TCR_Public/020110.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 10, 2002, Vol. 6, No. 7


AMC ENTERTAINMENT: Moody's Rates New Senior Sub. Notes as Junk
ANC RENTAL: Lease Decision Deadline Hearing Set for January 23
ADVANTICA RESTAURANT: S&P Ratchets Junk Ratings Down Further
AFFINITY TECHNOLOGY: Must Restructure Finances to Remain Viable
AMES DEPT: US Trustee Amends Creditors' Committee Membership

ARMSTRONG HOLDINGS: Settles Legal Squabble with Congoleum Corp.
BETHLEHEM STEEL: Gets Approval to Sign-Up PricewaterhouseCoopers
BRILLIANT DIGITAL: Sets Special Shareholders Meeting for Feb. 20
BROADBAND WIRELESS: Commences Reorganization Under Chapter 11
CHIPPAC INC: Expects Revenues to Reach $76.5 Million in Q4 2001

CHIQUITA BRANDS: Court Approves Management Retention Program
CHIVOR S.A.: Default Unlikely to Impact AES Gener's Ratings
CLARENT CORP: Probe Uncovers Irregularities in Financial Results
CLARENT: Appoints New Board Members & Senior Management Officers
COMDISCO INC: Selling Interests in 3 Partnerships for $5 Million

COVENTRY HEALTH: S&P Assigns BB+ Counterparty Credit Rating
EMAGIN CORP: Net Loss Nearly Doubled to $42MM in Sept. Quarter
EMERITUS ASSISTED: Will Get Mortgage Financing on 3 Properties
ENRON CORPORATION: Seeks Injunction Against Utility Providers
ENRON CORP: Receives Bids for Majority Stake in Trading Business

EXODUS COMMS: Gets Go-Signal to Hire Lazard Freres as Advisor
FACTORY CARD: U.S. Trustee Wants Case Converted to Chapter 7
FEDERAL-MOGUL: Robins Cloud Seeks Expansion of Claimants' Panel
FORMICA CORP: Bringing In Lazard Freres as Restructuring Advisor
GENESIS HEALTH: MultiCare Seeks 4th Extension of Removal Period

INDIGO BOOKS: No Offers Received to Acquire Stores in Canada
INTEGRATED HEALTH: Committee Wants to Sue Directors & Officers
KMART CORP: Fitch Downgrades Ratings into Low-B Territory
KMART FUNDING: Fitch Drops Secured Lease Bonds to B+ from BB+
LODGIAN INC: Gets Okay to Pay Critical Service Providers' Claims

LUBY'S INC: Working Capital Deficit Widens to $11.4 Million
MARINER POST-ACUTE: Taps Jones Day Again as Litigation Counsel
MARINER POST-ACUTE: Omnicare Completes Acquisition of APS Assets
NORD PACIFIC: Seeks Funding to Redeem Tritton Proj. in Australia
OPTICARE HEALTH: Seeking Consents for Capital Restructuring

PACIFIC GAS: CPUC Wants to End Exclusivity & Propose a Plan
PILLOWTEX: Summary of Debtors' Joint Plan of Reorganization
PSINET: Intends to Sell Unit in Japan to C&W Entity for $10.2MM
RESOURCE RECOVERY: Case Summary & 20 Largest Creditors
SIMON WORLDWIDE: Gotham Int'l Discloses 7.51% Equity Interest

SIMONDS INDUSTRIES: S&P Cuts Ratings to D After Missed Payment
SUITE101.C0M: Considering Discussing Reorganization Transactions
TELIGENT INC: Investcorp Acquires ECI Business for $60 Million
TELSCAPE INT'L: Trustee Has Until March 20 to Decide on Leases
TRISM INC: Has Until January 17 to File Schedules and Statements

U.S. WIRELESS: Wants Exclusive Period Extended to March 28
UNITED DEFENSE: Fitch Ratchets Senior Secured Rating Up to BB
VALLEY MEDIA: Giordano DellaCamera Reports 8.94% Equity Holding
VECTOUR INC: Wants Removal Period Stretched Through May 14, 2002
ZEPHION NETWORKS: Case Conversion Hearing Scheduled For Jan. 15

* DebtTraders' Real-Time Bond Pricing


AMC ENTERTAINMENT: Moody's Rates New Senior Sub. Notes as Junk
Moody's Investors Service assigned a Caa3 rating to the proposed
new senior subordinated notes to be issued by AMC Entertainment
Inc.  The rating agency also confirmed its ratings on the
company's outstanding issues. The rating outlook remains stable
while there is approximately $1 billion of debt securities
affected, the international rating agency said.

Moreover, Moody's said that it assigned the ratings to reflect
the company's high financial leverage and low coverage of
interest by pre-rent cash flow. The ratings also incorporate
several risks that remain truly relevant to the industry as a

The stable outlook incorporates the company's planned equity
offering of 9 million common shares as recently announced.
Moody's believe that this offering will augment the new high
yield note issuance in support of the planned acquisition of GC
Companies. Likewise, it will create additional liquidity through
incremental availability under its revolver after temporary
repayments are made.

                         Rating Action

   * $425 million Guaranteed Senior
        Unsecured Revolver due 2004    - B3

   * $150 million of New Senior
        Subordinated Notes due 2012    - Caa3

   * $200 million of 9-1/2% Senior
        Subordinated Notes due 2009    - Caa3

   * $225 million of 9-1/2% Senior S
        Subordinated Notes due 2011    - Caa3

   * Senior Unsecured Issuer Rating    - Caa2

   * Senior Implied Rating             - B3

One of the largest movie theater exhibition companies in the
United States, AMC Entertainment with theaters located mostly in
the United States maintains its headquarters in Kansas City,

ANC RENTAL: Lease Decision Deadline Hearing Set for January 23
ANC Rental Corporation, and its debtor-affiliates seek an order
granting the Debtors an extension through confirmation of a plan
or plans of reorganization in the Debtors' chapter 11 cases of
the time within which the Debtors must elect to assume or reject
the Leases. The Debtors additionally request that such extension
of time be without prejudice to the right of any lessor to
obtain an order requiring the Debtors to assume or reject a
particular lease in a shorter time, upon a showing of good

During the first 60 days of these cases, Mark J. Packel, Esq.,
at Blank Rome Comiskey & McCauley LLP in Wilmington, Delaware,
relates that the Debtors have been focusing their efforts on
stabilizing operations, obtaining approval of their initial and
subsequent post-petition financings and dealing with a myriad of
other pressing matters. The Debtors require an extension of time
to analyze the Leases and to avoid what would be either a
premature assumption or rejection of the Leases.

Mr. Packel submits that the Debtors' decision to assume or
reject a particular Lease, and the timing of such assumption or
rejection, depends in large part on whether the location which
relates to the Lease will play a future role in the Debtors'
operations going forward. At this early stage, the Debtors have
not yet determined whether each of these locations will play a
role in the Debtors' future operations. Moreover, that the
Debtors also need to consider and determine whether there is
value for the Debtors in assigning certain Leases rather than in
simply rejecting them. Mr. Packel believes that such decisions
cannot be made properly and responsibly in these cases without
an extension of the time within which such leases must either be
assumed or rejected. Several agreements have already been
rejected and Debtors will continue to do so as their role in the
reorganization becomes clear.

Due to the size, nature, and complexity of the Debtors chapter
11 cases and given the number of issues confronting the Debtors,
Mr. Packel contends that it is not possible for the Debtors to
determine whether to assume or reject all of the Leases at this
time. Over the course of these cases, the Debtors intend to
constantly reevaluate each different location to determine its
future role in the Debtors' operations. In addition, the Debtors
will determine which, if any, of the Leases can be consolidated
with another Lease to effect cost savings. If the Debtors are
forced to make the determination whether to assume or reject the
Leases now, or in the near term, Mr. Packel fears that they
could be compelled to make an imprudent determination that would
negatively effect their ability to reorganize successfully.
Therefore, the Debtors request an extension through confirmation
of a plan or plans of reorganization of the time within which
they must elect to assume or reject the Leases.

Absent an extension of the time to assume or reject the Leases,
Mr. Packel states that the Debtors will be forced to make
determinations regarding the Leases without the opportunity to
make a prudent determination as to whether the assumption or
rejection of each Lease is warranted. Such a result would put
the Debtors at risk of either assuming Leases prematurely, and
thereby creating unnecessary administrative expense claims, or
rejecting Leases that could prove to be valuable, either for the
Debtors' businesses or because such Leases could be profitably
assumed and assigned.

A hearing on this motion is scheduled for January 23, 2002. (ANC
Rental Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

ADVANTICA RESTAURANT: S&P Ratchets Junk Ratings Down Further
Standard & Poor's lowered its rating on Advantica Restaurant
Group Inc.'s $529.6 million 11.25% senior unsecured notes due
2008 to single-'C' from triple-'C'-plus and lowered its
corporate credit rating to double-'C' from single-'B' and its
senior secured bank loan rating to triple-'C'-plus from single-
'B'. All ratings were placed on CreditWatch with negative

The downgrade is based on Advantica's announcement that the
company will exchange up to $204.1 million of new 12.75% senior
notes for $265 million of existing 11.25% senior notes for $770
in principal for each $1,000 in principal. On completion of the
transaction, Standard & Poor's expects to lower the rating on
the senior unsecured notes to 'D'.

According to Standard & Poor's criteria, a default includes an
exchange offer in which the total value of securities and cash
offered is materially less than the originally contracted
amount. In addition, this offer is deemed coercive because the
unexchanged old notes will be structurally subordinated to the
new notes; therefore, the refusal to accept the offer could lead
to an even worse alternative for the noteholders.

Similarly, the corporate credit rating on Advantica would be
lowered to 'SD' (selective default) on completion of the
exchange offer. Standard & Poor's criteria requires a selective
default rating when an issuer defaults on one class of
obligations but continues to honor others.

DebtTraders reports that Advantica Restaurant Group's 11.250%
bonds due 2008 (ADVRES1) are currently trading between 69 and
71. For real-time bond pricing, see

AFFINITY TECHNOLOGY: Must Restructure Finances to Remain Viable
To date, Affinity Technology Group, Inc. has generated
substantial operating losses, has experienced an extremely
lengthy sales cycle for its products and has been required to
use a substantial amount of existing cash resources to fund its
operations. The Company has taken certain measures to increase
and preserve its cash resources. These measures include the
issuance of a $1 million note in July 2001, the placement of a
$1 million convertible debenture in November 2000, and a 33%
reduction in its work force in March 2001. The Company believed
that existing cash and internally generated funds would be
sufficient to fund its operations for the remainder of 2001.
However, the Company may have encountered unexpected expenses,
the loss of anticipated revenues and other developments that may
have impacted the Company's ability to fund operations for all
of 2001. To remain viable, the Company must substantially
increase its revenues, raise additional capital, or
significantly reduce its operating expenses. To maintain the
minimal resources necessary to support its current operations
and business lines, the Company does not believe that
substantial additional reductions in its operating expenses are
feasible. No assurances can be given that the Company will be
able to increase revenues, raise additional capital, or
significantly reduce its operating expenses in a manner that
will allow it to continue its operations.

The Company's revenues for the three and nine months ended
September 30, 2001 were $1,097,803 and $3,011,550, respectively,
compared to $446,352 and $1,478,731 for the corresponding
periods of 2000.  However, the Company has generated net losses
of $66,071,034 since its inception and has financed its
operations primarily through net proceeds from its initial
public offering in May 1996. Net proceeds from the Company's
initial public offering were $60,088,516. In July 2001, the
Company issued a $1 million note, secured by the common stock of
its subsidiary, Surety Mortgage, Inc.  Additionally, in 2000 the
Company sold 484,848 shares of its common stock for $500,000 and
issued a $1 million convertible debenture.

AMES DEPT: US Trustee Amends Creditors' Committee Membership
The United States Trustee for Region II amends her appointment
of creditors to the Official Committee of Unsecured Creditors of
Ames Department Stores, Inc., to include GMAC Commercial Credit
LLC.  The Official Committee of Unsecured Creditors is now
composed of:

       A. The Chase Manhattan Bank, Indenture Trustee
          Institutional Trust Services
          450 West 33rd Street, 15th Floor
          New York, New York 10001
          Attention: Mr. James R. Lewis, Vice President

       B. Mr. Paul K. Miller
          606 24th Ave. So., Ste. B-12
          Minneapolis, MN 55454

       C. GSC Partners
          500 Campus Drive, Suite 220
          Florham Park, NJ 07932
          Attention: Mr. Bradley Kane

       D. State Street Bank and Trust Co., Indenture Trustee
          2 Avenue de Lafayette
          Boston, MA 02111
          Attention: Ms. Laura L. Moran, Assistant Vice President

       E. Sara Lee Knit Products
          Retail Credit Department
          P.O. Box 2996
          Winston-Salem, NC 27102
          Attention: Mr. Grey Loggins, Credit Department

       F. VF Jeanswear LP
          400 North Elm Street
          Greensboro, NC 27401
          Attention: Mr. Michael Durant

       G. Hasbro, Inc.
          P.O. Box 200
          200 Narragansett Park Drive,
          Pawtucket, RI 02862-0200
          Attention: Ms. Judith A. Smith, VP & Assistant

       H. Arlee Home Fashions, Inc.
          261 Fifth Avenue
          New York, NY 10016
          Attention: Mr. Arnold Frankel, Chairman, CEO

       I. Thomasville Furniture Industries, Inc.
          401 East Main Street
          P.O. Box 339
          Thomasville, NC 27361-0339
          Attention: Mr. D. Paul Dascoli, Senior VP, CFO

       J. Sunbeam Corporation
          2381 Executive Center Dr.
          Boca Raton, FL 33446
          Attention: Mr. Douglas Ernst, VP - Financial Services

       K. American Greetings
          One American Road
          Cleveland, OH 44144
          Attention: Mr. Art Tuttle

       L. International Business Machines Corporation
          North Castle Drive
          Armonk, NY 10504
          Attention: Mr. David Karchere, Program Manager

       M. Footstar, Inc.
          One Crosfield Avenue
          West Nyack, NY 10994

       N. Kovoner/Rosen Interests
          P.O. Box 4054
          Farmington, CT 06034-4054
          Attention: Mr. R. Michael Goman, President

       O. GMAC Commercial Credit LLC
          One Pennsylvania Plaza, 9th Floor
          New York, New York 10119
          Attention: Mr. Cedric G. Williams, Vice President

(Ames Bankruptcy News, Issue No. 11; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

ARMSTRONG HOLDINGS: Settles Legal Squabble with Congoleum Corp.
Armstrong Worldwide, Inc., asks Judge Newsome for his
authorization and approval of a settlement with Congoleum
Corporation concluding non-bankruptcy litigation over certain
marketing which AWI used in which it compared its products to
those of Congoleum on a "rip tear and gouge" test.

                      The Congoleum Litigation

Debra A. Dandeneau, Esq., at Weil, Gotshal & Manges explains
that AWI uses various marketing techniques to promote its
"ToughGuard" vinyl flooring product line. One marketing
technique involves conducting performance tests using ToughGuard
products and a variety of competing vinyl flooring products,
including competing products manufactured by Congoleum. As a
result of such performance tests AWI's advertising and
promotional materials have represented that the performance
tests demonstrate that ToughGuard products are superior to the
competing products, including the Congoleum products. The
ToughGuard products include "Initiator," "Memories,"
"Starstep(R)," and "Rhythm(R)" vinyl flooring products.  The
Congoleum Products that were tested against AWI's ToughGuard
products include "Valuflor(R)," "Diamondflor(R)," Ultraflor(R),"
and "ArmorBright" vinyl flooring products.

On or about February 16, 2000, Congoleum filed a lawsuit in the
United States District Court for the District of Massachusetts
against AWI.  In the complaint, Congoleum alleged that AWI
violated the Lanham Act because AWI's advertising and
promotional materials allegedly contained false and/or
misleading information about the Congoleum products.
Specifically, Congoleum alleged in its complaint that the
product comparisons in certain AWI advertising and promotional
materials misrepresented the nature, characteristics, and
qualities of the Congoleum products by improperly portraying the
Congoleum products as the worst performing of the competing
products in performance tests conducted by AWI. In addition,
Congoleum alleged that AWI engaged in unfair competition under
common law and unfair or deceptive acts or practices under
Massachusetts law.  Congoleum sought injunctive relief,
compensatory damages, treble damages, corrective advertising,
and recovery of its attorney's fees and costs.

On April 28, 2000, AWI filed an answer denying the material
allegations of the complaint and asserting numerous affirmative
defenses. The Congoleum litigation was stayed as a result of the
commencement of AWI's Chapter 11 case.

