TCR_Public/020103.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

            Thursday, January 3, 2002, Vol. 6, No. 2

                           Headlines

AMF BOWLING: Has Until February 28 to Decide on Unexpired Leases
BE INCORPORATED: Jean-Louis Gessee Resigns as President and CEO
BIRMINGHAM STEEL: Ameristeel Takes-Over Cartersville Facility
BRIDGE INFO: Court Approves Settlement Terms with Bridge France
BURLINGTON INDUSTRIES: Court Okays Sitrick as PR Consultants

BURLINGTON INDUSTRIES: Net Sales Down by 13.4% in FY 2001
CORECOMM LIMITED: Cuts Debts to $183.8MM After Recapitalization
CYGNIFI DERIVATIVES: Lease Decision Period Extended to Jan. 31
DEAN HOLDING: S&P Downgrades Ratings Following Merger with Suiza
DIGITAL TELEPORT: Commences Reorganization Under Chapter 11

DIGITAL TELEPORT: Chapter 11 Case Summary
E.SPIRE COMMS: Gets Okay to Hold CyberGate Auction on Jan. 7
ENRON CORPORATION: Refuses to Make $51 Million 1997 Adjustment
FOAMEX: Societe Generale de Belgique Holds 5.9% Equity Interest
GLOBIX CORP: Pre-Pack Bankruptcy Talks Prompt S&P Junk Ratings

HAYES LEMMERZ: Court Okays $5.2M Payment for Prepetition Taxes
HUNTSMAN: Extends 10.125% Sr. Sub. Debt Exchange Offer to Jan. 9
IT GROUP: Heightened Liquidity Concerns Spur S&P to Junk Ratings
INTEGRATED HEALTH: Gets Approval of Rotech Disclosure Statement
LERNOUT & HAUSPIE: Resolves On-Going Disputes with AllVoice

LORAL CYBERSTAR: Subpar Exchange Offer Pushes Ratings to D Level
MARINER POST-ACUTE: Treatment of Claims Under First Amended Plan
MATLACK SYSTEMS: Board Approves Filing of Plan of Liquidation
METALS USA: Court Okays Fulbright to Perform Legal Services
METATEC INT'L: Will Undertake Further Restructuring in 2002

MOLL INDUSTRIES: Closes Partial Tender Offer for 10-1/2% Notes
NATIONSRENT INC: Will Continue Use of Cash Management System
OPTICARE: Seeks Okay of Proposals to Allow Debt Workout Deals
PILLOWTEX CORP: Exclusive Period Extended to March 15
PILLOWTEX CORP: Files Reorganization Plan & Disclosure Statement

POLYMER GROUP: Sr. Bank Lenders Agree to Forbear Until March 29
PROXITY DIGITAL: Bankruptcy Filing Likely to Sell CSA for $2.5MM
PRYOR/ETRAIN: Wants Plan Filing Exclusivity Extended to Jan. 21
QUALITY STORES: Tractor Supply Pitches Best Bid for 25 Stores
SOFTWARE LOGISTICS: Inks Pact to Sell All Assets to Zomax Inc.

SUN HEALTHCARE: Intends to Reject Tallahasee Office Space Lease
TELEPANEL SYSTEMS: Q3 Balance Sheet is Upside-Down by CDN$10MM
TOWER AUTOMOTIVE: Restructuring Charges Reach $289 Million in Q4
TRANSIT GROUP: Files for Chapter 11 Reorganization in Florida
TRANSIT GROUP: Chapter 11 Case Summary

TRICO STEEL: Court Extends Debtors' Exclusive Period to March 22
USG CORP: PI Committee Gets Court's Nod to Hire Professor Warren
US INDUSTRIES: Expects to File Form 10-K by January 14, 2002
US MINERAL: Court Extends Plan Filing Exclusivity Until March 19
VENTAS: Wants More Investment from Shareholders & New Investors

WINSLOEW FURNITURE: S&P Takes Low-B and Junk Ratings Off Watch

* DebtTraders' Real-Time Bond Pricing

                           *********

AMF BOWLING: Has Until February 28 to Decide on Unexpired Leases
----------------------------------------------------------------
AMF Bowling Worldwide, Inc., and its debtor-affiliates sought
and obtained entry of an order extending the deadline by which
the Debtors must assume or reject their unexpired leases of non-
residential real property through and including the effective
date of the Plan or February 28, 2002.

Dion W. Hayes, Esq., at McGuireWoods LLP in Richmond, Virginia,
informs the Court that as of the Petition Date, the Debtors were
party to more than 179 Unexpired Leases for locations throughout
the United States and abroad. During the post-petition period,
the Debtors have assessed and continues to assess the
profitability and desirability of the Unexpired Leases. In order
to avoid the premature expiration of the Assumption/Rejection
Deadline and to facilitate the implementation of Section 8 of
the Plan, the Debtors require an extension of the
Assumption/Rejection Deadline through the Effective Date or
February 28, 2002, whichever is later. Mr. Hayes contends that
such an extension is critical to the Debtors' ability to
maximize the value of the estates as they seek the confirmation
and implementation of the Plan.

Mr. Hayes assures the Court that the Debtors have the necessary
financial resources and intend to perform timely all of their
obligations under the remaining Unexpired Leases as and to the
extent required by section 365(d)(3) of the Bankruptcy Code.
Further, the mechanism detailed in Section 8 of the Plan
addresses the assumption and/or rejection of the Unexpired
Leases. Thus, Mr. Hayes asserts that the Assumption/Rejection
Deadline should be extended through and including the Effective
Date or February 28, 2002 to enable the mechanism in the Plan to
operate as intended. Moreover, prior to confirmation of the
Plan, individual lessors may ask, for cause shown, that the
Court fix an earlier date by which the Debtors must assume or
reject a particular Lease. Thus, lessors under the Unexpired
Leases will not be prejudiced by the relief sought therein.
(AMF Bankruptcy News, Issue No. 14; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


BE INCORPORATED: Jean-Louis Gessee Resigns as President and CEO
---------------------------------------------------------------
Be Incorporated (Nasdaq:BEOS) announced the resignation of its
President and CEO, Jean-Louis Gassee. Following the completion
of the sale of Be's intellectual property assets to Palm, Inc.,
the company has been pursuing activities mainly related to
winding down the business and dissolving the company as approved
by stockholders at the November 12, 2001 special meeting. The
Board of Directors has appointed Dan Johnston, Be's General
Counsel, to serve as President during the dissolution process.

"This is the normal progression of events in a company that is
winding down and dissolving," said Gassee. "Mr. Johnston is best
positioned to guide the company through the intricacies of the
statutory dissolution process, and to help the Board determine
whether an Antitrust suit against Microsoft is both viable and
serves to maximize stockholder value."

On November 12, 2001, Be held a special stockholders' meeting,
whereby Be stockholders approved the sale of substantially all
of its intellectual property and other technology assets to a
subsidiary of Palm, Inc., and the subsequent dissolution of Be
Incorporated pursuant to the terms of the plan of dissolution
set forth in the Definitive Proxy Statement filed on October 9,
2001. On November 13, 2001, Be completed the sale of assets to a
subsidiary of Palm, Inc.  Be's headquarters are in Menlo Park,
California. It is publicly traded on the Nasdaq National Market
under the symbol BEOS. Be can be found on the Web at
http://www.be.com.


BIRMINGHAM STEEL: Ameristeel Takes-Over Cartersville Facility
-------------------------------------------------------------
Birmingham Steel Corporation announced that its 85%-owned
subsidiary, Birmingham Southeast, LLC, has completed the sale of
its mini-mill facility in Cartersville, Georgia, to AmeriSteel
Corporation, a U.S. subsidiary of Gerdau S.A. (NYSE:GGB) of Rio
de Janeiro, Brazil. The Company had previously signed a
Definitive Agreement with AmeriSteel on November 14, 2001.

As a result of the sale, Birmingham Steel will reduce its debt
by approximately $30 million. In addition, the Company will be
relieved from off-balance-sheet lease obligations of
approximately $70 million. Effective December 29, 2001,
Birmingham Steel will have no further involvement in the
Cartersville operation.

Birmingham Steel operates in the mini-mill segment of the steel
industry. Birmingham Steel's stock is traded on the OTC Bulletin
Board under the symbol "BIRS."


BRIDGE INFO: Court Approves Settlement Terms with Bridge France
---------------------------------------------------------------
In 1998, Bridge Information Systems, Inc., and its debtor-
affiliates entered into a distribution agreement with Fininfo
S.A., under which Fininfo distributed the Debtors' services in
France, on the condition that Fininfo pays to the Debtors a
portion of its turnover.  Subsequently, Sean A. O'Neal, Esq., at
Cleary, Gottlieb, Steen & Hamilton, in New York, relates, the
Debtors and Bridge Information Systems SARL -- a French
subsidiary -- entered into a Master Services Agreement dated
January 15, 2001.  Under the agreement, Mr. O'Neal explains,
Bridge France, in consideration for services it provided,
invoiced to the Debtors the operational costs increased by a
commercial margin of 5%.

Eight months later, Mr. O'Neal tells Judge McDonald, Bridge
France obtained an order authorizing the attachment or seizure
from Fininfo of certain amounts -- up to a maximum of
approximately $933,000 -- for alleged amounts owed by Fininfo to
the Debtors in connection with the Distribution Agreement.
According to Mr. O'Neal, Bridge France alleged that the Debtors
owed such amounts to Bridge France in connection with post-
petition services under the Master Services Agreement.  And
then, on October 11, 2001, Bridge France filed an action in the
Commercial Court of Paris, France seeking:

     (1) validation of the attachment,

     (2) payment by the Debtors of approximately $933,000 in
         connection with post-petition obligations allegedly
         incurred under the Master Services Agreement in the
         second and third quarters of 2001, and

     (3) payment by the Debtors to Bridge France of certain legal
         expenses and other costs incurred in connection with the
         attachment and action.

Now, a settlement agreement between the Debtors and Bridge
France provides that:

     (a) The Debtors shall pay to Bridge France the amount of
         $100,000;

     (b) The Debtors shall exercise one of these options in
         connection with the claim by the Debtors against Fininfo
         arising from the Distribution Agreement, which claim is
         currently estimated to be approximately $600,000;

          (i) The Debtors shall appoint Bridge France as agent to
              collect their claim against Fininfo, or

         (ii) The Debtors shall assign to Bridge France their
              claim against Fininfo;

     (c) Bridge France shall waive its claim in the amount of
         $933,000 against the Debtors arising from the Master
         Services Agreement;

     (d) Bridge France shall release the attachment;

     (e) Bridge France shall dismiss the action; and

     (f) Each party to the settlement agreement shall bear the
         fees and expenses in connection with the disputes
         subject to the settlement agreement.

The settlement agreement allows the Debtors to avoid the
uncertainty, costs and burdens of defending a complex litigation
in an inconvenient, foreign jurisdiction, Mr. O'Neal explains.

By this motion, therefore, the Debtors seek an order:

     (i) authorizing the Debtors to enter into the settlement
         agreement,

    (ii) approving the terms of the settlement agreement in their
         entirety, and

   (iii) authorizing the Debtors to take such actions as may be
         necessary and appropriate to implement the terms of the
         settlement agreement.

                            *  *  *

Finding that sufficient cause exists for the Debtors' request,
Judge McDonald grants the Debtors' motion.  "This Court shall
retain jurisdiction over any dispute arising from or in
connection with the settlement agreement," Judge McDonald adds.
(Bridge Bankruptcy News, Issue No. 23; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


BURLINGTON INDUSTRIES: Court Okays Sitrick as PR Consultants
------------------------------------------------------------
The Court authorizes Burlington Industries, Inc., and its
debtor-affiliates to retain and employ Sitrick & Company as
their corporate communications consultants in these chapter 11
cases, nunc pro tunc as of the Petition Date.

"To the extent the Engagement Letter provides that the Debtors
will indemnify, hold harmless and defend Sitrick & Company and
its shareholders, officers, directors, employees and agents for
any losses, claims, damages, liabilities, costs and expenses
incurred in connection with the services to be rendered by
Sitrick to the Debtors, Sitrick & Company agrees to waive such
provisions with respect to pre-petition and post-petition
services," Judge Walsh emphasizes.

Also, Judge Walsh adds that: "To the extent the Engagement
Letter provides that if a dispute arises between the parties -
including any dispute with respect to the Engagement Letter -
either party may require the matter to be settled by binding
arbitration using the rules and procedures of the American
Arbitration Association, Sitrick agrees that the arbitration
provision in the Engagement Letter shall apply only to the
extent that the United States Bankruptcy Court, or the United
States District Court if the reference is withdrawn, does not
retain jurisdiction over a controversy or claim." (Burlington
Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


BURLINGTON INDUSTRIES: Net Sales Down by 13.4% in FY 2001
---------------------------------------------------------
Burlington Industries Inc.'s net sales for the 2001 fiscal year
were $1,403.9 million, 13.4% lower than the $1,620.2 million
recorded for the 2000 fiscal year. Exports totaled $161 million
and $179 million in the 2001 and 2000 fiscal years,
respectively.

PerformanceWear: Net sales for the PerformanceWear segment for
the 2001 fiscal year were $473.4 million, 19.4% lower than the
$587.3 million recorded in the 2000 fiscal year. Excluding $67.7
million sales reduction due to closed businesses and planned
capacity reductions, net sales of the PerformanceWear markets
were 8.9% lower than in the prior year. This decrease was due
primarily to 10.3% lower volume partially offset by 1.4% higher
selling prices and product mix. Export volume decreased by $13.1
million, in part due to the weak Euro
currency.

CasualWear: Net sales for the CasualWear segment for the 2001
fiscal year were $257.5 million, 6.2% higher than the $242.5
million recorded in the 2000 fiscal year. This increase was due
primarily to 9.6% higher volume offset by 3.4% lower selling
prices and product mix.

Interior Furnishings: Net sales of products for interior
furnishings markets for the 2001 fiscal year were $371.3
million, 25.2% lower than the $496.5 million recorded in the
2000 fiscal year. Excluding $66.2 million sales reduction due to
the sales of the tufted area rug and printed mats businesses
($56.1 million in 2001 versus $122.3 million in 2000), net sales
of the interior furnishings markets were 15.8% lower than in the
prior year. This decrease was primarily due to 17.9% lower
volume partially offset by 2.1% higher selling prices and mix.

Carpet: Net sales for the Carpet segment for the 2001 fiscal
year were $304.1 million, 2.8% higher than the $295.8 million
recorded in the 2000 fiscal year. This increase was primarily
due to 5.2% higher selling prices and product mix offset by 2.4%
lower volume.

Segment Income: Total reportable segment income for the 2001
fiscal year was $21.8 million compared to $66.8 million for the
2000 fiscal year.

PerformanceWear: Loss of the PerformanceWear segment for the
2001 fiscal year was $2.8 million compared to income of $13.9
million recorded for the 2000 fiscal year. This decrease was due
primarily to $20.9 million reduction in margins resulting from
lower volume, $24.2 million deterioration in manufacturing
performance due to lower volume, restructuring and plant
curtailments and $9.9 million lower equity earnings from the
Unifi joint venture, partially offset by $6.2 million
improvement in margins due to selling price/mix, $15.5 million
lower start-up costs in Mexico, $13.0 million of lower selling,
general and administrative expenses resulting from restructuring
and cost reduction programs, and $3.5 million of lower raw
material costs.

CasualWear: Losses of the CasualWear segment for the 2001 fiscal
year were $12.9 million compared to loss of $8.3 million
recorded for the 2000 fiscal year. This increased loss was due
primarily to $5.1 million lower margins due to selling prices
and mix, higher selling, general and administrative expenses of
$1.7 million associated with growing the garment business, and
$2.8 million reduction in manufacturing performance after
incurring the costs associated with plant curtailments,
partially offset by $2.3 million higher margins due to volume
and lower raw material costs of $2.8 million.

Interior Furnishings: Loss of the interior furnishings products
segment for the 2001 fiscal year was $17.1 million compared to
income of $12.1 million recorded for the 2000 fiscal year. This
decrease was due primarily to $23.2 million lower margins due to
volume and price/mix and a $13.1 million negative impact on
manufacturing performance due to lower volume, restructuring and
plant curtailments, partially offset by $1.2 million lower raw
material costs, $4.0 million of lower selling, general and
administrative expenses resulting from cost reduction programs
and $1.8 million improvement resulting from the sale of the
tufted area rug and printed mats businesses.

Carpet: Income of the Carpet segment for the 2001 fiscal year
was $56.1 million compared to $51.2 million recorded for the
2000 fiscal year. This increase was due primarily to $11.1
million higher margins due to price/mix, offset by $0.9 million
reduced margins due to lower volume, $1.6 million higher raw
material costs, $0.8 million reduction in margins due to
manufacturing inefficiencies caused by production curtailments
to reduce inventory levels, and $3.0 million higher selling
expenses resulting from expanding the sales force for better
geographic and market segment coverage and costs associated with
the introduction of new products.

Losses of other segments for the 2001 fiscal year were $1.5
million compared to $2.1 million recorded for the 2000 fiscal
year. This improvement resulted primarily from gains on asset
sales resulting from the downsizing of trucking operations.

