TCR_Public/020117.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 17, 2002, Vol. 6, No. 12     

                          Headlines

360NETWORKS: Big Pipe Wants Debtors to Decide on Contract
ABC-NACO: Completes Court-Approved Sale of Assets to TCF Railco
A.G.A. FLOWERS: Sets Jan. 30 as Deadline for Filing of Ballots
ANC RENTAL: Seeking Okay to Pay Prepetition PIP Coverage Claims
ARCH WIRELESS: Has Until Feb. 6 to File Schedules & Statements

AUDIO VISUAL: Deadline for Filing Schedules Moved to April 1
AVIATION SALES: Sets Special Shareholders Meeting for Feb. 19
BENEDEK COMMS: Net Loss Widens to $6.2MM as Revenues Drop in Q3
BETHLEHEM STEEL: Court Approves Surplus Asset Sale Procedures
BURLINGTON: Asking for Open-Ended Lease Decision Period

CASTLE ENERGY: Sells Oil & Gas Properties to Delta for $20 Mill.
ENRON CORP: Bringing-In Fergus as Special Regulatory Counsel
ENRON NATURAL GAS: Case Summary & Largest Unsecured Creditors
ENRON: Gottesdiener Says E-mail Reveals Mishandling of Lockdown
ENRON CORPORATION: Begins Trading Under New Stock Symbol "ENRNQ"

EXODUS COMMS: Eden Calling for Performance of Lease Obligations
FANSTEEL INC: Files for Chapter 11 Reorganization in Delaware
FANSTEEL INC: Case Summary & 20 Largest Unsecured Creditors
FEDERAL-MOGUL: Claimants' Committee Hires Legal Analysis Systems
GARDENBURGER INC: Completes Refinancing of Debt Obligations

GENERAL BINDING: S&P Places Low-B Ratings on Watch Negative
GUILFORD MILLS: Current Waiver under Credit Pact Expires Friday
HAYES LEMMERZ: Court Okays Bankruptcy Services as Claims Agent
IT GROUP: Files Chapter 11 Petition in DE to Sell Assets to Shaw
IT GROUP: Case Summary & 50 Largest Unsecured Creditors

INTEGRATED ELECTRICAL: S&P Profit Concerns Prompt Low-B Ratings
JACOBS ENTERTAINMENT: S&P Puts B Rating on Company & New Notes
JACOBSON STORES: Files for Chapter 11 Reorganization in Michigan
KMART CORPORATION: DebtTraders Reports Bankruptcy Rumors Abound
LASON: Files Joint Plan of Reorg. & Disclosure Statement in DE

LERNOUT & HAUSPIE: Bakers Want Liquidation of Holdings Debtor
LESCO INC: Completes Refinancing of Principal Debt Agreements
LODGIAN INC: Tapping Curtis Mallet-Prevost as Conflict Counsel
MICROCELL: S&P Affirms Low-B Ratings with Positive Outlook
MILLENIUM SEACARRIERS: Case Summary & Largest Creditors

NATIONSRENT INC: Signs-Up Robinson Lerer as Corp. PR Consultants
NETIA HOLDINGS: Subsidiary Defaults on 13-1/8% & 13-1/2% Notes
NORSKE SKOG: S&P Revises Outlook Over Deteriorating Performance
PIONEER COMPANIES: Will Idle Chlor-Alkali Plant in Washington
POINT.360: CEO R. Luke Stefanko Discloses 18.7% Equity Interest

POLAROID CORP: Wants Period to Remove Actions Extended to July 9
POLAROID: Court Grants Formal Recognition of Retirees' Committee
PRECISION SPECIALTY: Wants Lease Decision Time Pushed to May 14
RURAL/METRO: Dismisses Arthur Andersen & Hires PwC as Auditors
SAFETY-KLEEN: Dai-Ichi Seeks Allowance & Payment of $1.8MM Claim

THORN MEDIA: Chapter 11 Case Summary
UNDERWRITERS GUARANTEE: Receivership Spurs S&P Rating Cut
UNISOURCE INSURANCE: S&P Assigns R Financial Strength Rating
W.R. GRACE: Zonolite's Move to Dismiss Chap. 11 Cases Draws Fire
WINSTAR COMMS: Wins Nod to Hire Kelley Drye's as Special Counsel

WORLDTEX INC: Delaware Court Confirms Plan of Reorganization
YORK RESEARCH: Seeks to Dismiss Involuntary Bankruptcy Petition
ZIFF DAVIS: Taps Greenhill to Evaluate Debt Refinancing Options

* DebtTraders' Real-Time Bond Pricing

                          *********

360NETWORKS: Big Pipe Wants Debtors to Decide on Contract
---------------------------------------------------------
Big Pipe Inc., and Big Pipe (U.S.) Inc., ask the Court for an
order compelling 360networks inc., and its debtor-affiliates to
assume or reject, no later than February 11, 2002, an Agreement
under which the Debtors agreed, among other things, to deliver
fiber to Big Pipe along two distinct and independent, but
connected, routes that the Debtors would construct and maintain.

Audrey S. Trundle, Esq., at Gibson, Dunn & Crutcher LLP, in New
York, New York, tells the Court that the two Big Pipe entities
are subsidiaries of Shaw Communications Inc., which is a
diversified Canadian communications company whose core business
is providing broadband cable television, Internet and satellite
services to approximately 2,800,000 customers in the United
States and Canada.  According to Mr. Trundle, Big Pipe provides
the fiber optic network that carries Shaw's Internet,
telecommunication and E-Commerce services to its customers.
Since early 2000, Mr. Trundle relates, Big Pipe wanted to
increase the number of customers and geographic locations it
serves. To implement that plan, Mr. Trundle explains, Big Pipe
decided to acquire its own fiber in order to provide a stable,
reliable foundation for delivery of its services and sufficient
guaranteed future capacity to support its growth plans and
position as a leader in its industry.

So, Mr. Trundle says, Big Pipe entered into the Agreement.  The
critical components of this undertaking are represented by two
interrelated agreements and their supporting indemnities, as
amended:

  (a) a Fiber Sale Agreement, dated July 27, 2000, among 360
      USA, 360networks (CDN Fiber) ltd. and Big Pipe, as amended
      on August 15, 2000, November 3, 2000, June 8, 2001, June
      15, 2001, and October 4, 2001;

  (b) a Fiber Sale Indemnity Agreement, dated July 27, 2000,
      among 360networks Inc., 360 USA, 360 CDN and Big Pipe;

  (c) an IRU Agreement, dated July 27, 2000 between 360 USA and
      Big Pipe (U.S.) Inc., as amended on August 15, 2000, June
      8, 2001, June 15, 2001, and October 4, 2001; and

  (d) an IRU Indemnity Agreement, dated July 27, 2000, among
      360networks Inc., 360 USA and Big Pipe (U.S.) Inc.

Mr. Trundle states that the Agreement provides Big Pipe with
either title to or an indefeasible right to use a certain number
of dark or inactive strands of optical fiber, along with
undivided interests in, inter alia:

  (i) the infrastructure of the Routes,

(ii) certain rights (rights of way, easements and licenses)
      necessary for the construction, installation, maintenance
      and operation of the Routes, and

(iii) critical equipment shelters located approximately every
      100 kilometers along the Routes and points of presence or
      terminal facilities located in major cities that serve as
      interconnection points along the Routes.

Each of the two routes was to span both the United States and
Canada and then connect at key end points.

In addition, Mr. Trundle continues, the Agreement obligates the
Debtors to provide ongoing and long-term maintenance and repair
services for the Routes, which have critical timing
requirements.

Furthermore, Mr. Trundle relates that Big Pipe has acquired
capacity, on an interim basis, from 360 under a Capacity Lease
Agreement, dated July 27, 2000, among 360networks Services Ltd.,
360networks Services Inc. and Big Pipe for the delivery of its
Internet services.  The Capacity Lease has no connection to the
Agreement, Mr. Trundle explains, except as a short-term, interim
measure to provide Big Pipe with capacity until such time as the
360 Parties provide Big Pipe with the whole of the Routes and
the optical fiber is operational.

Big Pipe asserts that the 360 Parties have breached material
aspects of the Agreement, including, but not limited to, their
failure to complete work necessary to light and fully utilize
the Routes and indications that certain portions of the Routes
will likely not be constructed or delivered at all.  The Debtors
have also not demonstrated an ability to perform their future
obligations under the Agreement, Mr. Trundle adds.

According to Mr. Trundle, Big Pipe has serious and fundamental
concerns regarding the ability of the 360 Parties to ensure the
reliability of the Routes and to give Big Pipe what it bargained
for. Specifically, Mr. Trundle relates, Big Pipe is concerned
about:

  (i) whether the whole of the Northern Route will be delivered,
      in light of indications by the 360 Parties that they do
      not intend to build a substantial portion, roughly 30%, of
      that route and the apparent absence of sufficient funding
      to acquire fiber for Big Pipe in these uncompleted
      locations. Delivery of a complete Northern Route is
      important in order to complete (and thus render
      operational) a protection path for the Southern Route (a
      key to reliability), to connect the Northern Route to
      major markets and important cities, and to the overall
      layout of the Routes;

(ii) the ability of the 360 Parties to retain and protect the
      Underlying Rights necessary for the use of the Routes, in
      light of the fact that the 360 Parties still need, and do
      not appear to have the ability, to pay for the full amount
      of Underlying Rights. Failure to make the Underlying
      Rights Payments puts both Routes in jeopardy;

(iii) Big Pipe's ability to access equipment it owns which is,
      or will be upon the completion of the Northern Route,
      located in each of the equipment shelters and other
      facilities approximately every 100 kilometers along the
      Routes. Continued operations of and access to these
      facilities is critical because it is Big Pipe's equipment
      therein which lights the fiber and renders it operational;
      and

(iv) the increased and ongoing costs of relying on leased fiber
      optic capacity until both Routes are operational.

Mr. Trundle tells the Court that Big Pipe relied on the Debtors'
commitment to provide useable fiber optic capacity along the
Routes. But the Debtors have been either unwilling, unable or
both to provide such capacity in accordance with the terms of
the Agreement, Mr. Trundle observes.

"Big Pipe needs to know now whether the Debtors are willing and
able to perform under the Agreement, or whether Big Pipe will
have to make alternative arrangements for the fiber optic
capacity required," Mr. Trundle asserts.

If the Debtors cannot comply with the terms of the Agreement,
and provide assurances that they will be able to comply with all
of their present and future obligations thereunder, Mr. Trundle
suggests that the Debtors should promptly reject the Agreement,
allowing Big Pipe to contract with another provider.

On the other hand, Mr. Trundle notes, if the Debtors intend to
comply with all of the terms of the Agreement, the Debtors
should assume such Agreement, demonstrating to the Court and to
Big Pipe the Debtors' commitment and ability to perform all of
their obligations, both now and in the future, under the
Agreement.

Mr. Trundle argues that neither party benefits from a delay in
the assumption/rejection decision with respect to the Agreement.
Mr. Trundle observes that the Debtors have had sufficient time
to determine whether they can perform under the Agreement and
have in fact failed to perform all of their obligations.
Furthermore, Mr. Trundle continues, Big Pipe has made several
requests, including direct communications with the Debtors, for
adequate assurance regarding the 360 Parties' ability to perform
all of their obligations under the Agreement.  "However, no such
assurance has been given," Mr. Trundle says.

Delaying the rejection decision only increases the damages that
Big Pipe can assert against the Debtors' estates, Mr. Trundle
warns.  But if the Debtors assume the Agreement soon, Mr.
Trundle maintains that such a decision will not cause any
hardship to the Debtors.  "After all, performance will obligate
Big Pipe to pay amounts that have now been withheld or suspended
- and provides the assurances that Big Pipe requires," Mr.
Trundle contends.

                        Responses

(1) Debtors

In order to prevail in compelling the assumption or rejection of
the Agreements now - rather than upon confirmation of a Plan,
the Debtors assert that Big Pipe must satisfy their burden of
proving, inter alia, that:

  (a) such a decision would be timely now;

  (b) extraordinary circumstances exist that would gravely harm
      Big Pipe absent a prompt decision on assumption or
      rejection; and

  (c) such circumstances warrants this Court overriding the
      Debtors' strong countervailing interests in making any
      such determination concert with confirmation of a
      reorganization plan.

But Alan J. Lipkin, Esq., at Willkie Farr & Gallagher, in New
York, New York, observes that Big Pipe has ignored its burden of
proof as to all three elements.  "Thus, Big Pipe fails to
distinguish themselves from virtually every other party to a
contract with the Debtors," Mr. Lipkin tells the Court.

Moreover, the Debtors complain that Big Pipe's request loses all
credibility upon close examination:

Mr. Lipkin observes that while Big Pipe is pressuring the
Debtors to make a decision whether to assume or reject the
Agreement, the Motion reveals nothing that would adversely
impact Big Pipe if a decision on assumption or rejection was not
made for months or even years.  "That is because, inter alia,
Big Pipe has access to ample fiber optic network capacity for
its needs for the foreseeable future under the Capacity Lease,"
Mr. Lipkin informs Judge Gropper.  Even the cost of such
capacity is a non-issue for Big Pipe, Mr. Lipkin notes, because
the Capacity Lease (and Big Pipe's rent obligation thereunder)
would continue into the future even if the various fiber
segments at issue were delivered to Big Pipe today.

Furthermore, Mr. Lipkin explains, the Debtors are the ones who
are currently suffering harm.  Since Petition Date, Mr. Lipkin
recounts that the Debtors have worked diligently (and at Big
Pipe's request) to address Big Pipe's concerns (whether
legitimate or not) regarding segments already delivered and to
deliver the remaining segments. In fact, in December 2001, Mr.
Lipkin says, Big Pipe was tendered three of the five remaining
segments.  "Nonetheless, although all of that post-petition work
was done at Big Pipe's behest, Big Pipe then arbitrarily
determined that alleged future uncertainties somehow permitted
Big Pipe to withhold the more than C$74,000,000 now due to
360networks," Mr. Lipkin complains.  The Debtors contend that
such a tactic is the equivalent of an improper account freeze or
setoff and, in any event, breaches Big Pipe's obligation to pay
for post-petition goods and services solicited by Big Pipe.

Moreover, Mr. Lipkin notes that Big Pipe attempted to justify
its improper anticipatory setoff through an unfounded contract
interpretation.  Specifically, Mr. Lipkin explains, Big Pipe
contends it could receive all but one segment, but never have to
pay a dime for any of the segments (which cost hundreds of
millions of dollars) because "a condition precedent to payment
for any segment is delivery or assurance of delivery of every
segment".  Indeed, Mr. Lipkin says, Big Pipe asserts it would
have no payment obligation even were all segments delivered
absent Big Pipe determining in its sole discretion that it had
absolute assurance of performance of all other 360networks'
obligations over the next 20 years.

Consequently, Mr. Lipkin adds, Big Pipe's Motion is not only
deficient on its face, but upon closer scrutiny, is wrong on the
law, the facts, and the equities.  Thus, the Debtors assert that
Big Pipe's motion should be denied.

(2) Creditors' Committee

The Official Committee of Unsecured Creditors also supports the
Debtors' objection.

Norman N. Kinel, Esq., at Sidley, Austin, Brown & Wood LLP,
notes that the Agreements with Big Pipe may represent a
significant asset of the Debtors' estates, and thus may well be
a critical element in the Debtors' ongoing reorganization
efforts.  Mr. Kinel asserts that Big Pipe's Motion is entirely
premature, having been made at a relatively early stage in these
highly complex proceedings.  "The Debtors' period of exclusivity
has not yet terminated and neither the Debtors, nor the
Committee have had an adequate opportunity to assess the value
of the Debtors' agreements with the Movants or to fully
determine the financial implications to the Debtors' estates if
they were to assume or reject such agreements," Mr. Kinel
contends.

Also, Mr. Kinel continues, if the Debtors are prematurely
compelled to assume the agreements, they may subject their
estates to sizeable unnecessary potential administrative
liabilities.  "This is of particular concern to the Committee,"
Mr. Kinel emphasizes.

Moreover, Mr. Kinel adds, while the Movants claim that the
Debtors are in default of their obligations under the
agreements, it is of enormous concern to the Committee that
apparently it is the Movants themselves who are in default on
their obligations to the Debtors - to the tune of approximately
$70,000,000.

Therefore, the Committee asserts, the Court should deny Big
Pipe's motion. (360 Bankruptcy News, Issue No. 17; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


ABC-NACO: Completes Court-Approved Sale of Assets to TCF Railco
---------------------------------------------------------------
ABC-NACO Inc., announced that the sale of substantially all of
its assets to TCF Railco Acquisition LLC has been completed. A
hearing was held in the U.S. Bankruptcy Court in the Northern
District of Illinois on January 11, 2002 at which time the terms
of the final purchase agreement were approved.

The assets sold included substantially all of ABC-NACO's U.S.
operating assets and the stock of the operations in Europe and
China. The Company's Rail Products subsidiaries in Canada and
Mexico were not part of the sale. The Canadian subsidiary,
Dominion Castings Limited, is currently in receivership and the
Mexican operation in Sahagun, Hidalgo, Mexico has ceased
operations. It is not expected that the Company will realize any
of its investment in these two operations. As a result, ABC-NACO
will be left with very minimal assets.

As announced, on October 18, 2001, ABC-NACO and its U.S.
subsidiaries voluntarily filed for reorganization under Chapter
11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for
the Northern District of Illinois. The Company's liabilities in
this filing were approximately $310 million of which in excess
of $150 million was secured by substantially all of the
Company's assets under the indebtedness to the U.S. senior
secured bank group.

The sales proceeds, which are approximately $65 million (subject
to certain adjustments and assumption of certain liabilities),
from the sale of the assets to TCF will be used to satisfy the
indebtedness to the senior secured bank group including its
debtor in possession loans advanced after the bankruptcy filing.
Since the sales proceeds will be substantially less than the
amount owed to the senior secured bank group, proceeds for the
settlement of claims of unsecured creditors, if any, will be
minimal and there will be no proceeds available for recovery by
shareholders.

TCF is owned by Three Cities Funds III, L.P. and affiliates. The
Three Cities Funds are primarily engaged in making control
investments in medium-sized companies, where its investment can
lead to a meaningful, positive influence on the future direction
of the enterprise. Effective following the closing of this
transaction, the operations purchased by TCF will operate under
the name of Meridian Rail.


A.G.A. FLOWERS: Sets Jan. 30 as Deadline for Filing of Ballots
--------------------------------------------------------------
                  UNITED STATES BANKRUPTCY COURT
                   SOUTHERN DISTRICT OF FLORIDA
                        (MIAMI DIVISION)

---------------------------------
In re                            )  Chapter 11
A.G.A. FLOWERS, INC., et al.,    )  Case Nos. 01-13984-BKC-RAM
                      Debtors.   )  Substantively Consolidated
---------------------------------

  NOTICE AND SUMMARY DISCLOSURE STATEMENT TO EQUITY HOLDERS OF
  GERALD STEVENS, INC. PURSUANT TO BANKRUPTCY CODE SECTION 1125
  -------------------------------------------------------------

TO HOLDERS OF EQUITY INTERESTS IN DEBTOR GERALD STEVENS:

     On April 23, 3001 (the "Petition Date"), Gerald Stevens,
Inc. together with its 55 wholly-owned debtor subsidiaries
(together, the "Debtors") filed in the United States Bankruptcy
Court of the Southern district of Florida (the "Bankruptcy
Court") voluntary petitions for relief under Chapter 11 of the
Bankruptcy code.  Support of Debtors' first Amended Joint
Chapter 11 Plan of Liquidation.