On or about August 31, 2001, Congoleum filed a proof of claim
against AWI's estate.  The Congoleum Proof of Claim was filed by
Congoleum to ensure that any favorable judgment obtained by
Congoleum in the action would be recognized as a valid claim.
Specifically, in the Congoleum Proof of Claim, Congoleum
asserted a claim in the amount of not less than $2,000,000.00
for any damages arising in connection with the action.

                   The Congoleum Settlement Agreement

Following the filing of the answer, AWI and Congoleum engaged in
settlement negotiations in an effort to resolve the Congoleum.
litigation. As a result of such good faith, arms-length
negotiations, AWI and Congoleum entered into a settlement
agreement and mutual release on or about August 28, 2001.  The
principal terms of the Congoleum settlement are:

        (1) Congoleum will release, acquit, and forever discharge
AWI, and AWI will release, acquit, and forever discharge
Congoleum, from any and all known or unknown claims that
Congoleum or AWI

              (i) alleged or could have alleged (whether known or
unknown) as a result of the acts, omissions, occurrences, and
events set forth in Congoleum's complaint, and

              (ii) now have or may have in the future on account
of alleged false or misleading representations in AWI's
advertisements or promotional materials that were published
prior to the date of the Congoleum Settlement.

        (2) The Congoleum settlement does not constitute an
admission of liability by any party to any other party.

        (3) With the exception of certain disclosures that may be
made to third parties in connection with the Congoleum
Settlement, the terms and conditions of the Congoleum Settlement
shall remain confidential as between AWI and Congoleum and their
respective counsel, and are filed with this Court under seal.
The Congoleum Settlement will be submitted to the U.S. Trustee
and made available to each of the Committees on a confidential
basis, and a copy will be submitted to the Court under seal in
connection with the Seal Motion. The Permitted Disclosures

              (i) a statement disclosing that the Congoleum
litigation has been settled, but that a confidentiality
agreement prevents AWI and Congoleum from disclosing the details
of such settlement, and

              (ii) a joint statement that may be distributed in
its totality to third parties concerning the resolution of the
Congoleum Litigation. The Joint Statement is:

        Congoleum and Armstrong announce the settlement of the
lawsuit entitled Congoleum Corporation vs. Armstrong World
Industries. This settlement is not an admission of liability by
any party to the other party.

        Congoleum claimed that photographs in certain trade
advertising and promotional materials of Armstrong portrayed
Congoleum as the worst performing of several products in rip,
tear, gouge tests conducted by Armstrong. Armstrong acknowledges
that it was not the intention of these materials to suggest that
Congoleum's products performed worse than all other products in
the rip, tear, gouge tests. In fact, in many instances, the
Congoleum product performed better than other competitive
products portrayed in these promotional materials. Rather. the
intention was to show that the rip, tear, gouge tests
demonstrated the superiority of ToughGuard. Armstrong regrets
any harm that may have been caused to Congoleum.

        (4) Upon Court approval of the Congoleum Settlement, AWI
and Congoleum will prepare and execute all pleadings necessary
to dismiss the Congoleum litigation with prejudice.

Ms. Dandeneau argues that the Congoleum settlement is in the
best interests of creditors because it resolves the dispute on a
consensual basis.  AWI assures Judge Newsome it believes it has
a strong defense against Congoleum's accusations, but it
recognizes that litigation is always fraught with uncertainty.
The issues raised in this dispute are complex and fact-
intensive, so it is not possible to predict with any certainty
how a court might ultimately rule.  Based on these factors,
it is impossible to forecast whether AWI ultimately would
prevail in litigation against Congoleum.  Approval of this
settlement will eliminate any risks and uncertainty that is
associated with such litigation.

If AWI were required to defend against Congoleum's allegations,
AWI would be required to expend substantial time and legal
expense without the assurance of obtaining a better result.
Although Congoleum does not seek specified damages in its
complaint, the Congoleum proof of claim indicates that the total
amount of Congoleum's claim is "not less than $2,000,000, plus
unvalued injunctive relief.  AWI estimates that the cost of
defending against Congoleum's claims could be "substantial".
These legal expenses would constitute administrative costs that
would diminish AWI's chapter 11 estate.  In the absence of any
counterclaims against Congoleum, AWI does not believe that the
substantial fees and expenses associated with litigating
Congoleum's claims to their conclusion are reasonable.

Finally, AWI believes that approval of this settlement is in the
best interests of its creditors.   This settlement will enable
AWI to end the Congoleum litigation without expending any funds
or incurring the administrative expenses associated with
litigation.  Because these claims will be finally settled and
forever barred, the claims against AWI will be reduced by at
least $2,000,000 as a result.  Thus approval of this settlement
increases potential distributions available to AWI's creditors,
as well as the likelihood that AWI's creditors will be able
to receive a distribution immediately upon the effective date of
the plan.  AWI therefore believes, in what it describes as the
"exercise of its sound business judgment", that this settlement
should be approved. (Armstrong Bankruptcy News, Issue No. 15;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

BETHLEHEM STEEL: Gets Approval to Sign-Up PricewaterhouseCoopers
Bethlehem Steel Corporation and its debtor-affiliates want to
employ and retain PricewaterhouseCoopers, a limited liability
partnership comprised of experienced certified public
accountants and consultants, to provide professional services in
the areas of accounting, auditing, tax, and other related
consulting services in these Chapter 11 cases.

Jeffrey L. Tanenbaum, Esq., at Weil, Gotshal & Manges LLP, in
New York, New York, tells the Court that PricewaterhouseCoopers
has rendered extensive accounting and auditing and certain tax
advisory and related services to the Debtors prior to Petition
Date.  That's why, Mr. Tanenbaum explains,
PricewaterhouseCoopers is familiar with the Debtors' operations,
management and accounting procedures, and can render the
services for which the Debtors seek to retain
PricewaterhouseCoopers most effectively and efficiently.
Accordingly, Mr. Tanenbaum asserts that PricewaterhouseCoopers
is well qualified to perform the accounting, auditing and tax
advisory services for which they are sought to be retained.

Specifically, Mr. Tanenbaum notes that the scope of
PricewaterhouseCoopers' retention includes, but not limited to:

     (i) Audits of the financial statements of the Debtors as may
         be required from time to time and assistance in the
         preparation and filing of financial statements and
         disclosure documents required by the Securities and
         Exchange Commission, including Forms 10-K and 10-Q as
         required by applicable law, or as requested by the

    (ii) Audits of the Debtors' benefit plans as may be required
         by the Department of Labor or the Employee Retirement
         Income Security Act, as amended;

   (iii) Advice and assistance regarding tax issues, including
         assistance in the preparation, review and/or filing of
         tax returns as well as other tax advice and assistance
         as needed and requested by the Debtors; and

    (iv) Performance of other accounting services requested by
         the Debtors as may be necessary or desirable.

In connection with the annual audit services, Mr. Tanenbaum
informs Judge Lifland that the Debtors and
PricewaterhouseCoopers have agreed to a fixed fee of $860,500
for the audits of the Debtors' financial statements for the year
ended December 31, 2001 and the related quarterly reviews, as
well as the audits of employee benefit plans for 2000 and
certain other special reporting requirements.  To date, Mr.
Tanenbaum reports that $669,500 has been paid to
PricewaterhouseCoopers related to these auditing services.  "The
completion of such services will require the Debtors to pay an
additional $191,000, plus related out-of-pocket expenses, for
post-petition services," Mr. Tanenbaum says. For the Fixed Fee
Services, Mr. Tanenbaum continues, PricewaterhouseCoopers
intends to include as an exhibit to each of its interim fee
applications a summary (in reasonable detail) of the amount of
time spent by its professionals on various tasks in lieu of
contemporaneous time records in partial hour increments.  Both
parties contend that the fixed fee is reasonable, customary, and
at market rate for services of this nature.

PricewaterhouseCoopers advises the Debtors that the firm intends
to apply to the Court for allowances of compensation and
reimbursement of expenses for all other accounting, tax and
related support services.

James G. Kaiser, a partner of PricewaterhouseCoopers LLP,
reports that the range of current hourly rates charged by
PricewaterhouseCoopers' professionals assigned to this
engagement are:

        Partners                          $500 - $595
        Managers/Directors                $275 - $495
        Associates/Senior Associates      $140 - $325
        Administrative/Para-professional   $85 - $150

Mr. Kaiser emphasizes that these hourly rates are adjusted
annually.  Both parties maintain that these hourly rates are
consistent with market rates for comparable services.

In addition, Mr. Kaiser relates that PricewaterhouseCoopers will
also seek reimbursement for its reasonable out-of-pocket
expenses, which include travel, lodging, report production,
delivery services and other necessary costs incurred in
providing services to the Debtors.

According to Mr. Kaiser, PricewaterhouseCoopers' professionals
have conducted a review of its professional contacts or
connections with the Debtors, their affiliates and certain
entities holding large claims against the Debtors that were
reasonably known to PricewaterhouseCoopers' professionals.

PricewaterhouseCoopers discloses that it has provided and likely
will continue to provide services unrelated to the Debtors'
chapter 11 cases for its various clients.  "To the best of my
knowledge, no services have been provided to these entities or
other parties in interest which could impact their rights and
obligations with respect to the Debtors, their estates or these
chapter 11 cases, nor does PricewaterhouseCoopers' involvement
in these cases compromise its ability to continue such auditing,
tax and/or consulting services," Mr. Kaiser asserts.

Mr. Kaiser informs Judge Lifland that only two entities exceed
1% of PricewaterhouseCoopers' U.S. annual revenues.  "Those
entities, J. P. Morgan Chase & Co. and Bank of America, each
represented 1.2% of the PricewaterhouseCoopers' U.S. revenues
during the 2001 fiscal year," Mr. Kaiser reports.  According to
Mr. Kaiser, the primary services to each of these entities were
audit, tax, information system and other services, unrelated to
the Debtors and these chapter 11 cases.  Mr. Kaiser contends
that PricewaterhouseCoopers has provided and likely will
continue to provide services unrelated to the Debtors' chapter
11 cases for these entities.  "In the event that an actual
conflict arises with respect to J.P. Morgan Chase & Company or
Bank of America and PricewaterhouseCoopers' role in these cases,
the Debtors would employ other accountants or advisors or refer
such matters to accountants or advisors that have already been
retained in these cases," Mr. Kaiser explains.

Furthermore, Mr. Kaiser maintains that PricewaterhouseCoopers is
not a "creditor" of any of the Debtors.  To the extent any of
the Debtors owed any pre-petition fees to PricewaterhouseCoopers
for services rendered, Mr. Kaiser says, PricewaterhouseCoopers
agrees to waive any claim with respect to any such unpaid fees.

"To the best of my knowledge, PricewaterhouseCoopers is a
"disinterested person" as that term is defined in section
101(14) of the Bankruptcy Code," Mr. Kaiser assures the Court.

If any new relevant facts or relationships are discovered during
PricewaterhouseCoopers' update of its relationship database
search, Mr. Kaiser promises that the firm will promptly file a
supplemental affidavit disclosing all such facts and

Moreover, Mr. Tanenbaum states that the Debtors and
PricewaterhouseCoopers have agreed, subject to the Court's
approval of this Application, that:

   (i) any controversy or claim with respect to, in connection
       with, arising out of, or in any way related to this
       Application or the services provided or to be provided by
       PricewaterhouseCoopers to the Debtors as outlined in this
       Application, including any matter involving a successor in
       interest or agent of any of the Debtors or of
       PricewaterhouseCoopers, shall be brought in the Bankruptcy
       Court for the Southern District of New York or the
       District Court for the Southern District of New York, if
       such District Court withdraws the reference;

  (ii) PricewaterhouseCoopers and the Debtors, and any and all
       successors and assigns thereof, consent to the
       jurisdiction and venue of such court as the sole and
       exclusive forum (unless such court does not have or retain
       jurisdiction over such claims or controversies) for the
       resolution of such claims, causes of actions or lawsuits;

(iii) PricewaterhouseCoopers and the Debtors, and any and all
       successors and assigns thereof, waive trial by jury, such
       waiver being informed and freely made;

  (iv) if the Bankruptcy Court, or the District Court if the
       reference is withdrawn, does not have or retain
       jurisdiction over the foregoing claims and controversies,
       PricewaterhouseCoopers and the Debtors, and any and all
       successors and assigns thereof, will submit first to non-
       binding mediation; and, if mediation is not successful,
       the parties will submit to binding arbitration, in
       accordance with the dispute resolution procedures; and

   (v) judgment on any arbitration award may be entered in any
       court having proper jurisdiction.

Thus, the Debtors seek the Court's approval to employ
PricewaterhouseCoopers pursuant to this agreement.

Further, Mr. Tanenbaum relates, PricewaterhouseCoopers has
agreed not to raise or assert any defense based upon
jurisdiction, venue, abstention or otherwise to the jurisdiction
and venue of the Bankruptcy Court or the District Court to hear
or determine any controversy or claims arising out of this

                        *     *     *

After due deliberation, Judge Lifland approves the Debtors'
application.  The Court rules that all compensation and
reimbursement of expenses paid to PricewaterhouseCoopers,
including, for the fixed fee services described in the
application in an amount of up to $191,000, shall be subject to
prior Court approval. (Bethlehem Bankruptcy News, Issue No. 8;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

BRILLIANT DIGITAL: Sets Special Shareholders Meeting for Feb. 20
A Special Meeting of Stockholders of Brilliant Digital
Entertainment, Inc. will be held at the Hilton Hotel, 6360
Canoga Avenue, Woodland Hills, California 91367, on Wednesday,
February 20, 2002 at 10:30 a.m., Pacific Standard time. The
Special Meeting is being held for the following purpose:

      To approve an amendment to the Amended and Restated
Certificate of Incorporation of the Company to increase the
aggregate number of shares of common stock of the Company, par
value $0.001 per share authorized for issuance from 30,000,000
shares to 150,000,000 shares.

Only stockholders of record of the common stock of the Company
at the close of business on December 24, 2001 are entitled to
notice of, and to vote at, the Special Meeting and at any of its
adjournments or postponements.

                          *   *   *

As reported in the Dec. 12, 2001 edition of Troubled Company
Reporter, Brilliant Digital's Board had considered that due to
the difficulty to immediately attract other equity investments,
debt financings, or strategic partnership transactions, its was
foreseen that the company's financial condition could worsen,
and thus would be unable to continue as a going concern, and
forced to seek steps to protect its assets for the benefit of
the company's creditors.

Thus, the Board asserted that "given [its] current lack of
financing alternatives and our immediate need for capital, [its]
Board is not aware of any material controversy among
stockholders regarding the Transaction and believes the
Transaction is necessary to ensure [its] continuing viability."

Brilliant Digital Entertainment, Inc. (Amex: BDE) is a leading
developer of real-time 3D technology for rich media content
creation, distribution and ad serving for the Internet.  It
sells its b3d Studio content creation and authoring toolset to
enable the creation and delivery of interactive, streaming,
real-time 3D graphics over the Internet, and licenses its ad
serving technology to the content and advertising communities.
The b3d Studio toolset is used by studios, production houses,
web content suppliers and advertising agencies to produce
entertainment, advertising and music content for consumers
distributed over the Internet.  Brilliant also licenses its
Brilliant Banner ad serving technology to the web based
advertising industry. Brilliant produces real-time-3D digitally
animated interactive titles featuring popular characters such as
Superman, Xena, KISS and Ace Ventura, and music artists such as
DMX, Ja Rule, Sum 41 and Ludacris.  Developed using Brilliant's
proprietary suite of b3d software tools, these full-screen
productions have small files for faster downloads.  Content is
distributed broadly via Internet syndication to partners
including Warner Bros. Online,, Road Runner and
Find out more at

BROADBAND WIRELESS: Commences Reorganization Under Chapter 11
Broadband Wireless International Corporation (OTC Bulletin
Board: BBAN) announced the company has entered Chapter 11
Reorganization following the exit from the Federal Receivership
and the dismissal of actions by the SEC.  The SEC filed a motion
on December 12 with the Federal Court requesting the pending
actions against Broadband Wireless be dismissed.  The court
issued its final order approving the motion and removed the
Temporary Receiver on December 21st.  The application to
reorganize was filed on December 27 by the firm of Kline, Kline,
Elliott, Castleberry & Bryant, P.C., on behalf of the company.

"We are extremely excited about the events that have occurred
over the last 30 days and look forward to the reorganization
process finalizing in the near future.  The reorganization is an
essential part of the company putting a final closure to the
actions of past officers and directors that caused the SEC to
place the company in receivership in August of 2000," commented
BBAN President, Dr. Ron Tripp.