General corporate expenses not included in segment results were
$12.9 million for the 2001 fiscal year compared to $14.2 million
in the 2000 fiscal year. This reduction is due primarily to the
cost reductions resulting from the 2000 restructuring plan.

Before the 2000 goodwill write-off and provisions for
restructuring in both periods, operating income before interest
and taxes for the 2001 fiscal year would have been $8.2 million
compared to $25.6 million for the 2000 fiscal year. Amortization
of goodwill was 0.0 million and $16.7 million in the 2001 and
2000 fiscal years, respectively.   Net loss for the 2001 fiscal
year was $91.1 million in comparison with $527.0 million for the
2000 fiscal year.


CORECOMM LIMITED: Cuts Debts to $183.8MM After Recapitalization
---------------------------------------------------------------
CoreComm Limited (Nasdaq: COMM), announced that it has closed
the recapitalization transactions that it had announced on
December 18, 2001.

The remaining phase of the recapitalization will be the
previously described registered public exchange offer by
CoreComm Holdco, Inc., the recapitalized company ("Holdco"), to
CoreComm's common stockholders and any remaining holders of
CoreComm's 6% Convertible Subordinated Notes.

Pro forma for the recapitalization, the only remaining debt
obligations of Holdco are its $156.1 million credit facility,
$15.8 million in Senior Convertible Notes, and approximately
$11.9 million in capital leases.  There is no preferred stock
outstanding.


CYGNIFI DERIVATIVES: Lease Decision Period Extended to Jan. 31
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
extends Cygnifi Derivatives Services, LLC's deadline to assume
or reject unexpired leases of non-residential real property.

The Debtors' Lease Decision Period is extended through January
31, 2002. In its order, the Court also states that the Debtor
shall promptly and timely pay to Wasco Funding Corp. all monthly
amounts due arising on and after the Petition Date.

Cygnifi Derivatives Services, LLC, which provides a wide range
of services relative to the management of its clients'
derivatives portfolios, filed for Chapter 11 petition on October
3, 2001 in the U.S. Bankruptcy Court for the Southern District
of New York. Marc E. Richards, Esq. at Blank Rome Tenzer
Greenblatt, LLP represents the Debtor in its restructuring
efforts. When the Company filed for protection from its
creditors, it listed total assets of $34,200,000 and $5,100,000
in total debts.


DEAN HOLDING: S&P Downgrades Ratings Following Merger with Suiza
----------------------------------------------------------------
Standard & Poor's lowered its corporate credit rating on Dean
Holding Co. (successor to Dean Foods Co.) to double-'B'-plus
from triple-'B' and lowered the senior unsecured debt rating to
double-'B'-minus from triple-'B'. These ratings are removed from
CreditWatch, where they were placed on November 22, 2000.

At the same time, the 'A-2' short-term corporate credit and
commercial paper ratings as well as the preliminary triple-
'B'/triple-'B'-minus rating on Dean Holding Co.'s shelf
registration are withdrawn.

In addition, the double-'B'-plus corporate credit and senior
secured debt ratings on Dean Foods Co. (formerly Suiza Foods
Corp.) are affirmed. The single-'B'-plus rating on Dean Capital
Trust's (formerly Suiza Capital Trust II) preferred stock
(guaranteed by Dean Foods Co.) is also affirmed.

Also, the double-'B'-plus senior secured ratings on Dean Foods
Co.'s $300 million revolving credit facility due 2004 and on
Suiza Fluid Dairy Group L.P.'s $1.6 billion senior secured
credit facility due 2004 are withdrawn.

The outlook is negative.

The senior unsecured debt rating is two notches below the
corporate credit and senior secured debt ratings, reflecting the
large amount of secured debt represented by the merged entity's
new $2.7 million senior secured bank facility.

The rating actions are a result of the completion of the merger
of Suiza Foods and old Dean Foods Co. to form the largest
national dairy company in the U.S., with about a 35% market
share and about $10 billion in revenues, on December 21, 2001.
The purchase price for this transaction was $49.66 per share,
consisting of $21.00 in cash and 0.429 shares of Suiza's common
stock for total consideration of $2.7 billion (including the
assumption of about $900 million in old Dean Foods' debt).

At the same time, Dean Foods repurchased Dairy Farmers of
America Inc.'s (BBB+/Stable/A-2) 33.8% interest in Suiza Fluid
Dairy Group for about $165 million in cash and 11 dairy plants.

The ratings reflect the position of the merged company, with
about a 35% share of the U.S. dairy industry, following
completion of the combination of Suiza Foods and Dean Foods.
This is offset by an aggressive financial profile, a heavy debt
amortization schedule, and the firm's acquisitiveness. The
ratings also incorporate the operating risk associated with
integrating the two firms' operations. The ratings further
reflect the newly merged company's strong portfolio of national,
regional, and local brands and regional market positions,
greater geographic diversity, stable cash flows, moderate
capital expenditures, cost-saving opportunities ($60 million in
the first year and $120 million within three years of closing),
and an experienced management team.

The merged Dean Foods will be the leading processor and
distributor of branded dairy products under strong regional
brands and private labels in the U.S. Further, the firm will
have solid positions in pickles, ice cream, and other dairy
products. The firm's distribution network will be extensive
and cover all channels -- grocery and club retailers, drug and
mass merchandisers, convenience stores, and food service. These
distribution channels will be served by the merged entity's
direct store delivery system (about 6,000 routes) or its
national distribution system. The merged entity will have
greater economies of scale and opportunities for significant
cost savings.

Standard & Poor's expects that the merged Dean Foods will not be
acquisitive over the near term as it completes the integration
of the two firms' operations. However, longer term, Standard &
Poor's expects that Dean Foods will be acquisitive and will take
advantage of consolidating trends in the dairy and related food
industries. The combined company will have the financial
flexibility to pursue acquisitions in related industries under
its revolving credit facility.

Pro forma for this transaction, EBITDA to interest (including
preferred stock dividends as interest) is expected to be about
3.0 times. Operating margins (before depreciation and
amortization) of about 9% are expected to improve due to greater
economies of scale, higher volume, improved efficiencies in both
the company's processing and distribution systems, and cost-
saving initiatives. The consolidated company's total debt plus
preferred stock to EBITDA is about 4.3x. The rated preferred
securities have some equity characteristics, somewhat increasing
flexibility for the continuation of the merged Dean Foods'
acquisition strategy at the current rating level. Standard &
Poor's expects that minimal share repurchases are possible at
the merged company over the near term.

                    Outlook: Negative

The ratings reflect Standard & Poor's expectation that the
merged company will maintain its leading position in the dairy
industry. However, difficulties integrating Dean Foods'
operations with Suiza Foods and/or a decline in credit measures
could result in the ratings being lowered.


DIGITAL TELEPORT: Commences Reorganization Under Chapter 11
-----------------------------------------------------------
Digital Teleport Inc. and its holding company, DTI Holdings
Inc., filed voluntary petitions for Chapter 11 reorganization
with the U.S. Bankruptcy Court for the Eastern District of
Missouri. The company also announced it has received a
commitment for up to $5 million in debtor-in-possession
financing to fund continuing operations during its court-
supervised restructuring.

After reviewing various and previously disclosed strategic
alternatives, the regional fiber communications provider for
secondary and tertiary markets concluded that Chapter 11
reorganization offers the most attractive opportunity for
success. KLT Telecom Inc., a non-regulated subsidiary of Great
Plains Energy Inc. (NYSE:GXP), and current majority owner of the
company, is providing the DIP financing.

Through this restructuring, Digital Teleport expects to
eliminate about $300 million in debt and significantly reduce
other future commitments. Digital Teleport will use the debtor-
in-possession financing plus cash from operations to fund post-
filing operating expenses and obligations to suppliers and
employees.

"During telecom's peak growth years, Digital Teleport pursued an
aggressive national expansion at the cost of profitability,"
said Paul Pierron, president and CEO of Digital Teleport. "We
borrowed heavily to acquire fiber network routes that were never
put into service. Payments on our bond debt were set to begin in
September 2003 and create extraordinary financial pressure."

Digital Teleport expects to emerge from reorganization as a
stronger, more flexible company with a unique network, a
manageable debt load, and a growing base of recurring monthly
revenue. Excluding one-time legal and financial expenses
associated with its voluntary restructuring, Digital Teleport
expects to report positive operating cash flow for January 2002.

The company plans to exit the national long-haul business and
eliminate non-revenue producing fiber routes. Digital Teleport
will focus on operating its traditional core fiber optic network
that spans a five-state region in the Midwest.

"During the restructuring, the company will continue to be
focused on providing the highest quality service to our existing
bandwidth customers and fulfilling post-petition obligations to
customers, suppliers and employees," Pierron said.

"Digital Teleport is not going out of business. We are not
liquidating. Reorganization under Chapter 11 enables Digital
Teleport to strengthen our balance sheet, eliminating unneeded
network facilities, maintaining positive cash flows, ensuring
sufficient cash to continue operating and growing the business,"
Pierron said.

Earlier this year, KLT Telecom took a controlling ownership
interest in Digital Teleport. At that time, more emphasis was
shifted to revenue generation and a new team led by Pierron was
brought in. As a result, year-to-date revenues through last
Sept. 30, the last reported period, are up 68 percent compared
to the same period a year ago, despite the economic and telecom
downturn.

Digital Teleport provides wholesale fiberoptic transport
services in secondary and tertiary markets to national and
regional communications carriers. The company also provides
Ethernet service to enterprise customers and government agencies
in office buildings in areas adjacent to the company's
metropolitan network rings. Formed in June 1989, Digital
Teleport is 83.4 percent owned by Great Plains Energy Inc. Year-
to-date through Sept. 30, 2001 Digital Teleport reported total
revenues of $13 million. The company's Web site is
http://www.digitalteleport.com


DIGITAL TELEPORT: Chapter 11 Case Summary
-----------------------------------------
Lead Debtor: Digital Teleport, Inc.
              8112 Maryland Ave.
              4th Floor
              Saint Louis, MO 63105

Bankruptcy Case No.: 01-54369

Debtor affiliates filing separate chapter 11 petitions:

       Entity                               Case No.
       ------                               --------
       DTI Holdings, Inc.                   01-54370
       Digital Teleport of Virginia, Inc.   01-54371

Chapter 11 Petition Date: December 31, 2001

Court: Eastern District of Missouri (St. Louis)

Judge: Barry S. Schermer

Debtors' Counsel:  Robert E. Richards, Esq.
                    Sonnenschein, Nath & Rosenthal
                    8000 Sears Tower
                    Chicago, IL 60606
                    Tel: 312-876-8000


E.SPIRE COMMS: Gets Okay to Hold CyberGate Auction on Jan. 7
------------------------------------------------------------
e.spire Communications, Inc., (OTC Pinksheets: ESPIQ) announced
that the U.S. Bankruptcy Court for the District of Delaware has
approved procedures for sale of its Internet subsidiary,
CyberGate, Inc.  In accordance with the U.S. Bankruptcy Code, a
Court-supervised auction for CyberGate will be held at 2:00 PM
on January 7, 2002.

The Court also approved a lead bid of $21.0 million by a Web
hosting provider to acquire certain assets and to assume certain
liabilities of the business.

Opening competitive bids for the January 7 auction must exceed
the lead bid by a minimum of $500,000 and be received in writing
prior to 8:00 AM on January 7 by Credit Suisse First Boston
Corporation, 11 Madison Avenue, New York, NY 10010, Attn: Gina
Orlins, with copies to Saul Ewing LLP, 222 Delaware Avenue,
Suite 1200, Wilmington, DE 19801, Attn: Domenic E. Pacitti, Esq.

For more information about the sale procedures, please contact
Credit Suisse First Boston Corporation by faxing requests at
212-743-2893.

e.spire filed a voluntary petition for Chapter 11 protection
with the Court on March 22, 2001.

e.spire Communications, Inc., an integrated communications
provider, offers 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,
http://www.espire.net


ENRON CORPORATION: Refuses to Make $51 Million 1997 Adjustment
--------------------------------------------------------------
DebtTraders reports that Enron decided to ignore its auditor's
recommendations to cut its income by $51 million to $54 million
in 1997, according to the Washington Post newspaper. The Company
decided the adjustments were not material.  According to
DebtTraders analysts Daniel Fan and Blythe Berselli, Enron 6.4%
Bonds due 2006 were last quoted at 20.  See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ENRON4 for
real-time bond pricing.


FOAMEX: Societe Generale de Belgique Holds 5.9% Equity Interest
---------------------------------------------------------------
Societe Generale de Belgique and Compagnie Europeenne pour le
Developpement Electrique et Electronique, a wholly owned
subsidiary of Societe Generale de Belgique, beneficially own
5.9% of the outstanding common stock of Foamex International,
Inc., (based on a total of 27,158,016 shares of common stock,
par value $0.01 per share, outstanding as of the close of
business on December 11, 2001, as represented by the transfer
agent of Foamex International Inc.)  The firms hold sole powers
of voting and disposition over the total 1,592,671 shares held.

Foamex International is one of North America's largest makers of
polyurethane foam for carpets and furniture. Foamex's flexible
polyurethane and polymer foams are used in mattresses, couches,
car interior trim, carpets, and industrial filters. Its products
are sold primarily through outlets in North America, with the US
accounting for most of its sales. Automotive supplier Johnson
Controls accounts for 12% of sales. Other customers include
Sealy, Wal-Mart, Ford, and General Motors. The Bank of Nova
Scotia owns 24% of Foamex, which has acquired General Foam
Corporation's New Jersey operations.

Late last week, the company announced that the Company's bank
lenders had agreed to ease year-end 2001 loan covenants to
accommodate the fourth quarter charge, enabling Foamex to
proceed with Project Transformation. Loan covenants have also
been loosened for 2002. In addition, the company is implementing
a comprehensive profit enhancement program that will reduce
costs, spur revenue growth, and drive increased long-term
profitability and shareholder value.


GLOBIX CORP: Pre-Pack Bankruptcy Talks Prompt S&P Junk Ratings
--------------------------------------------------------------
Standard & Poor's lowered its corporate credit and senior
unsecured note ratings on Globix Corp to double-'C' from triple-
'C'. The outlook is negative.

The rating action is based on Globix' announcement that it is in
discussions with an informal committee of bondholders
representing approximately 48% of the company's outstanding $600
million issuance of 12 1/2% senior notes. The discussions
concern a financial reorganization of the company through a pre-
packaged bankruptcy proceeding that would be aimed at
significantly reducing the company's debt burden.

Ratings for Globix reflect a rapidly deteriorating credit
profile and an unproven business model that has yet to achieve
profitability. New York, N.Y.-based Globix provides advanced
Internet services and connectivity for businesses in the U.S.
and Europe through its fiber-optic network and state-of-the-art
Internet data centers in New York; Santa Clara, Calif.; and
London, U.K.

Globix' weak financial profile, with senior debt of more than
$600 million and revenue of $104 million for the fiscal year
ended September 2001, is compounded by mounting operating
losses. Sales have not meaningfully increased in 2001 and
operating losses expanded in its fiscal quarter ended
in September. Consequently, likely deterioration in Globix'
financial position and uncertainty associated with the company's
business model leave the company's credit profile vulnerable,
despite a cash balance of nearly $120 million as of September
2001.

                      Outlook: Negative

Ratings are likely to be lowered in the near term as management
proceeds with a financial restructuring.


HAYES LEMMERZ: Court Okays $5.2M Payment for Prepetition Taxes
--------------------------------------------------------------
Hayes Lemmerz International, Inc., and its debtor-affiliates
sought and obtained an order confirming their authority to pay
pre-petition sales, use, and gross receipts taxes and certain
other taxes to the respective federal, state and local taxing
authorities in the ordinary course of the Debtors' business. The
Debtors estimate that the amount of Taxes to be paid is between
$4,800,000 to $5,200,000.

Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP in
Wilmington, Delaware, tells the Court that the Debtors, in the
ordinary course of their business, incur various tax
liabilities, including, among others, Sales and Use Taxes and
employment and withholding Taxes. Prior to the Petition Date,
the Debtors generally paid their tax obligations as they became
due.   Mr. Chehi submits that Sales and Use Taxes accrue daily
in the ordinary course of the Debtors' business, and are
calculated based upon statutorily mandated percentages and in
some cases, are paid in arrears, once collected by the Debtors.
Many jurisdictions, however, require the Debtors to remit
estimated Sales and Use Taxes on a periodic basis during the
month or quarter in which sales are made. The Debtors then
generally timely file a Sales and Use Tax return with the
relevant taxing authority reporting the actual Sales and Use Tax
due, paying any further amounts owed for the month or quarter.

The Debtors distribute their finished products to automotive and
commercial highway vehicle customers throughout the United
States.  Mr. Chehi explains that because of the costs that would
be involved, and because the Debtors believe there exist
multiple legal bases for granting the relief requested, the
Debtors have not conducted an exhaustive survey of all the
jurisdictions and localities in which the Taxes are due to
determine whether such taxes are deemed "trust fund" taxes in
each and every such jurisdiction. The Debtors submit that most,
if not all, of the Taxes likely constitute so called "trust
fund" taxes that are required to be collected from third parties
and held in trust for payment to the taxing authorities. To the
extent that any Taxes are "trust fund" taxes collected by the
Debtors for remittance to Taxing Authorities, Mr. Chehi contends
that they are not property of the Debtors' estates and
therefore, they arguably have no equitable interest at all in
such Taxes and are obligated to remit to the appropriate Taxing
Authority all amounts collected from customers or withheld from
employees' payroll checks.