     No ballots will be sent to you as a Holder of Equity
Interest because Holders of Allowed Equity Interests shall be
deemed to vote against the Plan.  Furthermore, any and all
claims that the Holder of an Equity Interest in the Debtors
could bring, by virtue of their equity ownership, either against
the Debtors or their respective agents, members, affiliates,
representatives, officers, or directors shall be transferred to
the Liquidating Trust and the Liquidating Trustee shall have the
sole right to prosecute any such claims.

     Debtors will not provide you with copies of the Disclosure
Statement or the Plan unless you request copies in writing.  
Please direct your written request to First Union, Claimstrack
services Group, 210 North Ridgecrast Lane, No 100, Jacksonville,
Florida 32259.  First Union will provide you with copies of the
Disclosure Statement and the Plan at the Debtors' expense.

             DEADLINE FOR OBJECTIONS TO CONFIRMATION:
                        February 4, 2002

     DEADLINE FOR FILING BALLOTS ACCEPTING OR REJECTING PLAN:
                       January 30, 2002

     Under the terms of the Plan, holder of Allowed
Administrative Claims will be paid in full in cash on the
Confirmation Date.  The holders of Allowed Class 1 Claims shall
be paid in full on the effective date, or shall receive deferred
cash payments.  The holder of the Allowed Class 2 Claim will
receive the proceeds from the sale of certain of its collateral
in satisfaction of its secured claim.   The holder of the
Allowed Class 2 Claim shall have a deficiency claim, which shall
be treated as a Class 4 Claim.  The holder of the Allowed Class
3 claims shall receive at the option of the Liquidating Trustee
in full satisfaction of their Allowed Claims; (a) the collateral
securing their claim; (b) Payment of their Allowed Claims in
full on the Effective Date, or deferred Cash payments over a
period not to exceed six years from the Effective Date.  A
holder of an Allowed Class 4 Claim will receive, in full and
complete satisfaction of its Allowed Claim, a pro rata share of
the cash in the A.G.A. Liquidating Trust in accordance with the
terms of the Plan and the Trust Documents.  The Assets of the
A.G.A. Liquidating Trust shall consist of any and all causes of
Actions of the Debtors or their estates, plus $500,000 in cash.  
Finally Holder of Class 5 Equity interests shall receive nothing
under the Plan, and all equity interest shall be cancelled.

                                       Dated:  December 27, 2001


ANC RENTAL: Seeking Okay to Pay Prepetition PIP Coverage Claims
---------------------------------------------------------------
ANC Rental Corporation, and its debtor-affiliates seek entry of
an order pursuant to sections 105(a) and 363(c)(1) of the
Bankruptcy Code authorizing them to fulfill certain pre-petition
payment obligations with respect to personal injury claims.

In the ordinary course of business, Mark J. Packel, Esq., at
Blank Rome Comisky & McCauley LLP in Wilmington, Delaware,
states that the Debtors rent automobiles to individual drivers
who, in some instances, are involved in accidents while renting
and driving Debtors' vehicles. In order to qualify to rent cars
and do business in the United States, Debtors are required to
provide insurance up to certain minimum amounts pursuant to the
various applicable State laws. In approximately 17 States, as
part of the insurance coverage, Mr. Packel tells the Court that
the Debtors are required to pay directly certain expenses of the
parties to an accident such as medical bills and other expenses
or losses incurred by the injured parties. These payments,
referred to as no-fault or Personal Injury Protection, must be
made promptly after the request for payment. The time frames
vary in each State but generally payments are due within 30 days
after the bill is submitted to the Debtors. Failure to make the
requisite payments may result in the assessment of penalties,
interest and attorneys' fees against the Debtors and the
relevant States may refuse to renew the Debtors' certification
and prohibit them from doing business in that State if the
Debtors fail to comply with their State mandated insurance
obligations.

Mr. Packel maintains that the Debtors customarily make the
Personal Injury Protection payments in the ordinary course of
business but, since the Filing Date, have not paid PIP for
pre-petition expenses related to pre-petition accidents. As of
the date of this Motion, the Debtors owe approximately
$3,500,000 in Personal Injury Protection for personal injury
claims pending as of the Filing Date. The Debtors' cash flow
projections provided to the Court at each of the cash collateral
hearings since the Filing Date include the amounts necessary to
satisfy Debtors' Personal Injury Protection obligations.

Mr. Packel informs the Court that the Debtors have been working
closely with the Creditors' Committee to develop a plan to
authorize the Debtors to continue to settle and make payments on
the pre-petition personal injury claims consistent with the
ordinary course practices of the Debtors prior to the Filing
Date. Payment of the Personal Injury Protection obligations is
consistent with the Debtors' goal of developing a plan to
continue to resolve the pre-petition personal injury claims.

Mr. Packel asserts that Debtors' compliance with their insurance
obligations is an integral part of their business as the
insurance aspect is intertwined with every facet of the Debtors'
operations. For all the reasons set forth above, payment of the
Personal Injury Protection obligations, a component of the
Debtors' insurance responsibility in numerous States is critical
and necessary to the Debtors' reorganization efforts. (ANC
Rental Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


ARCH WIRELESS: Has Until Feb. 6 to File Schedules & Statements
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts
granted Arch Wireless Inc. an extension of time to file
Schedules and Statements of Affairs through February 6, 2002,
which is 60 days after the Petition Date.

Arch Wireless, Inc. through its subsidiaries, is a leading
provider of wireless messaging and information services in the
United States. The Company filed for chapter 11 protection on
December 6, 2001 in the U.S. Bankruptcy Court for the District
of Massachusetts. Mark N. Polebaum, Esq. at Hale & Dorr LLP
represents the Debtors in their restructuring effort. When the
company filed for protection from its creditors, it listed
$696,449,000 in assets and $2,163,053,000 in debt.


ARMSTRONG HOLDINGS: Bar Date for EPA Claims Extended to April 30
----------------------------------------------------------------
Armstrong Holdings, Inc., and its debtor-affiliates present
Judge Newsome with a third stipulation and order agreeing to
extend the bar date for filing proofs of claim by the United
States Environmental Protection Agency and the Federal Natural
Resources Trustee from the present date of December 16, 2001, to
and including April 30, 2002.  The reason given is that the
United States asked for the extension, and, subject to Judge
Newsome's approval, the Debtors have agreed to it.

Judge Newsome promptly signs the Order approving and
implementing the stipulation. (Armstrong Bankruptcy News, Issue
No. 15; Bankruptcy Creditors' Service, Inc., 609/392-0900)   


AUDIO VISUAL: Deadline for Filing Schedules Moved to April 1
------------------------------------------------------------
Audio-Visual Services Corporation and its Debtor-Affiliates
obtained Court approval to extend the time within which they
must file their respective Schedules and Statement of Financial
Affairs through April 1, 2002.

Audio-Visual Services filed for chapter 11 protection on
December 17, 2001 in the U.S. Bankruptcy Court for the Southern
District of New York. James M. Peck, Esq. at Schulte Roth &
Zabel LLP represents the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed $507,803,000 in total assets and $449,226,000 in total
debts.


AVIATION SALES: Sets Special Shareholders Meeting for Feb. 19
-------------------------------------------------------------
Aviation Sales Company (OTCBB:AVIO) has commenced its previously
announced rights offering and note exchange offer and consent
solicitation.

In addition, the Company announced that its special stockholders
meeting to consider and vote upon the proposed restructuring
will be held on February 19, 2002.

                    The Rights Offering

Holders of the Company's common stock at the close of business
on Friday, December 28, 2001 have been issued non-transferable
rights to purchase up to 24,024,507 post-reverse split shares of
the Company's common stock in the rights offering. Each right
allows the holder thereof to purchase one share of the Company's
post-reverse split common stock at a purchase price of $.8325
per share (or the equivalent of $.0833 per pre-reverse split
share). The rights offering will expire on February 20, 2002,
unless it is extended. The rights offering is subject to a
number of conditions, including the completion of the note
exchange offer and consent solicitation and the receipt of
stockholder approval of the restructuring, including approval of
the rights offering, the note exchange, a proposed reverse split
of the Company's currently outstanding common stock on a one-
share-for-ten-shares basis and a proposed increase in the
Company's authorized common stock from 30 million shares to 500
million shares.

The complete terms of the rights offering are contained in the
Company's prospectus dated January 9, 2002. Copies of the
prospectus and rights offering documents can be obtained from
Continental Stock Transfer & Trust Company, which is the
subscription agent for the rights offering, or from Morrow &
Co., Inc., which is the information agent for the rights
offering. Morrow & Co.'s telephone number is (800) 607-0088.
Continental's telephone number is (212) 509-4000 (Ext. 535).

       The Note Exchange Offer and Consent Solicitation

The Company is offering to exchange all of its currently
outstanding $165 million of 8 1/8% senior subordinated notes due
2008 for $10 million in cash, $100 million of the Company's new
8% senior subordinated convertible PIK notes due 2006, shares of
the Company's post-reverse split common stock and warrants to
purchase additional shares of the Company's post-reverse split
common stock.

The note exchange offer and consent solicitation will expire on
February 20, 2002, unless it is extended. Holders must tender
their old notes prior to the expiration date in order to receive
the exchange offer consideration. The note exchange offer and
consent solicitation is conditioned on a number of conditions,
including receipt of tenders from holders of at least $132
million in aggregate principal amount of the old notes (80% of
the outstanding old notes), completion of the rights offering
and the receipt of stockholder approval of each of the parts of
the restructuring. The holders of 73.02% of the outstanding old
notes have previously agreed to exchange their old notes in the
exchange offer.

The complete terms of the exchange offer and consent
solicitation are contained in the Company's prospectus dated
January 9, 2002. Houlihan Lokey Howard & Zukin Capital is the
exclusive dealer manager for the note exchange offer and consent
solicitation and HSBC Bank USA is the exchange agent for the
note exchange offer and consent solicitation. Copies of the
prospectus and consent solicitation and exchange offer documents
can be obtained by calling HSBC Bank USA at (800) 662-9844.
Additional information concerning the terms and conditions of
the note exchange offer and consent solicitation may be obtained
by contacting Houlihan Lokey Howard & Zukin Capital at (212)
497-4100.

                          General

The Company's registration statements relating to the rights
offering and the note exchange offer and consent solicitation
have recently become effective under the Securities Act of 1933.
The Company has also mailed a definitive proxy statement to its
stockholders relating to the February 19, 2002 meeting of its
stockholders, which meeting has been called to consider and vote
upon the terms of the restructuring. These documents contain
important information about the Company, the rights offering,
the note exchange offer and consent solicitation and related
matters. Noteholders, stockholders and other interested parties
are urged to carefully read these documents for information
regarding these matters. The prospectus and consent
solicitation, the related letter of transmittal and certain
other documents related to the note exchange offer and consent
solicitation and the prospectus and other documents related to
the rights offering will be made available to all stockholders
and noteholders as of the record date, at no expense to them.
These documents are also available at no charge at the SEC's
website at http://www.sec.gov This press release shall not  
constitute an offer to sell or the solicitation of an offer to
buy, nor shall there be any sale of the new notes or the shares
of common stock to be offered in the rights offering in any
state where such offer, solicitation or sale would be unlawful.

Aviation Sales Company is a leading independent provider of
fully integrated aviation maintenance, repair and overhaul
(MR&O) services for major commercial airlines and maintenance
and repair facilities. The Company currently operates four MR&O
businesses: TIMCO, which, with its three locations, is one of
the largest independent providers of heavy aircraft maintenance
services in North America; Aerocell Structures, which
specializes in the MR&O of airframe components, including flight
surfaces; Aircraft Interior Design, which specializes in the
refurbishment of aircraft interior components; and TIMCO Engine
Center, which refurbishes JT8D engines. The Company also
operates TIMCO Engineered Systems, which provides engineering
services to our MR&O operations and our customers.

DebtTraders reports that Aviation Sales Company's 8.125% bonds
due 2008 (AVIAS1) are trading between 38 and 40. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AVIAS1for  
real-time bond pricing.


BENEDEK COMMS: Net Loss Widens to $6.2MM as Revenues Drop in Q3
---------------------------------------------------------------
Benedek Communications Corporation owns and operates 23 network-
affiliated television stations throughout the United States. The
stations are geographically diverse and serve small to
medium-sized markets in 24 states. Eleven of the stations are
affiliated with CBS, seven are affiliated with ABC, four are
affiliated with NBC and one is affiliated with Fox.

In the third quarter of 2001, the Company reported net revenues
of $32.7 million compared to net revenues of $39.5 million in
the third quarter of 2000. The Company experienced a net loss of
$6.2 million for the third quarter of 2001 compared to a net
loss of $4.0 million for the corresponding period in 2000.
Adjusted EBITDA for the third quarter of 2001 was $8.1 million
as compared to $13.2 million for the third quarter of 2000.
Adjusted EBITDA on a same station basis for the third quarter of
2001 was $8.1 million as compared to $13.3 million for the third
quarter of 2000.

The decrease in net revenues was $6.8 million, or 17.2%.
Commercial-free programming in the days immediately following
the attacks on September 11, 2001 and the cancellation or
reduction of normal advertising schedules in the subsequent
weeks had a significant negative impact. The Company estimates
that approximately $3.5 million of net advertising revenues were
not realized as a result of these events. This further
exacerbated an already difficult advertising climate caused by
continued economic weakness and the lack of political
advertising revenues in the third quarter of 2001. National
advertising decreased by $2.1 million, or 15.4%, from the same
period in 2000. Local/regional revenues were impacted by a
lesser amount and were $22.0 million in the three months ended
September 30, 2001 as compared to $23.6 million for the same
period in 2000, a decrease of 6.7%. Also contributing to the
decline in net revenues was a $4.7 million decrease in political
advertising revenue for the third quarter of 2001 as compared to
the same period in 2000.

Net loss was $6.2 million for the third quarter of 2001 as
compared to a net loss of $4.0 million for the corresponding
period in 2000 as a result of factors noted above.

In the first nine months of 2001 net revenues were $102.7
million as compared to $112.8 million for the same period in
2000, a decrease of $10.1 million. A $5.3 million or 12.6%
decline in national advertising revenue negatively impacted net
revenues. Additionally, local/regional revenues
decreased by 1.5 million, or 1.7%. The lack of significant
political advertising revenue in 2001 resulted in a decrease of
$6.2 million in political revenue to $1.1 million for the first
nine months of 2001 from $7.3 million during the corresponding
period in 2000. The national crisis as a result of the September
11, 2001 attacks and the continued weakness in economic
conditions also contributed to
the decrease.

On a same station basis, net revenues for the first nine months
of 2001 declined by $13.4 million, or 11.5%, to $102.5 million
as compared to $115.9 million in the corresponding period of
2000 as a result of prevailing economic conditions. A $6.4
million, or 15.0% decline, in national advertising revenue
caused most of the decrease. In addition, political advertising
revenues decreased by $6.2 million for the first nine months of
2001 due to the absence of national political races in odd-
numbered years. On a same station basis, local/regional revenues
for the first nine months of 2001 were also lower by $3.5
million, or 4.9%, from the same period in 2000. Local/regional
revenues declined less than national revenues because of the
continued focus on local markets and strong relationships with
customers at that level.

The Company recognized a gain of $61.2 million for the first
nine months of 2000 as a result of the exchange of the assets of
WWLP-TV with a fair market value of $123.0 million and $18.0
million in cash for the assets of KAKE-TV and WOWT-TV. The
Company also realized a $0.3 million gain on the sale of KOSA-TV
in 2000. KOSA-TV was sold on March 21, 2000 for $8.0 million.

Net loss was $18.2 million for the first nine months of 2001 as
compared to net income of $15.2 million for the corresponding
period of 2000.

Benedek Communications owns nearly 25 television stations
primarily in small and medium-sized markets in the Midwest and
South. Its stations are affiliated with all four major networks.
The company also operates station-affiliated Web sites. Benedek,
which generates more than 50% of sales from local and regional
advertising, has been struggling with a slump in the ad market.
The family of chairman and CEO Richard Benedek owns about 95% of
the company; president and COO James Yager, 5%.  As at June 30,
2001, the company's balance sheet was upside-down, reporting a
total shareholders' equity deficit of $233 million.


BETHLEHEM STEEL: Court Approves Surplus Asset Sale Procedures
-------------------------------------------------------------
The Court approves these Surplus Asset sale procedures as
proposed by Bethlehem Steel Corporation and its debtor-
affiliates:

(a) The Debtors shall give notice of each proposed sale of
    Surplus Assets subject to any lien or encumbrance (other
    than Surplus Assets subject only to liens or encumbrances
    held by or for the benefit of the Debtors' (x) post-petition
    lenders or (y) pre-petition lenders under that certain
    $320,000,000 revolving credit facility) and/or for a
    purchase price in excess of $500,000 to:

       (i) the United States Trustee,
      (ii) attorneys for the statutory creditors' committees,
     (iii) attorneys for the Debtors' (x) post-petition lenders
           and (y) pre-petition lenders under that certain
           $320,000,000 revolving credit facility, and
      (iv) the holder of any lien or encumbrance relating to the
           Surplus Asset(s) proposed to be sold and, if
           requested by such holder of a lien or encumbrance,
           the attorneys for such holder of a lien or
           encumbrance.

   Notices shall be served by facsimile, so as to be received by
   5:00 p.m. (Eastern Standard or Daylight Time) on the date of
   service. The Notice shall specify the:

       (i) Surplus Asset(s) to be sold,
      (ii) the identity of the seller,
     (iii) the identity of the proposed purchaser,
      (iv) the proposed purchase price,
       (v) a brief statement of the Debtors' marketing efforts
           with respect to the Surplus Asset(s) proposed to be
           sold,
      (vi) the current estimated fair market value of the
           Surplus Asset(s) to be sold, and
     (vii) an estimate of the net proceeds of the proposed sale.

(b) The Notice Parties shall have 10 days after the Notice is
   served to object to the proposed transaction. All objections
   shall be in writing, delivered to Weil, Gotshal & Manges LLP,
   767 Fifth Avenue, New York, New York 10153, Attn: Jeffrey L.
   Tanenbaum, Esq. and George A. Davis, Esq., the Debtors'
   counsel, so as to be actually received by 5:00 p.m. (Eastern
   Standard or Daylight Time) 10 days after the Notice is
   served. If Weil Gotshal receives no written objection prior
   to the expiration of such objection period, the Debtors shall
   be authorized to consummate the proposed sale transaction and
   to take such actions as are necessary to close the
   transaction and obtain the sale proceeds.