In December of 2000 a new Board of Directors was installed
consisting of Mr. Albie Shaffer, Chairman, Mr. Bill Higgins, and
Dr. Tripp.  The court approved an application by the Board to
move into operations in February 2001. The company continues to
provide wireless service to financial institutions and the
Native American market.  In November, Broadband Wireless
released its nationwide ISP, bbanonline, and subsequently signed
a letter of intent and definitive agreement for acquisition of
EDTV of Las Vegas, Nevada.  EDTV utilizes a methodology of
marketing, Extreme Niche Targeting, combining multiple
technologies and communications media, providing artists,
athletes, labels, advertisers and consumer product manufacturers
direct contact with the targeted niche market.  Email, websites,
interactive games, and identity ISPs are the primary delivery

Tripp further stated, "The reorganization will allow us to move
forward and prepare to finalize the acquisition of EDTV.  The
primary need of the reorganization is to remove any possible
contingent liability created by the actions of those individuals
who allegedly violated SEC rules and regulations prior to August
of 2000.  In reorganization we will have the opportunity to
bring those issues created by Mr. Knight and others to closure
once and for all.  The company is currently in the process of
finalizing the disclosure statement and business plan that will
be distributed to shareholders for review and approval.  With
the support of the shareholders, Broadband Wireless will have an
opportunity to exit reorganization, complete the acquisition and
focus on the EDTV, ISP, and wireless service products that we
currently offer."

CHIPPAC INC: Expects Revenues to Reach $76.5 Million in Q4 2001
ChipPAC, Inc., (Nasdaq: CHPC) confirmed that it expects revenue
of approximately $76.5 million for the fourth quarter ended
December 31, 2001, which represents an increase from the
company's reported revenue of $74.6 million for the third
quarter ended September 30, 2001.  The company expects to report
a pro-forma net loss for the fourth quarter of $0.22 per share,
which is ahead of the First Call analyst consensus of $0.23.

ChipPAC is one of the world's largest and most diversified
providers of semiconductor assembly and test services.

On November 1, 2001, ChipPAC indicated it believed revenues for
the fourth quarter ending December 31, 2001 would be flat to up
5% from the preceding third quarter, with a pro-forma net loss
in the range of ($0.24) to ($0.22) per share.  This excludes the
previously announced planned restructuring charges and an asset
write-down which are designed to return the company to
profitability in the second half of 2002 based on improving
industry volume and a lower corporate cost structure.

Dennis McKenna, Chairman and Chief Executive Officer of ChipPAC,
Inc. commented, "We are seeing generally favorable trends with
unit volumes beginning to improve and the rate of selling price
declines decreasing.  We are also pleased with our continued
progress on reducing our cost structure and further
rationalizing our global asset base.  We are confident that our
actions have put our company in a stronger competitive position.
Overall, we have a positive view for ChipPAC in 2002."

ChipPAC will review detailed fourth quarter 2001 results and
guidance for the first quarter 2002 on Friday, February 1st at
5PM EST.  The conference call-in number is 212-346-0241.  A
replay will be available from 7PM EST on February 1st through
7PM EST, February 8th.  The replay number is 800-633-8284
(domestic) or 858-812-6440 (international).  The confirmation
number is 20133102.  The live call and replay will also be
accessible over the web at

ChipPAC is a full-portfolio provider of semiconductor packaging
design, assembly, test and distribution services.  The company
combines a history of innovation and service with more than a
decade of experience satisfying some of the largest -- and most
demanding -- customers in the industry.  With advanced process
technology capabilities and a global manufacturing presence
spanning Korea, China, Malaysia and the United States, ChipPAC
has a reputation for providing dependable, high quality
packaging solutions.  For more information, visit the company's
Web site at

ChipPAC is a full-portfolio provider of semiconductor package
design, assembly, test and distribution services. As of
September 30, 2001, the company sustained strained liquidity,
with current liabilities exceeding current assets by about

CHIQUITA BRANDS: Court Approves Management Retention Program
Chiquita Brands International, Inc., asks Judge Aug to approve
its management retention program.

Kim Martin Lewis, Esq., at Dinsmore & Shohl, in Cincinnati,
Ohio, explains that it is imperative for the Debtor to stabilize
its workforce at this point in their Chapter 11 case.  "This is
to ensure that the necessary complement of employees required to
proceed with the Debtor's reorganization are in place," Ms.
Lewis adds.  Ms. Lewis further tells the Court that this program
is a modification of the Debtor's regular management incentive
program for 2002 and is targeted at approximately 62 key
employees.  "During this chapter 11 case, an important element
of the Debtor's successful restructuring is its employees," Ms.
Lewis asserts.  This proposed management retention program is
designed to:

      (1) assist the Debtor's retention of the services of its
          employees by providing financial incentives,

     (ii) protect the Debtor's investment in human capital during
          this chapter 11 case, and,

    (iii) help the Debtor's achieve a successful restructuring.

Ms. Lewis informs the Court that the Debtor's senior management
has developed a management retention program, which has been
approved by the Debtor's Board of Directors.  The Management
Incentive Program provides for annual bonus payments to
employees at the manager level and above.  "These bonuses are
based on the Debtor's operating performance in connection with
the respective key employee's performance achievements.  It is
payable early in the year following the year in which the
performance achievements are reviewed," Ms. Lewis explains.
This Management Incentive Program is a merit based incentive
program. In accordance with the Debtor's Management Incentive
Program, each key employee has an annual target bonus amount,
which is expressed as a percentage of the base salary.

Ms. Lewis relates that the program is designed to reward key
employees who remain with the Debtor throughout the
restructuring.  "An employee must be actively employed at the
time program bonuses are paid in order to qualify for an award,"
says Ms. Lewis.  Ms. Lewis further states that 50% of the Target
Award for each eligible employee will be earned on the later of
June 30, 2002 or 90 days after the Debtor emerges from its
chapter 11 proceeding -- Earned Date.  According to Ms. Lewis,
the amount earned as of the Earned Date will constitute a
retention incentive and will not be conditioned on any rating of
the Key Employee dictated by the 2002 Management Incentive
Program, or any other criterion, other than continuing full-time
employment with the Debtor of its subsidiaries through the
Earned Date.  This Early Payment will be paid promptly after the
Earned Date.  Ms. Lewis relates that at the end of year 2002,
all participant employees will be rated in conformity with the
Debtor's procedures and the Key Employee's approved annual 2002
Management Incentive Program bonus will be reduced by the amount
of the corresponding Early Payment.  "Final payment of each 2002
Management Incentive Program award, if any, will be paid in
early 2003," Ms. Lewis informs Judge Aug.  In essence, Ms. Lewis
notes, the payment under the Program is simply an advance of 50%
of the annual bonus under the 2002 Management Incentive Program.
As a result of the credit, Ms. Lewis says, the Program will not
raise the overall costs of the Debtor's traditional Management
Incentive Program for the year 2002, except:

     (i) to the extent Key Employees terminate their employment
         relationship with the Debtor after having received the
         Early Payment but before a date upon which they would
         otherwise be eligible to receive the normal end-of-year
         Management Incentive Program, or

    (ii) to the extent a Key Employee's 2002 Management Incentive
         Program Award would have been less than the applicable
         Early Payment made on the Earned Date.

Ms. Lewis reports that the estimated maximum cost of the Early
Payments to be made under the Program to Debtor employees will
be approximately $1,500,000.

Ms. Lewis asserts that the implementation of the management
retention program will accomplish a sound business purpose and
maximize the value of the Debtor's estate.  "Key employees are
intimately familiar with the Debtor's business and if any of
these employees are lost, it will be difficult and expensive for
the Debtor to get qualified replacement," Ms. Lewis justifies.
Moreover, if key employees will leave the Debtor, Ms. Lewis
fears that the Debtor's operations will suffer greatly.

                        *    *    *

After due deliberation, Judge Aug grants the Debtor's management
retention program. (Chiquita Bankruptcy News, Issue No. 4;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

CHIVOR S.A.: Default Unlikely to Impact AES Gener's Ratings
Fitch views the recent payment default by Chivor S.A., an asset
of AES Gener S.A., on a bullet maturity of an international
syndicated bank loan as credit neutral to AES Gener.

The bank loan is non-recourse to AES Gener and potential
covenant violations with AES Gener and its other assets appear
manageable at this time. Late last month, Chivor S.A. was unable
to refinance an international syndicated bank loan in the
Colombian local bank and capital markets on time due to market
conditions and timing.

Chivor is currently seeking to negotiate an extension of its
existing debt, primarily the bank loan of US$336 million, to
provide the company with ample time to re-launch and/or seek
alternative financing options. Despite the missed payment,
Chivor continues to generate positive cash flow and has a solid
business position; cash flow is currently more than sufficient
to service interest expense.

Fitch's current 'BBB' unsecured debt rating of AES Gener does
not rely on associated income from Chivor given the expectation
that the company will complete the planned divestiture of Chivor
and that the company will be primarily operating in the Chilean
electricity market. Chivor is expected to be sold, or
transferred, to an AES affiliate at fair market value after the
debt negotiation and as part of AES Gener's medium-term plan.
AES Gener is rated higher than its parent, AES Corporation, but
to minimize associated credit risk the company has developed a
structure to insulate AES Gener's credit quality from that of
AES Corporation.

AES Gener is the second largest electricity generation group in
Chile in terms of operating revenue and generating capacity with
an installed capacity of 1,754 MW composed of 1,509 MW of
thermal and 245 MW of hydro generating capacity. The company
operates most of the thermal electric power plants in the
country and supplied approximately 23% of Chile's total
generating capacity during 2000. AES Gener serves both the
Central Interconnection System (SIC) and Northern
Interconnection System (SING) through various subsidiaries and
related companies.

CLARENT CORP: Probe Uncovers Irregularities in Financial Results
Clarent Corporation (Nasdaq:CLRNE) announced that it received a
Nasdaq Notice of Additional Concerns on January 3, 2002
indicating that the Company has failed to comply with
Marketplace Rule 4310(c)(14) with respect to its Annual Report
on Form 10-K for the year ended December 31, 2000 because the
Annual Report does not contain audited financial statements.
Additionally, the Nasdaq notice indicated that the information
contained in the Company's September 4, 2001 and October 23,
2001 press releases raises public interest concerns under
Marketplace Rules 4300 and 4300(a)(3) related to the protection
of investors.

The Company announced on November 27, 2001 that it had received
a Nasdaq Staff Determination that its common stock was subject
to delisting from The Nasdaq Stock Market. The Company has
requested a hearing before a Nasdaq Listing Qualifications Panel
to review the Staff Determination and to address the matters
described in the Notice of Additional Concerns. As a result, the
delisting has been stayed pending the Panel's determination.
There can be no assurance that the Panel will grant the
Company's request for continued listing.

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

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

CLARENT: Appoints New Board Members & Senior Management Officers
Clarent Corporation (Nasdaq:CLRNE) announced the addition of two
new members to its board of directors, J. Mark Hattendorf, and
Tom Elliot, as well as several changes to its management team
that have been instituted during the past several months. The
company also estimates that revenues for the year ended December
31, 2001 will be in the range of approximately $60 to $65
million, and cash and cash equivalents at December 31, 2001 will
be approximately $50 million.

New Additions:

Mr. Hattendorf brings over 30 years of financial and operational
experience, having served most recently as COO of Questlink
Technology. Mr. Hattendorf previously held CFO positions at
several public and private companies including;
Broderbund Software, Acclaim Entertainment and Prodigy Services.
Mr. Elliot brings over 35 years of important business experience
as well as knowledge of the cable industry, including being one
of the founders of CableLabs, a cable industry research and
development consortium of cable television system operators
representing most of the cable subscribers in North America. Mr.
Elliot previously spent numerous years in all phases of
technical management at Telecommunications, Inc.  Their
appointments underscore Clarent's commitment to effectively
managing its business and capitalizing on growth markets.

The company has also taken steps to bolster its management team
with several new appointments. Toward that end, Clarent has
appointed John J. O'Shea as chief financial officer. Mr. O'Shea
brings to Clarent more than 30 years of experience in startups
and public companies and has held roles as chief financial and
administrative officer for such telecommunications companies as
Tvia, Inc., V-Bits, Inc., and Compression Labs, Inc.

Changes to Management Team:

Mike Vargo, previously the company's chief technology officer
who had been serving as interim CEO, has stepped down, but will
continue to serve in a technical advisory capacity to the board.
The company's board has been in active discussions with
prospective CEO candidates who are positioned to assume CEO
responsibilities with minimal delay. To facilitate communication
and coordination with the board prior to the appointment of the
new CEO, the board has designated new board member, J. Mark
Hattendorf, to assist in day-to-day communications between the
board of directors andClarent's management team.

Clarent also announced a reorganization of its senior management
team and the delegation of new responsibilities. In addition to
Mr. O'Shea, the new management team includes:

      --  Tuck Newport, vice president of sales and service --
Currently responsible for Clarent's worldwide sales and service,
Mr. Newport has over 20 years of leadership experience in
developing and marketing software and network products for
start-up enterprises and large corporations. He has founded and
managed wireless data, enterprise software, and magazine
publishing firms and before joining Clarent served as a vice
president at VeriFone.

      --  Elizabeth Cholawsky, vice president of marketing -- Ms.
Cholawsky is responsible for product strategy and planning, and
for Clarent's global strategic marketing and branding
initiatives. She leads a team of business development, product
marketing, product management and marketing communications
professionals. She has 20 years of leadership experience in high
technology having held management positions with Voice
Processing Corporation, Connected Systems, !hey, Inc., Digital
Sound Corporation, Trinzic Corporation and Applied Expert

      --  Tim Harris, vice president of human resources -- With
more than 30 years of experience in human resources, Mr. Harris
currently manages the planning, development and implementation
of Clarent's human resource activities. He served as the
corporate vice president of administration for Adaptec, Inc.,
a global digital systems bandwidth manufacturer of hardware and
software high-performance products, and as the senior vice
president of human resources for Novell.

      --  David Emerson, general counsel -- Emerson oversees all
legal activity pertaining to Clarent, including commercial
contracts and intellectual property matters. With eight years of
practice in general business and corporate law, he most recently
practiced law at Cooley Godward LLP, where he specialized in
corporate and intellectual property law.

      --  Steve Langion, vice president of research & development
-- Mr. Langion is responsible for driving the continued
development and innovation of Clarent's softswitch and IP
products. With over 20 years of experience in various
engineering and development functions in the telecommunications
field, he has a proven track record for creating and managing
the successful delivery of complex, robust software systems and
network management systems. Most recently, Mr. Langion was
President and CEO of PEAK Software Solutions, and was
responsible for the creation, direction, organization, operation
and growth of the company and its software solutions.

      --  Ron Elswick, vice president of operations -- Mr.
Elswick manages Clarent's worldwide operating infrastructure and
information services areas to assure the company is well-
positioned to take advantage of market opportunities. He has
more than 40 years of experience in operations, manufacturing
and engineering with the last 10 years spent as vice president
of operations for telecommunications companies.

"We welcome the addition of Mark Hattendorf and Tom Elliot to
our board, and we are confident that our expanded board and new
management team will enable Clarent to continue to offer
industry leading products and services, and provide world-class
customer service to our customers around the world," said
director William R. Pape. "We want to particularly express the
company's gratitude to Mike Vargo for his tremendous commitment,
dedication and service to Clarent, and we look forward to
continuing to benefit from his knowledge and experience through
his technical advisory role to the board."

Clarent also announced that Simon Wong, who became Clarent's CFO
earlier last year, has decided to pursue other interests now
that the Company's restatement process is in its final stages.
"Simon has played a key role during our recent investigation and
restatement process and we appreciate his dedication, hard work
and important contributions to these efforts," said Mr. Pape.
"Simon was also instrumental in supporting Clarent in its
restructuring process last year," added Mr. Pape.

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

COMDISCO INC: Selling Interests in 3 Partnerships for $5 Million
Comdisco, Inc., and its debtor-affiliates notify the Court that
it intends to sell its interest in the limited partnership of
New Enterprise Associates 10, L.P.; Oak Investment Partners X;
and Weiss, Pack & Greer for a purchase price of $5,585,195.

The Debtors intend to sell these Assets to Commonfund Capital
Inc.  The Debtors assure the Court that Commonfund Capital is
not an insider and has no other connections to the Debtors.

The Debtors believe that the purchase price accurately reflects
the current market value of the Assets.

The Debtors marketed these Assets to the potential purchasers,
and this was the best bid they received.  The Buyer's offer is
fair, appropriate and favorable.  If there are no objections
filed by January 2, 2002 -- the Debtors will consummate the sale
of the Assets free and clear of liens, claims and encumbrances,
and take all actions necessary to close the transaction and sale
process. (Comdisco Bankruptcy News, Issue No. 18; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

COVENTRY HEALTH: S&P Assigns BB+ Counterparty Credit Rating
Standard & Poor's assigned its double-'B'-plus counterparty
credit rating to Coventry Health Care Inc.