Mr. Chehi fears that failure to timely pay, or a precautionary
withholding by the Debtors of payment of, the Taxes likely would
cause Taxing Authorities to take precipitous action, including a
flurry of lien filings and a marked increase in audits. Prompt
and regular payment of the Taxes would avoid any such
unwarranted governmental action.

Mr. Chehi also points out that most, if not all, of the Taxes
would be entitled to priority status and payment in full under
any reorganization plan. The Debtors' payment of the Taxes in
the ordinary course of business thus will affect only the timing
of the payments although in some cases, prepayment of such Taxes
may actually reduce the amounts ultimately paid to the Taxing
Authorities. The rights of other unsecured creditors and
parties-in-interest consequently would not be prejudiced if the
requested relief is granted, and the Court's exercise of its
equitable powers under section 105(a) will not be in derogation
of any other provision of the Bankruptcy Code.

Mr. Chehi informs the Court that the federal government and many
states in which the Debtors operate have laws providing that,
because the Taxes constitute "trust fund" taxes, the Debtors'
officers or directors or other responsible employees could,
under certain circumstances, be held personally liable for the
payment of such Taxes. To the extent any accrued Taxes of the
Debtors were unpaid as of the Petition Date in these
jurisdictions, the Debtors' officers and directors could be
subject to lawsuits during the pendency of these chapter 11
cases. Mr. Chehi claims that this would be extremely distracting
for the Debtors' directors and officers, whose full-time focus
must be to devise and implement a successful reorganization
strategy for the Debtors. The Debtors thus submit that it is in
their best interests and consistent with the reorganization
policy of the Bankruptcy Code to eliminate the possibility of
such time consuming and potentially damaging distractions.
(Hayes Lemmerz Bankruptcy News, Issue No. 3; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


HUNTSMAN: Extends 10.125% Sr. Sub. Debt Exchange Offer to Jan. 9
----------------------------------------------------------------
Huntsman International LLC announced that it has extended its
offer to the holders of 250,000,000 euros aggregate principal
amount of its 10.125% Senior Subordinated Notes due 2009 to
exchange such notes for a like principal amount of notes which
have been registered under the Securities Act of 1933, as
amended.

The exchange offer, scheduled to expire on December 31, 2001, at
5:00 p.m., London time, will now expire at 5:00 p.m., London
time, on Wednesday, January 9, 2002, unless further extended by
Huntsman International LLC.  All other terms, provisions and
conditions of the exchange offer will remain in full force and
effect.  The Bank of New York has been appointed as exchange
agent for the 10.125% Notes exchange offer.  Requests for
assistance or documents should be directed to The Bank of New
York at +44 (0) 207 964-6582.

Huntsman International LLC said it has been informed by the
exchange agent that, as of 5:00 p.m., London time, on December
31, 2001, approximately 249,950,000 euros in aggregate principal
amount of its 10.125% Notes had been tendered in the exchange
offer.  This amount represents approximately 99.98% of the
outstanding 10.125% Notes.

Huntsman International LLC is a global manufacturer and marketer
of specialty and commodity chemicals with annual revenues of
$4.5 billion for the year ended December 31, 2000.  Information
about Huntsman, including corporate background and press
releases, is available through its website at
http://www.huntsman.com

                             *  *  *

As reported in the Troubled Company Reporter (Nov. 27 2001
Edition), Huntsman International was not in compliance with the
leverage covenant contained within its bank facilities. Until
successfully amended, this condition would restrict Huntsman
International's access to its bank facility, thereby eliminating
alternative financial flexibility. It was also reported that the
collateral pledged to support Huntsman Corp.'s bank facilities
could trigger change of control provisions related to Huntsman
International's subordinated debt obligations.


IT GROUP: Heightened Liquidity Concerns Spur S&P to Junk Ratings
----------------------------------------------------------------
Standard & Poor's lowered its ratings on IT Group Inc. and
maintained them on CreditWatch with negative implications.

The downgrade reflects heightened liquidity concerns following
the company's announcement that it appears unlikely that
satisfactory arrangements can be negotiated with its senior
secured lenders for a longer term financial restructuring. IT
Group expects not be in compliance with the year-end 2001
financial covenants. The firm is exploring all alternatives
available to it, including the sale of assets and seeking
protection from its creditors under Chapter 11 of the U.S.
Bankruptcy Code.

IT Group is a leading provider of environmental consulting,
engineering and construction, remediation, and facilities
management services. The U.S. government accounts for about 55%
of revenues (the Department of Defense is by far the largest
customer), with the balance from commercial and state and local
government clients.

Standard & Poor's will monitor ongoing developments to assess
the impact on credit quality.

             Ratings Lowered; Remain on CreditWatch
                   with Negative Implications

      IT Group Inc.                       TO      FROM
        Corporate credit rating           CCC-    B
        Senior secured (bank) debt        CCC-    B
        Subordinated debt                 C       CCC+


INTEGRATED HEALTH: Gets Approval of Rotech Disclosure Statement
---------------------------------------------------------------
Judge Walrath has signed an order approving the Disclosure
Statement for the Amended Joint Plan of Reorganization of Rotech
and corresponding Solicitation Procedures.

Among other things, the Rotech Debtors specify in the Amended
Disclosure Statement that they intend to file, prior to the
Confirmation Hearing, a motion pursuant to Bankruptcy Rule 9019
for an order approving the IHS-Rotech Settlement Agreement.

The Court finds that the Rotech Disclosure Statement, dated
November 20, 2001, as amended, contains adequate information
within the meaning of section 1125 of the Bankruptcy Code.

On February 13, 2002, at 11:00 a.m. Eastern Time, Judge Walrath
will convene a Confirmation Hearing on the Rotech Plan.  The
Confirmation Hearing may be continued without further notice.
Any objections to confirmation of the Plan must be filed with
the Court and served so that they are actually received no later
than 4:00 p.m. Eastern Time, on January 30, 2002. The Debtors,
the Senior Lenders and the Creditors' Committee may serve
replies to such objections or proposed modifications by no later
than February 8, 2002.

The Court's order of approval provides for the following, among
other things:

-- December 20, 2001 is established as the Record Date for
    purposes of determining which creditors are entitled to vote
    on the Plan;

-- the Rotech Debtors are to mail or cause to be mailed
    solicitation packages by January 1, 2002;

-- the Rotech Debtors are authorized to retain Poorman-Douglas
    as the voting agent on the proposed terms and conditions;

-- all Ballots and Master Ballots must be properly executed,
    completed, and delivered to Poorman-Douglas so that they are
    received by Poorman-Douglas no later than 5:00 p.m., Pacific
    Time, on January 30, 2002 (the Voting Deadline);

-- creditors must vote all of their claims within a particular
    class under the Plan, whether or not such claims arc asserted
    against the same or multiple Rotech Debtors, either to accept
    or reject the Plan and may not split their vote(s), and thus
    a Ballot that partially rejects and partially accepts the
    Plan will he deemed a vote to accept the Plan; and it is

-- solely for purposes of voting to accept or reject the Plan,
    each claim within, a class of claims entitled to vote to
    accept or reject the Plan is to be temporarily allowed in an
    amount equal to the amount of such claim as set forth in a
    timely filed proof of claim, or, if no proof of claim was
    filed, the amount of such claim as set forth in the Rotech
    Debtors' schedules of assets and liabilities filed with the
    Bankruptcy Court, provided that:

    a.  If a claim is deemed allowed in accordance with the Plan,
        such claim is allowed for voting purposes in the deemed
        allowed amount set forth in the Plan;

    b.  contingent, unliquidated, or disputed claims shall be
        temporarily allowed for voting purposes at $1.00;

    c.  If a claim has been estimated or otherwise allowed for
        voting purposes by order of the Court, such claim is
        temporarily allowed in the amount so estimated or allowed
        by the Court, for voting purposes only, and not for
        purposes of allowance or distribution;

    d.  If a claim is listed in the Schedules as contingent,
        unliquidated, or disputed, or scheduled in the amount of
        zero, and a proof of claim was not timely filed, such
        claim shall be disallowed for voting purposes and for
        purposes of allowance and distribution pursuant to
        Bankruptcy Rule 3003(c), unless the Rotech Debtors have
        consented in writing; and

    e.  If the Rotech Debtors have served an objection to a claim
        at least 10 days before the Voting Deadline, such claim
        shall be temporarily disallowed for voting purposes only
        and not for purposes of allowance or distribution, except
        to the extent and in the manner as may be set forth in
        the objection; and it is further

    f.  If any claimant seeks to challenge the allowance of its
        claim for voting purposes in accordance with the above
        procedures, such claimant is directed to serve on the
        Rotech Debtors and file with the Court on or before the
        10 day after the later of (i) service of the Confirmation
        Hearing Notice and (ii) service of notice of an
        objection, if any, to such claim, a motion for an order
        pursuant to Bankruptcy Rule 3018(a) temporarily allowing
        such claim in a different amount for purposes of voting
        to accept or reject the Plan;

    g.  If a creditor files a motion pursuant to Bankruptcy Rule
        3018(a), such creditor's Ballot shall not he counted
        unless temporarily allowed by the Court for voting
        purposes after notice and a hearing.

The Rotech Debtors are authorized to make nonsubstantive changes
to the Disclosure Statement, the Plan, and related documents
without further order of the Court. (Integrated Health
Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


LERNOUT & HAUSPIE: Resolves On-Going Disputes with AllVoice
-----------------------------------------------------------
Luc A. Despins, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
asks Judge Wizmur to authorize the Lernout & Hauspie Group to
enter into a Settlement and License Agreement with AllVoice
Computing plc.

                 AllVoice's Pre-Petition Actions

On or about February 12, 1999, AllVoice initiated a lawsuit
alleging patent infringement in the Massachusetts District Court
against Dragon Systems, Inc. n/k/a L&H Holding. In the
Massachusetts Action, AllVoice alleged, among other things, that
the L&H Holdings' Dragon Naturally Speaking(R) series of
computer software products infringed AllVoice's U.S. Patent No.
5,799,273 ("Automated Proofreading Using Interface Linking
Recognized Words To Their Audio Data While Text Is Being
Change").

In May 2000, the Massachusetts District Court denied AllVoice's
first motion for preliminary injunctive relief -- a ruling that
AllVoice appealed to the United States Court of Appeals for the
Federal Circuit (the "Federal Circuit").  In September 2000,
before the Federal Circuit had ruled on AllVoice's appeal,
AllVoice filed a second motion for preliminary injunctive relief
in the District of Massachusetts.  Shortly thereafter, AllVoice
filed a motion to amend the relief  sought in its second
preliminary injunction motion to include the recall of
all units of L&H Holdings' Dragon Naturally Speakingr software
that previously had been sold or distributed.

The Debtors remind Judge Judith Wizmur that, subsequent to the
Petition Date, on or about January 10, 2001, AllVoice filed the
Motion For Relief From Automatic Stay Regarding Pending
Injunction Motion And Appeal Concerning Debtor's Post-Petition
Continuing Patent Infringement. The AllVoice Lift Stay Motion
sought relief from the automatic stay to proceed with the
Massachusetts Action and the Federal Circuit appeal. Judge
Wizmur granted the AllVoice Lift Stay Motion and modified the
automatic stay to allow (i) the Massachusetts District Court to
rule on AllVoice's motion for preliminary injunction and (ii)
the Federal Circuit to issue a ruling on AllVoice's appeal.

The Federal Circuit affirmed the Massachusetts District Court's
denial of AllVoice's initial motion for preliminary injunctive
relief. The Massachusetts District Court denied AllVoice's
second motion for preliminary injunctive relief. AllVoice has
since asserted new claims alleging infringement in the United
Kingdom, specifically with respect to AllVoice's U.K. Patent No.
2303955.

Proofs Of Claim Filed By AllVoice. AllVoice filed six proofs of
claim in the Chapter 11 cases (i.e., two proofs of claim in each
of the members of the L&H Groups' chapter 11 cases). The Proofs
of Claims are based upon, among other things, AllVoice's
assertion of patent infringement of either the '273 Patent or
the '955 Patent.

The Proofs of Claim assert that among other things, that L&H
Holdings exchanged assets with L&H NV and Dictaphone and jointly
marketed products that infringed AllVoice's '955 Patent.
Additionally, AllVoice maintains the infringing products include
PowerScriber, which is sold through the Dictaphone Healthcare
Solutions Group. The Proofs of Claim seek either (a) at least
$7,871,050 plus interest, attorneys' fees and such other damages
as may be granted in connection with the alleged infringement of
the '273 Patent or (b) $46,002,528 plus interest, attorneys'
fees and such other damages as may be granted in connection
with the alleged infringement of the '955 Patent. In sum,
AllVoice filed claims in excess of $55,000,000 against each of
the members of the L&H Group. The Proofs Of Claim also
specifically reserve AllVoice's right to file requests for
allowance and timely payment of administrative claims in these
cases insofar as the members of the L&H Group may be found to
have continued to infringe the '273 Patent or the '955 Patent
after the Petition Date.

As Judge Wizmur is aware, AllVoice filed, among other pleadings,
a motion to convert the chapter 11 cases of L&H NV and L&H
Holdings to cases under chapter 7 of the Bankruptcy Code.

On November 20, 2001, Dictaphone filed an Objection to Proofs of
Claim Nos. 2578 and 2580 filed by AllVoice Computing PLC as "No
Amount Due". The L&H Group and AllVoice commenced discovery
(i.e., document production and depositions) in connection with
the Objection.  AllVoice also recently filed a motion seeking a
2004 examination of L&H NV and L&H Holdings, and served
interrogatories on L&H NV and L&H Holdings.

                 Settlement And License Agreement

Set forth below are the principal terms of the Settlement and
License Agreement:

        Consideration. The L&H Group shall:

              (a) pay $450,000 in cash to AllVoice within 5 days
of the L&H Group obtaining the Approvals;

              (b) deliver within 5 days of the L&H Group
obtaining the Approvals 25,575 number of shares of Scansoft
stock (i.e., the stock received by L&H NV and L&H Holdings in
connection with the sale of their Speech and Language
Technologies Business) to AllVoice and its counsel;

              (c) The cash portion of the consideration will be
funded by Dictaphone from the escrow established for its benefit
in connection with Dictaphone's purchase of the Powerscriber
technology from L&H NV and L&H Holdings;

              (d) The shares of Scansoft stock being delivered to
AllVoice as part of the consideration will be contributed by L&H
Holdings; and

         No Admissions. Nothing herein or in the Settlement and
License Agreement shall be construed as an admission that any of
the L&H Group's products or technology infringe the '273 Patent
or the '955 Patent and the L&H Group expressly reserves all of
its rights, claims and defenses with respect to the same.

         Mutual Releases. AllVoice will release any and all
claims against any member of the L&H Group, their affiliates,
representatives, agents and attorneys. The members of the L&H
Group will release AllVoice from any and all claims arising out
of the patent infringement claims asserted by AllVoice;

         Licenses. AllVoice will grant certain fully paid-up
royalty free, world-wide licenses in the '273 and '955 Patents
to the members of the L&H Group and reorganized Dictaphone upon
emergence from chapter 11.

         Withdrawal Of Claims And Actions. AllVoice will withdraw
with prejudice (a) the Proofs of Claim; (b) the Motion to
Convert; and (c) the Massachusetts Action.

         Approvals. The Settlement and License Agreement is
subject to approval of this Court and, if necessary, the Belgian
bankruptcy authorities. The Settlement and License Agreement
will be null and void if the necessary approvals are not
obtained on or before December 31, 2001 (which date may be
extended by AllVoice).

         Reservation Of Rights. AllVoice reserves all claims and
rights it has or may have against the transferees of the L&H
Group's assets (other than Dictaphone and reorganized
Dictaphone).

        Execution Of Settlement And License Agreement Is
         Permissible As A Reasonable Business Decision

The Bankruptcy Code provides that "[t]he trustee, after notice
and a hearing, may use, sell or lease, other than in the
ordinary course of business, property of the estate."
Additionally, the Bankruptcy Code's general equitable authority
allows this Court to "issue any order, process, or judgment that
is necessary or appropriate to carry out the provisions of [the
Bankruptcy Code]." Courts generally approve the use of property
outside of the ordinary course of business if the debtor
demonstrates a sound business justification for such use of
estate property.

"The business judgment rule 'is a presumption that in making a
business decision the directors of a corporation acted on an
informed basis, in good faith and in the honest belief that the
action was in the best interests of the company.'" The business
judgment rule has vitality in chapter 11 cases and presumes that
the debtor's management decisions are reasonable. In addition,
under the general equity provisions of the Bankruptcy Code, the
court has expansive equitable powers to fashion any order or
decree that is in the interest of preserving or protecting the
value of the debtors' assets.

