take Effect Today
Video Update, Inc., (OTC: VUPDA) announced that its plan of
reorganization has been approved by the United States Bankruptcy
Court for the District of Delaware.

On September 18, 2000, Video Update and 19 of its US
subsidiaries sought relief from creditors under Chapter 11 of
the Bankruptcy Code. At that time, Video Update and its Canadian
subsidiary owned and operated 585 retail specialty video stores
in the United States and Canada. Under the Court approved plan,
Video Update will be recapitalized by and become a wholly owned
subsidiary of Dothan, Alabama-based Movie Gallery, Inc.

Movie Gallery is the leading provider of movie and video game
rentals and sales in rural and secondary markets in the United
States. After consummation, Movie Gallery will own and operate a
total of 1,420 video specialty stores located in 41 states and
five Canadian provinces.

Video Update's plan of reorganization will restructure more than
$120 million of senior secured debt and will eliminate
approximately $60 million of unsecured debt. All pre-existing
shares of Video Update common stock will be cancelled when the
plan becomes effective. The parties expect that the Court
approved Plan will become effective today.

WESTAR FINANCIAL: Files for Reorganization Under Chapter 11
Westar Financial Services Incorporated (OTC: WEST),
headquartered in Tumwater, Washington, filed for reorganization
protection under Chapter 11 of the Bankruptcy Code.

Until November 7th of this year, Westar was a leading originator
of prime credit auto leases. It reported revenues in its second
fiscal quarter ended September 30 of more than $147 million and
earnings of $2.3 million. It currently services more than 25,000
accounts valued at more than $625 million of leases for its own
account and others.

On November 7, 2001, Westar was notified by Bank One (NYSE: ONE)
of an alleged event of default on its credit facility on the
basis that Westar had failed to complete a term securitization
within the timeframe demanded by Bank One. Pursuant to this
declaration of default, Bank One terminated its obligation under
the credit facility to make further loans to Westar.

Despite Westar's profitable operations and the high quality of
its lease production, Bank One has ceased its six-year
participation in the market for automobile leases originated by
Westar and is attempting to transfer servicing from Westar to a
third party servicer. As a result of Bank One's actions, Westar
ceased originating automobile leases.

"A Chapter 11 filing is always disappointing to those involved,
but it seems extraordinarily so to those of us who've managed,
worked with, or invested in a firm as successful as Westar
proved to be," said R. W. Christensen, Jr., Westar's CEO. "Team
Westar built a world-class origination and servicing platform,
capable of extraordinary performance on an ordinary basis. To
see it cease most of its business activities is heartrending.

"We filed to protect Westar's servicing and portfolio interests
from the millions of dollars of damage we believe a transfer of
servicing would cause. Bank One is trying to force a transfer of
servicing that would add millions in damages to those Westar has
already incurred. We will use the protection afforded by the
courts to not only arrange an orderly plan to protect all of the
creditors of Westar and its shareholders, but also as a first
step to recoup the value of Westar's investment in the assets it
has created," he added.

WHEELING-PITTSBURGH: Court Rejects CWVEC's Motion Re Coal Pact
Judge William T. Bodoh issued his opinion and order on the
Motion of Central West Virginia Energy Company seeking an order
compelling Debtor Wheeling-Pittsburgh Steel Corporation to
assume or reject an executory contract regarding the supply of
coal by CWVEC to WPSC.  Benjamin C. Ackerly appeared for CWVEC,
and James M. Lawniczak appeared for the Debtor.

Judge Bodoh finds that CWVEC and WPSC entered into a prepetition
agreement for the supply of metallurgical quality coal for use
in connection with WPSC's basi steel-making operations.  Prior
to the Petition Date, WPSC was in default for payment on this
contract in the amount of $7,227,990.86.  Because of that
default, CWVEC suspended coal shipments and asserted a
reclamation claim for certain product that had been shipped to
the Debtor immediately before the Petition Date.

By a letter agreement in December 2000, CWVEC and WPSC agreed
that the coal shipments would be resumed at the contract price,
with WPSC agreeing to pay for each shipment by wire transfer
upon arrival for unloading onto the Debtor's barges.

Judge Bodoh announces that, upon consideration of the record as
a whole, he concludes that there has not been an unreasonable
period of time for WPSC to assume or reject the agreement.  WPSC
is making all postpetition contract payments in a timely
fashion.  The parties continue to operate under the terms of the
contract and to each receive the benefit of the bargain for
which they contracted.  The prepetition obligation of WPSC to
CWVEC is a general claim.  There is no reason articulated in the
record to force WPSC to convert that obligation to a dollar-for-
dollar claim simply because CWVEC could sell the coal on the
open market for approximately $8 a ton more than the current
contract price.