At the same time, Standard & Poor's assigned its double-'B'-plus
rating to Coventry's $175 million 10-year, fixed-rate unsecured
notes with registration rights. The outlook is stable.

The counterparty credit rating reflects Coventry's very good
quality balance sheet, very strong earnings and cash flow,
adequate but pressured capital adequacy, and acquisition growth

Coventry's securities are offered under Rule 144A and are exempt
from registration under the Securities Act of 1933. The net
proceeds of the offering will be used to repurchase Coventry
common stock and warrants from a primary shareholder.

Major Rating Factors:

      -- Very good quality balance sheet. Coventry maintains a
very good quality balance sheet supported by a conservative
investment portfolio strategy and prudent use of financial
leverage. Coventry's investment guidelines emphasize investment-
grade, fixed-income instruments to provide short-term liquidity
and minimize the risk to principal. Coventry's liquidity ratio,
based on Standard & Poor's liquidity model, was 175% at year-end
2000, which is considered strong. Pro forma debt leverage and
interest coverage at Sept. 30, 2001 would have amounted to 26.2%
and 10.1 times, respectively. For 2002, Standard & Poor's
expects debt leverage of 21%-23% and interest coverage of more
than 10x, which is above average for the current rating
category. Goodwill and intangibles, related mainly to
acquisitions, amounted to $265.4 million at Sept. 30, 2001, or
about 40% of shareholder equity. Standard & Poor's considers
this somewhat unfavorable for the company's financial condition
given the industry's recent history of asset write-downs and
restructuring charges. However, so far Coventry has been able to
successfully integrate numerous operations that conducted
business in markets already familiar to Coventry but in which
the acquired company lacked sufficient scale or expertise.

      -- Very strong earnings and cash flow. Coventry's financial
picture continues to improve, benefiting from favorable pricing
conditions and strong brand equity in its core markets. For
year-end 2001, Standard & Poor's expects Coventry to achieve its
third consecutive year of underwriting profitability as it
continues to increase membership and revenues. If Coventry meets
expectations, consolidated pretax income and operating cash
flows are expected to remain consistent with the trends
established through Sept. 2001. Given the underlying retention
of existing business and implemented premium yield increases,
Standard & Poor's believes Coventry is well-positioned to
sustain very strong earnings and cash flow performance in 2002.

      -- Adequate but pressured capital adequacy. Coventry's
capital adequacy, which is a function of how well its downstream
operating companies are capitalized, is currently considered
good but is near the marginal level according to Standard &
Poor's model. Consolidated capital adequacy, which was 103% at
year-end 2000, is expected to diminish modestly to 95%-100% by
year-end 2001 despite the expectation of strong earnings
overall. This is a function of Coventry's growth strategy and
current operational structure, which are based on acquisition
and building the parent company's cash position. Coventry
currently maintains strong liquidity at the holding-company
level, which partially mitigates the risks posed by the level of
capitalization at the operating companies. If either liquidity
at the holding company level or capital at the operating company
level diminishes materially in 2002, Standard & Poor's may lower
the rating.

      -- Acquisition-oriented growth strategy. Coventry's growth
strategy depends partly on its ability to acquire additional
health plans and successfully integrate those plans into its
existing operations. Although Coventry has been relatively
successful with this strategy so far, Standard & Poor's believes
current and future integration risks remain, particularly if the
size of the deals were to increase. In addition, Coventry's
balance sheet quality could be somewhat diminished by an
increase in the level of intangibles, and its risk-based
capitalization is likely to experience added strain as premium
growth exceeds underlying capital growth at the operating-
company level.

                      Outlook: Stable

Standard & Poor's expects the company's business position to
remain very good. Excluding acquisitions, enrollment is expected
to increase moderately to 1.90 million-1.95 million members for
2002. Consolidated GAAP pretax income is expected to achieve
sustained earnings strength for the year ending 2002, which is
expected to boost the company's five-year earnings adequacy
ratio to a level that Standard & Poor's considers very strong.
Despite the expectation for strong bottom-line performance in
2002, Standard & Poor's believes Coventry's capital adequacy is
likely to be modestly diminished by the level of revenue growth,
which is expected to increase statutory operating leverage. As a
result, capital adequacy is expected to diminish modestly to
90%-95% according to Standard & Poor's capital model.

EMAGIN CORP: Net Loss Nearly Doubled to $42MM in Sept. Quarter
eMagin Corporation is a leading developer of organic light
emitting diode ("OLED") microdisplays, and optics systems. It
currently provides custom video display headsets, in limited
quantities, largely to government customers. It is seeking to
transition into commercial distribution of its products and
technology as components to OEM system manufacturers for near-
eye and headset applications. The products are targeted for
handheld telecommunication and internet devices, wearable
computers, and computer and entertainment headsets.

Prior to the acquisition of FED Corporation (the predecessor
company), the Company had no operations. Management believes
that the comparison of eMagin's financial results to that of the
Predecessor provides the most meaningful comparative information
to the reader. Accordingly, the following comparative
information effects the operating results of eMagin Corporation
for the three and nine months ended September 30, 2001

Net revenue for the three and nine months ended September 30,
2001 were $1.2 million and $4.8 million, respectively, as
compared to $1.0 million and $2.4 million, respectively, for the
three and nine months ended September 30, 2000. Revenues consist
primarily of contracts funded by certain U.S. government
programs, and the amount of revenues earned in any period is
dependent upon, among other factors, the execution of new
government contracts and funding issues, and may not be
predictable or consistent from period to period but remains
subject to unpredictable government funding issues.

Product revenues of $0.3 million and $0.5 million, respectively,
for the three and nine months ended September 30, 2001 included
SVGA+ microdisplay evaluation kits and follow-on shipments,
primarily to government contractors. Evaluation kits are
composed of an OLED microdisplay with associated electronics for
customer evaluation.

The Company's net loss for the three months ended September 30,
2001 was $42,377,769 as compared to the net loss of $24,178,544
for the same three months of 2000.  Net loss for the nine months
ended September 30, 2001 was $62,918,960.

During the next 12 months, the Company's foreseeable cash
requirements are expected to be met by a combination of existing
cash, revenue generated by the Company's sales, and additional
equity or debt financing. The Company is currently devoting
substantial resources to the establishment of sales and
distribution relationships and it's initial product launch
cycles. The Company believes that it will be able to secure
financing in the near term and that the proceeds from such
financings, along with its remaining cash resources at September
30, 2001, will be sufficient to fund the Company's operations
into the second quarter of 2002 and beyond. However, there can
be no assurance that sufficient capital will be available, when
required, to permit the Company to realize its plan, or even if
such capital is available, that it will be at terms favorable to
the Company. Additionally, there can be no assurance that the
Company's efforts to produce a commercially viable product will
be successful, or that the Company will generate sufficient
revenues to provide positive cash flows from operations. These
and other factors raise substantial doubt about the Company's
ability to continue as a going concern. To the extent the
Company raises additional capital by issuing equity or
securities convertible into equity, ownership dilution to the
Company's shareholders will result.

EMERITUS ASSISTED: Will Get Mortgage Financing on 3 Properties
Emeritus Assisted Living (AMEX:ESC)(Emeritus Corporation), a
national provider of assisted living and related services to
senior citizens, announced that it has received a commitment for
mortgage financing on three properties totaling $30.5 million.

The commitment was provided by GE Capital Healthcare Finance,
formerly Heller Healthcare Finance, and is expected to close in
the first quarter of 2002. This commitment fulfills the
requirement to reduce indebtedness on the previously announced
extension of $73.3 million outstanding mortgage debt originally
due April 29, 2001. The commitment and subsequent closing of the
financing will allow Emeritus to extend the remaining $43.0
million to May 2003. The remainder of the portfolio can be
released as the individual properties qualify for new debt
financing. Ray Brandstrom, CFO commented, "The commitment from
GE Capital provides us an additional eighteen months to focus on
maturing this portfolio of properties and to secure permanent
financing solutions."

Emeritus Assisted Living is a national provider of assisted
living and related services to seniors. The Company is one of
the largest developers and operators of freestanding assisted
living communities throughout the United States. The Company
also participates in a joint venture to develop assisted living
communities in Japan. These communities provide a residential
housing alternative for senior citizens who need help with the
activities of daily living with an emphasis on assistance with
personal care services to provide residents with an opportunity
to age in place. The Company currently holds interests in 154
communities representing capacity for approximately 13,843
residents in 29 states and Japan. The Company's common stock is
traded on the American Stock Exchange under the symbol ESC, and
its home page can be found on the Internet at

ENRON CORPORATION: Seeks Injunction Against Utility Providers
Enron Corporation, and its debtor-affiliates ask the Court for
an order:

   (a) prohibiting the Utility Companies from altering, refusing
       or discontinuing services on account of pre-petition
       invoices, including the making of demands for security
       deposits or accelerated payment terms,

   (b) determining that the Utility Companies have been provided
       with "adequate assurance of payment" within the meaning of
       section 366 of the Bankruptcy Code,

   (c) establishing procedures for determining requests for
       adequate assurance of payment,

   (d) providing that if any Utility Company objects to entry of
       an order granting this Motion within 30 days of mailing of
       the Utility Order and requests adequate assurance that the
       Debtors believe is unreasonable, the Debtors will file a
       Motion for Determination of Adequate Assurance of Payment
       and the Court will set such motion for a hearing,

   (e) providing that any Utility Company that does not timely
       request adequate assurance, as provided for herein, shall
       be deemed to have adequate assurance under section 366 of
       the Bankruptcy Code; and

   (f) providing that, in the event that a Determination Motion
       is filed or a Determination Hearing is scheduled, any
       objecting Utility Company shall be deemed to have adequate
       assurance of payment under section 366 of the Bankruptcy
       Code without the need for payment of deposits or other
       securities or the acceleration of payment terms until an
       order of the Court is entered in connection with such
       Determination Motion or Determination Hearing.

Martin Sosland, Esq., at Weil, Gotshal & Manges LLP, in New
York, New York, tells the Court that Garden State Paper Company
obtains electricity, natural gas, water, telephone services,
garbage collection and/or other similar services from numerous
utility companies.

Section 366 of the Bankruptcy Code provides that within 20 days
after the commencement of Garden State's chapter 11 case, the
Utility Companies may not alter, refuse, or discontinue service
to, or discriminate against, Garden State solely on the basis of
the commencement of its chapter 11 case or the existence of pre-
petition debts owed by Garden State.  But after the 20-day
period, however, Mr. Sosland notes, the Utility Companies
arguably may discontinue service if the Debtors have not
provided adequate assurance of future performance of Garden
State's post-petition obligations to the Utility Companies.

"If the Utility Companies are permitted to terminate service on
the 21st day following the commencement of Garden State's
chapter 11 case, Garden State will be unable to complete the
orderly termination of operations at its paper mill and will not
be able to continue operation of its paper recycling centers,
resulting in additional costs and loss of revenue," Mr. Sosland
explains. This would cause substantial harm to the Debtors'
efforts to expeditiously restructure their business affairs to
the detriment of their estates and creditors, Mr. Sosland
anticipates.  Accordingly, Mr. Sosland asserts, it is important
that the Utility Services continue uninterrupted.

Garden State assures the Court that it generally has and will
continue to pay all undisputed obligations for Utility Services
as billed and when due.  The estimated average monthly cost of
their Utility Services has been approximately $1,421,125.  Mr.
Sosland claims the Debtors can readily demonstrate their ability
to provide "adequate assurance" of future payment for Utility
Services.  In addition, Mr. Sosland reminds the Court that
further adequate assurance is provided by the fact that the
claims of the Utility Companies for post-petition Utility
Services are to be granted administrative claim status.

According to Mr. Sosland, the Debtors' proposed method of
furnishing adequate assurance of payment for post-petition
Utility Service is in keeping with the spirit and intent of
section 366 of the Bankruptcy Code, is not prejudicial to the
rights of any Utility Company, and is in the best interest of
the Debtors' estates.

Persuaded by the Debtors' arguments, Judge Gonzalez authorizes
and directs the Debtors to pay on a timely basis all undisputed
invoices in respect of post-petition electricity, natural gas,
water, telephone services, garbage collection and/or other
similar services rendered by any utility company to or for the
benefit of Debtors.

"Any undisputed charge for utility services furnished by any
utility company to Debtors post-petition shall constitute an
administrative expense of the Debtors' chapter 11 cases in
accordance with sections 503(b) and 507(a)(1) of the Bankruptcy
Code," Judge Gonzalez rules.

At the same time, the Court prohibits the utility companies from
altering, refusing, or discontinuing service to, or
discriminating against Debtors on account of the Debtors' pre-
petition obligations, or requiring the payment of a deposit or
other security in connection with any utility services provided
to Debtors, except as may be otherwise ordered by the Court in
accordance with these procedures:

   (1) The Debtors shall serve a copy of this Order and the
       Motion upon:

         (i) each of the utility companies  by United States
             first class mail and/or facsimile transmission
             within 3 business days after the date of entry

        (ii) each of the utility companies that is listed on any
             subsequently filed supplement by United States
             first class mail and/or facsimile transmission
             within 3 business days after the date of filing of
             such supplement.

   (2) This Order is without prejudice to the rights of any of
       utility company to request additional adequate assurances
       of payment, and any such request shall be in writing and
       shall be addressed to:

              Enron Corp.
              Attention: Mr. Steve Woods
              Enron Building
              1400 Smith Street
              Houston, Texas 77002

              Weil, Gotshal & Manges LLP
              Attention: David Wolnerman, Esq.
              767 Fifth Avenue
              New York, New York 10153


              Togut, Segal & Segal LLP
              Attention: Gerard DiConza, Esq.
              One Penn Plaza, Suite 3335
              New York, New York 10119

   (3) In the event any utility company requests additional
       adequate assurances of payment within 30 days after
       mailing of this Order, and the Debtors believe such
       request to be unreasonable, the Debtors shall promptly
       file a Motion for Determination of Adequate Assurance of
       Payment as to such utility company and shall request a
       hearing thereon upon notice to such utility companies.

   (4) The objecting utility companies shall be deemed to have
       adequate assurance of payment pursuant to this Order
       unless and until this Court enters a final order to the
       contrary in connection with the Determination Motion.
       (Enron Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
       Service, Inc., 609/392-0900)

ENRON CORP: Receives Bids for Majority Stake in Trading Business
DebtTraders reports that Enron has reportedly received bids for
a majority stake in its trading operations from Citigroup, UBS
and BP. No financial details have been disclosed. However, an
announcement as to the winning bid is expected later this week.
Enron Corp. 7.875% bonds due 2003 were last quoted around 24.
For real-time bond pricing, see

EXODUS COMMS: Gets Go-Signal to Hire Lazard Freres as Advisor
Finding good and sufficient cause for the relief requested,
Judge Robinson approves the application of Lazard Freres & Co.
as Exodus Communications, Inc.'s financial advisor. Judge
Robinson also rules that Lazard's liability shall be limited to
the aggregate fees paid to Lazard for investment banking
services. (Exodus Bankruptcy News, Issue No. 11; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

FACTORY CARD: U.S. Trustee Wants Case Converted to Chapter 7
Donald F. Walton, the Acting United States Trustee for Region 3,
asks the Delaware Bankruptcy Court to convert Factory Card
Outlet Corp.'s cases to liquidation proceedings under chapter 7
or, alternatively, to dismiss the cases or to dispossess the
Debtors through appointment of a chapter 11 trustee, whichever
is the best interest of the creditors and the estate.

Failure to pay quarterly fees is among the grounds cited for
relief. According to the Motion, the Debtors are seeking to
evade full payment of quarterly fees by taking disbursements
which were made on a particular debtor's behalf and reallocating
them to another debtor in an attempt to pay amounts less than
those due the United States Trustee System Fund.

Factory Card Outlet Corporation, one of the largest chains of
company-operated superstores in the card, party supply and
special occasion industry in the United States, filed for
chapter 11 protection on March 23, 1999 in the District of
Delaware. Daniel J. DeFrancheschi of Richards Layton & Finger,
P.A., represents the Debtor in their restructuring effort. As of
August 4, 2001, the company listed $77,551,000 in assets and
$92,141,000 in debt.

FEDERAL-MOGUL: Robins Cloud Seeks Expansion of Claimants' Panel
Robins Cloud Greenwood & Lobel, LLP moves the Court to expand
the Official Committee of Asbestos Claimants, or alternatively,
to reconstitute The Official Committee of Asbestos Claimants in
the chapter 11 cases of Federal-Mogul Corporation and its

William J. Rhodunda, Jr., Esq., at Oberly & Jennings P.A. in
Wilmington, Delaware, informs the Court that Robins Cloud
represents numerous claimants injured by asbestos products
manufactured by Gasket Holdings, Inc., a debtor in these jointly
administered proceedings. On May 25, 2001, Robins Cloud obtained
a judgment for 22 clients against Gasket Holdings in the case of
Herman and Cynthia Wells, et al. v. Pittsburgh Corning, et al.,
in the Judicial District Court, Jefferson County, Texas. The
original amount of the Judgment was in excess of $20,000,000,
but it has been reduced to approximately $15,000,000 as a result
of a settlement with the other judgment defendant. According to
Mr. Rhodunda, the Judgment is the largest asbestos liability
judgment obtained and pending against the Debtors.