(c) If a Notice Party objects to the proposed transaction within
   10 days after the Notice is sent, the Debtors and such
   objecting Notice Party shall use good faith efforts to
   resolve the objection. If the Debtors and the objecting
   Notice Party are unable to achieve a consensual resolution,
   the Debtors shall not proceed with the proposed transaction
   pursuant to these procedures, but may seek Court approval of
   the proposed transaction upon notice and a hearing.

(d) The Debtors shall be authorized to consummate the sale of
   Surplus Assets not subject to any lien or encumbrance (other
   than Surplus Assets subject only to liens or encumbrances
   held by or for the benefit of the Debtors' (x) post-petition
   lenders or (y) pre-petition lenders under that certain
   $320,000,000 revolving credit facility) and for a purchase
   price of $500,000 or less without providing notice to any
   parties; provided, however, that to the extent the aggregate
   consideration received by the Debtors for sales of Surplus
   Assets to any single entity exceeds $500,000, the Debtors
   must follow the procedures prescribed in subparagraphs a
   through c herein with respect to such excess amount of
   Surplus Assets.

(e) To the extent the aggregate consideration received by the
   Debtors for sales of Surplus Assets to any single entity
   exceeds $6,000,000 during any 60-day period, the Debtors may
   not sell such excess amount of Surplus Assets pursuant to the
   Sale Procedures. (Bethlehem Bankruptcy News, Issue No. 8;
   Bankruptcy Creditors' Service, Inc., 609/392-0900)


BURLINGTON: Asking for Open-Ended Lease Decision Period
--------------------------------------------------------
Burlington Industries and its debtor-affiliates are tenants
under approximately 36 unexpired non-residential real property
leases. The leases primarily relate to:

    (a) distribution and warehousing facilities,
    (b) office space,
    (c) showrooms and
    (d) sales offices.

These leases remain in effect and have not expired or
terminated, and thus, they are subject to assumption, assumption
and assignment or rejection under section 365 of the Bankruptcy
Code.

By this motion, the Debtors ask Judge Walsh for an open-ended
extension, through confirmation of a plan of reorganization, of
their time to assume or reject all unexpired nonresidential real
property leases wherein they are lessees or sublessees.

Paul N. Heath, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, informs the Court that since the Petition
Date, the Debtors have focused their efforts in completing a
smooth transition to operations in chapter 11, as well as
fulfilling various administrative and reporting obligations
related to their cases.  Thus, the Debtors have been unable to:

    (i) evaluate any of the leases thoroughly,

   (ii) determine which of the leases will contribute to the
        Debtors' restructuring efforts, or,

  (iii) solicit the views of the Creditors' Committee and other
        constituencies regarding the appropriate treatment of
        each lease.

Furthermore, Mr. Heath states that given the potential
importance of the leases to the Debtors' ongoing operations and
the number of issues the Debtors must consider and resolve in
deciding whether to assume or reject the leases, it would be
impossible and imprudent for the Debtors to provide a decision
within the 60-day period specified.  "Without an extension, the
Debtors are at risk of prematurely assuming leases that may
later be discovered as burdensome or prematurely rejecting
leases that may later be discovered as critical to their
reorganization efforts," Mr. Heath adds.

Mr. Heath assures the Court that if the relief is granted, the
Debtors will continue to complete all evaluations,
determinations and negotiations necessary to assume or reject
the leases. "Pending to the Debtors decision, they will continue
to perform all their obligations under the leases including
payment of post-petition rent due," Mr. Heath says.  Thus, Mr.
Heath asserts that the extension of time requested will not
prejudice the Lessors under the leases.

Therefore, the Debtors ask the Court to grant them an extension
of time to assume or reject all the leases, through and
including the confirmation date.

Judge Walsh will hold a hearing on this request today in
Wilmington.  (Burlington Bankruptcy News, Issue No. 6;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   


CASTLE ENERGY: Sells Oil & Gas Properties to Delta for $20 Mill.
----------------------------------------------------------------
Castle Energy Corporation (Nasdaq:CECX) announced that it had
entered into a purchase and sale agreement to sell all of its
domestic oil and gas properties to Delta Petroleum Company
(Nasdaq:DPTR).

The purchase price is $20,000,000 cash plus 9,566,000 shares of
Delta's common stock, which would result in the Company owning
approximately 43% of Delta. The effective date of the sale is
October 1, 2001 and closing is expected by April 30, 2002 or
later.

Pursuant to the terms of the purchase and sale agreement, the
cash portion of the purchase price will be reduced by the cash
flow from the properties between the effective date and the
closing date. The sale is subject to approval by the
shareholders of Delta. Each party is subject to penalties for
failure to close the transaction.

Delta may repurchase 3,188,667 of its shares from Castle for
$4.50 per share for a period of one year after closing.

Mr. Joseph L. Castle II, Chief Executive Officer of the Company,
indicated that the decision to enter into the transaction with
Delta was based upon Delta's significant undeveloped crude oil
reserves, its potential to realize the value inherent in its
offshore California federal leases, the opportunity to eliminate
duplicate general and administrative costs and the chance for
the Company to sell its domestic oil and gas properties for a
reasonable price with potential upside with only minor tax
consequences.

Mr. Castle also indicated that the Company's Board of Directors
believes that the Company's resulting indirect interest in the
combined oil and gas reserves of Delta and the Company would
enhance shareholder value.

To that end, the Company's Board of Directors is currently
considering various future alternatives for the Company,
including but not limited to continuing operations or
liquidation assuming the sale closes as planned.

The Company's domestic oil and gas properties currently consist
of oil and gas interests in approximately 525 oil and gas wells
in fourteen states in the United States.

In addition, the Company still owns a fifty percent interest in
a drilling concession in Romania and a thirty-five percent
membership interest in Networked Energy LLC, a private company
engaged in the operation of energy facilities that supply power,
heating and cooling services directly to retail customers.


ENRON CORP: Bringing-In Fergus as Special Regulatory Counsel
------------------------------------------------------------
Enron Corporation, and its debtor-affiliates seek the Court's
authority to employ Fergus and Gary S. Fergus, Esq., as their
special regulatory counsel, as of January 1, 2002, in connection
solely with proceedings before the United States Federal Energy
Regulatory Commission captioned, San Diego Gas & Electric Co. v.
Sellers of Energy and Ancillary Services Into Markets Operated
by the California Independent System Operator Corporation and
the California Power Exchange.

According to Brian S. Rosen, Esq., at Weil, Gotshal & Manges
LLP, in New York, these FERC matters arose out of a complaint
filed by San Diego Gas & Electric alleging that all sellers of
electric energy into the California market had collected
unlawfully high prices during the period between October 2, 2000
and June 21, 2001.  Mr. Rosen relates that the complaint and
subsequent investigation by the FERC were based upon Section 206
of the Federal Power Act.

Mr. Rosen recounts the events:

-- August 23, 2000: the Commission started an investigation into
   the wholesale electricity rates charged in California.

-- November 1, 2000: the Commission issued an order finding that
   the "electric market structure and market rules for wholesale
   sales of electric energy in California were seriously flawed
   and that these market structures and rules, in conjunction
   with an imbalance of supply and demand in California, have
   caused, and continue to have the potential to cause, unjust
   and unreasonable rates for short-term energy . . . under
   certain terms and conditions."

-- June 19, 2001: the Commission issued an order convening a
   settlement conference for purpose of resolving refund claims
   for past periods. No settlement was reached.

-- July 12, 2001: the Chief Judge of the Federal Regulatory
   Commission issued a report finding that refunds owed to
   purchasers of electricity "amounted to hundreds of millions
   of dollars, probably more than a billion dollars in aggregate
   sum," although not the $8,900,000,000 claimed by the State of
   California and its public utilities.

-- July 25, 2001: the Commission issued an order convening an
   evidentiary hearing to determine what the just and reasonable
   rates should have been during the period October 2, 2000
   through June 20, 2001, the amount of the refunds owed, the
   amount of outstanding sums owed to sellers for energy
   delivered and any applicable offsets.

To date, Mr. Rosen tells the Court, the Debtors have been
represented in connection with these matters by Gary Fergus,
Esq., a partner in the law firm of Brobeck, Phleger, & Harrison
LLP, and Dan Watkiss of Bracewell and Patterson, who have
retained expert witnesses, interviewed and prepared witnesses,
and reviewed complex data of the Debtors as well as data
provided in discovery by other parties, all in contemplation of
and in preparation for the evidentiary hearing.  "At stake for
the Debtors are outstanding accounts receivable and potential
offsets worth tens of millions of dollars as well as potential
liability for refunds," Mr. Rosen emphasizes.  But effective
January 1, 2002, Mr. Rosen notes, Mr. Fergus will no longer be a
partner in Brobeck because he will have created his own law
firm, Fergus.

The Debtors want to continue to retain Mr. Fergus as special
counsel.  Thus, the Debtors request Judge Gonzalez to approve
Fergus' employment as special counsel in the Federal Energy
Regulatory Commission Matters at Fergus' standard hourly rates
and pursuant to Fergus' normal policies for reimbursement of
disbursements.

Gary Scott Fergus, Esq., founder of Fergus, asserts that his
firm's current hourly rates and disbursement policies are
inherently reasonable in comparison to the competitive national
market for legal services.  Subject to change from time to time,
Fergus' customary hourly rates are:

               $540 for Gary Fergus
               $200 to $400 for associates
               $50 to $125 for paraprofessionals

Mr. Fergus tells the Court that his firm regularly charges for
reimbursement of out-of-pocket expenses including secretarial
overtime, travel, copying ($.15 per page), outgoing facsimiles
($1.75 per page domestic), document processing, court fees,
transcript fees, long distance phone calls, postage, messengers,
overtime meals and transportation.

As a routine part of its practice, Mr. Fergus says, Fergus may
appear in cases, proceedings, and transactions involving many
different attorneys, accountants, financial consultants, real
estate consultants and investment bankers, including other
professionals representing the Debtors and other parties in
interest.  In certain instances, Mr. Fergus admits that such
professionals may be direct clients of Fergus.  But Mr. Fergus
assures the Court that he nor his firm does not represent any
party-in-interest in matters adverse against the Debtors. (Enron
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


ENRON NATURAL GAS: Case Summary & Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Enron Natural Gas Marketing Corp.
        1400 Smith Street
        Houston, Texas 77002

Bankruptcy Case No.: 02-10132-ajg

Type of Business: Marketer of natural gas and oil.

Chapter 11 Petition Date: January 11, 2002

Court: Southern District of New York (Manhattan)

Judge: Arthur J. Gonzalez

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

                          -and-

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

Total Assets: $ 79,042

Total Debts: $ 1,359,666,044

Debtor's Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
American Public Energy      Gas contract          $419,305,386
Agency
P.O. Box 98928
Lincoln, NE 68509-8928
Eban Ward
Tel: (402) 474-4759
Fax: (402) 474-0473

Mahonia Ltd.                Gas contract          $846,954,473
22 Greenville Street
St. Helier, Jersey
Channel Islands JE4 8PX
Ian James
Tel: 44 1534 609000
Fax: 44 1534 609333

Stoneville Aegean Limited   Gas contract           $70,919,563
22 Greenville Street
St. Helier, Jersey
Channel Islands JE4 8PX
Ian James
Tel: 44 1534 609000
Fax: 44 1534 609333

State of Louisiana          Taxes                   $2,486,622
Department of Revenue
and Taxation
P.O. Box 91011
Baton Rouge, LA 70821-9011


ENRON: Gottesdiener Says E-mail Reveals Mishandling of Lockdown
---------------------------------------------------------------
Two e-mails that Enron sent workers this past Fall concerning
the "lockdown" of the company's 401(k) Plan were released
yesterday by The Gottesdiener Law Firm
( http://www.gottesdienerlaw.com).  

Gottesdiener, the head of the Washington, D.C. 401(k) and
pension class action law firm that filed suit in November
against Enron Corporation, top Enron officials, Arthur Andersen
and other defendants in federal court in Houston to recover some
$1 billion in Enron employees' retirement savings
( http://www.enronsuit.com), believes the e-mails show the  
company's "callous disregard" for its employees.

According to Gottesdiener, many of Enron's employees were in the
midst of losing their life savings and their jobs during the
"lockdown," which prevented them from selling their shares of
Enron stock between October 26, 2001 and November 13, 2001,
while the Company spiraled into bankruptcy.

According to Enron, the lockdown was administratively necessary
for the company to proceed with a desired change of the 401(k)
Plan's trustee and record keeper. However, the suit filed by
Gottesdiener on behalf some 15,000 current and former Enron
employees disputes that any lockdown was necessary to change
service providers. He further alleges that, even if necessary,
it should have been postponed to allow employees, who had more
than 60% of their account savings in Enron stock, to sell their
stock and salvage some of their investment.

The just-released e-mails, according to Gottesdiener, reveal two
fundamental problems with the way Company executives handled the
lockdown. First, Gottesdiener said, the e-mails show that the
Company "arrogantly dismissed the concerns of employees who had
been imploring them to delay the lockdown." Second, Gottesdiener
said, they also show that the Company issued false information
about the lockdown, leading many workers to believe that the
lockdown began a week earlier than it did and causing them to
miss the opportunity to sell their stock when it was still
selling for around $30 a share. According to Gottesdiener, by
the time the lockdown was finally lifted, on November 13, 2001,
the price of Enron stock had plummeted to under $10 a share.

The first e-mail was issued the night of October 25, 2001, just
before the imposition of the lockdown the next day. Gottesdiener
explained that the Company issued the email because it had been
besieged by workers who were begging the Company to postpone the
lockdown to allow them to sell their shares. The e-mail twice
acknowledged workers' complaints, saying: "We understand that
you are concerned about the timing" of the lockdown and "We
understand your concerns." But, the Company said, it was going
ahead with the lockdown as planned anyway for its own
administrative convenience, saying, "We have been working with
Hewitt (the new recordkeeper) and Northern Trust (the old record
keeper) since July."

According to Gottesdiener, "In translation, this says: ``We know
that many of you have all of your savings in Company stock and
want to sell it to salvage what you can, but we simply can't be
bothered - we've been working on this transition since July and
it would be too much trouble to postpone it.'"

The second e-mail was issued on September 27, 2001 and was the
Company's initial announcement to employees about the lockdown.
The problem here, according to Gottesdiener, was that the
information contained in the e-mail was "simply false." The e-
mail told employees that the lockdown - which Enron
euphemistically termed a "transition" - would begin on October
19th, and not October 26th.

"To ensure that records and individual accounts are converted
accurately," the e-mail said, "a transition period of
approximately one-month will begin Oct. 19." "During the
transition period," the e-mail continued," participants "are not
able to transfer funds among investment options" or "request a
withdrawal." According to Gottesdiener, that last statement was
false: "In fact, workers could have sold their Enron stock
between October 19th and October 26th. During just that week,
right after the Company issued its dramatic 3rd Quarter
statement and the SEC opened its investigation, the stock lost
half of its value." Gottesdiener said that many workers did not
sell during that week based on the Company's statement that they
could not do so.

"Where were Ken Lay and other top Company officials all while
this was going on? The answer seems to be: On the phone to the
Bush administration asking for a bailout," Gottesdiener said.

Gottesdiener's reference was to the fact that while the Company
was refusing workers' calls to postpone the lockdown, Enron's
Chairman Kenneth L. Lay and other top officials, who personally
made tens of millions of dollars from selling off their Enron
stock, were telling Bush administration officials that without
some form of government assistance, Enron was looking at
bankruptcy.

"Enron's arrogance in refusing to delay the lockdown, knowing
what it knew, is simply stunning. From the beginning to the end
of the lockdown, October 26th-November 13th, the stock lost
another third of its value," Gottesdiener explained. "We are
obviously pursuing all this in court but the pension laws have
to be strengthened to prevent this type of victimization of
workers in the future."

NOTE: The e-mails are available at http://www.enronsuit.com   

Based in Washington, D.C., the Gottesdiener Law Firm and its
principal attorney, Eli Gottesdiener, specialize in complex
civil and criminal litigation on behalf of plaintiffs and
defendants in federal and state courts. Mr. Gottesdiener has
prosecuted some of the leading pension and 401(k) plaintiffs'
class action cases in the country, including Mehling v. New York
Life Ins. Co., a pending pension and 401(k) class action case
against New York Life Insurance Company; Gottlieb v. SBC
Communications, Inc., a 401(k) class action against SBC; and
Franklin (I and II) v. First Union Corp., two 401(k) class
actions against First Union Corporation that were recently
successfully settled for $26 million.


ENRON CORPORATION: Begins Trading Under New Stock Symbol "ENRNQ"
----------------------------------------------------------------
Enron Corporation announced that its common stock will now be
traded as an over-the-counter equity security under the symbol
"ENRNQ."  Quotation service will be provided by the National
Quotation Bureau, LLC "Pink Sheets."  Investors should call
their brokers for daily pricing and volume information.

In addition, other Enron securities will trade under the
following new symbols: Enron Capital LLC 8% Cumulative
Guaranteed Monthly Income Preferred Shares (ECTPQ), Enron
Capital Resources LP 9% Cumulative Series A (ECSPQ), Enron
Capital Trust I 8.30% Trust Originated Preferred Securities
(EONNQ), Enron Capital Trust II 8.125% Trust Originated
Preferred Securities (ENRPQ), Enron Capital LLC (ERNCF), and
Enron Corp. 7% Exchangeable Notes for common stock due July 31,
2002 (EONPQ).

The company's announcement follows a decision by the New York
Stock Exchange to file an application to delist Enron's common
stock.

Enron markets electricity and natural gas, delivers energy and
other physical commodities, and provides financial and risk
management services to customers around the world.  Enron's
Internet address is http://www.enron.com   

DebtTraders reports that Enron Corp.'s 7.375% bonds due 2019
(ENRON7) are trading between 19 and 21. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ENRON7for  
real-time bond pricing.


EXODUS COMMS: Eden Calling for Performance of Lease Obligations
---------------------------------------------------------------
Eden Ventures LLC seeks a Court order compelling Exodus
Communications, Inc., and its debtor-affiliates to immediately
perform their obligations under an unexpired non-residential
real property lease and continue performing post-petition
obligations.

Gregory A. Taylor, Esq., at Ashby & Geddes in Wilmington,
Delaware, relates that on July 21, 2000, relates that on July
21, 2000, Eden and Debtors executed a lease for non-residential
real property in Ashburn Corporate Center, Loudoun County,
Virginia. The Debtors contracted Turner Construction Company to
provide labor, equipment, materials and services for
construction of leasehold improvement in the premises. Mr.
Taylor states that Debtors failed to pay Turner for work
performed in constructing the improvements. As a result, on
October 9, 2001, Turner filed a Memorandum of Mechanic's Lien in
the amount of $3,604,456 plus interest against Debtors'
leasehold interest and Eden's ownership interest in the
premises. Turner's subcontractors in the project also filed and
docketed a mechanic's lien in the premises, including:

      Subcontractor          Amount of Claim
      -------------          ---------------
      Prospect                  $ 95,707
      Firewatch                   45,115
      S/H Datasite               167,708

On October 19, 2001, Eden notified Debtors that it was in
material post-petition default under the lease because by
failing to pay Turner the amount owed, it caused Turner to file
the fee lien against the premises contrary to its obligations
under the lease.