Judge Bodoh issues his Order overruling the Motion, finding that
"reasonable steps have been taken by Debtor to reach a proposed
plan of reorganization."  However, Judge Bodoh states he does
not foreclose revisiting this issue at a future date if the
Debtor does not continue to make positive steps toward a
reorganization. (Wheeling-Pittsburgh Bankruptcy News, Issue No.
14; Bankruptcy Creditors' Service, Inc., 609/392-0900)

WIND RIVER: S&P Rates $125M Convertible Subordinated Debt at B-
Standard & Poor's assigned its single-'B'-minus rating to Wind
River Systems Inc.'s new $125 million convertible subordinated
debt issue due 2006. At the same time, Standard & Poor's
affirmed the company's single-'B'-plus corporate credit rating.

The outlook is stable.

The ratings on Wind River reflect the company's growing market
position as an independent developer of embedded-systems
software and its technology competence, offset by a limited
product portfolio and an acquisitive growth strategy.

Alameda, California-based Wind River develops software operating
systems and development tools that allow customers to create
real-time software applications for embedded computers. The
company's products support multiple platforms, focusing on 32-
bit and 64-bit processors, while its installed base contributes
renewable revenues from license and maintenance fees. New
initiatives, such as providing software development solutions
for targeted vertical markets that include automobiles, Internet
appliances, and networking products, could provide meaningful
revenue growth. Although Wind River is attempting to consolidate
and standardize the embedded software market, the company is
still a small participant in this industry, with competition
from several larger companies. Sales cycles are long, technology
risks are high, and operating results could be affected by
purchasing patterns of customers and by competitive conditions.

Although cost-cutting measures from workforce and facilities
rationalizations should allow the company to generate
flat-to-slightly-positive operating cash flow, Wind River's
operating profitability will remain depressed from historical
levels over the next few quarters, reflecting deteriorating
customer spending on IT investments. The company expects to use
the proceeds from the new $125 million debt issue for working
capital, debt repayment, and possible acquisitions. Cash and
investment balances before the new issue, at $247 million as of
October 2001, should remain greater than debt and provide
adequate liquidity for small acquisitions and future debt
repurchases as the company manages reduced profitability and
cash flow protection.

                        Outlook: Stable

The outlook reflects Wind River's good position in its niche
market and financial flexibility that provides downward
protection for the rating. However, upside potential is
constrained by the challenges of developing innovative products
in a very competitive and difficult market environment.

YES CLOTHING: Brings In McKennon Wilson as Independent Auditors
Yes Clothing Company, Inc. has prepared a notice to its
shareholders which will inform them that the holders of a
majority of the outstanding shares of common stock of the
Company have approved the following actions by majority written

      o Election of Jon L. Lawver and Fred G. Luke as directors
of Yes for the next year,

      o Ratification of the appointment of McKennon, Wilson &
Morgan, LLP as the corporation's independent auditors for the
fiscal year ended March 31, 2002, and

      o An amendment to the corporation's Articles of
Incorporation to change the corporation's name to BioSecure
Corp. and to increase the number of authorized $.001 par value
common stock from 75,000,000 shares to 975,000,000 shares.

These actions will not be effective until a date which is at
least twenty (20) days after Yes files the Definitive
Information Statement.

Yes Clothing Company Inc. designs, contracts for the manufacture
and markets apparel for women in junior sizes and young men. For
the three months ended June 30, 2001, the Company reported no
revenues. Net loss increased 62% to $32 thousand. Revenues
reflect the suspension of operations due to a lack of working
capital. Higher loss reflects higher general and administrative
costs due to increased legal and consulting expenses.

YORK RESEARCH: NAEC Creditors File Involuntary Petition
York Research Corporation (Nasdaq: YORK) announced that an
involuntary bankruptcy petition under Chapter 11 of the U.S.
Bankruptcy Code had been filed against it in the U.S. Bankruptcy
Court for the Southern District of New York by certain creditors
of North American Energy Conservation Inc. (NAEC), its energy
trading subsidiary which previously filed for bankruptcy.  These
NAEC creditors hold claims against York as a result of York's
guarantee of certain obligations of NAEC.  The bankruptcy
petition was filed solely against York, the parent holding
company, and does not include any of York's subsidiaries, which
actually own and operate York's power projects.  As a result of
the filing, York has twenty days in which it can choose to seek
to have the petition dismissed, or converted to a voluntary
bankruptcy under Chapter 11.