The Wells Plaintiffs wish to serve on the Official Committee of
Asbestos Claimants in this case, but no Wells Plaintiff was
appointed by the US Trustee. Prior to the selection of the
Committee by the US Trustee, Mr. Rhodunda submits that the Wells
Plaintiffs filled out questionnaires detailing their claims
under the Judgment and attaching a copy of the Judgment.
Apparently these questionnaires were not considered by the US
Trustee in the selection process, as after the Committee was
appointed, counsel for the assistant US Trustee who actually
appointed the Committee indicated that she was unaware of the

Mr. Rhodunda points out that the Committee does not include an
asbestos judgment creditor of the Debtors and therefore, does
not adequately represent the interests of asbestos judgment
creditors. The issues that might concern asbestos creditors that
have pending lawsuits or settlements with the Debtors would not
be of concern to judgment creditors. By definition, the absence
of a judgment creditor on the Committee means that the interests
of judgment creditors are not represented.

The selection process utilized by the US Trustee to fill the
Committee appears to be flawed and one in which the Trustee has
abused his discretion, particularly, it has failed to:

A. Consider and/or review the information provided by creditors
    prior to appointing the members of the Committee.

B. Consider and/or review the Judgment prior to appointing the
    members of the Committee.

C. Appoint a judgment creditor to the Committee, although
    asbestos liability judgment creditors exist and hold
    substantial claims in this case.

D. Appoint members to the Committee with different interests.

E. Appoint an odd number of members to the Committee so as to
    avoid the possibility of voting deadlocks.

Mr. Rhodunda assures the Court that the addition of one more
member to the Committee would not disrupt its configuration, and
would in fact assist the function of the Committee by changing
its composition to an odd number - preventing the possibility of
deadlocked voting. (Federal-Mogul Bankruptcy News, Issue No. 9;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

FORMICA CORP: Bringing In Lazard Freres as Restructuring Advisor
Formica Corporation announced that its President, Chief
Executive Officer and Chairman of the Board of Directors, Vince
Langone, tendered his resignation as an officer and director of
the Company, its direct parent, FM Holdings, Inc. and its
indirect parent, Laminates Acquisition Co., and their
subsidiaries, and Mr. Langone was terminated as an employee of
these companies.

Formica Corporation also announced that Frank A. Riddick III has
been elected President, Chief Executive Officer and Director of
the Company, its direct parent, FM Holdings, Inc. and its
indirect parent, Laminates Acquisition Co. His experience
includes serving as President, Chief Operating Officer and Chief
Financial Officer of Armstrong World Industries, Inc. Mr.
Riddick also served as Chief Executive Officer of Triangle
Pacific Corporation, a wholly owned subsidiary of Armstrong
World Industries, Inc.

Formica Corporation also announced that it has entered into an
agreement with Lazard Freres & Co. LLC as restructuring advisor
to advise it in connection with potential restructurings,
business combinations and financings.

Formica Corporation also announced that William Adams resigned
as Director of Formica Corporation and its direct parent, FM
Holdings, Inc. and its indirect parent, Laminates Acquisition
Co., and their subsidiaries.  Mr. Adams also resigned as an
officer of Formica International Corporation, a subsidiary of
Formica Corporation, and its subsidiaries, but will remain as an
employee until June 14, 2002.

Formica Corporation, whose owners include Credit Suisse First
Boston Private Equity, Citicorp Venture Capital, Ltd. and CVC
Capital Partners Limited, was founded in 1913, and is a
prominent worldwide manufacturer and marketer of decorative
surfacing materials, including high pressure laminate, foils,
printed papers, Surell and Fountainhead solid surfacing
materials and laminate flooring.

GENESIS HEALTH: MultiCare Seeks 4th Extension of Removal Period
The MultiCare Companies, Inc., Debtors sought and obtained an
order from Judge Wizmur extending the deadline by which they may
remove prepetition lawsuits and other actions or proceedings
from courts outside of the District of Delaware to the District
of Delaware for continued litigation.  The MultiCare Debtors ask
that the deadline imposed under Rule 9027 of the Federal Rules
of Bankruptcy Procedure be extended through the earlier of (a)
March 18, 2002 or (b) the day which is 30 days after entry of an
order terminating the automatic stay with respect to the
particular action sought to be removed.

Maureen D. Luke, Esq., at Young, Conaway, Stargatt & Taylor,
says that the MultiCare Debtors need more time to evaluate
which, if any, lawsuits should be moved to Delaware.  During
these cases the MultiCare Debtors have focused on matters
related to large and complex chapter 11 bankruptcy cases

     -- finalizing their fiscal year 2001 budget and long range
        business plan;

     -- preparing and filing their schedules and statements of
        financial affairs;

     -- conducting their review and evaluation of the Debtors'
        related party transactions with GHV, and engaging in
        negotiations with GHV concerning the terms of such

     -- investigating and analyzing potential claims that the
        Debtors may have against GHV and its affiliated debtors;

     -- assessing the operations of their numerous facilities and
        renegotiating and/or rejecting certain of their leases;

     -- negotiating and consummating the complicated ElderTrust

     -- formulating and negotiating a restructuring strategy with
        their prepetition senior secured lenders and certain
        general unsecured creditors; and

     -- finalizing and seeking confirmation of a plan of

As a result, Ms. Luke explains, the MultiCare Debtors have not
as yet fully reviewed their records in order to evaluate whether
they need to or should remove any claims or civil causes of
action pending in state court. The MultiCare Debtors believe
that the most prudent and efficient course of action is to
request an extension of their removal period. (Genesis/Multicare
Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

INDIGO BOOKS: No Offers Received to Acquire Stores in Canada
On September 17, 2001, Richter & Partners Inc. was appointed
trustee under the Consent Order issued by the Competition
Tribunal dated June 6, 2001, regarding the sale of 23 Indigo and
Chapters stores. In accordance with the Consent Order, the
deadline for Chapters and Indigo assets to be divested will pass
today. Accordingly, Richter & Partners Inc.'s mandate as trustee
in the sale process also expires. While several parties
expressed interest in acquiring certain stores, no formal offers
were received.

Richter engaged in a comprehensive sale program and canvassed
domestic and international markets in search of potential
purchasers. In total, Richter contacted 288 parties regarding
the divestiture. "General market conditions, and restrictions on
foreign ownership of retail bookstores in Canada made it
difficult to secure a buyer for the stores," says Peter Farkas,
Senior Vice President, Richter & Partners Inc. "Tighter capital
markets, brought on by the recent economic downturn acted as a
further barrier to entry."

Richter & Partners Inc. is a leader in the field of financial
reorganization and insolvency, with offices in Toronto, Montreal
and Calgary. It is part of Richter, Usher & Vineberg, one of
Canada's largest independent accounting, business advisory and
consulting firms.

INTEGRATED HEALTH: Committee Wants to Sue Directors & Officers
The Committee in the Chapter 11 cases of Integrated Health
Services, Inc., and its debtor-affiliates, by and through its
co-counsel, Otterbourg, Steindler, Houston & Rosen, P.C. and
Klehr, Harrison, Harvey, Branzburg & Ellers LLP, moves the
Court, pursuant to Sections 105, 1103(c)(5) and 1109(b) of the
Bankruptcy Code, for entry of an Order authorizing the Committee
to commence and prosecute any and all claims arising from the
compensation and other matters investigated by the Committee in
connection with the Review (as previously reported and described
further below), relating to the compensation of the directors
and officers of IHS for the period prior to the February 2, 2000
petition date, when IHS was under the control of its then
Chairman and CEO, Dr. Robert N. Elkins. The Committee seeks
authority to commence and prosecute such claims including claims
against, among others and without limitation, certain current
and former members of the Debtors' Board of Directors and
certain current and former Officers of the Debtors.

Upon approval in January 2001 of the Separation Agreement
between the Company and Dr. Elkins, IHS was required to forgive
over $40 million in loans to Dr. Elkins in accordance with the
terms of his pre-petition agreements with the Company and the
notes he made in the Company's favor. IHS also incurred tax
obligations of approximately $20 million resulting from such
forgiveness.  In view of this massive forgiveness and related
liability, Committee counsel advised the Court at the hearing on
the Separation Agreement:

    "[that] those who are responsible for the implementation of
    the officer loan program, those who erred ... in connection
    with not knowing or realizing that there were tax
    consequences associated with forgiveness of loans when the
    program was implemented, are the subject of ongoing
    investigations. And that is why we reserved all our rights in
    connection with claims to be asserted under the officers and
    directors policy against Dr. Elkins and those policies
    aggregate about 90 million."

In connection with the Review of matters relating to the
compensation of the directors and officers of IHS for the period
prior to the February 2, 2000 petition date, the Committee
entered into the Stipulation and Order Establishing Protocol of
Joint Review with the Debtors, pursuant to which the Review was

As a result of the Joint Review, the Committee has determined
that colorable claims exist against, without limitation, certain
of the current and former Company officers and members of the
Board. While the confidentiality provisions of the Protocol
constrain the Committee from describing in detail the results of
the Review, the Committee relates that these Claims include,
inter alia, Claims of:

       (1) breach of the duty of loyalty;

       (2) waste; and

       (3) bad faith breach of the duty of care arising from the
           compensation matters investigated.

The Separation Agreement and the agreements between the Company
and several officers do not release the Claims. The Claims are
related to a series of decisions in connection with compensation
matters made by IHS during the period from not later than 1997
through 2000, at a time when the Board was dominated by Dr.
Elkins and implemented Dr. Elkins' compensation package at his
instruction, the Committee asserts. The Committee notes that the
following happened during this period:

        -- The Board approved the $40 million or more in loans to
Dr. Elkins, the terms of certain of which were modified as late
as July 1999, just months before the bankruptcy case, to provide
additional forgiveness to Dr. Elkins,

        -- Enhancements were made to Dr. Elkins' employment
arrangements during the same period, increasing his benefits
without discernable consideration to IHS.

        -- Loans were also made to IHS' Senior Officers, totaling
approximately $17 million, the forgiveness provisions of which
were enhanced just weeks before bankruptcy, when the Senior
Officers' employment agreements were executed or amended,
thereby entrenching Dr. Elkins, by effectively forgiving all
Senior Officers' debts, on several grounds, including, among
other reasons, termination of Dr. Elkins' employment with IHS.
(SVPs received automatic debt forgiveness by virtue of Dr.
Elkins' departure.  EVPs received the right to terminate their
employment for "Good Reason" based on Dr. Elkins' departure, and
debt forgiveness would be achieved by their termination for
"Good Reason".)

        -- Dr. Elkins and the Senior Officers received
significant enhancements as the Company slid toward bankruptcy.
Thus, while IHS was experiencing financial difficulties, and
only months before the Petition Date, in July 1999, IHS approved
changes to the terms of Dr. Elkins' loans, including the $4.7
Million Note, the $4.25 Million Note and the $4.5 Million Note,
to include significant forgiveness provisions that had not
previously been included.  Then, in January 2000, just weeks
before its bankruptcy filing, IHS approved employment agreements
with its SVPs and amendments to its EVPs' employment agreements.
The new documents included provisions whereby the loans to
Senior Officer effectively would be subject to forgiveness upon
the termination of Dr. Elkins' employment. As a result of these
amendments, the costs to IHS if Dr. Elkins were to be terminated
were significantly increased.

        -- As a result of Dr. Elkins' departure in January 2001,
all of the Senior Officer loans became eligible for forgiveness.

            The Debtors Declined to Prosecute the Claims

The Committee tells the Court that, both orally and by
subsequent letter dated December 21, 2001, the Committee advised
the Company that the Claims exist.  While formally making demand
upon the Company to assert the Claims on behalf of the Estates,
the Committee made it clear that the Committee believes that it,
and not the Debtors, is the proper party to prosecute the Claims
on behalf of the Estate.  The Committee has not received any
response to its December 21st letter.  The Committee tells the
Court that, so far as it is aware, "the Company has not taken
any steps necessary to prosecute these Claims in a timely
fashion."  "In these circumstances, the Debtors' silence is
tantamount to a refusal to prosecute the Claims directly," the
Committee asserts.

The Committee believes that the Debtors' inaction is
unjustified. The Committee believes that the Claims are
colorable and represent a significant asset of the Debtors'
estate and the potential recovery far outweighs the cost of
commencing and prosecuting such Claims. In total, the Committee
believes that damages incurred by IHS from these insider
transactions are not less than $75 million and likely as much as
$100 million or more. The time in which the Estates can commence
and prosecute certain of these causes of action pursuant to
Section 108 of the Bankruptcy Code may be claimed to lapse on
February 2, 2002, the two year anniversary of the Petition Date.

The Committee notes that the Debtors clearly have a conflict of
interest in that certain of the Debtors' directors and officers
may be potential targets of an action and would be unable to
zealously prosecute claims against themselves. The Committee
tells Judge Walrath it has no such conflict and will adequately
represent the interests of all creditors by pursuing claims
which will ultimately augment Estate assets. In addition, a
substantial amount of the due diligence required in bringing
such lawsuits has already been conducted. The Committee assures
that every effort will be made going forward to efficiently
prosecute these Claims, the Committee tells the Court.

The Committee is prepared to file a complaint or complaints
prosecuting the Claims as soon as the Committee is authorized to
do so, and certainly prior to February 2, 2002. The Committee
therefore seeks authority to prosecute all the Claims, whether
derivative or otherwise, arising from or related to the Review
and the facts discovered thereunder.

                          The Review

Pursuant to the Protocol approved by the Court, the Committee
investigated the matters broadly outlined in the Protocol
relating to the compensation of the directors and officers of
IHS prior to the Petition Date, including, without limitation,
salary, bonuses, loans made under a plan or otherwise, stock
options, tax liability and other matters related thereto or
arising therefrom to determine, inter alia, whether causes of
action exist, including, without limitation, causes of action
arising from (i) the acts, conduct and decisions of the officers
and directors of the Debtors, or (ii) the advice of consultants
to the Company, or its officers or directors (the "Review").

As part of the Review and in accordance with the Protocol, the
Committee obtained extensive documentation from the Debtors and
4 other persons or entities and 6 persons were examined or
interviewed on a confidential basis as required by the Protocol.
The Debtors' counsel received all the foregoing information and
attended or defended the examinations and interviews in
accordance with the Protocol.

Based upon the information obtained by the Committee, the
Committee believes that Claims exist arising from the Review,
including without limitation, Claims against current and former
Company officers and members of the Board. These Claims are
property of the Debtors' Estates, and the Committee believes
that the Claims should be prosecuted to maximize the Estates'

                      Overview of Claims

The Claims arising from the Review generally relate, without
limitation, to various compensation matters, including, inter
alia, the following, the Committee asserts, all at a time when,
the Board was under Dr. Elkins' control:

(a) approval of a series of loans made by IHS to Dr. Elkins
     totaling over $40 million in the aggregate, including:

      (1) a promissory note dated July 8, 1999 in the principal
          amount of $4,409,095 which superceded a promissory note
          dated December 19, 1996 evidencing a loan of $4,690,527
          (the $4.7 Million Note);

      (2) a $13,447,000 loan evidenced by a promissory note dated
          September 29, 1997 (the $13.5 Million Note);

      (3) a $2,088,000 loan evidenced by a promissory note dated
          January 28, 1998 (the $2.088 Million Note) which was
          subsequently consolidated with the $13.5 Million Note
          and restated on September 30, 1998 in the amount of
          $15,535,000 (the $15.5 Million Note) which in turn was
          subsequently replaced in its entirety by Note dated
          July 8, 1999 in the principal amount of $11,780,210;

      (4) a $4,250,000 loan evidenced by a promissory note dated
          October 12, 1998 (the $4.25 Million Note);

      (5) a $4,500,000 loan evidenced by a promissory note dated
          November 13, 1998 (the $4.5 Million Note); and

      (6) a $11,500,000 loan evidenced by a promissory note dated
          April 1999 (the $11.5 Million Note); and

      (7) approval in July 1999 of changes to the terms of the
          $4.7 Million Note, the $15.5 Million Note, the $4.25
          Million Note and the $4.5 Million Note including
          consolidation of the $4.25 Million Note and the $4.5
          Million Note into a single Note of $8.75 million (the
          $8.75 Million Note);

(b) approval in November 1997 of the Second Amendment to Dr.
     Elkins' Employment Agreement (Amendment No. 2 to  Employment
     Agreement) and a Supplemental Agreement between Dr. Elkins
     and IHS (the Supplemental Agreement);

(c) approval in November 1998 of Amendment No. 1 to the
     Supplemental Agreement between Dr. Elkins and IHS (the
     Amended Supplemental Agreement);

(d) a series of loans to IHS' Senior Officers made between 1997
     and 2000 totaling approximately $17 million including $12.9
     million in loans pursuant to the so called 1999 IHS loan
     program approved in March 1999 and the proceeds of which
     were disbursed in the following months through July 1999;

(e) approval in December 1999 and January 2000 of certain
     employment agreements for Senior Vice Presidents (SVPs) and
     amendments to the employment agreements for Executive Vice
     Presidents (EVPs and together with the SVPs, the Senior
     Officers) which effectively provided that officer loan
     obligations to IHS would be subject to forgiveness upon
     termination of Dr. Elkins' employment.