The L&H Group believes that it has a sound business
justification for entering into the Settlement and License
Agreement. The settlement of AllVoice's claims will bring
finality to one of the most difficult issues facing the L&H
Group -- the rights, if any, of AllVoice and the resolution of
AllVoice's Proofs of Claim. The Settlement and License Agreement
also ensures that, following its emergence from chapter 11,
reorganized Dictaphone will be able to use its current
technology free of potential lawsuits from AllVoice based upon
alleged patent infringement.

The Third Circuit has stated that the Bankruptcy Court is
required to "assess and balance the value of the claim that is
being compromised against the value to the estate of the
acceptance of the compromise proposal." A court should consider
four criteria in striking the balance between the value of the
claim and the value of the compromise to the estate: (1) the
probability of success in litigation; (2) the likely
difficulties in collection; (3) the complexity of the litigation
involved, and the expense, inconvenience and delay attending it;
and, (4) the paramount interest of the creditors.  The proposed
settlement between the L&H Group and AllVoice fulfills all of
the requirements necessary for court approval and serves the
interests of the creditors of the L&H Group in several respects.
The proposed settlement brings finality to a highly contentious
dispute in these chapter 11 cases that, if litigated, would have
cost the estates a significant amount of resources. This is a
global resolution of a string of claims filed by and persistent
litigation generated by AllVoice. The resolution of the AllVoice
claims will bring Dictaphone one step closer to emerging from
chapter 11 and will bring L&H NV and L&H Holdings closer to
formalizing a strategy to bring finality to their chapter 11
cases. Accordingly, the members of the L&H Group believe that
entering into the Settlement and License Agreement is in the
best interests of their estate and their creditors.
(L&H/Dictaphone Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


LORAL CYBERSTAR: Subpar Exchange Offer Pushes Ratings to D Level
----------------------------------------------------------------
Standard & Poor's lowered its ratings on Loral CyberStar Inc.'s
11.25% and 12.50% senior unsecured notes to 'D' from single-'C',
and lowered its corporate credit rating to 'D' from double-'C'.
These ratings were simultaneously removed from CreditWatch. The
downgrade is based on the completion of a subpar exchange offer
for these notes, which Standard & Poor's views as tantamount to
default.

At the same time, Standard & Poor's affirmed its single-'B'
rating on Loral CyberStar's $613 million senior unsecured notes
due in 2006. These notes are guaranteed by Loral CyberStar's
parent, Loral Space & Communications Ltd. (B/Negative/--).

Subsequent to the default, Standard & Poor's assigned its
single-'B' rating to the $37 million 11.25% senior unsecured
notes and $49 million 12.50% senior unsecured notes that were
not tendered as part of the exchange. A new single-'B' corporate
credit rating was also assigned to the company. The outlook is
negative.

The new rating assigned to the 11.25% and 12.50% senior
unsecured notes that were not tendered as part of the exchange
is the same as the rating on the recently exchanged $613 million
senior unsecured notes due in 2006. Although the 11.25% and
12.50% senior unsecured notes do not have any covenant
protection, or a guarantee from parent Loral Space &
Communications, they currently rank pari passu with Loral
CyberStar's $613 million senior unsecured notes and, therefore,
have similar default risk. At this juncture, the rating on Loral
CyberStar's $613 senior unsecured notes is not a function of the
corporate guarantee from Loral Space & Communications.


MARINER POST-ACUTE: Treatment of Claims Under First Amended Plan
----------------------------------------------------------------
Most of Mariner Post-Acute Network, Inc.'s creditors will
receive distributions of cash, common stock of Reorganized MPAN,
warrants to purchase New MPAN Common Stock, or other
consideration on or after the Plan's Effective Date. Only
creditors that have valid "Allowed Claims" against the Debtors
will receive consideration under the Plan.

Upon the Plan's Effective Date, all stockholders' Equity
Interests in MPAN and options and warrants to acquire old MPAN
Common Stock will be cancelled. The new stockholders of
Reorganized MPAN after the Effective Date initially will consist
of certain of the Debtors' prepetition creditors, specifically
the MPAN Senior Credit Facility Claim Holders, the MHG Senior
Credit Facility Claim Holders, general unsecured creditors of
the MPAN Debtors, and (to the extent such holders do not oppose
the Plan and otherwise qualify as Consenting Class UP-2 Holders)
holders of MPAN Subordinated Note Claims.

                                  Proposed Treatment And
Class Descript1on Of Class      Right To Vote On The Plan
----- --------------------      -------------------------

SP-1 MPAN Senior Credit        MPAN Senior Credit Facility Claim
      Facility Claims include   Holders will receive on the
      all Claims relating to    Effective Date: (a) 79.63% of the
      to: (i) the MPAN          "Available Cash," consisting of
      Debtors' principal        Debtors' Cash on hand as of the
      secured credit line,      Effective Date, plus the net
      term note, and letter     proceeds of any Exit Term Loans
      of credit obligations     (after payment of proceeds ear-
      evidenced by, among       marked for other creditors) or
      other things, the MPAN    Investor Notes, and less $25
      Senior Credit Facility    million working capital for the
      Agreement, for which      Reorganized Debtors' operations
      The Chase Manhattan       & certain other amounts under
      Bank serves as agent;     the Plan; (b) 79.63% of the
      (ii) the Synthetic        Lender Notes, if any are issued;
      Lease Transaction         (c) 76.44% of the New MPAN Common
      Documents; and            Stock; and (d) a release by the
      (iii) all notes,          Debtors and any entity claiming
      guarantees, pledges,      by or through Debtors.
      mortgages, and security   On or after the Effective Date,
      agreements relating       the MPAN Senior Credit Facility
      thereto.                  Claim Holders also will receive:
      MPAN Senior Credit        (y) 79.63% of the APS Sale
      Facility Claims           Proceeds (to the extent not paid
      are secured by first      prior to Effective Date); and
      priority liens on         (z) New MPAN Common Stock and
      substantially all of      New MPAN Warrants that would
      the MPAN Debtors'         otherwise have been distributed
      assets (except the        to holders of Allosved Class UP-2
      PHCMI Debtors),           Claims that are not Consenting
      subject only to the       Class UP-2 Holders.
      DIP financing and
      certain liens. MPAN       Class SP-1 is impaired and may
      Senior Credit Facility    vote on the Plan.
      Claims will be allowed
      under the Plan in the
      amount of $985,631,204.

SP-2 Claims of Omega           To be treated according to the
      Healthcare Investors,     terms of the Omega Settlement
      Inc. which are secured    Agreement, which was approved
      by the assets of the      by the Court on August 22,
      PHCMI Debtors. Omega      2001.
      was owed approximately
      $62.2 million as of       Class SP-2 is impaired and
      the Petition Date.        may vote on the Plan.

SP-3 Secured Claims of        The Allowed LaSalle Secured Claims
      LaSalle National Bank,   will include all unpaid principal
      as Trustee under the     and interest (if allowable under
      Pooling and Servicing    Bankruptcy Code section 506(b))
      Agreement relating to    the respective nondefault rate
      Commercial Mortgage      through the Effective Date, less
      Pass-Through             any adequate protection payments
      Certificates Series      received by or deposits applied by
      RMF 1995-1.               LaSalle. Notwithstanding the
      The LaSalle Secured       foregoing, in no event shall the
      Claims are secured        Allowed LaSalle Secured Claim
      by liens upon six of      exceed the value, as determined
      the Debtors' skilled      pursuant to Bankruptcy Code
      nursing facilities        section 506(a), of the collateral
      (SNF): Birchwood          securing such Claim, less any
      Nursing Home,             amount of adequate protection
      Crestview Nursing         payments that did not compensate
      Center, Dixon             for diminution in collateral
      Healthcare Center,        value.
      Flora Care Center,
      Lafayette Health          The Debtors will surrender to
      Care Center, and          LaSalle the Dixon Healthcare
      Parkway Healthcare        Center and the Crestview Nursing
      Center. The MPAN          Center SNFs and all personal
      Debtors believe they      property relating to them upon
      owed LaSalle approx.      which LaSalle holds validly
      $15.7 million as of       perfected, nonavoidable liens, in
      the Petition Date.        partial satisfaction of the
                                Allowed LaSalle Secured Claim.
                                With respect to the balance of
                                the Allowed La Salle Secured
                                Claim, LaSalle will receive (i) a
                                Cash Pay Down in the amount, if
                                any, necessary to provide it with
                                an 80% loan-to-collateral-value
                                ratio, and (ii) a New Project
                                Lender Note, as set forth in the
                                Plan.

                                Class SP-3 is impaired and
                                may vote on the Plan.

SP-4, Secured Claims of (i)     Each Allowed Secured Claim in
SP-5, Fireside Manor, relating  these Classes will include all
SP-6, to the Greenview Manor    unpaid principal and interest at
SP-8  SNF (Class SP-4);        the respective nondefault rate
      (ii) Aramark, relating   through the Effective Date, less
     to the Sunset Manor,      any adequate protection payments
     Sierra Vista HealthCare   received by or deposits applied by
     Center, and Alpine        the respective creditor. Each such
     Living Center SNFs        Allowed Secured Claim will be paid
      (Class SP-5); (iii)       in full in Cash on or about the
      Bank Midwest, relating    Effective Date.
      to the Arbor Manor SNF
     (Class SP-6); and         These Classes are impaired and may
      (iv) Lend Lease,          vote on the Plan.
      relating to the Arbor
      Manor SNF (Class SP-8).
      The MPAN Debtors believe
      they owed approximately
      $700,000 on account of
      these Claims as of the
      Petition Date.

SP-7  Bank of New York Claims   Class SP-7 is unimpaired and may
      relating to Summit        not vote because it is deemed to
      Hospital of Louisiana     have accepted the Plan.
      (note: this Class does
      not include Bank of New
      York's Claims, if any,
      relating to the
      Subordinated Notes).

SM-1  MHG Senior Credit         MHG Senior Credit Facility Claim
      Facility Claims include   Holders will receive on the
      all Claims arising        Effective Date: (a) 20.37% of the
     under, evidenced by,      Available Cash; (b) 20.37% of the
     or relating to the        Lender Notes, if any are issued;
     following, pursuant       (c) 19.56% of the New MPAN
     to which PNC Bank, NA.    Common Stock; (d) a release by the
     and First Union           Debtors and any entity claiming by
     National Bank serve       or through the Debtors, as set
     as agents: (i) the        forth in the Plan; (e) $625,000 in
     $210,000,000 Term         Cash on account of certain
     Loan Facility Credit      professionals' fees; and (f) the
     Agreement dated as of     surrender, cash collateralization,
     December 23, 1998;        or backing of all undrawn letters
     (ii) the $250,000,000     of credit issued pursuant to the
     Revolving Credit          MHG Senior Credit Facility
     Facility Credit           Documents. On or after the
     Agreement dated as of     Effective Date, the MHG Senior
     May 18, 1994; and         Credit Facility Claim Holders also
     (iii) all notes,          will receive: (y) 20.37% of the
     guarantees, security      APS Sale Proceeds (to the extent
     agreements, pledges,      not paid prior to the Effective
     and mortgages relating    Date); and (z) Cash that would
     to the foregoing.         otherwise have been distributed to
                                  holders of Allowed Class UM-2
     MHG Senior Credit         Claims that are not Consenting
     Facility Claims are       Class UM-2 Holders.
     secured by first
     priority liens on         Class SM-l is impaired and
     substantially all of      may vote on the Plan.
     the MHG Debtors' assets,
     subject only to the
     DIP financing and
     certain Project Lenders'
     and other permitted
     liens. MHG Senior Credit
     Facility Claims will be
     allowed under the Plan
     in the amount of
     $ 426,302,882.

SM-2  Secured Claims of (i)     Each Allowed Secured Claim in
SM-3  Bankers Trust, relating   these Classes will include
SM-5  to the Palmetto SNF      all unpaid principal and interest
SM-7  (Class SM-2) and the      (if allowable under Bankruptcy
SM-1O Westchester SNF           Code section 506(b)) at the
SM-11 (Class SM-3);             respective nondefault rate
SM-12 (ii) THCI, relating to    through the Effective Date,
      the Pendleton SNF         less any adequate protection
      (Class SM-5);             payments received by or deposits
      (iii) NHP, relating to    applied by the respective
      the Kensington SNF        creditor. Notwithstanding the
      (Class SM-7); and         foregoing, in no event shall an
      (iv) Monticello,          Allowed Secured Claim exceed the
      relating to the Bonifay   value, as determined pursuant
     SNF (Class SM-10), the    to Bankruptcy Code section 506(a),
      Titusville SNF (Class     of the collateral securing such
      SM-11), and the San       Claim, less any amount of
      Antonio SNF (Class        adequate protection payments that
      SM-12). The MHG           did not compensate for diminution
     Debtors believe they      in collateral value. Each creditor
     owed approximately        in these Classes will receive
     $37.9 million on          on account of its respective
     account of these claims   Allowed Secured Claim
     as of the Petition        (i) a Cash Pay Down in the
     Date.                     amount, if any, necessary
                                to provide such holder with
                                an 80% loan-to-collateral-value
                                ratio, and (ii) a New Project
                                Lender Note, as set forth in the
                                Plan.

                                These Classes are impaired and
                                may vote on the Plan.

SM-4 (i) Secured Claims of    Class SM-4 and SM-6 are unimpaired
SM-6 Bankers Trust relating   and may not vote because they are
       to the Debtors'          deemed to have accepted the Plan.
       purported guaranty of
       the St. Augustine SNF
       landlord's mortgage
       (SM-4), and
       (ii) HUD Jacksonville
       Claims relating to
       the Jacksonville SNF
       (Class SM-6).

SM-8 Porche Secured Claims    The Class SM-8 Claims will be
                                allowed in the amount of zero,
                                because the collateral securing
                                such Claims has no value. Class
                                SM-8 is impaired and may not vote
                                because it will neither receive
                                nor retain any consideration on
                                account of such Claims, and thus
                                is deemed to have rejected the
                                Plan.

SM-9 Quaker Deland Claims of  The Debtors will surrender to
       Quaker or HUC relating   HUD the Deland SNF and all
       to the Deland SNF.       personal property relating to
                                it upon which HUD holds validly
                                perfected, nonavoidable liens,
                                in full satisfaction of the
                                Allowed Quaker Deland Claims.

                                Class SM-9 is impaired and may
                                vote on the Plan.

SJ-1  Secured Tax Claims.     Each Allowed Class SJ-1 Claim will
        Each Allowed Class      include unpaid principal and
        SJ-l Claim will be      interest at the applicable
        deemed to be in a       statutory, nondefault rate.
        separate subclass for   Allowed Class SJ-1 Claims will be
        purposes of voting and  paid in full on or about the
        treatment under the     Effective Date.
        Plan.
                               Each member of Class SJ-1 is
                                impaired, and holders of Allowed
                                Class SJ-1 Claims may vote on the
                                Plan.

SJ-2  Other Secured Claims    Each Allowed Class SJ-2 Claim will
        include all Secured     include principal and unpaid
        Claims not otherwise    interest at the applicable,
        classified under the    nondefault rate through the
       Plan, including Claims  Effective Date (if allowable under
       of certain equipment      Bankruptcy Code section 506(b)),
       lessors, purchase money   less any adequate protection
       liens, and similar        payments received by or deposits
       Claims. Each Allowed      applied by the creditor.
      Class SJ-2 Claim will     Notwithstanding the foregoing, in
       be deemed to be in a      no event shall an Allowed Class
       separate subclass for     SJ-2 Claim exceed the value, as
      purposes of voting and    determined pursuant to Bankruptcy
      treatment under the       Code section 506(a), of the
      Plan.                     collateral securing such Claim.

                               In full satisfaction of each Class
                                SJ-2 Claim and all liens securing
                                it, each Allowed Class SJ-2 will
                                be treated under Option A, Option
                               B, or Option C, at the election of
                               the Debtors or Reorganized
                               Debtors.

                                Option A: The Disbursing Agent
                                will pay the Allowed Class SJ-2
                                Claim in full, in cash, on or
                                before the later of (i) 60 days
                                after the Effective Date, or (ii)
                                15 Business Days after the date
                                the Class SJ-2 Claim becomes an
                                Allowed Class SJ-2 Claim.

                                Option B: The Reorganized Debtors
                                will surrender the property
                                securing the Allowed Class SJ-2
                                Claim to the holder of such claim
                                on or before the later of (i) 60
                                days after the Effective Date, or
                                (ii) 15 Business Days after the
                                date the Class SJ-2 Claim becomes
                                an Allowed Class SJ-2 Claim; if
                               the Property securing a Class SJ-2
                                Claim has been lost or destroyed,
                               the Debtors will provide notice of
                               such fact to the holder of the
                               claim, and the delivery of such
                               notice will constitute "surrender"
                               of the property securing the Class
                               SJ-2 Claim for purposes of Option
                               B.

                               Option C: On or before the later
                               of (i) 60 days after the Effective
                               Date, or (ii) 15 Business Days
                               after the date the Class SJ-2
                               Claim becomes an Allowed Class SJ-
                               2 Claim, the Reorganized Debtors
                               will comply with the following:
                               (a) any default other than a
                               default of a kind specified in
                               section 265(b)(2) of the
                               Bankruptcy Code will be cured; (b)
                               the maturity of the Claim will be
                               reinstated as the maturity existed
                               before any default; (c) the holder
                               of such Claim shall be compensated
                               for any damages incurred as a
                               result of any reasonable reliance
                               of such holder to the extent
                               provided by Bankruptcy Code
                               section 1124(2); and (d) the other
                               legal, equitable, or contractual
                               rights to which the Claim entitles
                               the holder will not otherwise be
                               altered.