York continues to be in discussions with the NAEC creditors, as
well as the ad hoc committee of holders of the $150,000,000 12%
Senior Secured Bonds due October 30, 2007 issued by York Power
Funding (Cayman) Limited.  The holders of the Portfolio Bonds
did not join in the bankruptcy petition, and have not exercised
any remedies.

Robert C. Paladino, York's president and chief executive
officer, stated that "This bankruptcy filing does not affect the
continuing operations of any of York's power projects.  York
will continue its discussions with the NAEC creditors and the Ad
Hoc Bondholder Committee, and is hopeful that it can reach a
satisfactory resolution of all of their claims."

Please see York's Current Report on Form 8-K filed Friday with
the Securities and Exchange Commission.

York develops, constructs, and operates cogeneration and
renewable energy projects.

YORK RESEARCH: Chapter 11 Involuntary Case Summary
Alleged Debtor: York Research Corporation
                 280 Park Avenue
                 New York, NY 10017

Involuntary Petition Date: December 12, 2001

Case Number: 01-16361             Chapter: 11

Court: Southern District of New York (Manhattan)

Petitioner's Counsel: Fred S. Hodara, Esq.
                       Akin, Gump, Strauss, Hauer & Feld, L.L.P.
                       590 Madison Avenue
                       New York, NY 10022
                       Tel: 212-872-1000

List of Petitioners and Amount of Claim

Petitioners              Type of Claim         Amount of Claim
-----------              -------------         ---------------
Marathon Oil Company     Guaranty of trade          $5,329,015
539 South Main Street    indebtedness of North
Room 1014M               American Energy
Findlay, OH 45840        Conservation, Inc.

Dominion Field           Guaranty of trade          $3,000,000
Services, Inc.           indebtedness of
140 West Main Street     North American Energy
Clarksburg, WV 26301     Conservation, Inc.

Aquila Energy            Guaranty of trade          $2,880,135
Marketing Corporation    indebtedness of
1106 Walnut, Suite 3300  North American Energy
Kansas City, MO 64106    Conservation, Inc.

Mirant Americas          Guaranty of trade          $2,256,078
Energy Marketing, LP     indebtedness of North
1155 Perimeter Center    American Energy
West                     Conservation, Inc.
Atlanta, GA 30338-5416

Delmarva Power &         Guaranty of trade          $1,482,162
Light Company            indebtedness of North
P.O. Box 6066            American Energy
Newark, DE 19714-6066    Conservation, Inc.

Western Gas              Guaranty of trade          $1,169,652
Resources, Inc.          indebtedness of North
12200 N. Pecos Street    American Energy
Denver, CO 80234         Conservation, Inc.

Occidental Energy        Guaranty of trade            $489,646
Marketing, Inc.          indebtedness of North
5 E. Greenway Plaza      American Energy
Suite 2400               Conservation, Inc.
Houston, TX 77046

* Meetings, Conferences and Seminars
January 31 - February 1, 2002
    American Conference Institute
       Chapter11 Bankruptcy
          The Four Seasons Hotel in Dallas, Texas
             Contact: 1-888-224-2480 or

January 31 - February 2, 2002
    American Bankruptcy Institute
       Rocky Mountain Bankruptcy Conference
          Westin Tabor Center, Denver, Colorado
             Contact: 1-703-739-0800 or

January 11-16, 2002
    Law Education Institute, Inc
       National CLE Conference(R) - Bankruptcy Law
          Steamboat Grand Resort, Steamboat Springs, Colorado
             Contact: 1-800-926-5895 or

February 25-26, 2002
    American Conference Institute
       Chapter11 Bankruptcy
          Hyatt Regency in Los Angeles, California
             Contact: 1-888-224-2480 or

February 28-March 1, 2002
       Corporate Mergers and Acquisitions
          Renaissance Stanford Court, San Francisco, CA
             Contact: 1-800-CLE-NEWS or

March 3-4, 2002
    Association of Insolvency and Restructuring Advisors
       Business Valuation Conference (Held in conjunction with
       The Norton Bankruptcy Litigation Institute I)
          Park City Mariott, Park City, UT
             Contact: (541) 858-1665 Fax (541) 858-9187 or

March 3-6, 2002
       Norton Bankruptcy Litigation Institute I
          Park City Marriott Hotel, Park City, Utah
             Contact:  770-535-7722 or