Based on the Review, including the Committee's investigation
into the acts, conducts and decisions of the Board in connection
with the items, it is the Committee's view that colorable claims
exist, among others, against current and former officers and
members of the Board under Delaware law for, inter alia, (i)
breach of the duty of loyalty; (ii) waste; and (iii) bad faith
breach of the duty of care.

Accordingly, the Committee requests that the Court (i) authorize
the Committee to commence an action or actions on behalf of the
Estates asserting any and all of the Claims, whether derivative
or otherwise, relating to or arising from the Review, against
any person or entity, and (ii) grant such other, further and
different relief as the Court may deem warranted. (Integrated
Health Bankruptcy News, Issue No. 27; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

KMART CORP: Fitch Downgrades Ratings into Low-B Territory
Fitch lowered it ratings of Kmart Corporation as follows: bank
facility to 'BB-' from 'BB+'; notes and debentures to 'B+' from
'BB+'; and convertible preferred securities to 'B-' from 'BB'.

Approximately $3.8 billion of debt securities and $890 million
of preferred securities are affected by the downgrades. At the
same time, the Rating Outlook has been revised to Negative from

The downgrades reflect Kmart's weakened operations that have
produced materially lower cash flow and higher financial
leverage in 2001. Kmart's sales momentum turned negative during
the latter part of 2001 as a price cutting initiative in
consumable items failed to generate additional store traffic
while competition remained fierce. As a result, the company's
credit protection measures will be considerably worse than Fitch
had anticipated.

Despite these trends, Fitch is comfortable with Kmart's near
term liquidity position. Kmart is expected to have sufficient
capacity on its bank facility to cover any cash flow shortfall.
Also, Fitch expects that Kmart will be successful in renewing
its bank facility, which matures in December 2002, albeit with
higher rates, more restrictive covenants, and possibly security.
The higher rating for the bank facility reflects the banks'
superior position and ability to renegotiate terms ahead of the

Kmart's operations should begin to improve when the retail
environment picks up, but its ability to compete with the other
national discounters remains a concern. Kmart has made some
progress in improving its retail execution and customer service,
and will be overhauling its distribution infrastructure during
2002. Implementing new systems could be disruptive over the
short-run, but should support longer-term improvement in the
company's supply chain costs and in-stock position.

The Negative Rating Outlook takes into consideration the
challenges inherent in executing new strategies, as well as
longer-term competitive pressures, which will intensify with the
continued rapid growth of Wal-Mart and Target, among others.
Kmart is expected to adjust capital spending in 2002 to levels
that can be financed internally. While this is a necessary step
over the near term, reduced investment levels could dampen the
company's competitive position over time.

DebtTRaders reports that KMart Corp's 12.500% bonds due in 2005
(KMART9) are trading between 85 and 88. See

KMART FUNDING: Fitch Drops Secured Lease Bonds to B+ from BB+
Kmart Funding Corporation's secured lease bonds $96.6 million
series F and $20.9 million series G are downgraded to 'B+' from
'BB+' by Fitch. Series A, B, C, D and E have previously been
paid in full. The rating downgrades follow Fitch's review and
downgrade of Kmart's corporate credit on January 7, 2002. The
transaction closed August 1994.

The certificates are currently collateralized by an assignment
of rents on 24 properties guaranteed by absolute net leases to
Kmart Corporation, in which Kmart is obligated to pay rental
payments with no setoff, abatement or reduction. The properties
originally consisted of 19 Kmart stores, 4 Builders Square
stores and one apparel warehouse location. Although one of the
Kmart properties is vacant and the Builders Square locations are
vacant, the ratings of this transaction depend entirely on the
rating of Kmart's senior debt obligations. Fitch downgraded its
ratings of Kmart at to 'B+' from 'BB+' and revised the Rating
Outlook to Negative from Stable.

Fitch will continue to monitor the performance of this
transaction and the ratings of the corporate credit, as
surveillance is on-going.

LODGIAN INC: Gets Okay to Pay Critical Service Providers' Claims
Lodgian, Inc., and its debtor-affiliates sought and obtained
entry of an order authorizing them to pay, in their sole
discretion, the pre-petition claims of certain critical service
providers and authorizing and directing applicable banks and
other financial institutions to receive, process, and pay any
and all checks and other transfers related to such claims.

Adam C. Rogoff, Esq., at Cadwalader Wickersham & Taft in New
York, relates that in the ordinary course of the Debtors'
business, the Debtors rely on numerous third parties to provide
services that are necessary and critical to the Debtors' ability
to operate their hotels.  These Critical Service Providers
include food and beverage services, trash hauling services,
housekeeping and janitorial services, hotel safety and
maintenance services, snowplowing services, information
technology services, which providers maintain essential computer
and other equipment for the hotels and corporate-office support,
payroll processing related services, linen suppliers and
suppliers of room amenities.

Mr. Rogoff submits that many of the Critical Service Providers
are owed payments on account of unpaid pre-petition Critical
Services provided to the Debtors. Absent payment for their pre-
petition services, the Debtors believe that the Critical Service
Providers will not continue to perform the Critical Services for
the Debtors post-petition. The failure of the Debtors to
continue to obtain the benefit of the post-petition Critical
Services could have an immediate and adverse impact upon the
Debtors' operations.

Accordingly, in the Debtors' reasonable business judgment and
discretion, the Debtors payment of the Critical Service Provider
Claims to the Critical Service Providers, will be conditioned

A. the agreement of Critical Service Providers to continue to
    provide the Debtors with post-petition services on credit
    terms and limits that are the same as or better than those
    provided to the Debtors during the last quarter of the
    calendar year 2001, and thereafter, if the Critical Service
    Providers fail to adhere to the Acceptable Credit Terms
    during the pendency of these cases, then any payments of
    Critical Service Provider Claims made after the
    Commencement Date shall be deemed unauthorized post-
    petition transfers and thus recoverable by the Debtors in
    cash; and

B. at the Debtors' option, the Debtors receipt of written
    verification from the Critical Service Providers of the
    Acceptable Credit Terms.

Mr. Rogoff tells the Court that the Debtors need to ensure that
there is no disruption to the services necessary to operate
their hotels. While the Critical Service Providers have been or
will be assured of payment for their post-petition services, the
Debtors believe that it is likely that some or many of the
Critical Service Providers will refuse to continue to provide
post-petition services to the Debtors promptly and without
disruption absent assurances of payment of the pre-petition
amounts due and owing to such service providers.

Moreover, Mr. Rogoff points out that finding replacement service
providers for the Critical Services would be an arduous and
lengthy process. Further, in many of the areas in which the
Debtors' hotels are located, the Critical Service Providers are
or may be the primary providers of these services or are already
familiar with the Debtors' hotel operations. In addition, the
Debtors may be forced to pay a premium for replacement Critical
Service Providers because of the perceived risk of doing
business in chapter 11 or short notice of the requested

Without the continued assurances of the Critical Services,
including food and beverage services, trash pick-up,
housekeeping and janitorial services, snowplowing, and safety
and maintenance services, Mr. Rogoff explains that the Debtors
effectively would be unable to run their hotels or maintain
their corporate offices in a safe environment, thereby
prejudicing the estates and all parties in interest. Authorizing
payment of Critical Service Provider Claims would salvage
ongoing relationships among the Debtors and Critical Service
Providers and protect the Debtors' hotel guests.

Mr. Rogoff informs the Court that the Debtors only seek to pay
Critical Service Provider Claims where non-payment of such
claims would lead to the disruption of the Debtors' businesses.
The sums involved are insignificant in relation to the potential
disruption that would occur if relationships with the Critical
Service Providers were to be terminated. Thus, the Debtors
submit that the relief requested is narrowly tailored to
facilitate the Debtors' chapter 11 reorganization process and
approval of the payments is appropriate.

To implement the terms of the authority requested by the Motion,
the Court entered an order providing authorization for the
Debtors to do in order to satisfy the actual Critical Service
Provider Claims:

A. The Debtors are authorized, in their discretion and the
    exercise of their business judgment, to make payment to the
    Critical Service Providers on the conditions that by
    accepting payment, the Critical Service Providers agree to
    maintain or reinstate Acceptable Credit Terms during the
    pendency of these cases, and the Debtors mail a copy of the
    Order to each Critical Service Provider to which any
    payment permitted hereunder is made;

B. A Critical Service Provider's acceptance of payment is deemed
    to be acceptance of the terms of the Order, and if the
    Critical Service Provider thereafter does not provide the
    Debtors with Acceptable Credit Terms during the pendency of
    these cases, then any payments of pre-petition claims made
    after the Commencement Date may be deemed to be
    unauthorized post-petition transfers and therefore
    recoverable by the Debtors; and

C. The Debtors are authorized, but not required, to obtain
    written verification of Acceptable Credit Terms to be
    supplied by the Critical Service Providers before issuing
    payment hereunder. (Lodgian Bankruptcy News, Issue No. 2;
    Bankruptcy Creditors' Service, Inc., 609/392-0900)

LUBY'S INC: Working Capital Deficit Widens to $11.4 Million
Luby's Inc.'s sales decreased $18,705,000, or 16.4%, in the
first quarter of fiscal 2002 compared to the first quarter of
fiscal 2001.  Nine fewer days in the current quarter accounted
for approximately $12 million of the total sales decline.
Revenues were also lower due to the closure of 30 stores since
September 2000. Excluding the effect of fewer days and stores
this quarter, same-store sales declined $2.6 million, or 2.7%,
which was primarily pressured by recent recessionary trends.
Loss for the quarter ended November 21, 2001 was $5,184 as
compared with the loss of $2,115 for the same quarter of 2000.

Cash and cash equivalents decreased by $1,053,000 from the end
of the preceding fiscal year to November 21, 2001.  Capital
expenditures for the first quarter ended November 21, 2001, were
$3,062,000.  All capital expenditures for fiscal 2002 are being
funded from cash flows from operations and cash equivalents. As
of the quarter-end, the Company owned seven properties held for
sale, including five undeveloped land sites.  The Company also
has 18 properties held for future use.

Capital expenditures for fiscal 2002 are expected to approximate
$15 million. The Company will focus on improving the appearance,
functionality, and sales at existing restaurants.  These efforts
will include changing several locations to other dining
concepts, where feasible.  As a start, the Company plans to
remodel two currently closed units.  One will reopen as a new
seafood restaurant.  The new dining theme for the other
restaurant is still under development.

The Company typically carries current liabilities in excess of
current assets because a substantial portion of cash generated
from operating activities is reinvested in capital expenditures.
At November 21, 2001, the Company had a working capital deficit
of $11,405,000, in comparison to a working capital deficit of
$8,975,000 at August 31, 2001.  The higher deficit was primarily
attributable to an increase in accounts payable of $8,109,000,
due to changes in the timing of operational cutoffs and
Thanksgiving holiday purchases under the Company's new 13-period
fiscal year.  Partially offsetting the rise in accounts payable
was the improvement in cash and cash equivalents and short-term
investments provided by operating activities to a combined total
of $26,014,000 at the end of the first quarter of fiscal year
2002, from $24,083,000 at the end of the previous fiscal year.

As of September 1, 2001, the Company had a balance of $122
million outstanding under its credit facility.  Due to the
events of September 11 and the resulting impact on the economy,
the Company was unable to meet its first quarter fiscal 2002
EBITDA covenant requirement for its credit facility.
Accordingly, the Company obtained a waiver and amendment to its
credit facility dated December 5, 2001, which waives its
noncompliance with EBITDA levels, resets remaining fiscal 2002
quarterly EBITDA targets, and limits capital expenditures to $15
million.  During the quarter, two payments totaling $766,000
were made to the credit facility, which brought the balance to
$121.2 million as of November 21, 2001.  There is no ability to
borrow additional funds under the credit facility.

MARINER POST-ACUTE: Taps Jones Day Again as Litigation Counsel
The Mariner Health Group Debtors have given notice to reinstate
the application, filed almost a year ago (on January 5, 2001),
for retention and employment of Jones, Day, Reavis & Pogue as
Special Litigation Counsel, nunc pro tunc as of December 15,

Regarding the original application, a Certificate of No
Objection was filed with the Court due to miscommunication among
the Debtors' counsel and upon that, a order approving the
application was entered. The Debtors then sought and obtained an
order from the Court vacating that order of approval entered
upon miscommunication.

The Debtors now seek the retention of Jones, Day, nunc pro tunc
to the date of their current notice (December 13, 2001).
(Mariner Bankruptcy News, Issue No. 22; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

MARINER POST-ACUTE: Omnicare Completes Acquisition of APS Assets
Omnicare, Inc. (NYSE: OCR) announced that it has completed the
previously announced acquisition of the assets comprising the
pharmaceutical business of American Pharmaceutical Services,
Inc. and other related entities, wholly-owned subsidiaries of
Mariner Post-Acute Network or Mariner Health Group. Combined,
MPAN and MHG represent one of the nation's largest providers of
post-acute healthcare services, primarily through the operation
of skilled nursing facilities.

On December 6, 2001, Omnicare announced that, following a
successful bid for APS in an auction process established as part
of the bankruptcy proceedings of MPAN and MHG, it had executed a
definitive agreement to acquire APS.  The purchase price for the
transaction was $97 million in cash plus $18 million in deferred
cash payments contingent upon performance.  Given the
anticipated realization of economies of scale and cost synergies
from the acquisition, it will be accretive to Omnicare's diluted
per share earnings in 2002 and beyond.

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

Omnicare, based in Covington, Kentucky, is a leading geriatric
pharmaceutical care company.  Including the acquisition of APS,
Omnicare now serves approximately 715,000 residents in long-term
care facilities, in 43 states, making it the nation's largest
provider of professional pharmacy, related consulting and data
management services for skilled nursing, assisted living and
other institutional healthcare providers.  Omnicare also
provides clinical research services for the pharmaceutical and
biotechnology industries in 27 countries worldwide.  Omnicare's
total revenues are currently running at an annual rate in excess
of $2 billion.

For more information on Omnicare, Inc., via the Internet,
including a full menu of news releases, visit

NORD PACIFIC: Seeks Funding to Redeem Tritton Proj. in Australia
Nord Pacific Limited (OTC: NORPF; Toronto: NPF) announced that
effective October 29, 2001, the Company entered into a
settlement agreement with former President & CEO, Dr. W. Pierce
Carson.  In April of 2001, Dr. Carson filed an action in United
States District Court for the District of New Mexico against the
Company and its wholly owned subsidiary Hicor Corporation in
which he alleged his entitlement to early retirement and asked
the court to declare that split dollar insurance policy, for
which the Company had paid premiums, be committed to funding his

Under the terms of the settlement agreement, Dr. Carson agreed
to forego any claims to retirement benefits from the Company and
authorized the payment of $120,000 by the life insurance company
to Nord Pacific.  The Company gave up any claims to the split
dollar life insurance policy, and agreed to issue 1,431,482
shares of Common Stock to Dr. Carson on or before February 1,
2005 (or immediately under other certain events such as merger
or sale of substantially all of the Company's assets).  The
issued stock will be restricted (Rule 144) stock.  Dr. Carson
also agreed to a number of other conditions pertaining to the
stock for a period of two years upon issuance. Each party
released the other party for all further claims.  The settlement
is considered final and the case was dismissed with prejudice.