Mr. Taylor tells the Court that the filing of the liens against
the premises caused Eden's lender, which holds a deed of trust
against the premises, to notify Eden that it was in default of
its loan obligations. Eden's lender has agreed to temporarily
forbear from exercising its remedies under the loan documents
but Eden faces an actual threat of foreclosure or other adverse
action by its lender. (Exodus Bankruptcy News, Issue No. 11;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


FANSTEEL INC: Files for Chapter 11 Reorganization in Delaware
-------------------------------------------------------------
Fansteel Inc., (OTC Bulletin Board: FNST) announced that the
Company and most of its U.S. subsidiaries filed voluntary
petitions for reorganization under chapter 11 of the U.S.
Bankruptcy Code today in Federal Court in Delaware.

Fansteel and its subsidiaries continue to operate their
businesses in the U.S. and abroad.  Fansteel's non-U.S.
subsidiaries, including those in Mexico and the Caribbean, are
not part of the filing.  Fansteel intends to continue to
manufacture, market and distribute its core products and to
provide customer service and support for these products.

Fansteel has entered into an agreement with The CIT
Group/Commercial Services Inc., whereby CITCS has agreed to
purchase receivables of the Company for a purchase price of up
to $10 million.  The agreement with CITCS is subject to
bankruptcy court approval and the results of a public auction
anticipated to be held in late February 2002.

The Company has also entered into an agreement with HBD
Industries to provide interim debtor in-possession financing of
up to $3 million, which would be repaid from the proceeds of the
sale of receivables to CITCS or the winning bidder at the
auction.  HBD Industries is controlled by certain members of
Fansteel's board of directors, E.P. Evans, R.S. Evans and T.M.
Evans, Jr., who collectively also own approximately 46.56 % of
Fansteel's outstanding common stock.  Upon court approval, which
is expected shortly, the proceeds of the DIP Financing will be
available to supplement the Company's cash flow.

Management is also considering the sale of one or more of its
businesses and additional long term debtor in possession
financing as methods to obtain additional funding.  However,
there can be no assurance that any asset sales (which will
require 20 days notice and an auction in bankruptcy court) or
further debtor in possession financing will occur.

In conjunction with the court proceedings, Fansteel expects to
file a variety of "first day motions" including motions seeking
approval of the DIP Financing and court permission to: continue
payments for employee payroll and health benefits; honor
existing warranties; maintain cash management programs, retain
legal, financial, and other professionals to support Fansteel's
reorganization and to set dates for hearings related to the
proposed CITCS receivables sale.  In accordance with applicable
law and court orders, pre- petition claims against Fansteel and
its U.S. subsidiaries will be frozen pending court authorization
of payment or consummation of a plan of reorganization.


FANSTEEL INC: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Lead Debtor: Fansteel Inc.
             One Tantalum Place
             North Chicago, IL 60064
             aka Hydro Carbide
             aka VR/Wesson
             aka California Drop Forge
    
Bankruptcy Case No.: 02-10109

Debtor affiliates filing separate chapter 11 petitions:

             Entity                        Case No.
             ------                        --------
             Fansteel Holdings, Inc.       02-10110
             Custom Technologies Corp.     02-10111
             Escast, Inc.                  02-10112
             Wellman Dynamics Corp.        02-10113
             Phoenix Aerospace Corp.       02-10114
             American Sintered
             Technologies, Inc.            02-10115
             Fansteel Schulz Products,
             Inc.                          02-10116
             Washington Mfg. Co.           02-10117

Type of Business: Fansteel is a specialty metal manufacturer of
                  engineered metal components and tungsten
                  carbide products.

Chapter 11 Petition Date: January 15, 2002

Court: District of Delaware

Debtors' Counsel: Laura Davis Jones, Esq.
                  Pachulski, Stang, Ziehl Young & Jones
                  919 N. Market Street
                  16th Floor
                  Wilmington, DE 19899-8705
                  Tel: 302 652-4100
                  Fax: 302-652-4400

Total Assets: $64,805,176

Total Debts: $91,585,665

Debtor's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Nuclear Regulatory          Environmental Issue    $57,000,000
Commission
Ellen Poteat
License Fee & Accounts
Receivable Branch
PO Box 954514
St. Louis, MO 63195-4514
Fax: 301 415 5387

Northern Trust Bank         Line of Credit          $8,507,181
Michelle Loftus             Letters of Credit       $6,438,424
Fax: 312 557 9330

American National Bank      Letters of Credit       $1,800,104
Susan Kruesi
Fax: 312 661 5733

H.C. Starck                 Trade                     $980,511
Jean Mazolic
PO Box 371229
Pittsburgh, PA 15251
Fax: 617 630 5908

Pennsylvania Economic       Loan for Capital          $926,420
Development Finance         Equipment in Building   
Authority                   Expansion
Kelly Stephens
Finance Manager
Department of Community
and Economic Development
466 Forum Building
Harrisburg, PA 17120
Fax: 717 787 0879

Mississippi Business        Loan for Equipment        $835,000
Finance Corporate
Bill Barry
1306 Walter Siller Bldg.
550 High Street
PO Box 849
Jackson, MI 39205

OMG Americas                Trade                     $645,294
Tony Kaszarsky
PO Box 6066N
Cleveland, OH 44193
Fax: 440 808 7291

Allvac                      Trade                     $618,726
Mac King
Dept. LA 21001
Pasadena, CA 91185
Fax: 704 282 1511

Alldyne Powder              Trade                     $566,986
Technologies
Accounts Payable
7300 Highway 20 West
Hunsville, AL 35806
Fax: 888 777 9624

TTI Metals                  Trade                     $411,245
Clay hardin
290 King of Prussia Rd.
Radnor, PA 19087
Fax: 610 688 9257

Saegertown                  Trade                     $402,666
Clint Moreland
PO Box 64L484P
Pittsburgh, PA 15264
Fax: 814 763 2069

NF&M International, Inc.   Trade                      $394,787
Mel Green
125 Jericho Turnpike
Jericho, NY 11753
Fax: 516 997 4599
Tel: 516 997 4212

Sogem-Afrimet              Trade                      $355,020
Joe Ransom
Magnolia Bldg. Ste. 110
3120 Highwoods Blvd.
Raleigh, NC 27604

AON Risk Service, of PA    Trade                      $300,929
Richard G. Scherdner
PO Box 7247-7389
Philadelphia, PA 19170
Fax: 412 562 9606

Johnson Lift/Hyster        Lease                      $290,000-
Jeff Solen                                            $300,000
PO Box 60007
city of Industry, CA 90706
Fax: 562 692 6306
Tel: 562 692 9311

Alldyne                   Trade                       $262,260
Vennie Krutz
Lock Box 360281M
Pittsburgh, PA 15251
Fax: 724 532 6439
Tel: 724 532 6393

UMICORE                   Trade                       $163,250

Precision Rolled          Trade                       $149,674

REMET                     Trade                       $130,188


FEDERAL-MOGUL: Claimants' Committee Hires Legal Analysis Systems
----------------------------------------------------------------
The Official Committee of Asbestos Claimants of Federal-Mogul
Corporation and its debtor-affiliates ask the court for an entry
of an order authorizing the employment of Legal Analysis Systems
nunc pro tunc as of December 1, 2001 as its asbestos-related
bodily injury consultant.

Colette Margaret Platt, executrix of the asbestos claimants
committee, tells the court that the Committee's choice of Legal
Analysis Systems was based upon the firm's extensive experience
and knowledge with respect to analyzing and solving complex
problems associated with asbestos-related bodily injury matters.
Also considered is the experience of its principal, Mark A.
Peterson, in extensive analytical support in estimating the
number and time of potential asbestos-related bodily injury
claims by disease, development of alternative methods of
providing compensation for asbestos-related diseases, estimation
of the costs of such compensation and consulting with asbestos
trusts on claims, procedures and estimations. It is thus
believed that the services of LAS are both necessary and
appropriate and will assist the Committee in the negotiation,
formulation, development and implementation of the plan of
reorganization.

Mark A. Peterson, principal of Legal Analysis Systems, informs
the court he has served as an expert or consultant to the
asbestos-related bodily injury creditors' committee of The
Babcock & Wilcox Company, Owens Corning Corporation, Pittsburgh
Corning Corporation, Armstrong World Industries Inc., Burns &
Roe Enterprises Inc., G-1 Holdings Inc., W.R. Grace & Company,
United States Gypsum Corporation, Dow Corning, Raytech
Corporation, Fuller Austin Insulation Company Inc., H.K. Porter
Company Inc., and six other Chapter 11 restructurings. In
addition, he has also rendered consultancy services to the
Manville Personal Injury, Eagle Picher, Celotex and H.K. Porter
Asbestos Trusts and other claims resolution settlement trusts.

The services expected to be rendered by Legal Analysis Systems
include to:

A. Estimation of the number and value of present and future
   asbestos personal injury claims;

B. Development of claims procedures to be used in the
   development of financial models of payments and assets of a
   claims resolution trust;

C. Analyzing and responding to issue relating to the settling of
   a bar date regarding the filing of personal injury claims;

D. Analyzing and responding to issues relating to providing
   notice to personal injury claimants and assisting in the
   development of such notice procedures.

Mr. Peterson submits that no retainer has been received by Legal
Analysis Systems. Compensation of its professionals will be in
accordance with the firm's current professional hourly rates
plus reimbursement of actual necessary expenses. The current
hourly rates of Legal Analysis Systems' professionals are:

      Mark A. Peterson                             $500
      Daniele Relles (statistician)                $330
      Patricia Ebener (data collection expert)     $240
      Mary Gail Brauner (statistician)             $185
      Gregory Ridgeway (statistician)              $150

Mr. Peterson assures the Court that Legal Analysis Systems in
itself is a disinterested person, as defined in the Bankruptcy
Code, and that neither he nor any employee has any relationship
with the Debtors and their estates that may be adversarial to
the creditors or to the Committee. (Federal-Mogul Bankruptcy
News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


GARDENBURGER INC: Completes Refinancing of Debt Obligations
-----------------------------------------------------------
Gardenburger, Inc., (OTC Bulletin Board: GBUR) announced it had
completed a comprehensive refinancing of its debt obligations
and extension of the maturities of its existing convertible
senior subordinated notes and convertible preferred stock.  As a
result of the refinancing, the Company now has no significant
debt maturing prior to December 2004.

As part of the refinancing, the Company obtained an $8 million
term loan and $7 million line of credit from CapitalSource
Finance LLC, a national commercial finance company.  The
proceeds of the term loan were used to purchase the Company's
manufacturing equipment, which it had been leasing under
operating leases.  The line of credit replaces prior lines with
Wells Fargo Bank.  As a condition to obtaining new financing,
the Company also negotiated extensions to the maturities of its
convertible notes and its convertible preferred stock.

"This is a significant event in our turnaround plan," said Scott
Wallace, Gardenburger's Chief Executive Officer.  "The terms of
the purchase of the manufacturing equipment and resulting debt
allow for significant cash flow improvement over the operating
leases.  In addition, with the extension of the maturities of
our existing obligations, we can now devote our energy to
improving the Company's operating results.  The extensions of
the maturities of our indebtedness required certain concessions
on our part; however, we felt the terms were acceptable in order
to achieve the necessary extensions."

The Company's new term loan and line of credit are secured by
the Company's assets, including the purchased manufacturing
equipment and its accounts receivable and inventory.  The new
obligations mature in December 2004.  The maturity date under
the Company's convertible notes was extended to March 2005,
while the earliest mandatory redemption date under the Company's
preferred stock was extended to March 2006.

In order to obtain the extension of the convertible notes, the
Company agreed to increase the interest rate of the notes from 7
to 10 percent, pay a twenty percent premium at repayment or
maturity, issue the noteholder a warrant to purchase 557,981
shares of common stock at a price of $0.28 per share, and
negotiate an extension of the redemption date of its preferred
stock.  To achieve the preferred stock redemption date
extension, the Company agreed to a ten percent premium on the
preferred shareholders' accumulated liquidation preference and
redemption price, payable upon redemption or any liquidation,
and to issue to preferred shareholders warrants to purchase a
total of 557,981 shares of common stock, also at a price of
$0.28 per share.

Gardenburger also announced that its board of directors today
appointed Tim Burke to fill a vacancy created by the resignation
of Jason Fish.

Mr. Burke is a principal of Rosewood Capital, an affiliate of
one of the Company's preferred shareholders.

Founded in 1985 by GardenChef Paul Wenner, Gardenburger, Inc. is
an innovator in meatless, low-fat products.  The Company
distributes its flagship Gardenburger veggie patty to more than
35,000 food service outlets throughout the United States and
Canada.  Retail customers include more than 30,000 grocery,
natural food and club stores.  Based in Portland, Oregon, the
Company currently employs approximately 180 people.


GENERAL BINDING: S&P Places Low-B Ratings on Watch Negative
-----------------------------------------------------------
Standard & Poor's placed its ratings for General Binding Corp.
on CreditWatch with negative implications.

The CreditWatch placement reflects the firm's challenging
operating environment, which is exacerbated by its high debt
leverage.

Industry sales of office products are under pressure,
particularly in the office superstore channel. Although General
Binding has responded by cutting costs and focusing on
profitable products, its core markets remain highly competitive.
Higher interest rates from its new bank agreement could lower
credit protection ratios.

Standard & Poor's will meet with General Binding's management to
discuss business and financial strategies.

                Ratings Placed on CreditWatch
                 with Negative Implications

     General Binding Corp.
        Corporate credit rating         B+
        Senior secured debt             B+
        Subordinated debt               B-


GUILFORD MILLS: Current Waiver under Credit Pact Expires Friday
---------------------------------------------------------------
Guilford Mills, Inc., (NYSE: GFD) announced operating results
for the Company's fourth quarter and fiscal year ended September
30, 2001.

Fiscal 2001 sales were $643,519,000 as compared to fiscal 2000
sales of $814,226,000.  Net loss for fiscal 2001 was
$160,757,000 and included restructuring and impaired asset and
investment charges, net of tax of $82,826,000 and an
extraordinary loss, net of tax, of $2,856,000.  Net loss for
fiscal 2000 was $20,974,000 and included restructuring and
impaired asset charges, net of tax, of $17,329,000.

Fourth quarter sales of $145,520,000 were lower than the
$184,957,000 reported for the fourth quarter of the prior year.  
The Company incurred a net loss of $112,995,000, which included
$70,110,000 of additional after-tax restructuring and impaired
asset and investment charges.  This compared to the prior year's
fourth quarter net loss of $24,178,000 which included after-tax
restructuring charges of $17,329,000.

Sales for the fourth fiscal quarter declined 21% from the
comparable quarter of the prior fiscal year and reflected the
challenging industry and economic conditions as well as the
Company's exit from numerous domestic market sectors within its
Apparel segment.  Sales in the Apparel segment for the fourth
quarter declined 47% from the prior year's quarter as a result
of sector exits, low-priced imports and depressed retail sales.  
Guilford's worldwide Automotive segment sales fell 6%.  Despite
the North-American car build decline of 15%, Guilford's U.S.
automotive sales declined by less than 8% as year over year
headliner market share increased.  Home Fashions segment sales
for the quarter were 5% lower than last year's comparable
period. Direct-to-retail sales increased by more than 9% as
bedding product sales continued to grow.  The improvement was
more than offset by a decline in Home Fashions fabric sales.  
The Other segment sales were flat versus last year.

The fiscal year sales also declined 21% as compared to fiscal
2000.  Sales declined in the Apparel segment by 36%, in the
Automotive segment by 12%, in the Home Fashions segment by 17%
and in the Other segment by 4%.  The Automotive segment
comprised 52% of consolidated sales for the fiscal year.

The Company's fourth quarter operating margin decreased
$45,123,000 from last year's comparable period.  Included in the
operating loss of $79,896,000 was a restructuring and impaired
asset charge of $58,659,000 substantially related to the
Company's previously announced closure of its Cobleskill, NY
Apparel and Home Fashions facility and the downsizing of its
Pine Grove, PA facility to an industrial plant.  The fourth
quarter, excluding these one-time restructuring charges, as well
as related inventory write-downs and the new Mexican facility
start up costs aggregating $17,800,000, reflected an operating
loss of $3,437,000 as compared to the prior year's loss of
$6,130,000 before restructuring charges of $28,643,000.  Sales
volume declines and related capacity underutilization in all
segments were more than offset by fixed cost reductions and
other operating performance improvements.

Fiscal 2001 operating margin was a loss of $122,837,000 versus a
loss of $20,422,000 for fiscal 2000.  The single most
significant impact to margin was the Company's continued
strategic realignment of its Apparel and Home Fashions segments
which resulted in incremental restructuring and impaired asset
charges of $42,732,000 and related expenses of $29,486,000 for
run-out inefficiencies, new plant start-up and inventory write-
downs.  Sales volume decline and corresponding capacity
underutilization totaled approximately $60,000,000.  The
declines were partially offset by fixed cost reductions of
approximately $50,000,000.

The Company's strategic realignment plan, which began in the
fourth quarter of fiscal 2000, was designed to match capacity to
demand and reduce costs by moving production from old,
inefficient facilities to newer cost- efficient focused
factories.  The actions resulted in the elimination of all four
domestic apparel dyeing and finishing facilities, the downsizing
of another facility, a headcount reduction of approximately
1,725 associates or 29% of the Company's employees, fixed cost
savings, and the start-up of a state-of-the-art facility in
Altamira, Mexico.

Guilford has continued to experience tightened lending practices
from traditional financial institutions due principally to
precipitous earnings declines and uncertainty within the
industry.  The industry has likewise been generally unable to
obtain additional capital from appropriate financial markets.  
The absence of a long-term commitment by Guilford's domestic
lenders has exacerbated the Company's poor performance due to
increased concerns by both trade credit and customer
constituencies.

On September 30, 2001 (and for the second and third quarters of
fiscal 2001), the Company was not in compliance with certain
terms of its senior loan agreements.  The Company received
waivers of such non-compliance from its lenders.  Since October
2001, the Company has continued to receive waivers while
negotiating with its senior lenders toward a mutually
satisfactory restructuring of the Company's indebtedness owed to
such lenders.  The Company remains in active negotiations with
its lenders over the terms of such a restructuring.  There can
be no assurances, however, that a satisfactory debt
restructuring will be consummated.  In addition, if the
Company's lender negotiations are not successfully concluded or
the current waiver is not extended beyond its expiration date of
January 18, 2002, then the Company would be in default under its
senior loan agreements.  The occurrence of an event of default
under the Company's senior loan agreements entitles the lenders
to exercise certain rights, including the right to declare all
amounts outstanding immediately due and payable, and the right
to liquidate the collateral securing such loans.  The Company's
senior debt is secured by substantially all of the Company's
domestic assets as well as by 65% of the stock the Company holds
in its foreign subsidiaries.  If the lenders were to exercise
the above-described rights upon the occurrence of an event of
default, then the Company would be forced to seek protection
from its creditors under the bankruptcy laws, as the Company
lacks sufficient liquidity to repay the outstanding amounts owed
to the lenders and the Company does not expect to be able to
obtain satisfactory alternate financing arrangements on a timely
basis.  The Company's independent public accountants, in their
report for the Company's 2001 fiscal year, noted that in light
of the foregoing, substantial doubt exists concerning the
Company's ability to continue as a going concern.