                               The Debtors will be deemed to have
                               elected Option C, except with
                               respect to any Class SJ-2 Claim as
                               to which the Debtors elect Option
                               A or Option B by filing a notice
                               of such election with the
                               Bankruptcy Court and serving such
                               notice on the holder of the
                               respective Class SJ-2 Claim on or
                               before the later of (i) 45 days
                               after the Effective Date, and (ii)
                               10 Business Days after the Class
                               SJ-2 Claim becomes an Allowed
                               Class SJ-2 Claim.

                               To the extent the Debtors elect
                               Option C, the claim will be
                               unimpaired, and the holder will be
                               deemed to have accepted the Plan.
                               Otherwise, Class SJ-2 is impaired,
                               and the holder may vote on the
                               Plan.

Not     Priority Tax Claims   Allowed Priority Tax Claims will
Classi- (Claims entitled to   be paid in full, in Cash, on or
fied    priority under        about the Effective Date.
          Bankruptcy Code
          Sec. 507(a)(8)).      Holders of Priority Tax Claims
          These Claims are not  are not entitled to vote
          classified in any     on the Plan.
          Class, as provided
          by Bankruptcy Code
          Sec. 1123(a)(1).

PJ-1  Other Priority Claims  Allowed Other Priority Claims will
        (including employees'  be paid in full, in Cash, on or
        Claims for no more     about the Effective Date.
        than $4,300 in wages
        incurred within 90     Class PJ1 is unimpaired and may
        days before the        not vote because it is deemed
        Petition Date,         to have accepted the Plan.
        certain employee
        benefit Claims, and
        other unsecured
        Claims entitled to
        priority under
        Bankruptcy Code
        Sec. 507(a), other than
        Administrative Expenses
        and Priority Tax Claims).

GP-1  MPAN United States      The holders of Class GP-1 Claims
        Claims.                 will receive the treatment set
                                forth in the Federal Government
                                Settlement.

                                Class GP-1 is impaired and is
                                consenting to the Plan
                                pursuant to the Federal
                                Government Settlement.

GM-1  MHG United States       The holders of Class GM-1 Claims
        Claims.                 will receive the treatment set
                                forth in the Federal Government
                                Settlement.

                                Class GM-1 is impaired and is
                                consenting to the Plan
                                pursuant to the Federal
                                Government Settlement.

UP-1  MPAN General Unsecured   Holders of Allowed Class UP-1
        Claims (including       Claims will receive Pro Rata
        those of most           distributions of (i) 399,078
        suppliers of goods and  Shares of New MPAN Common
        services to the MPAN    Stock (2.0% of the Primary
        Debtors, litigation    Effective Date Shares); and
        claimants, parties     (ii) New MPAN Warrants, which will
        to executory contracts  enable such holders to purchase
        and real and personal   an additional 376,893 shares of
        property leases that    New MPAN Common Stock (subject to
        are rejected, and       the anti-dilution provisions
        undersecured creditors' contained in the New Warrant
        deficiency Claims).     Agreement). The Pro Rata
                               distribution to each creditor will
                                depend upon the total amount of
                                Allowed Claims, which will not be
                                known until after the Plan's
                                Effective Date. Accordingly, the
                               timing and amount of distributions
                                to each creditor cannot be
                                determined at this time, but the
                                Debtors anticipate that it will
                                take a significant amount of time
                                to complete all distributions.

                                Class UP-1 is impaired, and
                                holders of Allowed Class UP-1
                                Claims may vote on the Plan.

UP-2 MPAN Subordinated Note   Holders of Allowed Class UP-2
       Claims                  Claims will receive Pro Rata
                               distributions of: (i) 399,078
                               Shares of New MPAN Common (2%
                               of the Primary Effective Date
                               Shares); and (ii) New MPAN
                               Warrants, which will enable
                               such holders to purchase an
                               additional 376,893 shares of
                               New MPAN Common Stock (subject
                               to the anti-dilution provisions
                               contained in the New Warrant
                               Agreement). The Pro Rata
                               distribution to each creditor will
                               depend upon the total amount of
                               Allowed Claims, which will not be
                               known until after the Plan's
                               Effective Date. Accordingly, the
                               timing and amount of distributions
                               to each creditor cannot be
                               determined at this time.

                               Notwithstanding the foregoing, a
                               holder of Class UP-2 Claims will
                               receive no distribution on account
                               of Securities Damages Claims, and
                               further will receive no
                               distribution unless such holder is
                               a "Consenting Class UP-2 Holder",
                               defined as a holder that (i) does
                               not vote against the Plan, (ii)
                               does not object to confirmation of
                               the Plan, and (iii) does not
                               object to, or otherwise challenge,
                               the allowance or treatment of the
                               MPAN Senior Credit Facility Claims
                               under the Plan. With respect to
                               each Consenting Class UP-2 Holder,
                               the MPAN Senior Credit Facility
                               Claim Holders will waive their
                               contractual subordination rights
                               against such holder.

                               Class UP-2 is impaired, and
                               holders of Allowed Class UP-2
                               Claims may vote on the Plan.

UP-3  MPAN Punitive Damage    Each holder of a Punitive Damage
        Claims, including any   Claim against any of the MPAN
        Claim against the MPAN  Debtors will receive no
        Debtors, whether secured distribution under the Plan on
        or unsecured, for any    account of such Claim.
        fine, penalty, or
        forfeiture, or for       Class UP-3 is impaired and
        multiple, exemplary, or  may not vote on the Plan
        punitive damages, to     as the holders of Class
        the extent that such     UP-3 Claims are deemed to
        fine, forfeiture, or     have rejected the Plan.
        damages are not
        compensation for
        the holder's actual
        pecuniary loss.

UM-1  MHG General Unsecured    Holders of Allowed Class UM-l
      Claims (including those  Claims and Allowed Class UM-2
      of most suppliers of     Claims will receive Pro Rata
      goods and services to    distributions from the "MHG
      the MHG Debtors,         Unsecured Claims Distribution
      litigation claimants,   Fund," consisting of the lesser of
      parties to executory    (a) $7.5 million, or (b) such
      contracts and real and  amount as may be necessary to fund
      personal property leases  a 5% distribution. The Pro Rata
      that are rejected, and   distribution to each creditor will
      undersecured creditors'   depend upon the total amount of
      deficiency Claims).       Allowed Claims, which amount will
                                not be known until after the
                                Plan's Effective Date.
                                Accordingly, the timing and
                                amount of distributions to each
                                creditor cannot be determined at
                                this time, but the Debtors
                                anticipate that it will take a
                                significant amount of time to
                                complete all distributions.

                                Class UM-1 is impaired, and
                                holders of Allowed Class UM-1
                                Claims may vote on the Plan.

UM-2  MHG Third Party           Holders of Allowed Class UM-2
      Subordinated Note         Claims and Allowed Class UM-1
      Claims, consisting of     Claims will receive Pro Rata
      MHG Subordinated Note     distributions from the MHG
      Claims that are not       Unsecured Claims Distribution
      held by the MPAN          Fund. The Pro Rata distribution
      Debtors.                  to each creditor will depend
                                upon the total amount of Allowed
                                Claims, which amount will not
                                be known until after the Plan's
                                Effective Date. Accordingly, the
                               timing and amount of distributions
                                to each creditor cannot be
                                determined at this time, but the
                                Debtors anticipate that it will
                                take a significant amount of time
                                to complete all distributions.
                                Notwithstanding the foregoing, a
                                holder of Class UM-2 Claims will
                               receive no distribution on account
                               of Securities Damages Claims, and
                               further shall receive no
                               distribution unless such holder is
                               a "Consenting Class UM-2 Holder",
                               defined as a holder that (i) does
                               not vote against the Plan, (ii)
                               does not object to confirmation of
                               the Plan, and (iii) does not
                               object to, or otherwise challenge,
                               the allowance or treatment of the
                               MHG Senior Credit Facility Claims
                               under the Plan. With respect to
                               each Consenting Class UM-2 Holder,
                               the MHG Senior Credit Facility
                               Claim Holders will waive their
                               contractual subordination rights
                               against such holder.

                               Class UM-2 is impaired, and
                               holders of Allowed Class UM-2
                               Claims may vote on the Plan.

UM-3  MHG Punitive Damage       Each holder of a Punitive Damage
     Claims, including any     Claim against any of the MHG
     Claim against the MHG     Debtors will receive no
     Debtors, whether secured  distribution under the Plan on
     or unsecured, for any     account of such Claim.
     fine, penalty, or
     forfeiture, or for        Class UM-3 is impaired and
     multiple, exemplary,      may not vote on the Plan
     or punitive damages,      as the holders of Class UM-3
     to the extent that such   Claims are deemed to have
     fine, forfeiture, or      rejected the Plan.
     damages are not
     compensation for the
     holder's actual
     pecuniary loss.

UJ-1  Debtors Intercompany      At the election of the Debtors
      Claims                    with respect to each Debtors
                                Intercompany Claim that is
                               reflected on the Debtors' books
                               and records as of the Effective
                               Date, the Debtors will eliminate
                               such Debtors intercompany Claim on
                               the Effective Date either through
                               (i) the declaration of
                               intercompany dividends and/or
                               contributions to capital, or
                               (ii) cancellation of such Debtors
                               intercompany Claim. All other
                               Debtors Intercompany Claims
                               will be deemed to be released as
                               of the Effective Date.

                               Class UJ-1 consists of
                               co-proponents of the Plan and
                               thus consents to the Plan.

                        Equity Interests

                                 Proposed Treatment And
Class Descript1on Of Class     Right To Vote On The Plan
----- --------------------     -------------------------

EP-1  Old MPAN Common Stock,   Holders of Old MPAN Common Stock
        including MPAN's         (including related options) and
        existing stockholders    related Securities Damages
        and holders of options   Claims will receive no
        and warrants to acquire  consideration on account of
        MPAN stock, and all      their Equity Interests and any
        Securities Damages       Claims relating thereto. All
        Claims relating          existing shares of Old MPAN
        thereto.                 Common Stock and options or
                                 warrants to acquire the same
                                 will be deemed cancelled as
                                 of the Petition Date.

                                 Class EP-l is impaired but
                                 may not vote because it is
                                 deemed to have rejected the
                                 Plan.

EM-1 Old MHG Common Stock      The holders of Class EM-1 Equity
                                Interests will receive no
                                consideration on account of such
                               Equity Interests. Reorganized MPAN
                               will receive the New MHG Common
                               Stock on account of the MHG Senior
                               Credit Facility Claim Holders'
                               subordination of their rights to
                               receive such stock. Class EM-1
                               consists of co-proponents of the
                               Plan and thus consents to the
                               Plan.

EJ-1 Old Affiliates Equity     The holders of Class EJ-1 Equity
                               Interests will receive no
                               consideration on account of such
                               Equity Interests. The Reorganized
                               Debtors will receive the New
                               Affiliates Equity on account of
                               the Senior Credit Facility Claim
                               Holders' subordination of their
                               rights to receive such equity.
                               Class EJ-1 consists of co-
                               proponents of the Plan and thus
                               consents to the Plan.
(Mariner Bankruptcy News, Issue No. 22; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


MATLACK SYSTEMS: Board Approves Filing of Plan of Liquidation
-------------------------------------------------------------
On December 21, 2001, the Board of Directors of Matlack Systems,
Inc., a Delaware corporation  unanimously approved the filing
with the United States Bankruptcy Court for the District of
Delaware of a Plan of Liquidation for the Company and all of its
direct and indirect wholly owned subsidiaries. The Matlack
Entities are the subjects of a voluntary petition seeking
protection under Chapter 11 of the United States Bankruptcy Code
in the Bankruptcy  Court, which are consolidated for the purpose
of joint administration as Case No. 01-1114 (MFW).   Execution
of the Plan of Liquidation is subject to the approval of the
Bankruptcy Court.

Among other things, the Plan of Liquidation provides for (a) the
classification of claims against the Matlack Entities, (b) the
transfer of the assets, titles and rights of the Matlack
Entities to a liquidating trust overseen by representatives of
the committee of unsecured creditors of the Matlack Entities,
(c) the valuation and liquidation of the Remaining Assets
transferred to the Trust, (d) the payment of claims against the
Matlack Entities in accordance with the classifications set
forth in the Plan, to the extent of the Remaining Assets, (e)
the substantive consolidation of the Matlack Entities and (f)
the retention of jurisdiction by the Bankruptcy Court until the
completion of the liquidation and distribution of the Remaining
Assets.  The Company anticipates that the aggregate value of the
Remaining Assets  following their liquidation will not be
sufficient to permit any distribution to  stockholders, and the
Plan of Liquidation does not provide for any distribution to the
Company's stockholders.

              Resignations of Directors and Officers

On December 14, 2001, Michael B. Kinnard, the Company's
President and Chief Executive  Officer, and Patrick J. Bagley,
its Vice President-Finance and a Director of the Company,
resigned, effective as of the close of business on that date,
from those positions and from any other positions held as
directors or officers of any of the Company's subsidiaries.

On December 21, 2001, the Board of Directors of the Company
elected Stephen E. Judge, the Company's Vice President-
Administration and Controller, as the Company's Chief
Reorganization Officer and appointed Mr. Judge to fill the
vacancy on the Board of Directors created by Mr. Bagley's
resignation.

Matlack, North America's No. 3 tank truck company, provides
liquid and dry bulk transportation, primarily for the chemicals
industry.  The company filed for chapter 11 protection last
March 29, 2001, in the U.S. Bankruptcy Court for the District of
Delaware, and is represented by Richard Scott Cobb, Esq., at
Klett Rooney Lieber & Schorling.  Matlack's 10Q Report, filed
with the Securities and Exchange Commission on March 31, 2001,
lists assets of $81,160,000 and liabilities of $89,986,000.


METALS USA: Court Okays Fulbright to Perform Legal Services
-----------------------------------------------------------
Metals USA, Inc., and its debtor-affiliates obtained Court
authority to employ and retain Fulbright & Jaworski LLP to
represent them in these cases to perform legal services.

Fulbright will render general bankruptcy representation to the
Debtors, including:

A. advising and consulting the Debtors about their powers and
    duties as a debtors-in-possession in the continued
    operation of their businesses and management of their
    properties;

B. representing Debtors in cash collateral and debtor-in-
    possession financing negotiations and litigation;

C. representing the Debtors in asset sales and other liquidity
    transactions;

D. representing the Debtors concerning disposition of their
    executory contracts;

E. assisting the Debtors in the development, negotiation,
    litigation and confirmation of a chapter 11 plan of
    reorganization and the preparation of a disclosure
    statement, concerning treatment of secured and unsecured
    claims including both trade debt and bond debt;

F. preparing for the Debtors' necessary applications, motions,
    complaints, adversary proceedings, answers, orders, reports
    and other pleadings and legal documents, in connection with
    matters affecting the Debtors and their estates;

G. taking actions as may be necessary to preserve and protect
    the Debtors' assets including the prosecution of avoidance
    actions and adversary proceedings on the Debtors' behalf,
    defense of actions commenced against the Debtors,
    negotiations concerning litigation in which the Debtors are
    involved, objection to claims filed against the Debtors'
    estate and estimation of claims against the estates; and

H. performing other legal services that the Debtors may request
    in connection with these cases. (Metals USA Bankruptcy News,
    Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-
    0900)


METATEC INT'L: Will Undertake Further Restructuring in 2002
-----------------------------------------------------------
Metatec International, Inc., (Nasdaq:META) announced additional
restructuring measures.

"Our number one objective is to return Metatec to
profitability," said Christopher A. Munro, president and chief
executive officer.  "Our 2001 strategy has been to refocus the
business by transitioning it from primarily an optical disc
manufacturer to a supply chain solutions company. The refocusing
has helped us examine overall customer profitability and to
identify some customers that have become unprofitable for us to
serve. This was caused primarily by the prolonged economic
downturn in the U.S. and Europe and the commoditization of the
CD-ROM business overall. The restructuring measures we are
announcing are intended to help increase our focus on selling
higher margin supply chain services and further reduce expenses
by reducing manufacturing capacity and overhead costs."

Munro said that Metatec will reduce capacity at its Dublin CD-
ROM manufacturing plant by 25 percent in January as the result
of a top-down assessment of customers and their fit with
Metatec's solutions-based business model going forward.

He said that the capacity reduction will cause a corresponding
workforce reduction of 20 percent, or approximately 80 people.
He said the workforce reduction will take place during January
2002 and will reduce the company's expenses by more than $3
million annually.

"Metatec is on track to becoming a leaner, more profitable
company that can leverage its core competency in high quality
optical disc services with information intensive supply chain
solutions. We believe our company will be well positioned for
the eventual economic upturn."

           Company Continues Turn-Around Plans for 2002

In addition to restructuring measures announced, Munro said
Metatec will stay focused in 2002 on the following initiatives:

      --  Accelerating sales activities targeted at companies
          needing supply chain services in North America and
          Western Europe.