As separate matters, the Company's wholly owned subsidiary in
Australia, Nord Australex Nominees Pty Ltd., which is the
company that legally owns Nord Pacific's interests in the
Girilambone Joint Ventures and the Tritton Copper Project, is in
dispute with its joint venture partner, Straits Mining Pty Ltd
of Perth, Western Australia (a wholly owned subsidiary of
Straits Resources Limited) over the management and funding of
the Girilambone Copper Operations.  Previously, Australex had
defaulted on scheduled payments for the purchase of the Tritton
project from Straits.  The defaults occurred following the
Company's failure to procure anticipated financing.  This was
exacerbated by the reduced cash flow being derived from
Australex's share of copper sales from Girilambone, due to the
gradual exhaustion of copper production from the leach heaps,
and by the low price of copper being realized.  On December 21,
2001, Straits issued to Australex a Statutory Demand for Payment
of monies owed (A$1,500,000 or approximately US$780,000) under
the terms of the Tritton Sale Agreement.  Australex has
21 days, or until January 11, 2002, to meet this demand.  Under
Australian law, a company may be declared insolvent if it cannot
meet its bills when due and payable.  In order to rectify these
situations, Nord Pacific is in discussion with a number of
parties to secure financing for the acquisition of Straits'
share of the Girilambone joint ventures and the redemption of
the Tritton Project, or, to otherwise come to some suitable
arrangement with Straits.

OPTICARE HEALTH: Seeking Consents for Capital Restructuring
OptiCare Health Systems, Inc. (Amex: OPT) announced that it has
distributed to its stockholders a form of consent and related
consent statement regarding its proposed capital restructuring.
In the consent statement, the Company is seeking the consent of
holders of a majority of its outstanding common stock to a set
of proposals which, if approved by the stockholders, would
authorize the Company to carry out its previously announced
capital restructuring.

OptiCare intends to take the corporate action and close the
proposed capital restructuring transactions as promptly as
practicable after OptiCare has received the consents of holders
of a majority of its outstanding common stock in favor of the
proposals, and all other conditions to the closing of the
transactions have been fulfilled or waived, including the
execution of definitive agreements.  However, OptiCare will not
take action on the proposals or close the restructuring
transactions prior to January 15, 2002.

OptiCare Health Systems, Inc. is an integrated eye care services
company focused on managed care and professional eye care
services.  It also provides systems, including internet-based
software solutions, to eye care professionals.

PACIFIC GAS: CPUC Wants to End Exclusivity & Propose a Plan
Pacific Gas and Electric Company issued the following statement
after the California Public Utilities Commission (CPUC) filed a
motion in Bankruptcy Court objecting to the extension of the
utility's exclusivity period and announced sparse elements of an
alternative plan:

      "The CPUC announcement [Tues]day is simply the latest in a
series efforts to delay PG&E's emergence from bankruptcy.  The
CPUC, whose actions and inactions were a major cause of the
state's energy crisis and PG&E's bankruptcy, has tried to
obstruct our efforts to resolve the case.

      "PG&E has developed a plan of reorganization that resolves
all creditor claims, does not ask the Bankruptcy Court to raise
rates, protects customers from rate volatility and provides a
path for the state to get out of the energy business.  Our plan
is supported by the Official Creditors' Committee and has been
developed in record time, notable achievements in a bankruptcy
of this size.

      "The elements outlined [Tues]day by the CPUC do not appear
to provide these benefits.  We will be asking the Bankruptcy
Court to deny the CPUC's request."

PILLOWTEX: Summary of Debtors' Joint Plan of Reorganization
Pillowtex Corporation and its debtor-affiliates present the
Court with their Plan of Reorganization.  The cornerstones of
that plan are:

-- the cancellation of certain indebtedness in exchange for
    cash, New Common Stock or New Warrants;

-- the cancellation of indebtedness under the Designated Post-
    Petition Loans in exchange for Exit Term Loan Notes;

-- the discharge of pre-petition Intercompany Claims among the

-- the cancellation of the Old Common Stock of Pillowtex and Old
    Preferred Stock of Pillowtex;

-- the assumption, assumption and assignment, or rejection of
    Executory Contracts and Unexpired Leases to which any Debtor
    is a party;

-- the selection of boards of directors (or similar governance
    bodies) of the Reorganized Debtors;

-- the merger of Pillowtex with and into New Pillowtex, a
    Delaware corporation, with New Pillowtex as the surviving
    corporation; and

-- the corporate restructuring of certain Pillowtex Subsidiary
    Debtors designed to simplify the Debtors' corporate

The Effective Date is assumed to occur on June 29, 2002.

According to William H. Sudell, Esq., at Morris, Nichols, Arsht
& Tunnell, in Wilmington, Delaware, the Debtors have evaluated
numerous alternatives to the Plan, including:

     (a) alternative structures and terms of the Plan,

     (b) the liquidation of the Debtors, and

     (c) delaying the adoption of any plan of reorganization.

"While the Debtors have concluded that the Plan is the best
alternative and will maximize recoveries by holders of Claims,
if the Plan is not confirmed, the Debtors could attempt to
formulate and propose a different plan or plans of
reorganization," Mr. Sudell admits.

If no plan of reorganization can be confirmed, Mr. Sudell
relates that the Reorganization Cases may be converted to
chapter 7 cases.  In a liquidation case under chapter 7 of the
Bankruptcy Code, Mr. Sudell notes, a trustee or trustees would
be elected or appointed to liquidate the assets of each Debtor.
"The proceeds of the liquidation would be distributed to the
respective creditors of the Debtors in accordance with the
priorities established by the Bankruptcy Code," Mr. Sudell adds.

The Debtors contend that a chapter 7 liquidation would result in
substantial reduction in the value to be realized by holders of
Claims, as compared to the proposed distributions under the
Plan, because of, among other factors:

   (a) the failure to realize the maximum going concern value of
       the Debtors' assets;

   (b) the substantial negative impact of conversion to a chapter
       7 case and subsequent liquidation on the employees and
       customers of the Debtors;

   (c) additional costs and expenses involved in the appointment
       of trustees, attorneys, accountants and other
       professionals to assist such trustees in the chapter 7
       cases and potential litigation arising from the same;

   (d) additional expenses and Claims, some of which would be
       entitled to priority in payment, which would arise by
       reason of the liquidation and from the rejection of
       unexpired real estate leases and other Executory Contracts
       and Unexpired Leases in connection with a cessation of the
       Debtors' operations; and

   (e) the substantial time that would elapse before entities
       would receive any distribution in respect of their Claims.

Faced with this bleak alternative, the Debtors urge approval of
this Plan. (Pillowtex Bankruptcy News, Issue No. 20; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

PSINET: Intends to Sell Unit in Japan to C&W Entity for $10.2MM
PSINet, Inc., and its debtor-affiliates move the Court, pursuant
to Sections 105, 363, 365 and 1146 of the Bankruptcy Code and
Rules 2002, 6004, 6006 and 9014 of the Bankruptcy Rules, for
approval of a sale of the Debtor's non-debtor subsidiary in
Japan, PSINet Japan, to an entity designated by Cable & Wireless
IDC Inc. (C&W), for US$10.2 million, subject to higher and
better offers.

                         Sale Procedures

The Debtors sought and obtained the entry of a Sale Procedures

(1) approving certain bidding and sale procedures, including
     payment of a termination fee and expense reimbursement in
     certain circumstances;

(2) scheduling a bidding deadline and a Sale Hearing to consider
     approval of the Sale; and

(3) approving the form and manner of notice thereof;

                    The Cable & Wireless Transaction

The Debtors seek the entry of a Sale Order:

(1) authorizing the sale of all of the issued ordinary shares of
     PSINet Japan (the Company) by PSINet to the C&W designee or
     the "Buyer"), free and clear of all liens, claims,
     encumbrances and interests, subject to the terms and
     conditions of the Share Purchase Agreement and subject to
     higher and better offers;

(2) approving the terms and conditions of the Share Purchase
     Agreement, dated as of December 9, 2001, by and between
     PSINet (the Seller), on the one hand, and C&W, on the other
     hand, and approving certain related agreements; and

(3) determining that the Sale is exempt from any stamp,
     transfer, recording or similar tax.

The Court has granted part I of the motion and issued a Sale
Procedures Order authorizing the Debtors, among other things, to
solicit bids in accordance with the Bidding Procedures, and to
subsequently hold a public auction on January 14, 2002 at 11:00
a.m. at the offices of Dresdner Kleinwort Wasserstein, 1301
Avenue of the Americas, New York, New York.

The Debtors are also authorized to pay to Purchaser the
termination fee in an amount up to $306,000, in the case of a
termination, in accordance with Article 7 of the Share Purchase
Agreement) and to make reimbursement of expenses not to exceed

The Court has determined that the Debtors' payment to Purchaser,
of the Termination Fee and the Expense Reimbursement is (i) an
actual and necessary cost of preserving the Debtors' estates,
within the meaning of 11 U.S.C. Sec. 503(b), (ii) necessary to
ensure that Purchaser will continue to pursue its proposed
acquisition of the Shares, (iii) of substantial benefit to the
Debtors' estates, and (iv) reasonable and appropriate, including
in light of the size and nature of the Sale and the efforts that
have been and will be expended by Purchaser notwithstanding that
the proposed Sale is subject to higher or better offers. The
Court is satisfied that the Termination Fee and Expense
Reimbursement were material inducements for, and conditions of,
Purchaser's entry into the Purchase Agreement and has therefore
promoted more competitive bidding.

Judge Gerber directs that the Debtors' obligation to pay the
Termination Fee and the Expense Reimbursement shall survive
termination of the Purchase Agreement and, until indefeasibly
paid, shall constitute administrative expenses of Realty's
estate under sections 503(b) and 507(a)(1) of the Bankruptcy
Code and shall be paid when due without further order of the

On January 15, 2002, at 9:45 a.m. Eastern time, the Court will
conduct a Sale Hearing to consider Part II of the Motion with
respect to the Sale and consider confirmation of the Auction, if
any. Objections to the entry of the Sale Order, if any, must be
actually received no later than 4:00 p.m. Eastern time on
January 11, 2002.

                        Business Rationale

The Debtors reiterate that, since the latter part of 2000, they
have been engaged in developing an effective restructuring
strategy together with their professionals. In the beginning of
March 2001, the Debtors determined that it was necessary to
pursue a dual tracked approach; marketing their businesses for
sale while simultaneously developing a stand-alone plan of
reorganization.  The Debtors, with the assistance of Goldman
Sachs, prepared a detailed offering memorandum describing the
Debtors' entire business. The Offering Memorandum was
distributed to over 50 parties who were willing to sign
confidentiality agreements. A number of assets, including the
Debtors' subsidiaries in Canada, Hong Kong, Panama and Chile
have been sold with the authorization of the Court.

With respect to PSINet Japan, the Debtors received several
inquiries. After discussions with multiple parties, the Debtors
determined that the terms offered by Buyer were the highest and
best terms available, and that proceeding to contract with Buyer
would be in the interests of the Debtors and their estates. The
Debtors submit that negotiations with the Buyer were extensive,
in good-faith, noncollusive, and at arms length.

The Debtors believe that the proposed transaction represents
exercise of reasonable business judgment and is in the best
interests of the Debtors' estates. First, the proceeds of a sale
of the Shares, to the extent sold as a going concern, likely
will be greater than if the assets of PSINet Japan are sold by
piecemeal liquidation. Second, a prompt sale will aid in
minimizing administrative expenses of the estates. Third, prompt
receipt of the Sale proceeds will provide working capital to
fund the Debtors' various operations and to preserve the value
of their assets, thereby maximizing the value received from a
restructuring, sale or other disposition of their assets for the
benefit of the Debtors' estates and their creditors.

The Share Purchase Agreement provides for the sale of the Shares
to the Buyer, free and clear of all liens, claims, encumbrances,
interests and transfer taxes in exchange for $10.25 million in
cash (subject to certain adjustments and escrows). The Temporary
Trademark License Agreement and the Transitional Services
Agreement are attached as Exhibit D and E to the Share Purchase
Agreement. Establishment of the escrow account provides the
Buyer security in the event the Sellers fail to perform their
obligations under the Share Purchase Agreement and constitutes a
material inducement for the Buyer to enter into the Share
Purchase Agreement, the Debtors represent.

Accordingly, the Debtors request the Court's approval of the
Sale to the Buyer pursuant to the Asset Purchase Agreement and
related agreements.

The Debtors also request that the Buyer be granted limited
relief from the automatic stay to the extent necessary to allow
the Buyer to give any notice provided for under the Share
Purchase Agreement or the Related Agreements and to take any
actions permitted by such agreements.

The Debtors further request that, in the event the Debtors
become obligated to pay any amounts pursuant to the Share
Purchase Agreement or the Related Agreements, such obligation
will constitute an administrative expense under Sections 503(b)
and 507(a)(1) of the Bankruptcy Code and be immediately payable
if and when the Debtors' obligations arise under the Share
Purchase Agreement or the Related Agreements without further

The Debtors request that the Court eliminate the 10-Day Stay
under Rule 6004(g) of the Bankruptcy Rules because they need to
close this Sale as soon as possible after closing conditions
have been met.

While the Debtors believe that the Buyer's offer for the Shares,
reflected in the Share Purchase Agreement, is the best offer the
Debtors have received, in order to obtain the greatest value for
the Shares, the Debtors believe good cause exists to expose the
Shares to sale at a public auction, thereby maximizing the value
obtained for the Shares.

The Debtors believe the Bidding Procedures will promote active
bidding that will result in the highest and best offer the
marketplace can offer, and the proposed sale procedures and
protections taken together will encourage, rather than hamper,
bidding for the Shares and that they are therefore appropriate
under the standards governing bidding incentives in bankruptcy

                       Bidding Procedures

Pursuant to the Court's Sale Procedures Order, the proposed sale
will be subject to Bidding Procedures as follows:

(A) Any Competing Offer must provide for aggregate consideration
     or value to the Sellers' estates of at least $10,956,000.

(B) All subsequent overbids at the auction must include
     additional consideration of at least $250,000, over the
     previous bid.

(C) In order for a Competing Offer to be considered, it must
     meet the criteria of a "Qualified Bid" as set forth in the
     Sale Purchase Agreement.

     Among other things, a Qualified Bid must

    (1) be in writing in the form of the Share Purchase Agreement
        marked to show any and all changes thereto;

    (2) have a cash component greater than or equal to the sum of
        (x) the value, as reasonably determined by the
        independent financial advisor of Seller, of the
        consideration to be provided by the Share Purchase
        Agreement, plus (y) the amount of the Termination Fee and
        the Expense Reimbursement, plus (z) US $350,000 (the sum
        of subsections (x), (y) and (z) is referred to as the
        "Alternative Purchase Price");

    (3) is a proposal that Seller and the Committee, in good
        faith and after consultation with their independent
        financial advisors (if Seller and the Committee deem such
        consultation to be necessary and appropriate) reasonably
        determine is not materially more burdensome or
        conditional than the terms of this Agreement (in light of
        the total consideration provided by such Competing

    (4) is substantially on the same or better terms and
        conditions as those set forth in a copy of the Share
        Purchase Agreement and the Related Agreements;

    (5) is accompanied by satisfactory evidence of committed
        financing or other ability to perform the payment of the
        Alternative Purchase Price;

    (6) is accompanied by a deposit (by means of a certified bank
        check from a U.S. bank or by wire transfer) equal to or
        greater than the Initial Deposit plus the Termination Fee
        and the Expense Reimbursement; and

    (7) includes a commitment to consummate the transaction not
        more than 30 days after the entry of an order approving
        the purchase, subject to receipt of governmental and
        regulatory approvals, which must be obtained or otherwise
        satisfied within 60 days of such order.

(D) Each Competing Offer must be irrevocable until the closing
     of the purchase of the Shares.

(E) Competing Offers shall be delivered to the Debtors, with
     copies to Purchaser and to the Committee, so as to be
     received by them no later than noon on January 11, 2002 (the
     "Bid Deadline"), provided, however, that prospective
     purchasers that submitted timely Competing Offers and the
     Purchaser shall be permitted to make subsequent Overbids at
     the auction.

     Competing Offers shall be delivered to the Debtors, the
     Committee and Purchaser as follows:

     (1) to the Debtors, to: PSINet Inc. 44983 Knoll Square
         Ashburn, VA 20147 Attention: General Counsel Telephone:
         (703) 726-4100 Facsimile: (703) 726-4264 with a copy to:
         Wilmer, Cutler & Pickering 2445 M Street N.W.
         Washington, DC 20037 Attention: Craig Goldblatt, Esq.
         Telephone: (202) 663-6000 Facsimile: (202) 663-6363

     (2) to the Purchaser, to: Cable and Wireless plc 124
         Theobalds Road London WC1X 8RX England Attention:
         Jonathan Hardy Facsimile: +44 (207) 315-5077 with a copy
         to: Cleary, Gottlieb, Steen & Hamilton One Liberty Plaza
         New York, New York 10006 Attn: James L. Bromley, Esq
         Telephone: (212) 225-2264 Facsimile: (212) 225-3999

     (3) to the Committee, to: Wachtell, Lipton, Rosen & Katz 51
         West 52nd St. New York, New York 10019-6188 Attention:
         Scott Charles, Esq. Telephone: (212) 403-1000 Facsimile:
         (212) 403-2000

(F) If the Debtors do not receive any Qualified Bids, the
     Debtors will proceed with the Sale pursuant to the terms of
     the Share Purchase Agreement, subject to Debtors' right to
     pursue an Alternative Transaction.