John Emrich, President and Chief Executive Officer, said, "The
U.S. textile industry has suffered significant declines in the
past four years beginning with the Asian financial crisis, a
situation exacerbated by the shrinking apparel and home fashions
markets, the domestic economic slowdown and the U.S.
government's unwillingness to assist.  Guilford has effected
dramatic and difficult operational changes over the past 18
months and continues to face harsh market and financial
conditions as it attempts to position itself for the future.  
Executing our business plan is dependent upon the Company's
ability to restructure its debt."

The Company Tuesday filed with the Securities and Exchange
Commission its Annual Report on Form 10-K for fiscal year 2001.  
The Company does not intend to schedule a conference call for
the fourth quarter.

Guilford Mills is an integrated designer and producer of value-
added fabrics using a broad range of technologies.  The Company
is one of the largest warp knitters in the world and is a leader
in technological advances in textiles, including microdenier
warp knits and wide width circular knits of cotton blended with
LYCRAr.  Guilford Mills serves a diversified customer base in
the home furnishings, apparel, automotive and industrial
markets. Through its Guilford Home Fashions subsidiary, the
company produces bedding products, window treatments and shower
curtains for the retail market.


HAYES LEMMERZ: Court Okays Bankruptcy Services as Claims Agent
--------------------------------------------------------------
Hayes Lemmerz International, Inc., and its debtor-affiliates
sought and obtained entry of an order authorizing them to retain
and employ Bankruptcy Services LLC (BSI) as their claims,
noticing and balloting agent to, among other things:

A. serve as the Court's noticing agent to mail notices to the
   estates' creditors and parties in interest,

B. provide computerized claims, objection and balloting database
   services, and

C. provide expertise, consultation and assistance in claim and
   ballot processing and other administrative information with
   respect to the Debtors' bankruptcy cases.

Kenneth A. Hiltz, the Debtors' Chief Financial Officer and Chief
Restructuring Officer, tells the Court that the Debtors have
thousands of creditors, potential creditors and parties in
interest to whom certain notices, including notice of these
chapter 11 cases, will be sent. The size of the Debtors'
creditor body makes it impracticable for the Debtors to, without
assistance, undertake the task of sending notices to creditors
and other parties in interest. The Debtors submit that the most
effective and efficient manner by which to provide notice and
solicitation in these cases is to engage an independent third
party to act as an agent of the Court.

Mr. Hiltz submits that BSI is a data processing firm that
specializes in chapter 11 administration, consulting and
analysis, including noticing, claims processing, voting and
other administrative tasks in chapter 11 cases. The Debtors wish
to engage BSI to send out certain designated notices and to
maintain claims files and a claims and voting register. The
Debtors believe that such assistance will expedite service of
notices, streamline the claims administration process and permit
the Debtors to focus on their reorganization efforts.

The Debtors believe that BSI is well-qualified to provide such
services, expertise, consultation and assistance as BSI has
assisted and advised numerous chapter 11 debtors in connection
with noticing, claims administration and reconciliation and
administration of plan votes, including Access Beyond
Technologies, Inc.; Apex One, Inc.; Carmike Cinemas, Inc.; BMI
Transportation, Inc.; Discovery Zone, Inc.; Eagle Geophysical,
Inc.; Global Ocean Carriers Limited; Heilig-Meyers Company;
Wireless One, Inc.; and 360networks (USA) Inc.

Under the BSI Agreement, BSI will perform the following
services, if necessary, as the Claims, Noticing and Balloting
Agent, at the request of the Debtors or the Clerk's Office:

A. Prepare and serve required notices in these chapter 11 cases,
   including:

      a. A notice of commencement of these chapter 11 cases and
         the initial meeting of creditors under section 341(a)
         of the Bankruptcy Code;

      b. A notice of the claims bar date;

      c. Notices of objections to claims;

      d. Notices of any hearings on a disclosure statement and
         confirmation of a plan of reorganization; and

      e. Such other miscellaneous notices as the Debtors or the
         Court may deem necessary or appropriate for an orderly
         administration of these chapter 11 cases;

B. Within five business days after the service of a particular
   notice, file with the Clerk's Office an affidavit of
   service that includes a copy of the notice served, an
   alphabetical list of persons on whom the notice was served,
   along with their addresses, and the date and manner of
   service;

C. Maintain copies of all proofs of claim and proofs of interest
   filed in these cases;

D. Maintain official claims registers in these cases by
   docketing all proofs of claim and proofs of interest in a
   claims database that includes the following information for
   each such claim or interest asserted:

     a. The name and address of the claimant or interest holder
        and any agent thereof, if the proof of claim or proof
        of interest was filed by an agent;

     b. The date the proof of claim or proof of interest was
        received by BSI and/or the Court;

     c. The claim number assigned to the proof of claim or proof
        of interest; and

     d. The asserted amount and classification of the claim;

E. Implement necessary security measures to ensure the
   completeness and integrity of the claims registers;

F. Transmit to the Clerk's Office a copy of the claims registers
   on a weekly basis, unless requested by the Clerk's Office
   on a more or less frequent basis;

G. Maintain a current mailing list for all entities that have
   filed proofs of claim or proofs of interest and make such
   list available to the Clerk's Office or any party in
   interest upon request;

H. Provide access to the public for examination of copies of the
   proofs of claim or proofs of interest filed in these cases
   without charge during regular business hours;

I. Record all transfers of claims pursuant to Bankruptcy Rule
   3001(e) and provide notice of such transfers as required by
   Bankruptcy Rule 3001(e);

J. Comply with applicable federal, state, municipal and local
   statutes, ordinances, rules, regulations, orders and other
   requirements;

K. Provide temporary employees to process claims, as necessary;

L. Promptly comply with such further conditions and requirements
   as the Clerk's Office or the Court may at any time
   prescribe;

M. Provide balloting and solicitation services, including
   preparing ballots, producing personalized ballots and
   tabulating creditor ballots on a daily basis; and

N. Provide such other claims processing, noticing, balloting and
   related administrative services as may be requested from
   time to time by the Debtors.

The Debtors request that the fees and expenses of BSI incurred
in the performance of the above services be treated as an
administrative expense of the Debtors' chapter 11 estates and be
paid by the Debtors in the ordinary course of business.

Mr. Hiltz asserts that to the best of their knowledge, neither
BSI nor any employee thereof has any connection with the
Debtors, their creditors or any other party in interest herein;
they are "disinterested persons," as that term is defined in
section 101(14) of the Bankruptcy Code, as modified by section
1107(b) of the Bankruptcy Code; and they do not hold or
represent any interest adverse to the Debtors' estates. (Hayes
Lemmerz Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


IT GROUP: Files Chapter 11 Petition in DE to Sell Assets to Shaw
----------------------------------------------------------------
The IT Group, Inc., announced that it has signed a letter of
intent with The Shaw Group Inc., (NYSE: SGR) regarding a
proposed transaction in which Shaw would acquire substantially
all of The IT Group's assets in exchange for approximately $105
million and the assumption of certain liabilities.  The Company
estimates the transaction to have a value of approximately
$160 million to $200 million.

In addition, The IT Group announced that the Company and certain
of its subsidiaries have filed voluntary petitions for relief
under chapter 11 of the U.S. Bankruptcy Code in the U.S.
Bankruptcy Court in Wilmington, Delaware.  In connection with
these filings and the proposed transaction with Shaw, Shaw has
agreed in principle to provide The IT Group with a debtor-in-
possession (DIP) credit facility of up to $75 million, $25
million of which will be available to The IT Group upon initial
bankruptcy court approval.  The remaining $50 million will be
available to the Company at Shaw's discretion upon final
bankruptcy court approval.

The chapter 11 filings and the agreement in principle to provide
DIP financing from Shaw will allow The IT Group to provide for
an orderly sale of the Company, which will be subject to higher
or otherwise better bids in the bankruptcy court process, while
enabling the Company to take steps to address its liquidity
issues and stabilize operations.  The Company's joint ventures
and its Canadian subsidiary, Roche Limited Consulting Group, are
not included in the chapter 11 reorganization cases, but are
included in the proposed asset sale to Shaw and are continuing
normal business operations.

Dr. Francis J. Harvey, acting president and chief executive
officer of The IT Group, said, "We are very pleased to have
reached this agreement with The Shaw Group, particularly since
it will provide an excellent opportunity for many of our
employees to be part of a stronger, world-class company with a
large engineering, consulting and construction group.  Likewise,
we expect that this transaction will ensure a continuation of
outstanding service and support to our customers."

"As a result of our comprehensive business review, which we
commenced upon my appointment as acting president and CEO two
months ago, we concluded that the sale of the Company was in the
best interest of The IT Group and our stakeholders," Dr. Harvey
continued.  "We believe The Shaw Group meets the criteria we
established for selecting the most appropriate buyer: expertise
and experience in the environmental, infrastructure and
engineering industries; a reputation for outstanding customer
service; a culture that values people and the development of
their employees; and the resources to profitably grow The IT
Group's businesses."

Dr. Harvey said, "We appreciate the continuing support of our
customers, subcontractors and vendors, as well as the dedication
of our employees. Today's court filings present new challenges
for the Company and its stakeholders.  However, we firmly
believe that a court-supervised reorganization process
represents the best means of resolving the Company's severe
liquidity issues and stabilizing operations while we move
aggressively to finalize the sale of the Company."

The proposed transactions with Shaw are subject to, among other
things, execution of definitive documentation, higher or
otherwise better offers, court approval and receipt of other
regulatory required approvals.  It is currently contemplated
that the transaction with Shaw will be completed before the end
of the first quarter.

The Shaw Group Inc. is the world's only vertically integrated
provider of complete piping systems and comprehensive
engineering, procurement and construction services to the power
generation industry. Shaw is the largest supplier of fabricated
piping systems in the United States and a leading supplier
worldwide, having installed piping systems in power plants with
an aggregate generation capacity in excess of 200,000 megawatts.  
While the majority of Shaw's backlog is attributable to the
power generation industry, the company also does work in the
process industries, including petrochemical, chemical and
refining, and the environmental and infrastructure sector.  The
company currently has offices and operations in North America,
South America, Europe, the Middle East and Asia-Pacific; and has
more than 13,000 employees. For additional information on The
Shaw Group, please visit the company's web site at
http://www.shawgrp.com  

The IT Group addresses the infrastructure and environmental
needs of both private and public sector clients as a leading
provider of diversified services, including environmental,
engineering, facilities management, water, construction,
emergency response, remediation, liability transfer and
information management.  Additional information about The IT
Group can be found on the Internet at http://www.theitgroup.com  
The IT Group's common stock and depositary shares have been
suspended from trading by the New York Stock Exchange.  
Information about the status of the common stock will be posted
on the Company's web site as events warrant.


IT GROUP: Case Summary & 50 Largest Unsecured Creditors
-------------------------------------------------------
Lead Debtor: The IT Group
             2790 Mosside Blvd.
             Monroeville, PA 15146-2792

Bankruptcy Case No.: 02-10118-MFW

Debtor affiliates filing separate chapter 11 petitions:

             Entity                        Case No.
             ------                        --------
             37-02 College Point
             Boulevard, LLC                02-10119-MFW
             Advanced Analytical
             Solutions, Inc.               02-10120-MFW
             E-Com Solutions, Inc.         02-10121-MFW
             Empire State I, LLC           02-10122-MFW
             Empire State II, LLC          02-10123-MFW
             EVAP Technologies, LLC        02-10124-MFW
             Evergreen Acquisition
             Sub I, Inc.                   02-10125-MFW
             Groundwater Technology, Inc.  02-10126-MFW
             IT Administrative Services,
             LLC                           02-10127-MFW
             IT C&V Operations, Inc.       02-10128-MFW
             IT E&C Operations, Inc        02-10129-MFW
             IT Environmental and
             Facilities, Inc               02-10130-MFW
             IT International Holdings,
             Inc                           02-10131-MFW
             IT International
             Investments, Inc.             02-10132-MFW
             IT International
             Operations,Inc                02-10133-MFW
             IT Investment Holdings, Inc   02-10134-MFW
             IT Iron Mountain
             Operations, LLC               02-10135-MFW
             Jernee Mill Road LLC          02-10136-MFW
             KIP I, LLC                    02-10137-MFW
             LandBank Acquisition I, LLC   02-10138-MFW
             LandBank Acquisition II, LLC  02-10139-MFW
             LandBank Acquisition III, LLC 02-10140-MFW
             LandBank Environmental
             Properties, LLC               02-10141-MFW
             LandBank Remediation Corp.    02-10142-MFW
             LandBank, Inc.                02-10143-MFW
             LandBank Wetlands, LLC        02-10144-MFW
             Marconi Wartburg, LLC         02-10145-MFW
             Millstone River Wetland
             Services, Inc.                02-10146-MFW
             Northeast Restoration
             Company LLC                   02-10147-MFW
             Organic Waste Technologies,
             Inc.                          02-10148-MFW
             Otay Mesa Ventures I, LLC     02-10149-MFW
             PHR Environmental
             Consultants, Inc              02-10150-MFW
             Raritan Venture I, LLC        02-10151-MFW
             The Dorchester Group, LLC     02-10152-MFW
             U.S. Wetlands Services, LLC   02-10153-MFW
             Whippany Ventures I, LLC      02-10154-MFW
             Wycoff's Mills, LLC           02-10155-MFW
             American Landfill Supply
             Co., Inc.                     02-10156-MFW
             Benecia North Gateway LLC     02-10157-MFW
             EMCON                         02-10158-MFW
             EMCON Industrial Services,
             Inc                           02-10159-MFW
             Enterprise, Environmental
             & Earthworks, Inc.            02-10160-MFW
             Fluor Daniel Environmental
             Services, Inc. (FDESI)        02-10161-MFW
             Gradient Corporation          02-10162-MFW
             IT Alaska, Inc                02-10163-MFW
             IT Baker, LLC                 02-10164-MFW
             IT Corporation                02-10165-MFW
             IT Corporation of North
             Carolina, Inc                 02-10166-MFW
             IT Lake Herman Road LLC       02-10167-MFW  
             IT Vine Hill, LLC             02-10168-MFW
             IT-Tulsa Holdings, Inc.       02-10169-MFW
             ITGtech                       02-10170-MFW
             Jellinek, Schwartz &
             Connolly, Inc                 02-10171-MFW
             JSC International Inc         02-10172-MFW
             Kato Road, LLC                02-10173-MFW
             Keystone Recovery, Inc        02-10174-MFW
             LFG Specialties, Inc          02-10175-MFW
             Monterey Landfill Gas Company 02-10176-MFW
             National Earth Products, Inc  02-10177-MFW
             Northern California
             Development Limited           02-10178-MFW
             OHM Corporation               02-10179-MFW
             OHM Remediation Services Corp 02-10180-MFW
             Pacific Environmental Group,
             Inc                           02-10181-MFW
             Sielken, Inc                  02-10182-MFW
             Submerged Lands, LLC          02-10183-MFW
             W&H Pacific, Inc              02-10184-MFW
             Wehran Engineering PC         02-10185-MFW
             Wehran New York, Inc          02-10186-MFW
             Woodbury Creek, Inc           02-10187-MFW

Type of Business: The Debtors are a leading provider of
                  consulting, facilities management, water,
                  engineering & construction, and remediation
                  services addressing the infrastructure needs
                  of both private and public sector firms.
                  Through their diverse group of highly
                  specialized companies, with over 6,400
                  employees in over 80 domestic offices and
                  over ten international offices, clients are
                  provided with a single, fully integrated    
                  delivery system and extensive expertise. The
                  Debtors broad range of services includes the
                  identification of contaminants including
                  anthrax in soil, air and water and the
                  subsequent design and execution of remedial
                  solutions. The Debtors also provide project
                  and facilities management, capabilities and
                  other related services to non-environmental
                  civil construction, watershed restoration and
                  the outsourcing privatization markets.