      --  Continuing strict cost management initiatives through a
          new Continuous Improvement Program.

      --  Carefully managing the CD-ROM and DVD manufacturing
          business during the economic slowdown.

      --  Completing negotiations for the disposal of the
          company's Silicon Valley plant, closed earlier this
          year.

      --  Concluding long-term financing to support the company's
          business strategy.

Metatec International enables companies in the computer
hardware, software, telecommunications and media/publishing
markets to streamline the process of delivering products and
information to market by providing technology driven supply
chain solutions that increase efficiencies and reduce costs.
Technologies include CD-ROM and DVD manufacturing services, a
full range of supply chain management services and secure
Internet-based software distribution services. Extensive real-
time customer-accessible online reporting and tracking systems
support all services. Metatec maintains operations in Ohio and
The Netherlands. At September 30, 2001, the company reported
that its liquidity is strained, with current liabilities
exceeding current assets by about $16 million.

More information about Metatec is available by visiting the
company's web site at http://www.metatec.com
http://www.metatec.nl and http://www.irbyctc.com


MOLL INDUSTRIES: Closes Partial Tender Offer for 10-1/2% Notes
--------------------------------------------------------------
Moll Industries, Inc., announced that it has closed the cash
tender offer and consent solicitation regarding a portion of its
outstanding $116.5 million principal amount of 10-1/2% Senior
Subordinated Notes due 2008 and regarding certain amendments to
the indenture governing the Notes, between the Company and the
trustee for the Notes. The Offer and the Solicitation expired at
5:00 p.m., New York City time, on Friday, December 28, 2001. The
terms of the Offer and the Solicitation are more fully described
in the Offer to Purchase and Consent Solicitation, dated
September 19, 2001, as amended.

As of the expiration of the Offer and the Solicitation, the
Company had received tenders with respect to $28,825,000
aggregate principal amount of Notes and had received consents
(without a tender) with respect to $68,890,000 aggregate
principal amount of Notes, representing the consents of the
holders of at least a majority in aggregate principal amount of
the outstanding Notes. The Company and the trustee for the Notes
have executed and delivered a First Supplemental Indenture
relating to the Indenture and effecting the Proposed Amendments.

The Company has completed its debt restructuring which includes
an amendment to its existing senior credit facility and a waiver
of the default under that facility's fixed charge coverage
covenant. The debt restructuring also includes a new mezzanine
multi-draw debt term loan facility in the aggregate principal
amount of $33,000,000. A portion of the proceeds of the new loan
facility is being used to fund the Offer and the Solicitation.

Banc of America Securities LLC acted as exclusive dealer manager
and solicitation agent for the Offer and the Solicitation. D.F.
King & Co., Inc. acted as information agent for the Offer and
the Solicitation. State Street Bank and Trust Company acted as
the depositary and tabulation agent for the Offer and the
Solicitation. Questions concerning the Offer and the
Solicitation may be directed to Banc of America Securities LLC,
attention of Henk Bouhuys at 704/388-2842 or 888/292-0070.

Located in Davie, FL, Moll Industries, Inc. (a Delaware
corporation) is a leading full service manufacturer and designer
of custom molded and assembled plastic components for a broad
variety of customers and end markets throughout North America,
Europe and Brazil.


NATIONSRENT INC: Will Continue Use of Cash Management System
------------------------------------------------------------
NationsRent Inc., and its debtor-affiliates sought and obtained
authority to continue using their Cash Management System, as
that system may be modified pursuant to the requirements of the
DIP Facility.

Joseph I. Izhakoff, the Debtors' Vice-President and General
Counsel, relates that prior to the commencement of these cases,
in the ordinary course of businesses, the Debtors maintained
approximately 66 bank accounts, including deposit accounts,
operating accounts, merchant accounts and miscellaneous, special
purpose accounts, out of which they managed cash receipts and
disbursements. The Debtors believe that all of the Pre-petition
Bank Accounts maintained in the United States are with
financially stable banking institutions with deposit insurance.

Mr. Izhakoff submits that the Debtors' Cash Management System is
an integrated system that provides well-established mechanisms
for the collection, concentration, management and disbursement
of funds used in the Debtors' businesses. The principal
components of the Cash Management System and the flow of funds
through the Pre-petition Bank Accounts in that system are:

A. Cash Collection and Concentration - All of the Debtors' cash
    receipts ultimately flow into the Concentration Account at
    Bank of America, and the funds for all disbursements
    originate from the Concentration Account. The Debtors'
    procedures for cash collections and concentration are:

      a. The Debtors maintain six lockbox accounts, five of which
         are maintained at Bank of America, while the other, a
         regional account, is maintained at Fifth Third Bank.
         Debtors also maintain various regional merchant
         accounts, depository accounts and local accounts.

      b. Funds collected in the Collection Accounts are deposited
         into or credited to the Concentration Account and used
         on a daily basis for disbursements. Any collected
         funds that remain in the Concentration Account after
         the funding of disbursements are swept nightly into
         overnight investments that are consistent with the
         investment guidelines.

B. Disbursements - All of the Debtors' material disbursement
    accounts are zero balance accounts that are funded from the
    Concentration Account. The Debtors maintain all but four of
    the General Disbursement Accounts at Bank of America while
    the remaining accounts are maintained at Fleet Bank, First
    MA Bank, Bank One and Bank of Utah. Disbursements from the
    General Disbursement Accounts primarily include accounts
    payable, payroll and other operating expenses. Certain of
    the Debtors' other expenses are funded through certain of
    the Pre-petition Bank Accounts as follows:

      a. Purchase Cards Account: The debtors maintain an account
         at Bank of America used for payment of expenses
         incurred on purchase cards, which are issued to
         certain employees and used to charge specified
         business expenses.

      b. Health Benefits Imprest Account: The Debtors maintain an
         account at Citibank, N.A. that is used for payment of
         expenses incurred under the Debtors' health benefit
         plans, which are administered by Connecticut General
         Life Insurance Company, a subsidiary of CIGNA
         Corporation.

      c. Health Benefits Imprest Account(California): The Debtors
         maintain additional account at Citibank for use in
         connection with the Debtors' welfare benefit program
         in California, which is administered by CIGNA
         HealthCare of California and its agent, CGLIC. After
         each renewal under the Program, imprest balances are
         recalculated based on claims made during the prior
         policy year.

C. Investments - The Debtors maintain five investment accounts
that were used prior to the Petition Date for investments that
are consistent with the investment guidelines, including:

      a. Securities Investment Accounts: The Debtors maintain two
         active securities investment accounts at Citibank that
         are managed by The Bear Stearns Companies. One of the
         accounts is used to hold investments in equity
         securities of third-party corporations, and the other
         is used to hold securities of the Debtors that have
         been repurchased by the Debtors.

      b. Other Investments Accounts: The Debtors also maintain
         three separate investment accounts a governmental
         funds account with Nations Funds at Bank of America; a
         money market funds account with Provident
         Institutional Funds at Provident Bank; and a money
         market funds account with Goldman Sachs Funds and
         Wachovia Bank, N.A. As an alternative to the overnight
         investments described above, the Debtors periodically
         deposited collected funds that remained in the
         Concentration Account after disbursements into these
         accounts for investment in certain short-term
         instruments. These accounts currently are inactive and
         carry zero balances.

Daniel J. DeFranceschi, Esq., at Richards Layton & Finger, P.A.
in Wilmington, Delaware, states that the Cash Management System
has been utilized by the Debtors for the past three years and
constitutes a customary and essential business practice. The
widespread use of such a system is attributable to the numerous
benefits it provides, including the ability to control and
monitor corporate funds, invest idle cash, ensure cash
availability and reduce administrative expenses by facilitating
the movement of funds and the development of timely and accurate
account balance and presentment information. These controls are
especially important here, given the significant volume of cash
transactions, aggregating approximately $1,250,000,000 managed
through the Cash Management System annually.

In light of the substantial size and complexity of the Debtors'
operations, Mr. De Franceschi believes that a successful
reorganization of the Debtors' businesses as well as the
preservation and enhancement of the Debtors' values as going
concerns, simply cannot be achieved if the Debtors' cash
management procedures are substantially disrupted. Therefore, it
is essential that the Debtors be permitted to continue to
consolidate the management of their cash and transfer monies
from entity to entity as needed, in the amounts necessary to
continue the operation of their businesses and in accordance
with their existing cash management procedures.

Given the Debtors' corporate and financial structure and the
number of affiliated entities participating in the Cash
Management System, Mr. DeFranceschi contends that it would be
unduly burdensome for the Debtors to establish an entirely new
system of accounts and a new cash management and disbursement
system for each separate legal entity. By contrast, the
modifications to the Cash Management System that may be required
in connection with the DIP Facility will not be difficult to
implement and will not disrupt the movement of cash through the
system. Under the circumstances, Mr. DeFranceschi asserts that
maintenance of the Cash Management System, as modified pursuant
to the requirements of the DIP Facility, is not only is
essential, but also is in the best interests of the Debtors'
respective estates. In addition, preserving a "business as
usual" atmosphere and avoiding the unnecessary distractions that
inevitably would be associated with any substantial disruption
of the Cash Management System will facilitate the Debtors'
stabilization of their post-petition businesses and assist the
Debtors in their reorganization efforts.

To avoid substantial disruption to the normal operation of their
businesses and to preserve a "business as usual" atmosphere, the
Court also permits the Debtors to continue to use Pre-petition
Bank Accounts. Allowing these accounts to be maintained with the
same account numbers will assist the Debtors in accomplishing a
smooth transition to operations in chapter 11.

To protect against the possible inadvertent payment of pre-
petition claims, the Court advises all banks with which the
Debtors hold Pre-petition Bank Accounts not to honor checks
issued prior to the Petition Date, except as otherwise ordered
by the Court. Mr. DeFranceschi assures the Court that the
Debtors have the capacity to draw the necessary distinctions
between pre and Post-petition obligations and payments without
closing the Pre-petition Bank Accounts and opening new ones.

To avoid disruption of the Cash Management System and
unnecessary expense, the Court orders that the Debtors are not
be required to include the legend "Debtor in Possession" or a
"debtor in possession number" on any checks or other business
forms. In the ordinary course of their businesses, the Debtors
use a multitude of checks and other business forms. By virtue of
the nature and scope of the Debtors' business operations and the
large number of suppliers of goods and services with which the
Debtors deal on a regular basis, Mr. DeFranceschi deems it
important that the Debtors be permitted to continue to use their
existing checks and other business forms without alteration or
change.

The Court also orders that the banks that participate in the
Cash Management System be permitted to charge back returned
items against amounts from time to time on deposit in the Pre-
petition Bank Accounts, regardless of whether such amounts were
deposited before or after the Petition Date and regardless of
whether the returned items relate to pre- or post-petition
items. In this regard, these banks are also be permitted to
assess and deduct their normal servicing charges in the ordinary
course of business. (NationsRent Bankruptcy News, Issue No. 2;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


OPTICARE: Seeks Okay of Proposals to Allow Debt Workout Deals
-------------------------------------------------------------
OptiCare Health Systems, Inc. is directing a letter to its
stockholders in which stockholders are advised that OptiCare's
Board of Directors is soliciting stockholders written consent to
the following proposals:

          1. Approval of an amendment to OptiCare's certificate
of incorporation to increase the number of authorized shares of
common stock from 50,000,000 to 75,000,000 shares.

          2. Approval of the creation of a new class of
convertible preferred stock, to be designated as the Series B
12.5% Voting Cumulative Convertible Participating Preferred
Stock, par value $.001 per share, as authorized by OptiCare's
board of directors, consisting of up to 3,500,000 shares, each
share of Series B Preferred Stock to be convertible into 10
shares of common stock at a price of $0.14 per share of common
stock (subject to adjustment as provided in the Series B
Preferred Stock), to have voting power corresponding to the
shares of common stock into which it is convertible, and to be
mandatorily redeemable on December 31, 2008.

          3. Approval of the issuance and sale of approximately
2,678,571 shares of the Series B Preferred Stock to Palisade
Concentrated Equity Partnership, L.P. for a cash payment of
$3,750,000. Palisade is presently the holder of approximately
16% of OptiCare's outstanding common stock and would hold, upon
consummation of the proposed issuance of the Series B Preferred
Stock, approximately 69% of the outstanding voting stock (i.e.,
common stock and Series B Preferred Stock) of OptiCare.

          4. Approval of an investment in OptiCare by Dean J.
Yimoyines, M.D., chariman of the board and chief executive
officer of Opticare, and/or members of his family, of $500,000
in cash, in the form of a purchase of 357,143 shares of Series B
Preferred Stock, or a subordinated secured note issued by
OptiCare due in 10 years, or a combination of Series B Preferred
Stock, or a subordinated secured note issued by OptiCare due in
10 years, or a combination of Serires B Preferred Stock and a
note.

          5. Approval of the issuance to Palisade of
approximately 285,714 additional shares of Series B Preferred
Stock (plus additional shares of Series B Preferred Stock for
accumulated interest) as payment in full of principal and
interest owed on Palisade's $400,000 participation in a junior
secured bridge loan to OptiCare by Alexander Enterprise Holdings
Corp.

          6. Approval of the issuance to Dr. Yimoyines of
approximately 35,714 additional shares of Series B Preferred
Stock (plus additional shares of Series B Preferred Stock for
accumulated interest) as payment in full of principal and
interest owed on Dr. Yimoyines' $50,000 participation in the
Alexander bridge loan.

          7. Approval of the issuance to Palisade and Dr.
Yimoyines of warrants to purchase an aggregate of up to
17,500,000 shares of common stock, at an exercise price of $0.14
per share (subject to adjustment as provided in the warrant).
The warrants shall expire ten years from the date of the
issuance and shall be issued to Palisade and Dr. Yimoyines in
consideration of Palisade and Dr. Yimoynes making subordinated
secured loans to OptiCare of up to $13,900,000 of principal and
agreeing to defer a portion of the interest accruing thereon, to
the 10-year maturity date of the loans, which loans are to be
evidenced by subordinated secured notes issued by OptiCare.

The board of directors believes that it is in the best interests
of OptiCare's stockholders to adopt all of the proposals to
allow for the closing of a series of transactions that will
restructure its debt and capital and satisfy its obligations to
its senior secured lenders, which are now in default and
immediately due and payable. The additional number of authorized
shares of common stock and the creation of the Series B
Preferred Stock will provide OptiCare with an adequate amount of
capital stock to carry out the proposed transactions. In
particular, the additional authorized shares are being sought to
provide the availability of common stock to be issued upon the
conversion of the Series B Preferred Stock and exercise of the
Warrant.

The closing of the transactions contemplated by the requested
consent statement is contingent upon, among other things, the
stockholders approval of all of the proposals.

Before the proposals can become effective, the holders of a
majority of OptiCare's outstanding common stock must give their
written consent.


PILLOWTEX CORP: Exclusive Period Extended to March 15
-----------------------------------------------------
Having reviewed the motion, Judge Robinson extends Pillowtex
Corporation's exclusive period to file a reorganization plan
through and including March 15, 2002 while the expiration of
their exclusive solicitation period is moved to May 15, 2002.
(Pillowtex Bankruptcy News, Issue No. 19; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


PILLOWTEX CORP: Files Reorganization Plan & Disclosure Statement
----------------------------------------------------------------
Pillowtex Corporation (OTC Bulletin Board: PTEXQ) and its United
States subsidiaries filed their joint Plan of Reorganization and
Disclosure Statement with the U.S. Bankruptcy Court in the
District of Delaware on December 28, 2001, outlining the
Company's plans to emerge from Chapter 11.  Pillowtex filed a
voluntary petition for reorganization on November 14, 2000.

"The filing of our Plan of Reorganization represents a
significant step toward successfully reorganizing our Company
and is an important milestone in our financial restructuring,"
said Pillowtex President and Chief Operating Officer Tony
Williams.  "We are confident that the reorganization structure
and program outlined in the Plan lay a strong foundation for our
Company's future success."

The Plan and Disclosure Statement outline the proposed structure
and business operations for the reorganized Company, including
reincorporating the parent company, Pillowtex Corporation, as a
Delaware corporation.  Under the proposed Plan, all shares of
Pillowtex's currently issued Common Stock and Preferred Stock
will be cancelled with current shareholders receiving no
distribution.  The Plan provides that the reorganized Company
will issue new Common Stock to its secured creditors and a
combination of new Common Stock and warrants to its unsecured
creditors.  In addition, the Plan as filed provides that the
Company will emerge with approximately $200 million of debt,
significantly less than the more than $1.1 billion of debt the
Company had prior to its bankruptcy filing.

"Our strategy going forward is to improve our position in the
highly competitive industry of home fashions," Williams said.
"Our business plan focuses on four broad initiatives -- branding
and marketing, capacity rationalization, strategic sourcing and
total quality management.  Our objective is to be the undisputed
leader in customer service."

Part of the process Pillowtex undertook during its
reorganization was to examine how it operates and to initiate
changes designed to improve processes, improve the bottom line
and enhance customer service.  "Pillowtex employees across the
country have performed for months under challenging
circumstances," Williams said.  "We are very pleased that our
employees not only recognize the need for change if we are to
achieve long term success, but have embraced the changes we have
instituted and will continue to introduce in how we do
business."