March 7-8, 2002
       Third Annual Conference on Healthcare Transactions
          The Millennium Knickerbocker Hotel, Chicago
             Contact: 1-800-726-2524 or

March 8, 2002
    American Bankruptcy Institute
       Bankruptcy Battleground West
          Century Plaza Hotel, Los Angeles, California
             Contact: 1-703-739-0800 or

March 14-15, 2002
    American Conference Institute
       Commercial Loan Workouts
          The New York Marriott Marquis in New York City
             Contact: 1-888-224-2480 or

March 20-23, 2002
       Spring Meeting
          Sheraton El Conquistador Resort & Country Club
          Tucson, Arizona
             Contact: 312-822-9700 or

April 11-14, 2002
       Norton Bankruptcy Litigation Institute II
          Flamingo Hilton, Las Vegas, Nevada
             Contact:  770-535-7722 or

April 18-21, 2002
    American Bankruptcy Institute
       Annual Spring Meeting
          J.W. Marriott, Washington, D.C.
             Contact: 1-703-739-0800 or

April 25-27, 2002
       Fundamentals of Bankruptcy Law
          Rittenhouse Hotel, Philadelphia
             Contact:  1-800-CLE-NEWS or

May 13, 2002 (Tentative)
    American Bankruptcy Institute
       New York City Bankruptcy Conference
          Association of the Bar of the City of New York
          New York, New York
             Contact: 1-703-739-0800 or

May 15-18, 2002
    Association of Insolvency and Restructuring Advisors
       18th Annual Bankruptcy and Restructuring Conference
          JW Mariott Hotel Lenox, Atlanta, GA
             Contact: (541) 858-1665 Fax (541) 858-9187 or

May 26-28, 2002
    International Bar Association
       International Insolvency 2002 Conference
          Dublin, Ireland
             Contact: Tel +44 207 629 1206 or

June 6-9, 2002
    American Bankruptcy Institute
       Central States Bankruptcy Workshop
          Grand Traverse Resort, Traverse City, Michigan
             Contact: 1-703-739-0800 or

June 20-21, 2002
       Fifth Annual Conference on Corporate Reorganizations
          The Millennium Knickerbocker Hotel, Chicago
             Contact: 1-800-726-2524 or

June 27-30, 2002
       Western Mountains, Advanced Bankruptcy Law
          Jackson Lake Lodge, Jackson Hole, Wyoming
             Contact: 770-535-7722 or

July 11-14, 2002
    American Bankruptcy Institute
       Northeast Bankruptcy Conference
          Ocean Edge Resort, Cape Cod, MA
             Contact: 1-703-739-0800 or

July 17-19, 2002
    Association of Insolvency and Restructuring Advisors
       Bankruptcy Taxation Conference
          Snow King Resort, Jackson Hole, WY
             Contact: (541) 858-1665 Fax (541) 858-9187 or

August 7-10, 2002
    American Bankruptcy Institute
       Southeast Bankruptcy Conference
          Kiawah Island Resort, Kiawaha Island, SC
             Contact: 1-703-739-0800 or

October 9-11, 2002
    INSOL International
       Annual Regional Conference
          Beijing, China
             Contact: or

October 24-28, 2002
       Annual Conference
          The Broadmoor, Colorado Springs, Colorado
             Contact: 312-822-9700 or

December 5-8, 2002
    American Bankruptcy Institute
       Winter Leadership Conference
          The Westin, La Paloma, Tucson, Arizona
             Contact: 1-703-739-0800 or

April 10-13, 2003
    American Bankruptcy Institute
       Annual Spring Meeting
          Grand Hyatt, Washington, D.C.
             Contact: 1-703-739-0800 or

December 3-7, 2003
    American Bankruptcy Institute
       Winter Leadership Conference
          La Quinta, La Quinta, California
             Contact: 1-703-739-0800 or

April 15-18, 2004
    American Bankruptcy Institute
       Annual Spring Meeting
          J.W. Marriott, Washington, D.C.
             Contact: 1-703-739-0800 or

December 2-4, 2004
    American Bankruptcy Institute
       Winter Leadership Conference
          Marriott's Camelback Inn, Scottsdale, AZ
             Contact: 1-703-739-0800 or

The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday.  Submissions via
e-mail to are encouraged.


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

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

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

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

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


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

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

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

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

The TCR subscription rate is $575 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each.  For subscription information, contact Christopher
Beard at 240/629-3300.

                      *** End of Transmission ***