Chapter 11 Petition Date: January 16, 2002

Court: District of Delaware

Judge: Mary F. Walrath

Debtors' Counsels: David S. Kurtz, Esq.
                   Skadden Arps Slate Meagher & Flom (Illinois)
                   333 W. Wacker Drive, Chicago, IL 60606
                   Tel: 312-407-0700

                   Gregg M. Galardi, Esq.
                   Marion M. Quirk, Esq.
                   Skadden Arps Slate Meagher & Flom LLP
                   One Rodney Square
                   Wilmington, DE 19899
                   Tel: 302 651-3000
                   Fax: 302-651-3001

                   Daniel J. DeFranceschi, Esq.
                   Mark D. Collins, Esq.
                   Richards, Layton & Finger
                   One Rodney Square, P.O. Box 551
                   Wilmington, DE 19899
                   Tel: 302 658-6541
                   Fax: 302-651-7701

Total Assets: $1,344,830,000

Total Debts: $1,086,548,000

Debtor's 20 Largest Consolidated Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
The Bank of New York        Debentures            $225,000,000
(as indenture Trustee for
11 1/4% Senior Subordinated
Notes issued by the IT
Group, Inc., due 2009)
Corporate Trustee
Administration
101 Barclay Street, 21 W
New York, NY 10286
Fax: 212 815 5915

United States Trust         Debentures             $31,622,000
Company of New York
(as indenture Trustee
for 8% Convertible
Subordinated Debentures,
issued by OHM Corporation,
due 2006)
Corporate Trust and
Agency Services
47 Wall Street
New york, NY 1005
Tel: 212 852 1235
Fax: 212 852 1625

Citibank (SD, N.A.)         Trade Debt              $6,753,128
Ken Stork
701 E. 60th Street
Sioux Falls, SD 57117
Tel: 605 331 2626
Fax: 605 331 1966

Shareholders of Roche Ltd.  Share Purchase          $2,770,800
Consulting Group            Agreement
3075 chemin des
Quatre-Bourgeois
Sainte-Foy, Quebec
Canada
G1W4Y4

Stone & Webster             Trade Debt              $1,531,773
Engineering  
A Unit of the Shaw Group
John Clemmons
100 Technology
Center Drive
Stoughton, Ma 2072
Tel: 617 589 2702
Fax: 617 589 2156

Samsung Corporation         Trade Debt              $1,526,746
Hyung Soo Kim
677-25 Yeoksam-Dong
Kangnam-Ku
Seoul, Korea 135-080
Tel: 82 2 527 8592
Fax: 82 2 527 0199

Containment Control Inc.    Trade Debt              $1,462,036
Buckey Thompson
48-C Robeson Street
Fayetteville, NC 28301
Tel: 910 484 7000
Fax: 910 484 4978

AWS Remediation, Inc.       Trade Debt              $1,460,829
Gary Thurheimer
One Triangle Lane
Export, PA 15632
Tel: 724 733 1009
Fax: 724 327 5946

IUC White Mesa LLC          Trade debt              $1,345,176
Ron Hochstein
Independence Plaza
Suite 9
1050 Seventeenth Street
Denver, CO 80265
Tel: 303 628 7798
Fax: 303 389 4125

Pinetree Environmental Co.  Trade Debt              $1,306,085
Matt Schofield
Suite 905, Marine Center
118, 2-GA, Namdaemun-RO
Seoul, Korea 100-770
Tel: 82 2 752 7141
Fax: 82 2 752 7144

Mid Atlantic Tank Inspect   Trade Debt              $1,226,488
President
464 S. Independence Blvd.
Suite C-108
Virginia Beach, VA 23452
Tel: 757 497 7853
Fax: 757 497 7823

Innovative tech Solutions   Trade Debt              $1,223,122
Dev Shukla
2730 Shadelands Drive
Suite 100
Walnut Creek, CA 94598
Tel: 925 256 8898
Fax: 925 256 8998

Eurest Support Services     Trade Debt              $1,215,473
George cuzzort
9210 Vanguard Drive
Suite 1
Anchorage, AK 99507
Tel: 907 344 1207
Fax: 907 344 0353

MHF Logistical Solutions    Trade Debt              $1,202,453
Clifford J. Bright
800 Cranberry Woods Drive
Suite 450
Cranberry, PA 16066
Tel: 724 452 9300
Fax: 724 452 3753

W&HP ESOP Trust             Stock Purchase          $1,160,000
J.Kim Cacace, CTFA          Agreement
1201 Third Avenue
Suite 5010
Seattle, WA 98101
Fax: 206 664 8844

SAIC                        Trade Debt              $1,081,693
PO Box 64115
Baltimore, MD 21264
Tel: 858 826 6000
Fax: 858 826 6808

Duratek Field Services,     Trade Debt                $990,233
Inc.  
Bob Hornbeck
628 Gallaher Road
Kinston, TN 37763
Tel: 856 376 8286
Fax: 865 376 6247

ETI Services, Inc.          Trade Debt                $914,862
Sherman Wright
12790 Highway 51
Malvern, AR 72104
Tel: 501 844 4702
Fax: 501 844 4416

Emax Laboratories, Inc.     Trade Debt                $879,896
Jim Carter
630 Maple Ave.
Torrance, CA 90503
Tel: 310 618 8889
Fax: 310 618 0818

Miller Drilling Company     Trade Debt                $861,122
Mark Herndon
200 Dan Tibbs Road
Hunsville, AL 35806
Tel: 423 622 3161
Fax: 423 622 3182

United Rentals              Trade Debt                $852,735
Michael Nolan
PO Box 100711
Atlanta, GA 30384-0711
Tel: 800 704 1767
Fax: 203 622 6080

Harding Lawson Assoc.       Trade Debt                $834,878
Contracts Dept.
PO Box 2786
Englewood, CO 801503
Tel: 303 292 5365
Fax: 303 273 5062

Midwest Soil Remediation    Trade Debt                $777,565
Bruce Penn
1480 Sheldon Drive
Elgin, IL 60120
Tel: 847 742 4331
Fax: 847 742 4294

Severn Trent Laboratories   Trade Debt                $768,670
Rhonda Breeching
10 Hazelwood Drive
Suite 106
Amherst, NY 14228-2298
Tel: 330 996 9338
Fax: 330 966 0247

Xerox Corporation           Trade Debt                $726,030
Tom Colella
Eight Penn Center West
Pittsburgh,PA 15276
Tel: 412 521 1567
Fax: 412 521 1801

Jeffrey M. Daggett          Stock Purchase            $680,000
3350 Monte Villa Parkway    Agreement
Bothell, WA 98021-8972
Tel: 425 951 4800
Fax: 425 951 4808

William M. Jabs             Stock Purchase            $680,000
8405 SW Nimbus Avenue       Agreement
Beaverton, OR 97008-7141
Tel: 503 626 0455
Fax: 503 526 0775

On-Site Environmental       Trade Debt                $679,006
Rich Yanoski
4710 East Elwood
Suite 10
Phoenix, AZ 85040
Tel: 410 694 5146
Fax: 410 865 7972

Environmental Rail          Trade Debt                $655,425
Solutions
Dave Ardito
115 Cloverdale Circle
Tinton Falls, NJ 7724
Tel: 732 389 6554
Fax: 732 389 6370

Angelini Blasting, Inc.     Trade Debt                $636,081
John Angelini
1621 NE 17th Way
Ft. Laudale, FL 33305
Tel: 954 565 4171
Fax: 954 565 4171

Boart Longyear Company      Trade Debt                $635,582
Tom Othoudth
14950 Iris Road
PO Box 355
Little Falls, MN 56345
Tel: 800 422 6552
Fax: 320 632 2915

Arrowhead Services, Inc.    Trade Debt                $621,310
John Koutelas
12920 Metcalf Avenue
Suite 150
Overland Park, KS 66213
Tel: 913 814 9994
Fax: 913 814 9997

The Watertown Construction  Trade Debt               $613,943
Company Inc.
Robert Santamaria
680 Main Street
Watertown, CT 06795-0059
Tel: 860 945 5300
Fax: 860 945 0530

Mid State Mechanical Inc.   Trade Debt               $596,041
703 Clydesdale Avenue
Anniston, AL 36201
Tel: 256 237 2126
Fax: 264 238 9512

Karleskint-Crum             Trade Debt               $582,389
Incorporated
Ted Maino
PO Box 5358
San Luis Obispo, CA 93403
Tel: 805 543 3304
Fax: 805 843 3827

Wholesale Building          Trade Debt               $565,318
Production  
PO Box 1659
Vidalia, GA 30475
Tel: 912 537 4100
Fax: 912 537 6490

Geotrans, Inc.              Trade Debt               $559,829
Pete Anderson
46050 Manekin Plaza
Suite 100
Sterling, VA 20166
Tel: 703 444 7000
Fax: 703 444 1658

Garcia Paving Company, Inc. Trade Debt               $555,526
Attn: Michael Garcia
2951 S. Elm Street
Fresno, CA 93706
Phone: (559) 266-3258
Fax: (559) 266-6337

Ironhorse Ltd.              Trade Debt               $553,821
Attn: Gaines Smith
P.O. Box 399
Waynesville, GA 31566
Phone: (912) 778-3275
Fax: (605) 778-3247

Hertz Equipment Rental      Trade Debt               $550,158
Attn: Richard Heward
5128 Fishwick Drive
Cincinnati, OH 45216
Phone: (201) 307-2774
Fax: (201) 505-5477

URS/Dames & Moore           Trade Debt               $528,237
Philip Hatfield
911 Wilshire Blvd.
Suite 800
Los Angeles, CA 90017
Phone: (213) 996-2410
Fax: (213) 996-2374

Brice, Inc.                 Trade Debt               $523,881
Sam Brice
P.O. Box 70668
3200 Shell Street (99701)
Fairbanks, AK 99707
Phone: (907) 452-2512

Safety & Ecology Corp.      Trade Debt               $523,552
Martin Gray
2800 Solway Road
Knoxville, TN 37931
Phone: (865) 690-0501
Fax: (865) 539-9868

D.L. Braughler Co., Inc.    Trade Debt               $520,704
Dave Braughler
1018 W. Main Street
Morehead, KY 40351
Phone: (606) 784-7544
Fax: (606) 784-7545

NFT, Inc.                   Trade Debt               $518,352
Joe Perdue
600 Corporate Circle
Suite A
Golden, CO 80401
Phone: (865) 576-2724
Fax: (865) 574-9443

Pond Company                Trade Debt               $506,207
2635 Century Parkway
Suite 125
Atlanta, GA 30345
Phone: (404) 633-8998
Fax: (404) 325-5458

Field Lining Systems, Inc.  Trade Debt               $496,032
Janet Eeds
439 S. Third Avenue
Avondale, AZ 85323
Phone: (888) 382-9301
Fax: (888) 382-9302

Ellington & Son, Inc.       Trade Debt               $467,660
Mark Ellington
5188 Old Route 75
Oxford, NC 27565
Phone: (919) 693-1230
Fax: (919) 693-0402

Simbeck & Associates, Inc.  Trade Debt               $458,606
John Simbeck
38256 Highway 160
Mancos, CO 81328
Phone: (970) 533-7178
Fax: (970) 533-3026

Residence Inn/Torrance      Trade Debt               $476,594
3701 Torrance Blvd.
Torrance, CA 90503
Phone: (310) 543-4566
Fax: (310) 542-3026


INTEGRATED ELECTRICAL: S&P Profit Concerns Prompt Low-B Ratings
---------------------------------------------------------------
Standard & Poor's lowered its ratings on Integrated Electrical
Services Inc. At the same time, the ratings on the company were
removed from CreditWatch. The outlook is stable.

The rating actions affect the company's $150 million secured
bank credit facility and $275 million in subordinated debt.

The rating actions reflect the company's weaker-than-expected
profitability and cash flow generation, which has eroded the
credit profile. Mixed end-market fundamentals, including
increased pricing pressures and the potential for project
deferrals and cancellations, make it unlikely that credit
protection measures will meet Standard & Poor's prior  
expectations in the intermediate term.

The ratings reflect Integrated Electrical's leading market
position, a somewhat aggressive financial policy, and fair
credit protection measures.

With revenues approaching $1.7 billion, Integrated Electrical is
a leading provider of electrical contracting and communications
infrastructure services. These markets are very large, highly
fragmented, and typically require very modest amounts of fixed
capital investment. Barriers to entry are modest. However,
recent industry trends of outsourcing and vendor consolidation,
which are occurring in a variety of commercial and industrial
markets, are making product breadth and geographic reach
additional methods to differentiate between competitors.

Projects are generally modest-in-size, including new
construction and maintenance of computer and advanced voice and
data systems, lighting, environmental control systems,
manufacturing lines, and power systems. However, good risk
management techniques, including project estimation and bidding
controls, can lead to solid returns on permanent capital.
Electrical Contractor Magazine estimates that about 50% of all
electrical contracting projects are for maintenance and retrofit
activities. Nonetheless, the markets are considered cyclical,
with volume and pricing determined on a very local level.
Standard & Poor's has increasing concerns that in the near to
intermediate term, new and retrofit construction activities in
the commercial office and industrial markets will decline as a
result of excess supply and a weak economy.

According to the Engineering News Record, Integrated Electrical
is the third largest electrical contractor in the U.S. The
company's competitive advantages include its broad product
capabilities and geographic reach. Although the company operates
in 47 states, it has meaningful geographic concentrations in
Texas and the Southeast. While its geographic exposure should
provide for fair growth opportunities in the long run, many of
these locations currently are experiencing decelerating demand.
In the intermediate term, Integrated Electrical is expected to
pursue an internal growth strategy, focusing on improving its
already variable cost structure, and consolidating its
communications operations into its electrical business units.
Furthermore, the company will continue to install its enterprise
resource planning (ERP) information system throughout the
organization. When the ERP system is fully integrated, it should
enable the firm to achieve improved purchasing leverage and
enhance its fair risk management programs.

Integrated Electrical generated EBITDA to interest coverage of
4.2 times, and total debt to EBITDA of 2.6x, for fiscal 2001
(ended Sept. 30, 2001). However, in the near term, weakness in
some markets, particularly in the communications infrastructure
sector, will further erode credit protection measures. As a
result, the company may trip its bank financial covenants.
Standard & Poor's expects that Integrated Electrical will be
able to effectively amend its covenants, if necessary, although
it is possible that the lenders may decide to reduce the total
facility size given the firm's internal growth strategy, limited
fixed capital needs, and modest debt maturity schedule.

Cash generation is seasonal, with cash generation improving in
the second half of the year, and is cyclical, with about 65% of
revenues tied to new construction projects. Still, over the
intermediate term, Integrated Electrical is expected to generate
some free cash flow, which is expected to be used primarily for
debt reduction. Although the company has stated that it will
likely need to take a material charge as it implements FAS 142
(to write-off goodwill), this action will not have any effect on
cash or cash generation. Although credit protection measures
will vary with the business cycle, EBITDA to interest coverage
is expected to average around 4x, and total debt to EBITDA in
the 3x area, consistent with current credit quality.

                        Outlook: Stable

Leading market positions, a highly variable cost structure, and
the expectation that the company's internal growth strategy will
lead to improved operational execution, limit downside risk.
Cyclical end markets, meaningful geographic concentrations, and
possible bank covenant violations in the near term, restrain
upside ratings potential.

           Ratings Lowered, Removed from CreditWatch

     Integrated Electrical Services Inc.       TO     FROM
       Corporate credit rating                 BB     BB+
       Senior secured debt                     BB+    BBB-
       Subordinated debt                       B+     BB-


JACOBS ENTERTAINMENT: S&P Puts B Rating on Company & New Notes
--------------------------------------------------------------
Standard & Poor's assigned its single-'B' rating to Jacobs
Entertainment Inc.'s proposed $120 million senior secured notes
due 2009. These securities are expected to be privately placed
under Rule 144A.

Proceeds of the notes will be used to fund the pending
acquisitions of Black Hawk Gaming & Development Co., Jalou LLC,
and Colonial Holdings Inc. (unrated entities). The transactions
are expected to close during the first quarter of 2002, subject
to financing and regulatory approvals. At the same time,
Standard & Poor's assigned its single-'B' corporate credit
rating to the company.

The outlook is stable.

Jacobs Entertainment, upon consummation of the proposed offering
and pending transactions, will be the holding company parent of
existing operations. The company's subsidiaries include two
gaming facilities in Black Hawk, Colo., a casino in Reno, Nev.,
a racetrack and four off-track wagering (OTW) facilities in
Virginia, and six truck plazas in Louisiana (with a revenue
interest in a seventh).

Ratings reflect Jacobs Entertainment's small cash flow base,
competitive market conditions, and high debt levels. These
factors are tempered by Jacobs' relatively stable cash flow base
from its truck plaza and OTW operations, and good credit
measures for the rating.

Consolidated operating performance at the company's two Black
Hawk properties, The Lodge and Gilpin Hotel Casino, have
remained relatively steady over the past few years despite an
increasingly competitive market environment. The Lodge has
benefited from its good location, from a niche market position,
and by being one of two operators offering hotel rooms. The
Gilpin has seen recent operating results negatively affected by
the opening of additional properties and the increased
competitive environment. Jacobs is planning an approximately $6
million expansion of the Gilpin to enhance its competitive
position. Still, the recent opening of another competitor
will test the depth of the market and could cause some dilution
at Jacob's properties.

The company's other operations have been relatively steady
performers. The Reno facility has benefited from its middle
market focus and its recently installed player tracking system,
despite a competitive market environment. The company's pari-
mutuel operations in Virginia include Colonial Downs and
four OTW facilities throughout the state. These operations
benefit from limited direct competition, as the company holds
the only unlimited pari-mutuel license in the state. The OTW
facilities possess high margins and provide a stable source of
cash flow. The company's truck plaza operations in Louisiana
benefit from good locations and established customer bases.

Pro forma for the offering and based on current operating
trends, EBITDA coverage of interest expense is expected to be
approximately 2 times, and total debt to EBITDA over 4x.
Financial flexibility is adequate, with approximately $10
million in cash on hand and moderate maintenance capital
expenditures.

                        Outlook: Stable

Ratings stability reflects the expectation that Jacobs
Entertainment will maintain its market positions and that the
company's overall financial profile provides some cushion
against increased competitive pressures in some markets.


JACOBSON STORES: Files for Chapter 11 Reorganization in Michigan
----------------------------------------------------------------
Jacobson Stores Inc. (Nasdaq: JCBS), a leading regional
specialty store chain, filed bankruptcy under Chapter 11 for
reorganization with the United States Bankruptcy Court.  The
request was filed with the U.S. Bankruptcy Court for the Eastern
District of Michigan, Southern Division, in Detroit.

Subject to court approval as part of the reorganization, the
company announced plans to close five under-performing stores
and eliminate 520 associate positions in them.  The five
facilities to be closed are Columbus and Toledo, Ohio, and
Clearwater, Osprey and Tampa, Florida.  Jacobson's said it
expects to begin store-closing sales at each location in a few
weeks.

Jacobson's also announced that subject to court approval it has
reached agreement with Fleet Retail Finance Inc. and Back Bay
Capital Funding L.L.C., both of Boston, for a $130 million
commitment to provide debtor-in-possession financing for the
company's reorganization requirements.

"Let me underscore that this was an exceptionally difficult
decision for us to make.  After exploring other alternatives,
however, we concluded that a court-protected reorganization is
the best option for the Company to address its financial
challenges," said Carol Williams, Jacobson's President and Chief
Executive Officer.

"This action will allow Jacobson's to maintain normal business
operations in our 18 best performing stores while restructuring
our finances," Williams said.

Prior to this announcement, Jacobson's operated 23 specialty
stores in Michigan, Ohio, Indiana, Kentucky, Kansas and Florida.  
The Company's web site is located at www.jacobsons.com .

The Company has established a vendor relations call center at
517-748-2048 to address questions and informational needs of its
vendors.


KMART CORPORATION: DebtTraders Reports Bankruptcy Rumors Abound
---------------------------------------------------------------
DebtTraders reports that Kmart Corporation's Board of Directors
met on Tuesday to discuss possible options for the Company.
"There is a great deal of speculation that the Company may file
for bankruptcy," DebtTraders says.

According to the same report, the Company recently disclosed
that it is in talks with lenders to obtain additional funds as
well as review its current financing. Kmart, which is trying to
implement a $2 billion turnaround plan, is struggling with high
debt levels as well as declining market share to competitors,
Wal-Mart and Target.

DebtTraders analysts Daniel Fan and Blyther Berselli relate that
Kmart Corporation's 8.375% Bond due 2004 was last quoted at a
price of 63.0. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=KMART5


LASON: Files Joint Plan of Reorg. & Disclosure Statement in DE
--------------------------------------------------------------
Lason, Inc., (OTC Bulletin Board: LSONE) and its U.S.
subsidiaries filed their joint Plan of Reorganization and
related Disclosure Statement with the U.S. Bankruptcy Court in
the District of Delaware.  Lason and its U.S. subsidiaries filed
a voluntary petition for reorganization under Chapter 11 of the
Bankruptcy Code on December 5, 2001, as part of a pre-arranged
agreement with certain holders of its approximately $260 million
in senior secured debt.

The Plan and Disclosure Statement outline the proposed capital
structure and business operations for the reorganized company,
as well as the treatment of Lason's various creditors and other
parties in interest.  In particular, under the proposed Plan all
shares of the Company's currently issued common stock will be
cancelled with current shareholders receiving no distribution.
The Plan also provides that the reorganized company will issue
new common stock for its unsecured creditors on a pro-rata basis
as detailed in the Plan. Before the Plan can be presented to
certain classes of the Company's creditors for acceptance, the
Bankruptcy Court must determine whether the Disclosure Statement
contains adequate information, as required by the Bankruptcy
Code. The Company anticipates seeking approval of its Disclosure
Statement and to move expeditiously towards confirmation of its
Plan over the next few months.