Before the Plan can be presented to certain classes of the
Company's creditors for acceptance, the Bankruptcy Court must
determine whether the Disclosure Statement contains adequate
information, as required by the Bankruptcy Code.  "The proposed
Plan, if confirmed by the Court, is intended to maximize the
value of the Company's assets for the benefit of our creditors
and position the new, restructured company to emerge in a
stronger financial condition," Williams said.  "The filing of
the Plan is another step in our reorganization to enhance our
ability to meet the needs of our customers and deliver high
quality products and services, both now and in the future."

The Company also filed a Form 8-K with the U.S. Securities and
Exchange Commission on December 28, 2001.  Copies of the Plan
and the Disclosure Statement are exhibits to the Form 8-K and
will be available on the Company's Web site at
http://www.pillowtex.com

Pillowtex Corporation, with corporate offices in Kannapolis,
N.C., is one of America's leading producers of household
textiles including towels, sheets, rugs, pillows, mattress pads,
feather beds, comforters, and decorative bedroom and bath
accessories.  The Company's brands include Cannon, Fieldcrest,
Royal Velvet, Charisma and private labels.


POLYMER GROUP: Sr. Bank Lenders Agree to Forbear Until March 29
---------------------------------------------------------------
Polymer Group, Inc. (NYSE: PGI) announced that the waiver of
covenant default under the Company's senior credit facility
expired on December 29, 2001, in accordance with its terms.
Consequently, the Company is currently in default under its
senior credit facility as a result of the Company's
noncompliance with formula-based financial covenants and has
entered into a forbearance agreement with its senior bank
lenders.  The Company remains current in its payment obligations
under the senior credit facility.

The Company also announced that the senior bank lenders have
issued a notice to the trustee under the Company's 9% Senior
Subordinated Notes due 2007 exercising their right to block the
Company's interest payment of $17.8 million scheduled to be made
on January 2, 2002.  The payment blockage notice is not an
acceleration of the maturity of the Company's debt obligations
under the senior credit facilities or the 9% Senior Subordinated
Notes.  A failure by the Company to pay interest on the
outstanding Senior Subordinated Notes when due, which continues
for 30 days or more (whether or not prohibited by the Company's
senior bank lenders), would constitute an event of default under
such Senior Subordinated Notes.

The Company also announced that PGI's senior bank lenders have
agreed to a forbearance period during which they will not
exercise certain remedies available to them as a result of the
covenant default under the senior credit facility.  The
forbearance period, which is scheduled to end on March 29, 2002,
could end sooner upon the occurrence of certain events, such as
the exercise of any remedies by the holders of the Senior
Subordinated Notes, or in the event the Company fails to
complete certain actions over the course of the next month
leading to a financial restructuring.  The Company's senior bank
lenders have also prevented the Company from making any
additional borrowings in excess of the amounts currently
outstanding under the revolving credit portion of the senior
credit facility.

The Company currently has sufficient liquidity to meet its
current obligations and holds adequate cash and short-term
investments to continue to operate its business in the normal
course.  The Company anticipates maintaining existing payment
terms and remaining current with all of its suppliers and other
vendors.  As of December 29, 2001, the Company had available
cash and short-term investments in excess of $45 million.  The
Company is also continuing to explore various financial
restructuring alternatives with third parties and has retained
the investment banking firm of Dresdner Kleinwort Wasserstein to
assist in its efforts.

Polymer Group, Inc., the world's third largest producer of
nonwovens, is a global, technology-driven developer, producer
and marketer of engineered materials.  With the broadest range
of process technologies in the nonwovens industry, PGI is a
global supplier to leading consumer and industrial product
manufacturers.  The Company employs approximately 4,000 people
and operates 25 manufacturing facilities throughout the world.
Polymer Group, Inc. is the exclusive manufacturer of Miratec
fabrics, produced using the Company's proprietary advanced APEX
laser and fabric forming technologies.  The Company believes
that Miratec has the potential to replace traditionally woven
and knit textiles in a wide range of applications.  APEX and
Miratec are registered trademarks of Polymer Group, Inc.


PROXITY DIGITAL: Bankruptcy Filing Likely to Sell CSA for $2.5MM
----------------------------------------------------------------
Billy Robinson, Chairman of Proxity Digital Networks, Inc. (OTC
Pink Sheets: PDNW), announced that PDNW entered into an
agreement to reorganize and sell Computer Support Associates,
Inc (CSA) for $2.5 million.

Sectec, Inc. security software and VPN Software Company has
agreed to purchase CSA under the following terms. CSA must be
placed in Chapter 11 and the bankruptcy court must approve a
reorganization plan that settles all claims with the creditors
and allows Sectec and PDNW to share revenues of a net of $2.5
million to PDNW. Sectec will immediately take control of CSA and
provide funding to complete the reorganization business plan.

This transaction allows PDNW to shed approximately $1,600,000.00
(one million six hundred thousand dollars) in secured and
unsecured debt that was assumed as a result of the transaction,
and to free up future funding for new acquisitions and operating
capital.

In addition to the purchase of CSA, PDNW has decided to invest
an addition $750,000 in Setec through a stock exchange between
the two companies. "Robert Dunlap, President of Sectec stated
the purchase of CSA and the investment by PDNW in the company
gives a unique working relationship between the two companies.
The earnings potential under the proposed agreement could be
very substantial."

About the transaction, Robinson commented, "Selling CSA frees us
to acquire companies which are more in line with our core
business goals. After we had been in CSA as the operator for
several months, it became readily apparent that CSA's core
business would grow in a different direction and not complement
Proxity's current direction..." CSA's newly reappointed
President Steve Hamilton commented, "That in light of the
separation of the two companies, CSA and PDNW will still market
the $380,000,000 (Three Hundred and Eighty Million Dollar), DSL1
government contract that CSA holds and will continue to work
together on future projects."

Proxity Digital Networks, Inc., (OTC PINKSHEETS: PDNW) is a New
Orleans based integrated entertainment and technology company.
PDNW's recent acquisitions now include Proxity, Inc., (
http://www.proxity.com/) a leading global provider of end-to-
end online solutions for the small-to-midsize e-business market;
Proxity is headquartered in Santa Monica, CA. PDNW also has
acquired Trivia Group, Inc. owner of http://www.triviaspot.com/
and http://www.funtrivia.com/and Computer Support Associates,
Inc. ( http://www.csa-solutions.com/) in New Orleans and
dotNow.com, Inc. ( http://www.dotnow.com/) the nations 2nd
largest free ISP based in Des Moines, Iowa. dotnow.com, Inc. has
recently entered into a letter of intent to merge with
Neighborhood Access Corp owner of http://www.goez.net


PRYOR/ETRAIN: Wants Plan Filing Exclusivity Extended to Jan. 21
---------------------------------------------------------------
Pryor/eTrain Holdings. L.L.C. asks the U.S. Bankruptcy Court for
the District of Delaware to extend its Exclusive Periods during
which to file a chapter 11 plan and to solicit acceptances of
that plan through January 21, 2002 and March 22, 2002,
respectively.

The Debtors say that they need more time to complete
negotiations with the Committee which "may involve a lawsuit by
the present owners against the former owners."  Thus, the
extension of exclusive periods is requested to allow the Debtors
an opportunity to complete negotiations and to keep all options
open for the conclusion of this case.

Pryor/eTrain Holdings. L.L.C. filed for chapter 11 protection on
July 25, 2001 in the U.S. Bankruptcy Court for the District of
Delaware. Laura Davis Jones, Esq. at Pachulski, Stang, Ziehl, et
al represents the Debtors in their restructuring effort.


QUALITY STORES: Tractor Supply Pitches Best Bid for 25 Stores
-------------------------------------------------------------
Tractor Supply Company (NASDAQ: TSCO), the nation's largest
retail farm and ranch store chain, announced that its recently
formed Joint Venture with Great American Group, Gordon Brothers
Retail Partners, LLC and DJM Asset Management LLC was the
successful bidder at auction for the assets of Quality Stores,
Inc., a debtor and debtor in possession under Chapter 11 of the
United States Bankruptcy Code.

The bid, which has been approved by the United States Bankruptcy
Court for the Western District of Michigan, provides for the
Joint Venture to act as exclusive agent for the disposition of
substantially all of the Quality Stores, Inc. assets located in
New York, Pennsylvania, Virginia, Maryland, West Virginia,
Delaware, Kentucky, Ohio, Indiana and Michigan. Financial terms
of this agreement were not disclosed.

Under its agreement with the other Joint Venture partners,
Tractor Supply Company has agreed to purchase the real estate
assets for approximately 25 stores, to assume the lease rights
for approximately 60 additional stores and to purchase the
related equipment, furniture and fixtures. After a complete
liquidation of the existing inventory by other members of the
joint venture, Tractor Supply expects to reopen approximately 85
stores in the Tractor Supply format by the middle of 2002.

Joe Scarlett, Tractor Supply Company Chief Executive Officer,
commented, "The addition of approximately 85 stores to our 2002
new store plan represents a significant store expansion for
Tractor Supply Company. Specifically, we expect to open a total
of over 100 stores next year, further building on our proven
business strategy. This asset purchase will expand our
geographic coverage, increase our market share, leverage our
general and administrative expenses and improve overall
efficiency while delivering a differentiated merchandise
assortment to our new customers."

Mr. Scarlett concluded, "We have been impressed with the
commitment of Quality's knowledgeable store managers and sales
associates and the historically strong support from their
customers who embrace the rural lifestyle. We're looking forward
to building a strong partnership with a significant number of
Quality employees to help us deliver the finest possible
shopping experience for our customers."

At December 31, 2001, Tractor Supply Company operated 323 stores
in 28 states, supplying the daily farm and ranch maintenance
needs of its target customers: hobby, part-time and full-time
farmers and ranchers, as well as suburban customers, contractors
and tradesmen.  The Company's stores are located in rural
communities and in the outlying areas of large cities where the
rural lifestyle is a significant factor in the local economy.
The Company offers a comprehensive selection of merchandise
including farm maintenance products, animal and pet products,
general maintenance products, lawn and garden products, light
truck equipment, and work clothing.


SOFTWARE LOGISTICS: Inks Pact to Sell All Assets to Zomax Inc.
--------------------------------------------------------------
Zomax Incorporated (Nasdaq: ZOMX) announced the signing of a
Letter of Intent to purchase substantially all the assets of
Software Logistics Corporation, dba iLogistix.  iLogistix
provides supply chain services to leading technology companies,
including procurement, inventory management, assembly,
fulfillment, e-commerce, and distribution services.  iLogistix
has operating facilities in the United States, The Netherlands,
Singapore, Taiwan, Mexico, and Brazil.

iLogistix is currently operating under the protective provisions
of Chapter 11 of the U.S. Bankruptcy Code while it pursues the
sale of its business.  Under the Letter of Intent with the
Trustee of the Bankruptcy Court, Zomax will, subject to approval
of the Bankruptcy Court, become the leading bidder and will
attempt to agree to a definitive asset purchase agreement with
the Trustee by January 11, 2002.  The purchase price agreed to
be paid by Zomax will be based primarily on iLogistix's working
capital assets as of the closing date.  If a definitive
agreement is signed, an auction process will be instituted by
the Trustee in the third week of January, 2002. Under this
process, other suitors may submit bids.  Zomax may, but is not
obligated to, participate in the additional bidding rounds.  The
Trustee, in consultation with the secured lenders, will
determine the winning bidder. There is no guarantee that Zomax
will be able to negotiate a definitive agreement for the
purchase of the assets of iLogistix or that, if a definitive
agreement is signed, Zomax will be the winning bidder.

Zomax is a leading international outsource provider of process
management services.  The Company's fully integrated services
include "front-end" E-commerce support, call center and customer
support solutions; DVD authoring services; CD and DVD mastering;
CD and DVD replication; supply chain and inventory management;
graphic design; print management; assembly; packaging;
warehousing; distribution and fulfillment; and RMA processing.
The Company's Common Stock is traded on the Nasdaq National
Market under the symbol "ZOMX."


SUN HEALTHCARE: Intends to Reject Tallahasee Office Space Lease
---------------------------------------------------------------
Due to the restructuring and consolidation of certain of their
operations, Sun Healthcare Group, Inc., and its debtor-
affiliates no longer require certain office space located in the
Highpoint Center Building, 106 East College Avenue, Suite 700,
Tallahassee, Florida that they leased from Tallahassee Highpoint
Partners, Ltd.

According to Russell C. Silberglied, Esq., at Richards, Layton &
Finger, P.A., in Wilmington, Delaware, the Debtors have reviewed
and analyzed the lease to determine its respective economic
value and marketability in the perspective of the Debtors'
reorganization.  But the Debtors are convinced that the lease
does not and will not contribute value to the Debtors' estates,
Mr. Silberglied relates, and the Debtors have thus determined
that rejection of the lease is in the best interest of their
estates.

As a result of the rejection of the lease, the Debtors' estates
will save approximately $1,450,000 in future rent obligations,
Mr. Silberglied tells Judge Walrath.  Absent mitigation, Mr.
Silberglied estimates lease rejection damages at $253,652.

The Debtors also request that the rejection of the lease be
effective as of December 31, 2001.  Mr. Silberglied assures
Judge Walrath that the leased premises will be vacated, swept
clean, and the keys returned to the lessor by December 31, 2001.

Therefore, the Debtors ask the Court to authorize and approve
their rejection of the lease. (Sun Healthcare Bankruptcy News,
Issue No. 29; Bankruptcy Creditors' Service, Inc., 609/392-0900)


TELEPANEL SYSTEMS: Q3 Balance Sheet is Upside-Down by CDN$10MM
--------------------------------------------------------------
Telepanel Systems Inc. (TSE:TLS and OTC:TLSXF), a world leader
in electronic shelf label systems for retail stores, announced
financial results for the third quarter ended October 31, 2001
(all results are stated in Canadian Dollars).

For the nine months ended October 31, 2001, revenue remained
fairly consistent at $2,318,759, as compared to $2,376,285 over
the same period last year, while the contribution from sales
increased to $948,653 from $622,628. For the nine month period
ended October 31, 2001, the loss before amortization, interest
and under noted items decreased to $1,488,962 from $3,048,950
for the comparative period last year and decreased to $278,105
from $1,134,869 for the three-month period ended October 31,
2001 and 2000. The lower loss and the increased contribution
from sales reflects the proactive undertaking to streamline and
make the organization more efficient, as well as a focus on
higher margin products. The loss for the nine-month period ended
October 31, 2001, was $4,356,402 as compared to a loss of
$4,616,116 for the corresponding period in 2000. The decrease in
operating costs was largely offset by an increase in non-cash
amortization and interest costs and the restructuring provision
recorded last quarter ended July 31, 2001.

"The reduction in our loss before non-cash items for the three-
month period has decreased by over $825,000 and while not fully
attributable to the action we took to restructure the company,
these results demonstrate our focus to bring expenditures in
line with our current revenues. Management execution of our plan
to increase sales revenues while decreasing operating expenses
is key to capitalizing on the emergence of the ESL marketplace,"
stated Garry Wallace, President and CEO of Telepanel Systems
Inc.

Mr. Wallace added, "We continue to focus our resources on
supporting IBM on closing large-scale rollouts, while continuing
to provide support for current customers. The level of interest
we are receiving from top-tier retailers is increasing as we add
value to the business case of ESLs through demonstrating reduced
operating costs, facilitating Revenue Management systems and by
illustrating the inherent benefits of the system to promote
programs, such as loyalty shopping. Innovative and progressive
retailers are beginning to realize the long potential of
integrating ESL solutions into their stores."

Telepanel is a leader in developing wireless electronic shelf
labelling systems for retail stores. Telepanel ESLs are placed
on the edge of store shelves to show a product's price and other
information. Prices are changed by a radio communications link
from the store's product database, to provide rapid, accurate
pricing updates.

Telepanel's systems are integrated with the leading 2.4 GHz RF
LANs which allows retailers to take advantage of their
investment in IEEE-standard in-store RF networks and extend
their use to electronic shelf labels.

Telepanel wireless ESLs are installed throughout the United
States, Canada, and Europe, with such premier supermarket chains
as Adam's Super Food Stores, A & P, Stop & Shop,
Loblaws, Big Y, Reasor's, Doll's, Brown's, Stew Leonard's, Grand
Union, Wakefern, Berks, Ellington, Port Richmond, Champion,
Leclerc, Intermarche, SPAR, and Super U, and at Universal
Studios, Hollywood.

At the end of the third quarter, Telepanel Systems balance sheet
shows a total stockholders' equity deficit standing at over $10
million.


TOWER AUTOMOTIVE: Restructuring Charges Reach $289 Million in Q4
----------------------------------------------------------------
Tower Automotive, Inc. (NYSE:TWR) announced that it will be
taking restructuring and impairment charges totaling $289
million in the fourth quarter ending December 31, 2001. Of this
amount, $277 million relates to non-cash charges associated with
goodwill and other asset impairments. The company expects that
the cash charges recorded will be recovered with operating
savings by the end of its 2002 fiscal year. A Form 8-K has been
filed Friday last week reflecting this announcement. The charges
being announced are in addition to those associated with the
closure of the company's Sebewaing facility, which was announced
in October 2001.