(G) If a qualifying Competing Offer is submitted, an auction
     (the "Auction") will be held on January 14, 2002 at 11:00
     a.m. at the offices of Dresdner Kleinwort Wasserstein, 1301
     Avenue of the Americas, New York, New York. Only the
     Purchaser and any prospective purchaser that has timely
     submitted a qualifying Competing Offer shall be entitled to
     participate in the Auction. At the Auction, bidding shall
     begin with the highest qualifying Competing Offer timely
     submitted. All subsequent Overbids shall include additional
     consideration of at least $250,000 over the previous bid.
     All Bids made at the Auction must remain open until the
     highest and best Qualified Bid is determined.

(H) A Competing Offer shall not be considered to be a higher and
     better offer unless, at a minimum, such offer is a proposal
     that the Sellers determine, in good faith (in consultation
     with the Committee) provides for aggregate consideration or
     value to the Sellers' estates, when taken together with the
     value of any Shares or assets of the Company that would be
     retained by the Sellers under the Competing Offer (as
     determined in good faith by the Seller in consultation with
     the Committee) of at least $10,956,000 (with respect to the
     initial round of bidding) and of at least $250,000, in
     excess of the aggregate consideration contained in the
     highest standing Competing Offer (with respect to each
     subsequent round of bidding, if any).

The most favorable bid as determined by the Seller shall be
submitted to the Court for approval at the Sale Hearing.

The Debtors may determine, in their business judgment, which
Competing Offer is the highest or otherwise best offer and
reject any competing offer at any time before entry of an order
of approval by the Court. (PSINet Bankruptcy News, Issue No. 12;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

RESOURCE RECOVERY: Case Summary & 20 Largest Creditors
Debtor: Resource Recovery Industries, LLC
         33 West 67th Street
         New York, NY 10023
         aka Resource, LLC

Bankruptcy Case No.: 02-10051-ajg

Type of Business: Debtor is engaged in the business of the
                   recycling of aluminum scrap and residues.

Chapter 11 Petition Date: December 7, 2002

Court: Southern District of New York (Manhattan)

Judge: Arthur J. Gonzalez

Debtor's Counsel: Laurence May, Esq.
                   Angel & Frankel, P.C.
                   460 Park Avenue
                   New York, NY 10022
                   Tel: (212) 752-8000
                   Fax: (212) 752-8393

Total Assets: $8,718,000

Total Debts: $13,118,000

Debtor's 20 Largest Unsecured Creditors:

Entity                              Claim Amount
------                              ------------
R&J Trucking                        $293,695
P.O.Box 9454
Boardman, OH 44513

Edward's Transportation Inc.        $262,752
P.O.Box 278
Ravenswood, WV 26164

Athens Hocking                      $119,159

Stedman                              $95,855

Hope Gas, Inc                        $69,462

Allegheny Power                      $68,428

All-Pro Transport, Inc               $64,740

Amerimark Bldg Prod - Owens          $60,171

Indalex Inc                          $45,309

Ormet Aluminum                       $41,804

Air Products and Chemicals, Inc      $33,245

Bearing Distributors, Inc            $31,828

Sheriff of Tyler County              $31,473

Rasnake Enterprises                  $25,616

Allied Metals                        $24,376

Mountain State Blue Cross            $24,159

Didion International                 $23,981

Frank Bills Trucking, Inc.           $23,976

Dana Transport Inc.                  $22,643

American Industrial Power, Inc.      $21,671

SIMON WORLDWIDE: Gotham Int'l Discloses 7.51% Equity Interest
Gotham International Advisors, L.L.C., a limited liability
company organized under the State of Delaware, holds 1,250,909
shares of the common stock of Simon Worldwide, Inc., which
represents  beneficial ownership of 7.51% of the Company. Gotham
International Advisors, L.L.C., serves as investment manager to
Gotham Partners International, Ltd, a company organized under
the laws of the Cayman Islands.

Simon Worldwide is a diversified marketing and promotion agency
with offices throughout North America, Europe and Asia. The
Company has worked with some of the largest and best-known
brands in the world and has been involved with some of the most
successful consumer promotional campaigns in history. Through
its wholly owned subsidiary, Simon Marketing, Inc., the Company
provides promotional agency services and integrated marketing
solutions including loyalty marketing, strategic and calendar
planning, game design and execution, premium development and
production management. The Company was founded in 1976.

As previously reported, as a result of the alleged fraudulent
actions of a former employee of its main operating subsidiary,
Simon Marketing, the Company's two largest customers, McDonald's
and Philip Morris, representing approximately 88% of its sales
base, terminated their relationship with the Company in August
2001. As a result of the loss of these major customers, along
with associated legal matters described in the Company's
quarterly report for the third quarter 2001 on Form 10-Q, there
is substantial doubt about the Company's ability to continue as
a going concern. Results for the three and nine-month periods
ended September 30, 2001 included pre-tax charges of
approximately $48.8 million and $69.0 million, respectively,
relating principally to the write-down of goodwill attributable
to Simon Marketing.

SIMONDS INDUSTRIES: S&P Cuts Ratings to D After Missed Payment
Standard & Poor's lowered its corporate credit and subordinated
debt ratings on Simonds Industries Inc. In addition, all ratings
were removed from CreditWatch were they had been placed December
14, 2001.

The rating action follows the company's failure to make its
January 1, 2002, interest payment associated with its $100
million 10.25% notes due 2008. Standard & Poor's December 14,
2001, press release incorrectly stated that the interest payment
was due on January 15, 2002.

Simonds' difficulties arise from a highly leveraged balance
sheet, onerous debt burden, and weak operating performance.
Operations have been severely affected by operating
inefficiencies, pricing pressures, and continued softness in
several of the company's end markets. In addition, weak foreign
currency exchange rates continued to negatively affect
profitability. For the nine months ended September 29, 2001,
total debt to EBITDA was around 9.5 times and interest coverage
was about 0.8x. Simonds recently retained Credit Suisse First
Boston to assist the company in addressing alternative
transactions to strengthen Simonds' balance sheet.

Simonds manufactures industrial cutting and sharpening tools,
including saw blades, files, knives, steel rule, and filing room
equipment. The company's products are sold into the wood, pulp
and paper, packaging, and metal cutting markets.

            Ratings Lowered, Removed From Creditwatch

      Simonds Industries Inc.            TO        FROM
        Corporate credit rating          D         CC
        Subordinated debt                D         C

SUITE101.C0M: Considering Discussing Reorganization Transactions
----------------------------------------------------------------, Inc. (OTC BB: BOWG) announced that in furtherance
of its previously announced efforts to re-direct its operations
currently under consideration by its Board of Directors, it is
inviting companies and other persons with a possible strategic
interest in to consider entering into discussions
with the Company looking to a possible business combination,
restructuring or other reorganization transaction. The Company
is seeking initial responses on or before January 25, 2002.

The Company also announced that in conjunction with its efforts
to re-direct its operations, it has reduced its staff by five
people to 14 employees and has revised its monthly compensation
arrangements with its approximately 1,000 Contributing Editors
on its editorial team. Previously, the Contributing Editors had
received compensation of up to $25 per month, based on the
number of articles written. As of December 31, 2001, the Company
terminated the payment of the monthly compensation to
Contributing Editors. The Company continues to compensate its
Managing Editors and Senior Managing Editors. As the Company's
management continues its efforts to re-direct its activities,
further changes in staffing and compensation arrangements may be

The Company believes that the changes made in its staff and
compensation arrangements are appropriate in the light of the
Company's limited revenues and will enhance its ability to enter
into a business combination or other restructuring transaction
by reducing current levels of overhead. Management also believes
that these revised compensation arrangements are in line with
current practices of other Internet communities.

TELIGENT INC: Investcorp Acquires ECI Business for $60 Million
Investcorp, a leading global investment group, announced that it
has acquired from Teligent, Inc. substantially all of the assets
of Executive Conference, Inc., a leading provider of audio and
Internet-based conferencing services, for $60 million in cash.

The acquisition of the assets of ECI was authorized by the U.S.
Bankruptcy Court in the Southern District of New York, which is
overseeing the ongoing bankruptcy proceedings of Teligent.

Wayne, NJ-based ECI offers businesses and other organizations a
comprehensive portfolio of telephone conferencing services.
ECI's audio conferencing capabilities include operator-assisted
calls, automated calls, dedicated access numbers, question and
answer sessions, automated polling, participant announcements
and a number of enhanced features including PowerCall, audio
streaming, digital replay and transcription services.

As part of the transaction, Graham Sampson, a co-founder of ECI
Conference Call Services in 1991 and its former Chairman and
CEO, will return as the Chief Executive Officer.

"The assets of ECI comprise a business that has an impressive
track-record of rapid growth in revenues and profitability.  The
business of ECI has an extensive base of blue-chip customers and
a strong commitment to excellent customer service, qualities
that have established it as a leading independent provider of
teleconferencing services," said Christopher J. Stadler, a
member of Investcorp's Management Committee.  "We believe the
new company under the leadership of its former CEO and co-
founder Graham Sampson will be well positioned to generate
further profitable growth."

Investcorp is a global investment group with offices in New
York, London and Bahrain.  The firm has four lines of business:
corporate investment, real estate investment, asset management
and technology investment.  It was established in 1982 and has
since completed transactions with an aggregate value of
approximately $20 billion.

In the United States, Investcorp and its clients currently own
corporate investments that include Neptune, Jostens and
Synthetic Industries. In Europe, Investcorp and its clients
currently own corporate investments that include Avecia,
Gerresheimer Glas AG and Welcome Break.  Additional information
may be found at

TELSCAPE INT'L: Trustee Has Until March 20 to Decide on Leases
By order of the U.S. Bankruptcy Court for the District of
Delaware, the time within which the Telscape International
Trustee must decide whether to assume or reject unexpired leases
of nonresidential real property is extended through March 20,

Telscape International is a leading integrated communication
providers serving the Hispanic markets in the United States,
Mexico and Central America, offering local and long distance
telephone, internet and pre-paid calling card services. The
Company filed for Chapter 11 petition on April 27, 2001 in the
District of Delaware. Brendan Linehan Shannon at Young, Conaway,
Stargatt & Taylor and Victoria Watson Counihan at Greenberg
Traurig, LLP represent the Debtors in their restructuring

TRISM INC: Has Until January 17 to File Schedules and Statements
By order of the U.S. Bankruptcy Court for the Western District
of Missouri, Trism Inc.'s time to file schedules of assets and
liabilities, schedules of current income, and expenditures,
statements of financial affairs and statement of executory
contracts is extended through January 17, 2002.

Trism, Inc., the nation's largest trucking company that
specializes in the transportation of heavy and over-dimensional
freight and equipment, as well as material such as munitions,
explosives and radioactive and hazardous waste, filed for
chapter 11 protection on December 18, 2001 in Western District
of Missouri. Laurence M. Frazen, Esq. at Bryan Cave LLP
represents the Debtors in their restructuring efforts. When the
Company filed for protection from its creditors, it listed $155
million in assets and $149 million in debts.

U.S. WIRELESS: Wants Exclusive Period Extended to March 28
U.S. Wireless Corporation asks the U.S. Bankruptcy Court for the
District of Delaware to extend its exclusive periods to file a
plan of liquidation through March 28, 2002 and asks for a
concomitant extension of its time to solicit votes on that plan
through May 28, 2002.

Until the January 22, 2002 Claims Bar Date has passed, the
Debtors won't be in a position to properly analyze the full
extent of the asserted claims against their estates.  That's a
cornerstone of any liquidating plan.

U.S. Wireless Corporation is a research and development of
wireless location technologies, designs and implements wireless
location networks using proprietary "location pattern matching"
technology. The Company filed for chapter 11 protection on
August 29, 2001 in the U.S. Bankruptcy Court for the District of
Delaware. David M. Fournier, Esq. at Pepper Hamilton LLP
represents the Debtor in their restructuring effort. When the
Company filed for protection from its creditors, it listed
$17,688,708 in assets and $22,239,832 in liabilities.

UNITED DEFENSE: Fitch Ratchets Senior Secured Rating Up to BB
Fitch raises United Defense Industries, Inc.'s (UDI) senior
secured rating to 'BB' from 'BB-'. The Rating Outlook is
Positive. The rating upgrade reflects the company's repayment of
approximately $163 million of senior secured debt from its
initial public offering (IPO).

In December 2001, UDI and selling shareholders received
approximately $401 million in gross proceeds from its IPO. UDI
sold 9.25 million shares and Carlyle sold 11.85 million shares
to the public at a share price of approximately $19. As a result
of the offering and free cash flow, UDI reduced its senior
secured term loans by about $169 million to about $431 million.

Following the IPO and debt reduction, total debt to EBITDA
improved to about 2.7 times from approximately 3.7x at September
30, 2001. Pro forma interest coverage strengthened to an
estimated range of 3.5 to 4.0x. The company's operating
performance for the nine months ended Sept. 30, 2001 was
moderately below expectations. However, the unfavorable
variances appear to be primarily attributable to timing
differences. Funded backlog increased to approximately $2
billion at September 30, 2001 from $1.8 billion at September 30,

The Rating Outlook Positive relies on continued improvement in
the company's leverage position through free cash flow. The
Rating Outlook also reflects the company's additional financial
flexibility by having access to the public equity market and the
favorable trend in defense procurement.  However, Fitch
acknowledges that UDI's program concentration and inherent
political risk in its business continue to constrain the senior
secured rating.

UDI designs, manufactures, and supplies tracked armored combat
vehicles and weapons systems for the US military and the
militaries of certain allied governments. The company is a sole-
source/prime contractor for a number of important defense
programs including the Bradley family of vehicles, the M113
troop transport vehicle, the M88 tank recovery vehicle, the M109
self-propelled howitzer, and the Crusader.

VALLEY MEDIA: Giordano DellaCamera Reports 8.94% Equity Holding
Giordano DellaCamera Securities, LLC., securities dealer
registered under Section 15 of the Exchange Act, owns 8.94% of
the common stock of Valley Media, Inc. by beneficially holding
770,100 shares of that Company.  The securities dealer holds
sole voting and dispositive power over the stock.

On November 20, 2001, Valley Media, Inc. (Nasdaq:VMIX) filed a
voluntary petition for relief under Chapter 11 of the federal
bankruptcy code in the United States Bankruptcy Court for the
District of Delaware. No trustee, receiver or examiner has been
appointed, and the Company will act as debtor-in-possession
while being subject to the supervision and orders of the Court.

VECTOUR INC: Wants Removal Period Stretched Through May 14, 2002
VecTour, Inc. asks the U.S. Bankruptcy Court for the District of
Delaware to enlarge its time to file notices of removal of
related proceedings through May 14, 2002.

As of the Petition Date, the Debtors were party to a large
number of civil actions and proceeding in a variety of forums,
including numerous tort actions and pending protests of tax
assessments. The Debtors and its professionals have not yet had
an opportunity to assess all actions that are currently pending
in state and federal courts to determine if any should be
removed. Moreover, the possibility exists that causes of action
of which the Debtors are presently unaware will be revealed by
proofs of claim filed prior to the claims bar, date which has
not yet been established. To avoid prejudice to the Debtors'
estates and their creditors from a loss of the ability to remove
related causes of action, the Debtors believe that the most
prudent course of action is to briefly extend the removal

VecTour, Inc. is a leading nationwide provider of ground
transportation for sightseeing, tour, transit, specialized
transportation, entertainers on tour, airport transportation and
charter services. The Company filed for chapter 11 protection on
October 16, 2001 in the U.S. Bankruptcy Court for the District
of Delaware. David B. Stratton, Esq. and David M. Fournier, Esq.
at Pepper Hamilton LLP represent the Debtors in their
restructuring effort.

ZEPHION NETWORKS: Case Conversion Hearing Scheduled For Jan. 15
A hearing on Zephion Network's motion to convert its chapter 11
cases to chapter 7 liquidation proceedings is scheduled for
January 15, 2002, before Judge Gregory M. Sleet in the U.S.
Bankruptcy Court for the District of Delaware.

Zephion Networks, Inc. which provides Internet access solutions
and network services, filed for chapter 11 protection on June
25, 2001 in the U.S. Bankruptcy Court for the District of
Delaware. Charlene D. Davis at The Bayard Firm represents the
Debtor in their restructuring efforts.

* 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


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

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

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

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

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


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

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

Copyright 2002.  All rights reserved.  ISSN: 1520-9474.

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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.

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