"The filing of our Plan and Disclosure Statement is a major
milestone in our reorganization process towards successfully
emerging from Chapter 11.  The proposed Plan, if confirmed, is
structured to maximize the value of the Company for the benefit
of its creditors and ultimately for its customers and employees
by allowing it to emerge in a stronger financial condition and
positioned for future growth opportunities," stated Ronald D.
Risher, president and chief executive officer.

The Company also filed a Form 8-K with the U.S. Securities and
Exchange Commission.  The Plan and Disclosure Statement have
been attached as exhibits to the Form 8-K.  Lason is
headquartered in Troy, Michigan.  More information about the
Company can be found on its website at http://www.lason.com  

Lason is a leading provider of integrated information management
services, transforming data into effective business
communication, through capturing, transforming and activating
critical documents.  Lason has operations in the United States,
Canada, Mexico, India and the Caribbean.  The company currently
has over 85 multi-functional imaging centers and operates over
60 facility management sites located on customers' premises.  
Lason is available on the World Wide Web at http://www.lason.com


LERNOUT & HAUSPIE: Bakers Want Liquidation of Holdings Debtor
-------------------------------------------------------------
James Baker, Janet Baker, JK Baker LLC and JM Baker LLC, ask
Judge Judith Wizmur to convert L&H Holdings USA, Inc. to a
Chapter 7 liquidation and appoint a trustee if the Baker
Settlement is not approved.

The Bakers state that where, as here, the vast majority, if not
all of Holdings' assets risk being consumed by extraordinary
professional fees and uncompensated intercompany claims,
conversion to Chapter 7 and the appointment of an attendant
trustee are particularly warranted.

Karen C. Dyer, Esq., at Boies, Schiller & Flexner LLP in
Orlando, notes that L&H Holdings USA, Inc.'s Consolidated
Forecasted Net Cash Available, dated December 20, 2001, shows
the Debtors in Possession have amassed a net operating loss of
over $35,412,051 and cash proceeds from the liquidation of
assets of only $26,272,655 ($42,272,655 if Holdings' proposed
proportional share of ScanSoft stock is included). Debtors have
expended over $9.2 million in professional fees to accomplish
this.

Moreover, Ms. Dyer complains that the Debtors have done
virtually nothing to resolve the disputed intercompany accounts
receivables owing to Holdings from the other Debtors in March
2001 in the amount of $478 million. Despite assurances to Judge
Wizmur by the Debtors that these intercompany disputes would be
resolved shortly, this practice is still continuing as evidenced
by the testimony of John Shagoury at the September 17, 2001
hearing, where he acknowledged that Dictaphone had been using
the MREC and other related technology without compensation
prior to the Powerscribe transaction.

Section 1112 of the Bankruptcy Code sets forth a list of factors
for determining whether cause exists to convert to Chapter 7,
and provides in pertinent part that:

    . . . on request of a party in interest or the United States
    trustee or bankruptcy administrator, and after notice and a
    hearing, the court may convert a case under this
    chapter to a case under chapter 7 of this title or may
    dismiss a case under this chapter, whichever is in the best
    interest of creditors and the estate, for cause, including -

             (1) continuing loss to or diminution of the
                 estate and absence of a reasonable likelihood
                 of rehabilitation;

             (2) inability to effectuate a plan. . . .

In the instant case the plan of reorganization pertaining to
Holdings, and the other Debtors, filed on August 27, 2001, was
withdrawn on or about October 2, 2001 and no plan of
reorganization, liquidation, or otherwise, has been forthcoming
since.  Any chance for rehabilitation appears slim at best.  
Further, by the time any plan is filed and confirmed by Debtors,
assuming one is, the administrative costs and expenses will have
consumed all the assets in the Holdings' estate and render any
proposed plan meaningless. There must be "a reasonable
possibility of a successful reorganization within a reasonable
time. Moreover, rehabilitation under Section 1112 does not
encompass filing a self-liquidating plan.

Additionally, as required by the second prong of the Code's
test, in light of, among other things, the significant
intercompany claims remaining to be resolved, the ability of
Debtors to propose a plan that could ever be confirmed, as well
as the ability to do so before administrative insolvency would
occur, is highly unlikely.

                    Holdings' Negative Cash Flow

To establish cause for conversion to a Chapter 7, it is not
necessary to show a significant loss in value of the estate,
only some diminution need be shown. Although failing to adduce
any evidence with regard to this, Debtors themselves have
claimed and represented to this Court a diminution in the value
of the Holdings' assets.

Further, while negative cash flow need not be shown to
demonstrate a diminution in value of the estate, here the Bakers
say that the Debtors' own documents demonstrate a negative cash
flow during the pendency of these cases. Specifically, excepting
out the beginning cash balance of $6,555,818 on hand at the
start of the bankruptcy, Debtors' Chart shows Holdings with a
negative cash flow of $4,699,481, which does not even include an
additional $3.6 million in administrative expenses shown in the
Chart. Although Holdings also has $16 million of Scansoft stock,
they have refused to consider this asset in determining whether
to support the Baker Settlement. If the stock has no value to
the estate, as the Debtors' Chart seeks to suggest, Debtors
should not be permitted to use it to avoid conversion. In any
event, this $16 million in stock will be consumed by
administrative costs if Debtors are permitted to continue to
amass professional fees unabated.

The Bakers assert that the Debtors acknowledged at the November
5, 2001 hearing Holdings was cash flow negative. Further,
conversion is particularly appropriate where, as here, payments
to insiders have diminished debtors' estate.

                   The Debtor's Prior Efforts

Further, failure to convert this case is not justified on
grounds that Debtors "have come this far" and should be allowed
to allocate the proceeds and complete the liquidation of
Holdings. The Debtors administration if the Holdings' estate has
been a debacle and if allowed to continue will only make matters
worse. Indeed, the allocation of both the proceeds of the
November 26, 2001 auction, as well as the allocation if
intercompany debts and administrative claims is crucial to
Holdings and its creditors and, based on the record to date,
should not be left in the hands of Debtors.

                       The Cost Comparison

Moreover, any notion that it is more cost efficient to leave
matters in the hands of the Debtors rather than under the
management of a skilled and impartial Chapter 7 trustee is a
fallacy.  If the Chapter 11 process involving a plan, disclosure
statement, hearings, voting confirmation and distribution were
faster and less expensive than the Chapter 7 procedures,
Congress would doubtless have incorporated such a procedure in
the Code's basic liquidation chapter. The Bakers see no
indication that the administration expenses will be less under
Chapter 11 than in Chapter 7.

There is every reason to believe that the substantial costs
savings realized by minimizing the fees and expenses of debtors'
counsel and the Creditors' Committee's counsel should more than
offset the fees and expenses of a trustee.

Any notion that leaving Holdings and its professionals in place
is more efficient in this case is also belied by the record of
the Debtors' performance to date, and by the Debtors own
estimates as of September 17, 2001 that Holdings cash burn rate
was $900,000 per week and costs and professional fees associated
with the Debtors' estate were accruing at a rate of
approximately $2 million per month.

Finally, the conversion of Holdings to Chapter 7 and appointment
of a trustee will far better serve the interest of the creditors
who will be left with nothing for distribution if Debtors and
their professionals are allowed to continue their veritable raid
on Holdings' assets. Further, a trustee is particularly well-
suited to deal with the issues presented by the conflict of
interests between the related debtor entities, which inevitably
result from the myriad intercompany claims and the need for
allocation of massive administrative expenses.


For these reasons the Bakers ask that, in the event Judge Wizmur
declines to approve the Baker Settlement, she grant this
alternative motion to convert Holdings to Chapter 7 and appoint
a trustee to protect the continuing claims of the Bakers and
Holdings' other creditors.

                      The Debtors' Opposition:
                           No "Cause" Shown

The Debtors assert that Judge Wizmur should deny the Motion
because the Bakers have not met the Code's requirement of
"cause" for conversion and appointment of a trustee.  In
resolving this type of motion, a court "should resolve all
doubts in favor of the debtor."  The Debtors say that the
Bakers' sole purpose in bringing this motion is to "extract a
settlement from L&H and Holdings" with respect to the various
Baker claims.

First, conversion or dismissal is appropriate only when both
continuing loss to or diminution of the estate - and absence of
a reasonable likelihood of rehabilitation -- are shown to exist
together.  The Debtors say that the Bakers have not and cannot
establish either of these requirements.

There is a reasonable likelihood of rehabilitation here because
Holdings has proposed and can confirm a liquidation plan in its
currently pending chapter 11 case.  This Code section requires a
reasonable likelihood of rehabilitation - not necessarily
reorganization.  Thus, the standard is not the technical one of
whether the debtor can confirm a plan, but rather whether the
debtor's business prospects justify continuance of the
reorganization effort in the hope of achieving any of the
chapter 11 goals.  These goals include the filing and
confirmation of a plan which provides for liquidation.  A
chapter 11 plan may include the sale or liquidation of all or
any part of the property of a debtor's estate.  The case law
cited by the Bakers merely stands for the proposition that a
chapter 11 case may not be initiated with no attempt at
rehabilitation.

             Joinder of Unsecured Creditors Committee

Represented by Joseph J. Bodnar and Francis A. Monaco of the
Wilmington firm of Walsh Monzack & Monaco, PA, as local counsel,
and Daniel H. Golden and Ira S. Dizengoff of the New York firm
of Akin Gump Strauss Hauer & Feld LLP as lead, the Official
Committee of Unsecured Creditors of Lernout & Hauspie Speech
Products NV and L&H Holdings USA, Inc., join the Debtor in
opposing the Bakers' Motion. (L&H/Dictaphone Bankruptcy News,
Issue No. 17; Bankruptcy Creditors' Service, Inc., 609/392-0900)  


LESCO INC: Completes Refinancing of Principal Debt Agreements
-------------------------------------------------------------
LESCO, Inc. (Nasdaq: LSCO), the leading provider of products for
the professional turf care market, announced the refinancing of
its principal debt agreements in a new senior secured credit
facility.  The new $122 million facility includes an amortizing
term loan of approximately $7 million and a revolving credit
line of up to $115 million, with a three-year maturity.  
Availability under the new revolving credit facility is
determined by a borrowing formula based upon the Company's
eligible receivables and inventory.

"We are pleased that our new credit facility provides LESCO with
increased availability for our seasonal working capital needs,
less restrictive loan covenants and a longer maturity profile,"
said William A. Foley, Chairman and Chief Executive Officer.

Initial proceeds of $81 million have been used to repay the
Company's $45 million term notes to insurance companies; $31.2
million outstanding under its $50 million asset securitization
facility; and fees, accrued interest and other costs related to
the transaction, including a prepayment penalty.

As part of the refinancing, LESCO paid a prepayment penalty of
$3.5 million to its term note holders, of which $2.0 million was
paid in cash and $1.5 million was in the form of newly issued
Series B cumulative preferred shares with a $1,000 per share
liquidation preference.  The newly issued preferred shares do
not have mandatory redemption or conversion features, and carry
a 7 percent dividend payable in additional Series B preferred
shares. LESCO will record an extraordinary charge related to
early termination of debt of approximately $2.8 million after
tax in the first quarter.

PNC Bank, National Association arranged the new credit facility
and Brown, Gibbons, Lang & Company Securities, Inc. advised
LESCO on the transaction.

LESCO is a specialty provider of products for the professional
turf care market.  Serving more than 130,000 customers
worldwide, LESCO distributes through 227 LESCO Service Centers,
78 LESCO Stores-on-Wheels, lawn care service representatives and
other direct sales efforts.  Sales in 2000 totaled $499.6
million.  Additional information about LESCO can be found on the
Internet at http://www.lesco.com


LODGIAN INC: Tapping Curtis Mallet-Prevost as Conflict Counsel
--------------------------------------------------------------
Lodgian, Inc., and its debtor-affiliates sought and obtained an
order from the Court authorizing their employment and retention
of Curtis Mallet-Prevost Colt & Mosle LLP as co-counsel with
Cadwalader Wickersham & Taft to avoid unnecessary litigation and
reduce the overall expenses of administering these cases. The
Debtors believe that Curtis Mallet-Prevost Colt & Mosle LLP will
be needed in matters that the Debtors may encounter which are
not appropriately handled by Cadwalader Wickersham & Taft
because of potential conflict of interest issues, which can be
more efficiently handled by Curtis.

Steven J. Reisman, a member of the firm of Curtis Mallet-Prevost
Colt & Mosle LLP, tells the Court that they have considerable
experience in matters of this nature, and has acted in a
professional capacity in numerous Chapter 11 cases, representing
the interests of debtors, creditors' committees, trustees and
individual secured and general creditors, including representing
such entities in matters pending before this Court.

Mr. Reisman relates that the Debtors and Curtis have agreed that
the firm shall be paid its customary hourly rates for services
rendered that are in effect from time to time plus reimbursement
of actual and necessary expenses incurred in connection with the
client's cases. The firm's current hourly rates are:

           Partners            $390-$625
           Associates          $180-$435
           Paralegals          $ 95-$135

Mr. Reisman informs the Court that Curtis has received $150,000
from the Debtors as a retainer for professional services
rendered and to be rendered, and as an advance against expenses
incurred and to be incurred, in connection with these chapter 11
cases. Curtis has applied the retainer to services rendered and
expenses incurred prior to the Commencement Date and a balance
remains, which will be applied to such post-petition allowances
of compensation and reimbursement of expenses as may be granted
by the Court.

After review of the Firm's records, Mr. Resiman believes that
the members and associates of Curtis do not have any connection
with or any interest adverse to the Debtors, their creditors, or
any other party in interest, or their respective attorneys and
accountants. Curtis does have connections with the Debtors'
creditors on unrelated matters as follows:

A. Represents certain private banking clients of affiliates of
       Merrill Lynch in matters which are unrelated to this
       engagement.

B. Represents certain domestic and off shore funds controlled by
       affiliates of Merrill Lynch & Co., Inc. in matters which
       are unrelated to this engagement.

C. Represents both private clients of Bankers Trust and
       affiliates of Bankers Trust in matters which are
       unrelated to this engagement.

D. A partner of Curtis is acting as an international arbitrator
       in which Hilton International is a party. This
       international arbitration is unrelated to this
       engagement.

E. Curtis, Mallet-Prevost & Gilioli, a law firm affiliated with
       Curtis, represents Dean Witter Reynolds, Inc., a related
       company to Morgan Stanley Dean Witter, in connection with
       a matter in Milan, Italy unrelated to this engagement.

F. Represents Ernst & Young LLP in connection with certain Latin
       American matters unrelated to this engagement.

G. Represents Credit Suisse First Boston (USA) Inc. in
       connection with tax matters unrelated to this engagement.

H. Represents Arthur Andersen LLP, the proposed accountants and
       auditors for the Debtors, in matters unrelated to this
       engagement.

I. Represented Oracle in connection with matters unrelated to
       this engagement.

J. represented affiliates of Chase Bank on foreign tax matters
       unrelated to this engagement.

K. Represented Sysco Corporation in matters unrelated to this
       engagement. (Lodgian Bankruptcy News, Issue No. 3;
       Bankruptcy Creditors' Service, Inc., 609/392-0900)  


MICROCELL: S&P Affirms Low-B Ratings with Positive Outlook
----------------------------------------------------------
Standard & Poor's affirmed its single-'B' corporate credit
rating and single-'B'-minus senior unsecured debt rating on
Microcell Telecommunications Inc. In addition, all ratings were
removed from CreditWatch, where they were placed October 9,
2001. The outlook is positive.

The rating actions reflect the company's success in securing
additional funding through a combination of a rights offering,
private placements, and bank financing.

The ratings take into consideration the strength of Microcell's
subscriber growth and operating metrics; the prospect of growing
positive EBITDA in the near term; and the prefunding of its
business plan despite more challenging market conditions. These
factors are offset by increasing competition from incumbents
with access to greater financial resources and the execution
risks associated with the deployment of advanced mobile data
services.

Since launching personal communications service (PCS) in 1996
using global system for mobile communications (GSM) technology
under the Fido brand name, Microcell's subscriber base has grown
to 1,108,861 at September 30, 2001. Despite slower-than-
anticipated growth in wireless partially due to a slowdown in
the economy, characteristics of the industry remain strong.

At 2.8%, blended monthly churn for the third quarter of 2001 was
high relative to 2000 churn of 2.3% for the same period. This
was reflective of aggressive promotions and pricing plans in the
industry, including handset giveaways. In the future, however,
the introduction of new wireless applications and new feature-
rich phones that enable advanced messaging and data transmission
are expected to have a positive effect on retention closer to
historical levels of around 2.2%-2.3% and accelerate the rate of
subscriber growth. Customer acquisition costs should remain in
the low-C$300 area per subscriber, reflecting a higher level of
customer acquisition activity, decreasing equipment subsidies,
and higher sales and marketing costs, all typical of the fourth
quarter. Operating costs, however, are expected to reduce in
2002, as the company focuses more on  profitability.

Capital expenditures are expected to increase as the subscriber
base increases in the medium term, but peaked in 2001 at below
C$300 million as the company completes enhancements to its
packet-data transmission network and launches high-speed
Internet-based data services. Microcell is forecast to be
profitable on an EBITDA basis in 2002 and on free cash flow
positive basis by early 2004. In the interim, the company
benefits from some financial flexibility with adequate liquidity
of more than C$420 million at the end of 2001, which allows for
the prefunding of its business plan until it reaches a free cash
flow positive position. In December 2001, Microcell was
successful in obtaining additional equity funding of C$351
million through a combination of a rights offering and private
placements. Microcell announced an additional C$100 million of
bank financing, which is expected to close in the first quarter
of 2002. Also, the addition of two new investors, Canadian
Imperial Bank of Commerce and Capital Communications CDPQ Inc.,
underscores Microcell's operating success to date and long-term
growth prospects. The company's success in securing additional
funding and the support of new and existing shareholders is
viewed positively.

                       Outlook: Positive

The outlook incorporates the expectation that Microcell will
continue to meet its business plan expectations in the
deployment of next generation wireless services. A clearer
demonstration of positive EBITDA growth during the next few
quarters could lead to a ratings upgrade within the next 12
months.


MILLENIUM SEACARRIERS: Case Summary & Largest Creditors
-------------------------------------------------------
Lead Debtor: Millenium Seacarriers, Inc.
             P.O. Box 309, Ugland House
             South Church Street,
             George Town, Cayman Islands
             Grand Cayman, B.W.I.