The first portion of the restructuring charge relates to
consolidation of technical activities and a reduction of other
salaried colleagues pertaining to a reorganization of the
company's U.S. and Canada operations. The reduction affects 215
engineering, finance, information technology and human resource
colleagues in the company's technical and administrative centers
in Novi, Rochester Hills, and Grand Rapids, Mich.; Milwaukee,
Wis.; and its U.S. and Canada manufacturing locations. This
portion of the restructuring will result in a charge of $17
million, the cash portion of which is $9.8 million. The
reduction in the salaried colleague workforce should be
completed by third quarter 2002.

The second portion of the restructuring charge will be
approximately $69 million, of which only $2.4 million is cash,
related to the relocation of some component manufacturing from
the company's Milwaukee Press Operations to other Tower
locations.

The company also will record non-cash charges of approximately
$203 million related to the impairment of goodwill and
underutilized assets at certain business locations, and the
carrying value of an under-performing investment.

In addition to the reorganization and realignment actions noted
above, early in December Tower Automotive informed the unions
representing its Milwaukee Press Operations colleagues that the
site's management team will recommend the discontinuance of all
stamping and ancillary processes currently performed at the
facility and the relocation of that work to other Tower
Automotive plants or Tier II suppliers. Tower Automotive is in
discussions with the leadership of these unions related to this
recommendation, and expects a decision early in first quarter
2002. Approximately 40 salaried colleagues and 450 hourly
colleagues would be affected by a closure of the Milwaukee Press
Operations, with anticipated cash closure costs of $10 million
to $20 million and additional impairment charges of $50 million
to $60 million. The company intends to continue the assembly of
frames for the Dodge Ram and Ford Ranger trucks at its Milwaukee
facilities.

Tower Automotive, Inc., produces a broad range of assemblies and
modules for vehicle structures and suspension systems for the
automotive manufacturers, including Ford, DaimlerChrysler, GM,
Honda, Toyota, Nissan, Fiat, Kia, Hyundai, BMW and Volkswagen.
Products include body structural assemblies such as pillars and
package trays, control arms, suspension links, engine cradles
and full frame assemblies. The company is based in Grand Rapids,
Michigan. At the end of the third quarter, Tower Automotive's
working capital deficit stood at around $250 million.


TRANSIT GROUP: Files for Chapter 11 Reorganization in Florida
-------------------------------------------------------------
Transit Group, Inc., (OTC: TRGP) announced that to support its
financial restructuring, the company and certain of its
subsidiary companies have filed voluntary petitions for
reorganization under Chapter 11 of the U.S. Bankruptcy Code in
the United States Bankruptcy Court for the Middle District of
Florida.

Excluded from the filing is the company's Land Transportation
subsidiary, which governs relationships with trucking agents and
brokers.

"While Transit has sound operating businesses, the company has a
capital structure which it cannot sustain," said Philip A.
Belyew, President and CEO. "In addition our industry has been
significantly impacted by the overall economic decline and
escalating insurance premiums.  While we have made good progress
in reducing our overhead costs over the past year, we have
determined the best means to secure a strong future for Transit
is through a Chapter 11 financial reorganization."

"We have the support of our lenders and their commitment to
provide additional financial resources to meet our operating
requirements through this process.  We are taking steps to
ensure that our employees, drivers, owner-operators, agents,
customers and ongoing trade suppliers are not affected by our
financial reorganization.  We will continue to serve our
customers as usual, while we complete the necessary changes to
establish a sustainable capital structure.  This action is a
major step towards meeting this objective."

The Court has been asked to approve First Day Order requests
that authorize Transit to continue to manage its businesses on a
normal course basis throughout the restructuring process.  This
includes authorizing the company to meet its ongoing financial
obligations with respect to employee salaries and benefits, as
well as payments to owner-operators, agents and third-party
carriers, which make up the Transit workforce.

Subject to receiving Court approval, Transit expects to enter
into a debtor-in-possession (DIP) financing facility with GE
Capital Corporation.  In addition, the company has ongoing
access to an operating line of credit supported by its senior
working capital lender.

"Through undertaking a financial reorganization and obtaining
additional financing, we have strengthened our ability to
deliver the high standard of service that Transit is known for.
Our commitment is to ensure that our financial reorganization
remains a largely invisible process to our customers and our
workforce."

Transit Group, Inc., headquartered in Atlanta, Georgia, is one
of the largest truckload companies in the United States, with
operations in 48 states.


TRANSIT GROUP: Chapter 11 Case Summary
--------------------------------------
Lead Debtor: Transit Group, Inc.
              2859 Paces Ferry Road, Suite 1740
              Atlanta, GA 30339

Bankruptcy Case No.: 01-12820

Debtor affiliates filing separate chapter 11 petitions:

        Entity                              Case No.
        ------                              --------
        Transit Group of Canada, Inc.       01-12822
        Transit Group Transportation LLC    01-12821

Chapter 11 Petition Date: December 28, 2001

Court: Middle District of Florida

Judge: Karen S. Jennemann

Debtors' Counsel: R. Scott Shuker, Esq.
                   Post Office Box 3353
                   Orlando, FL 32802
                   407-481-5808


TRICO STEEL: Court Extends Debtors' Exclusive Period to March 22
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware granted
the request of Trico Steel Company, LLC to further extend its
exclusive time to file a chapter 11 plan and likewise, to
solicit acceptances of that plan.  The Court, after finding that
there is sufficient cause for the request, extended the Debtors'
Exclusive Plan Filing Period through March 22, 2002 and the
Exclusive Solicitation Period through May 24, 2002.

Trico Steel Company, LLC filed for chapter 11 protection on
March 27, 2001 in the U.S. Bankruptcy Court for the District of
Delaware.  Edward J. Kosmowski, Esq. and Michael R. Nestor, Esq.
at Young Conaway Stargatt & Taylor represents the Trico Debtors
in their restructuring effort.


USG CORP: PI Committee Gets Court's Nod to Hire Professor Warren
----------------------------------------------------------------
Judge Newsome approves Professor Warren's retention by the
Official Personal Injury Committee of USG Corporation nunc pro
tunc to September 12, 2001, as requested, dismissing objections
interposed by the U.S. Trustee.  Judge Newsome makes it clear,
however, that issues concerning the propriety, nature, and
extent of services and any fees paid will be subject to the fee
application process and may be revisited if any objection is
raised. (USG Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


US INDUSTRIES: Expects to File Form 10-K by January 14, 2002
------------------------------------------------------------
U.S. Industries, Inc., (NYSE:USI) announced that it has filed
with the Securities and Exchange Commission pursuant to Rule
12b-25, extending the filing date of its Annual Report on Form
10-K to Monday, January 14, 2002.

The Form 10-K is being delayed to allow the Company to update
its financial statements to give effect to a Disposal Plan of
five non-core businesses approved by the Company's Board of
Directors.

Following the completion of its Disposal Plan, U.S. Industries
will own several major businesses selling branded bath and
plumbing products, along with its consumer vacuum cleaner
company. The Company's principal brands will include Jacuzzi,
Zurn, Sundance Spas, Eljer, and Rainbow Vacuum Cleaners.

In addition, the Company stated in its filing that it expects to
report sales from continuing operations of $1.1 billion,
compared to $1.7 billion in the prior year, excluding sales of
$1.4 billion in both fiscal 2001 and 2000 related to the Non-
Core Assets and a loss from continuing operations for fiscal
2001 of $3.1 million (excluding $176.7 million in after-tax non-
recurring charges and credits, principally goodwill impairment
charges) compared to income of $59.2 million (excluding $20.5
million of after-tax non-recurring charges.) Including non-
recurring charges and credits, the loss from continuing
operations was $179.8 million in fiscal 2001, compared to income
of $38.7 million in fiscal 2000.

The net loss, including non-recurring charges and credits, was
$524.6 million for fiscal 2001, compared to net income of $35.6
million in fiscal 2000. Results for fiscal 2001 include the
estimated net loss on the disposals and in 2001 and 2002 the
related operating results of the discontinued operations of the
Non-Core Assets included in the Disposal Plan.

In connection with the Disposal Plan, the Company will report a
non-cash charge of $232.6 million which is equal to the
difference between the historical net carrying value and the
estimated net realizable value of five of the Company's
businesses, Ames True Temper, Selkirk, Lighting Corporation of
America, Spear and Jackson PLC, and SiTeco Lighting
(collectively the "Non-Core Assets"), and reflect the net assets
of the Non-Core Assets as Net Assets Held for Disposition. The
results of the Non-Core Assets will not be reflected in
continuing operations of the Company. If the Non-Core Assets
were included in continuing operations of the Company for the
2001 fiscal year, the Company would have had sales of $2.5
billion and income from continuing operations of $38.5 million
excluding net non-recurring charges of $321.6 million, compared
to sales of $3.1 billion and income from continuing operations
of $114.2 million for fiscal 2000, excluding net non-recurring
charges of $78.6 million.

The Company also stated that it plans to issue its customary
release with its annual earnings on Monday, January 14, 2002.

As previously announced, the sale of the Ames True Temper
business is expected to yield proceeds of approximately $165
million. The net proceeds from this transaction, which is now
anticipated to close in early January, will be used, pursuant to
the Waiver and Consent described below, to restore the Unfunded
Commitment used to satisfy the remaining December 31, 2001
Credit Facility amortization of approximately $58.0 million. The
Company has received a Waiver and Consent from the Lenders under
the Credit Facility whereby a payment in the amount of the
unpaid amortization will be made by a permanent reduction of the
Unfunded Commitments under the Facility. Upon the closing of the
Ames True Temper sale, the Company will be allowed to retain
proceeds in the identical amount of the unpaid amortization paid
for by the permanent reduction. The remaining net proceeds,
subject to post-closing adjustments, will be used to permanently
reduce outstanding debt under the Credit Facility and
approximately $40.0 million will be deposited in a cash
collateral account for the benefit of the holders of the
Company's Senior Notes due 2003 and 2006.

The Company continues to actively pursue its Disposal Plan and
also intends to seek a refinancing of its bank debt. However,
there can be no assurance when or whether the Company will
consummate any of the proposed transactions. If the Company is
unable to consummate asset disposals or refinancing in time to
meet scheduled amortizations, the Company expects to seek a
further restructuring of its credit facilities. While the
Company believes it should be possible to implement such a
further restructuring, there can be no assurance at this time
that it will be able to do so. As a result of such
uncertainties, the Company's independent auditor has advised the
Company that it may be necessary to include a qualification in
its report on the fiscal 2001 financial statements with respect
to the ability of the Company to continue as a going concern.


US MINERAL: Court Extends Plan Filing Exclusivity Until March 19
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extended
the Exclusive Periods for United States Mineral Products
Company. The Debtor's Exclusive Plan Filing Period is extended
through March 19, 2002 and the Exclusive Solicitation Period
runs through May 19, 2002.

United States Mineral Products Company filed for Chapter 11
Bankruptcy Petition in the U.S. Bankruptcy Court for the
District of Delaware on June 23, 2001. Aaron A. Garber, David M.
Fournier and David B. Stratton at Pepper Hamilton LLP represent
the Debtor in its restructuring efforts.


VENTAS: Wants More Investment from Shareholders & New Investors
---------------------------------------------------------------
Ventas, Inc., is offering the opportunity to participate in a
Distribution Reinvestment and Stock Purchase Plan available for
existing stockholders to increase their holdings of Company
common stock and for new investors to make an initial investment
in the Company's common stock.

Existing stockholders may elect to have cash distributions
automatically invested in additional shares of common stock.
Either an existing stockholder or a new investor may purchase
shares of common stock on a monthly basis with optional cash
payments at the market price of common stock less a discount
ranging between 0% and 5%. All purchases under the Plan are
subject to certain dollar limitations. The price of shares
purchased with reinvested dividends will be based on whether
shares are purchased directly from Ventas or through open market
purchases. If shares are purchased directly from the Company,
the price will be 100% (subject to change) of the average of the
high and low sales prices of the shares of common stock on the
New York Stock Exchange on the investment date. If the shares
are purchased through open market purchases, the price will be
the weighted average of the actual prices paid for all of the
shares of common stock purchased with all participants'
reinvested distributions for that particular distribution minus
brokerage commissions.

The offering relates to 25,000,000 shares of common stock, par
value $0.25 per share, to be offered for purchase under the
Plan. Ventas, Inc.'s common stock is listed on the New York
Stock Exchange under the trading symbol "VTR".  The closing
price of the common stock on December 20, 2001 was $11.85 per
share.

Brokers and nominees may reinvest distributions and make
optional cash payments on behalf of beneficial owners.
Enrollment in the Plan is entirely voluntary and investors may
terminate participation at any time. Under the Plan, Ventas will
receive proceeds from the sale of newly issued common stock but
will not receive any proceeds from open market sales.

Ventas, Inc. is a real estate investment trust whose properties
include 44 hospitals, 216 nursing facilities, and eight personal
care facilities in 36 states. The company was formed in 1998
when health care concern Vencor split into an operating company
(a new company, which took the Vencor named, now Kindred
Healthcare) and a real estate investment trust to own the
properties (Ventas, the original Vencor). Ventas owns 44 acute
care hospitals, more than 200 skilled nursing facilities, and
eight personal care facilities in 36 states. Nearly all of its
properties are leased to Kindred, one of the US's largest
providers of long-term health care. Kindred emerged from
bankruptcy in 2001; Ventas agreed to a reorganization plan
making it a 10%-owner of its primary tenant.


WINSLOEW FURNITURE: S&P Takes Low-B and Junk Ratings Off Watch
--------------------------------------------------------------
Standard & Poor's affirmed its single-'B' corporate credit,
single-'B' senior secured, and triple-'C'-plus subordinated debt
ratings on WinsLoew Furniture Inc., and removed them from
CreditWatch, where they were placed on November 15, 2001. This
rating action follows WinsLoew's announcement that its bankers
have approved an amendment to its credit agreement relaxing its
covenants.

The outlook is negative.

Total debt was $274.5 million as of September 28, 2001.

The ratings reflect Birmingham, Al.-based WinsLoew Furniture
Inc.'s highly leveraged capital structure and, as a manufacturer
of casual furniture, its vulnerability to economic downturns.
Somewhat mitigating these factors is the company's solid share
in its key markets.

WinsLoew is a designer, manufacturer, and distributor of casual
indoor and outdoor furniture, seating products, and ready-to-
assemble products for residential and commercial use. Standard &
Poor's assigns a higher level of business risk to furniture
manufacturers, since this industry is sensitive to economic
downturns and real estate development cycles.

WinsLoew's ability to provide timely delivery is a key
competitive advantage. The company's dedication to customer
service and build-to-order processes has enabled WinsLoew to
take market share from its competitors over the last few years
and to create strong relationships with its distributors and
retailers. This is especially important at the higher-end price
points where WinsLoew competes, since these products have short
selling seasons and retailers want to minimize their inventory.

Year-to-date operating results were below Standard & Poor's
expectations.  Pro forma for recent acquisitions, the firm's
sales fell over 9% for the nine months ended September 28, 2001.
The trend accelerated in the third quarter as casual furniture
and contract and hospitality product line sales, excluding
acquisitions, fell 24% and 10%, respectively, compared to the
prior year. The firm's weak results stemmed from the economic
slowdown, which was exacerbated by poor weather conditions. For
the first nine months of fiscal 2001, EBITDA declined 6%,
because of lower volumes and higher costs, as the company
integrated its newly acquired businesses.

For the past 12 months ended Sept. 28, 2001, the EBITDA coverage
of interest expense was 1.7 times, down from 2.0x the year
before. Total debt to EBITDA was 5.5x. Standard & Poor's expects
that EBITDA coverage will be below 2.0x over the near term.

                       Outlook: Negative

The outlook reflects Standard & Poor's expectation that WinsLoew
will maintain its solid market positions and credit measures
appropriate for the rating over time. However, if financial
ratios and flexibility further deteriorate, the ratings could be
lowered.


* DebtTraders' Real-Time Bond Pricing
-------------------------------------

Issuer               Coupon   Maturity   Bid - Ask Weekly change
------               ------   --------   --------- -------------
Crown Cork & Seal     7.125%  due 2002    67 - 69        +7
Federal-Mogul         7.5%    due 2004    12 - 14         0
Finova Group          7.5%    due 2009    38 - 39        +2
Freeport-McMoran      7.5%    due 2006    71 - 74         0
Global Crossing Hldgs 9.5%    due 2009     8 - 10        -1
Globalstar            11.375% due 2004     7 - 9       -0.5
Levi Strauss & Co     11.625% due 2008    88 - 90        +1
Lucent Technologies   6.45%   due 2029    66 - 68        -5
Polaroid Corporation  6.75%   due 2002     9 - 11         0
Terra Industries      10.5%   due 2005    77 - 80         0
Westpoint Stevens     7.875%  due 2005    33 - 36        +1
Xerox Corporation     8.0%    due 2027    55 - 57         0

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
http://www.debttraders.com

                           *********

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

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

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 http://www.debttraders.com/

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

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

                           *********

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

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

Copyright 2002.  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 ***