Bankruptcy Case No.: 02-10180-cb

Debtor affiliates filing separate chapter 11 petitions:

             Entity                        Case No.
             ------                        --------
             Ivy Navigation Ltd.           02-10182
             Millenium II, Inc.            02-10183
             Millenium IV, Inc.            02-10184
             Millenium V, Inc.             02-10185
             Millenium VI, Inc.            02-10186
             Millenium Aleksander, Inc.    02-10187
             Millenium Amethyst, Inc.      02-10188
             Millenium Asset, Inc.         02-10189
             Millenium Baltic, Inc.        02-10190
             Millenium Elmar, Inc.         02-10191
             Millenium Giant, Inc.         02-10192
             Millenium Lady, Inc.          02-10193
             Millenium Majestic, Inc.      02-10194
             Millenium Maritime, Inc.      02-10195
             Millenium Scorpio Maritime,
             Inc.                          02-10196
             Millenium Transport, Inc.     02-10197
             Millenium Valiant, Inc.       02-10198
             Millenium Victory, Inc.       02-10199
             Millenium Voyager, Inc.       02-10200

Type of Business: Millenium Seacarriers, Inc. is a holding
                  company of international shipping company
                  subsidiaries engaged in the transportation of
                  cargo around the world on vessels acquired
                  and operated through its subsidiaries.

Chapter 11 Petition Date: January 15, 2002

Court: Southern District of New York (Manhattan)

Judge: Cornelius Blackshear

Debtors' Counsel: Christopher F. Graham
                  Thacher Proffitt & Wood
                  11 West 42nd Street
                  New York, NY 10036
                  Tel: (212) 789-1470
                  Fax: (212) 789-3535

Total Assets: $85,078,831

Total Debts: $112,874,053

Debtor's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Allfirst Bank               Notes                 $103,000,000
25 South Charles Street
Mail Code 101-991
Baltimore, MD 21201

Thacher Proffitt & Wood     Legal Fees                $112,554

Praxiz Energy               Trade Debt                $186,828

Assuranceforeningen Skuld   Insurance Premiums         $77,945

Deloitte & Touche           Trade Debt                 $55,627

Standard & Poor's Rating    Trade Debt                 $32,500
Services

ABS Group, Inc.             Trade Debt                 $24,436

Sveriges AngFartyos         Insurance Premiums         $21,293
Assurans Forening

Moody's Investors Services  Trade Debt                 $15,000

Patkos B.T.                 Legal Fees                 $14,400

Det Norske Veritas          Trade Debt                  $8,053

Maples and Calder           Legal Fees                  $7,985

Associated Marine           Trade Debt                  $7,885
Cons/Simant

Aspida Travel               Trade Debt                  $4,216

Marsoft, Inc.               Trade Debt                  $4,000

QSPV Limited                Trade Debt                  $2,690

Cayman Islands Gov't.       Corporate Fees              $2,128

Terriberry, Carrol &        Legal Fees                  $2,008
Yancey, LLP

Gordon Fenwick Marine       Trade Debt                  $1,660
Surveys Inc.

Marine Money Internation    Trade Debt                  $1,495


NATIONSRENT INC: Signs-Up Robinson Lerer as Corp. PR Consultants
----------------------------------------------------------------
NationsRent Inc., and its debtor-affiliates apply to the Court
for permission to retain and employ Robinson Lerer & Montgomery,
LLC as their corporate communications consultants in these
chapter 11 cases, nunc pro tunc to the petition date.

Joseph I. Izhakoff, the Debtors' Vice-President and General
Counsel, tells the Court that Robinson Lerer is particularly
well suited to serve as the Debtors' corporate communications
consultants in these chapter 11 cases. Founded over a decade
ago, Robinson Lerer specializes in advising corporations on the
most effective uses of strategic communications. As such,
Robinson Lerer advises clients with respect to communications
with a variety of constituencies, including customers,
employees, vendors, shareholders, bondholders and the media. Mr.
Izhakoff assures the Court that Robinson Lerer has substantial
experience providing corporate communications services to
clients in similar situations, including Sunbeam Corporation and
Converse. Inc.

Mr. Izhakoff contends that Robinson Lerer also is familiar with
the Debtors' current corporate communications needs because
during the period leading up to the Petition Date, Robinson
Lerer assisted in the development and implementation of a
comprehensive communications strategy designed to facilitate the
smooth transition of the Debtors' operations into chapter 11.
Specifically, Robinson Lerer has provided strategic advice to
the Debtors, monitored the media in South Florida, prepared key
messages for the Debtors to deliver to various constituencies
and advised the Debtors with respect to their other corporate
communications needs. Through these and other ongoing
activities, Mr. Izhakoff submits that Robinson Lerer's
professionals have worked closely with the Debtors' management,
internal communications staff and other professionals and have
become well acquainted with the Debtors' corporate
communications needs. Accordingly, Robinson Lerer has developed
significant relevant experience and expertise that will assist
it in providing effective and efficient services to the Debtors
in these chapter 11 cases.

Pursuant to the terms and conditions of the Engagement Letter
and subject to the Court's approval, Patrick S. Gallagher, Chief
Financial Officer of Robinson Lerer & Montgomery LLC, submits
that the firm intends to charge for its professional services on
an hourly basis in accordance with its ordinary and customary
hourly rates in effect on the date services are rendered' and
seek reimbursement of actual and necessary out-of-pocket
expenses. The current hourly rates of Robinson Lerer's
professionals are:

      Walter Montgomery, Partner                     $495
      Elizabeth Mather, Executive Vice President     $330
      Mark Baker, Vice President                     $270
      Nancy Whitehurst, Senior Associate             $210

According to Mr. Gallagher, the Engagement Letter provides that
the Debtors agree to indemnify and hold harmless Robinson Lerer,
Robinson Lerer's parent, WPP Group plc, and all of WPP's
subsidiary and affiliated entities, Robinson Lerer's and the
Affiliates' officers, directors, members, agents and employees
to the fullest extent permitted by law from and against any and
all losses, claims, damages, actions, proceedings, arbitrations
or investigations thereof, and expenses related thereto, based
upon, relating to or arising out of Robinson Lerer's engagement
by the Debtors to perform services under the Engagement Letter
or any Indemnified Person's role therein; provided, however,
that the Debtors shall not be liable under this paragraph:

A. for any amount paid in settlement of claims without the
       Debtors' consent, unless the Debtors' consent is
       unreasonably withheld, or

B. to the extent that it is finally judicially determined, or
       expressly stated in an arbitration award, that such
       Liabilities resulted primarily from the willful
       misconduct or gross negligence of the Indemnified Person
       seeking indemnification.

In connection with the Debtors' obligation to indemnify for
expenses, the Debtors further agree to reimburse each
Indemnified Person for all such expenses as they are incurred by
such Indemnified Person; provided, however, that if any
Indemnified Person is reimbursed for any expenses, the amount so
paid shall be refunded if and to the extent it is finally
judicially determined, or expressly stated in an arbitration
award, that the Liabilities in question resulted primarily from
the willful misconduct or gross negligence of such Indemnified
Person. The Debtors also agree that neither Robinson Lerer nor
any other Indemnified Person shall have any liability to the
Debtors in connection with Robinson Lerer's engagement by the
Debtors except to the extent that such Indemnified Person has
engaged in willful misconduct or been grossly negligent.

Prior to the Petition Date, that the Debtors paid a total of
$160,000 to Robinson Lerer as a retainer for services to be
rendered, which has been exhausted as of the Petition Date. Mr.
Gallagher submits that Robinson Lerer is not owed any amount for
pre-petition services or expenses.

Mr. Gallagher assures the Court that Robinson Lerer neither
holds nor represents any interest adverse to the Debtors or
their respective estates in the matters for which it is proposed
to be retained and is a "disinterested person," as defined in
section 101(14) of the Bankruptcy Code and as required by
section 327(a) of the Bankruptcy Code. The firm, however, had
relationships with parties in interests in these cases in
unrelated matters including Skadden Arps Slate Meagher & Flom
LLP, First Union National Bank, Credit Suisse Asset Management,
Ford Motor Credit Company, J.P. Morgan Capital Corporation.
(NationsRent Bankruptcy News, Issue No. 3; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


NETIA HOLDINGS: Subsidiary Defaults on 13-1/8% & 13-1/2% Notes
--------------------------------------------------------------
Netia Holdings S.A. (Nasdaq: NTIA, WSE: NET), Poland's largest
alternative fixed-line telecommunications services provider,
announced that an "event of default" occurred as of the close of
business Monday (January 14, 2002) under the indentures
governing the 13-1/8% Senior Dollar Notes due 2009 and the 13-
1/2% Senior Euro Notes due 2009 of its subsidiary, Netia
Holdings II B.V.

As previously announced, Netia Holdings II B.V., did not make an
interest payment of $6,562,500 on the 131/8% Senior Dollar Notes
due 2009 or an interest payment of approximately EUR 6,750,000
on the 13 1/2% Senior Euro Notes due 2009, both of which were
due on December 15, 2001. Since Netia Holdings II B.V. did not
make these interest payments on or before the expiration of the
applicable grace period on January 14, 2002, an "event of
default" under the indentures governing these notes has
occurred.

Netia also announced that the event of default under the
indentures governing these notes has triggered the cross-default
provisions of the indentures governing the 10 1/4% Senior Dollar
Notes due 2007 of Netia Holdings B.V., the 11 1/4% Senior
Discount Dollar Notes due 2007 of Netia Holdings B.V., the 11%
Senior Discount DM Notes due 2007 of Netia Holdings B.V. and the
13 3/4% Senior Euro Notes due 2010 of Netia Holdings II B.V.
and, as a result, an "event of default" also occurred as of the
close of business Monday under the indentures governing those
notes.

Netia previously announced plans to engage in discussions with
its bondholders concerning a consensual reorganization of its
balance sheet to reduce its debt and interest burdens. Pending
further developments in relation to these discussions, it made
the decision in December to withhold the interest payments on
certain of the notes due on December 15, 2001.

Netia is the leading alternative fixed-line telecommunications
provider in Poland. Netia provides a broad range of
telecommunications services including voice, data and Internet-
access and commercial network services. Netia's American
Depositary Shares are listed on the Nasdaq National Market
(NTIA), and the Company's ordinary shares are listed on the
Warsaw Stock Exchange. Netia owns, operates and continues to
build a state-of-the-art fiber-optic network that, at September
30, 2001, had connected 343,634 active subscriber lines,
including 93,713 business lines. Netia currently provides voice
telephone service in 24 territories through Poland, including in
six of Poland's ten largest cities.

DebtTraders reports that Netia Holdings SA's 13.500% bonds due
2009 (NETHOL2E) are currently trading between 18 and 20. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NETHOL2Efor  
real-time bond pricing.


NORSKE SKOG: S&P Revises Outlook Over Deteriorating Performance
---------------------------------------------------------------
Standard & Poor's revised its outlook on Norske Skog Canada Ltd.
to negative from stable. At the same time, the ratings
outstanding on the company, including the double-'B'-plus long-
term corporate credit rating, were affirmed.

The outlook revision stems from deteriorating operating
performance brought about by significantly weakening market
conditions for the company's primary products, newsprint,
uncoated groundwood papers, and market pulp. The
weakened economy has had a significant negative effect on demand
and prices for the company's products, which, combined with the
debt burden stemming from the acquisition of Pacifica Papers
Inc. in August 2001, will hamper the company's ability to
improve its credit measures.

The ratings on Norske Canada reflect the company's average cost
position in groundwood papers, narrow revenue base, and moderate
financial policies.

With its acquisition of Pacifica Papers, Norske Canada is the
third-largest groundwood paper producer in North America. The
company's concentration in newsprint and other groundwood
papers, which account for more than three-quarters of sales,
exposes it to price volatility in these segments. The effect of
this cyclicality on profitability may be intensified when prices
for market pulp, which accounts for 17% of volumes, move in
tandem with paper prices. This volatility is somewhat mitigated
by the company's leading position in directory papers in North
America, a market segment that is characterized by longer term
contracts and lower price volatility.

With completion of both its Pacifica Papers acquisition and
C$1.5 billion special distribution to shareholders, Norske
Canada's strong financial profile moderated in August 2001 as
expected. As of third-quarter 2001, debt to capitalization was
53%. The company remains focused on achieving a target debt-to-
capitalization ratio of 35%-45%, which would necessitate about
C$300 million in debt reduction. Given market conditions, this
will be difficult to achieve before late 2003.

Norske Canada's profitability measures remain adequate for the
rating category, with a 2001 third-quarter operating margin of
14%. The company's profitability will be enhanced with the
realization of the C$60 million in synergies and the ongoing
cost reduction programs from the Pacifica Papers acquisition.
Norske Canada's facilities are well integrated with pulp, and
its chip requirements are satisfied externally through stable
long-term agreements that are linked to market pulp prices. Cash
flow protection measures are currently satisfactory for the
category. Nevertheless, continuation of the recent weakness for
the company's main products will impede its debt reduction and
lead to a deterioration of credit measures.

In light of weaker-than-expected cash flow generation in 2002,
Norske Canada is expected to take measures to conserve cash,
including lowering its capital expenditures. The company
currently has good financial flexibility in the form of cash
balances of more than C$90 million and availability of C$220
million under its credit facility. Nevertheless, this
flexibility could be hampered if the company experiences poor
operating performance that affects compliance with the covenants
under its credit facility.

Standard & Poor's has evaluated Norske Canada's credit quality
on a stand-alone basis. After the company's equity was used to
pay for the Pacifica Papers acquisition, ownership by Norske
Skogindustrier ASA, the world's second-largest newsprint
producer, dropped to 36% from 50.8%. Although Norske Canada is
an important strategic investment for the parent, there is no
guarantee on its debt, nor are there any cross-default
provisions.

                       Outlook: Negative

Weak newsprint and uncoated groundwood prices in 2002 will
reduce profitability and adversely affect cash flow protection
and other credit measures. Should the company not attain its
debt reduction targets because of protracted weakness in the
industry, the ratings could be lowered.


PIONEER COMPANIES: Will Idle Chlor-Alkali Plant in Washington
-------------------------------------------------------------
Pioneer Companies, Inc., (OTC: PONRV) announced that it will
idle its chlor-alkali plant located in Tacoma, Washington due to
current market conditions.  The plant has an annual production
capacity of approximately 225,000 tons of chlorine and 248,000
tons of caustic soda.  Approximately half of that capacity had
been idled last year.  After the plant is idled, Pioneer will
meet customer requirements from other Pioneer sources.

Pioneer, based in Houston, Texas, manufactures chlorine, caustic
soda, hydrochloric acid and related products used in a variety
of applications, including water treatment, plastics, pulp and
paper, detergents, agricultural chemicals, pharmaceuticals and
medical disinfectants.  The Company owns and operates five
chlor-alkali plants and several downstream manufacturing
facilities in North America. Pioneer filed for Chapter 11
Reorganization in the U.S. Bankruptcy Court for the Southern
District of Texas on July 31, 2001.

Other information and press releases of Pioneer Companies, Inc.
can be obtained from its Internet web site at
http://www.piona.com


POINT.360: CEO R. Luke Stefanko Discloses 18.7% Equity Interest
---------------------------------------------------------------
R. Luke Stefanko, President and Chief Executive Officer of
Point.360, beneficially owns 1,734,166 shares of that Company
with sole voting and dispositive powers.  His holding represent
18.7% of the outstanding common stock of Point.360.  Point.360
principally engaged in servicing the post-production and
broadcast distribution needs of entertainment studios,
advertising agencies, corporations and independent producers.

From July through December, 2001, 859,900 shares of common stock
previously owned by Mr. Stefanko have been sold by Prudential
Securities, Inc. as pledgee for the account of Mr. Stefanko
under a margin loan agreement entered into in 1996.  Although
permitted by such agreement, the sales were executed against Mr.
Stefanko's express requests.  As of January 2, 2002 Mr.
Stefanko's  ownership consists of 1,500,166 shares owned and
options to purchase 234,000 shares within 60 days of January 2,
2002.  The 1,500,166 shares were acquired in connection with a
court-approved Written Stipulation for Judgment  in connection
with the dissolution of Mr. Stefanko's marriage, which
dissolution became effective on January 26, 2000. The
Stipulation divided ownership with respect to 5,275,400 shares
of common stock previously held by Mr. and Mrs. Stefanko as
community property.

Prudential Securities, Inc. has the right to receive or the
power to direct the receipt of proceeds  from the sale of
1,500,166 shares of common stock owned by Mr. Stefanko and
pledged as security  pursuant to the margin loan agreement
entered into in 1996.

The company, which changed its name from VDI MultiMedia in mid-
2001, provides video and film management services to film
studios and ad agencies. Point.360 offers editing, mastering,
reformatting, archiving, and distribution services for
commercials, movie trailers, electronic press kits,
infomercials, and syndicated programs. Services provided to the
seven major film studios accounted for nearly 40% of VDI's 2000
revenue. Its ad agency clients include Saatchi & Saatchi and
Young & Rubicam. A deal to be acquired by Bain Capital was
terminated in 2000. As at September 30, 2001, the company
sustained strained liquidity, with total current liabilities
exceeding total current assets by about $17 million.


POLAROID CORP: Wants Period to Remove Actions Extended to July 9
----------------------------------------------------------------
Gregg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in Wilmington, Delaware, tells the Court that Polaroid
Corporation, and its debtor-affiliates are parties to over 50
different judicial and administrative proceedings currently
pending in various courts or administrative agencies throughout
the country.  "The Actions involve a wide variety of claims,
some of which are extremely complex as they consist of all forms
of environmental, commercial, employment-related, product
liability, trademark and patent litigation," Mr. Galardi
relates.  Because of the number of Actions involved and the wide
variety of claims, Mr. Galardi explains, the Debtors need more
time to determine which of the state court actions they will
remove and transfer to this district.

Thus, the Debtors ask Judge Walsh to extend period to remove
actions through the longer of:

    (a) July 9, 2002 or

    (b) 30 days after entry of an order terminating the
        automatic stay with respect to any particular action
        sought to be removed.

An extension of this deadline will provide the Debtors with
sufficient opportunity to make fully informed decisions
concerning the possible removal of the Actions, Mr. Galardi
says.

The Debtors assure the Court that their adversaries will not be
prejudiced by such an extension because such adversaries may not
prosecute the Actions absent relief from the automatic stay.
(Polaroid Bankruptcy News, Issue No. 9; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


POLAROID: Court Grants Formal Recognition of Retirees' Committee
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware granted
formal recognition of a Retirees' Committee in the Polaroid
bankruptcy proceeding during a hearing Tuesday.

"We're very pleased that the court has recognized the Polaroid
retirees as an important constituency in the bankruptcy
process," said Karl Farmer, chair of the retirees' committee.
"More than 6,000 retirees were affected by the abrupt
termination of health and life insurance coverage just days
before the company filed for bankruptcy."

In December, the retirees challenged the requested $19 million
in bonuses sought by the Polaroid management team. Prior to
Tuesday's hearing, Polaroid withdrew the bonus proposal for the
45 top executives and is currently reworking that plan.

Three days before filing for bankruptcy protection in October,
Polaroid informed retirees that their benefits were suspended.
Subsequently, the company suspended benefits for employees on
long-term disability and withdrew severance payments for long-
term employees.

Scott Cousins, a bankruptcy attorney with Greenberg Traurig and
representative for the committee, added, "We were able to come
to agreement with Polaroid, its lenders and the unsecured
creditors' committee with respect to both the formation of an
official retirees' committee and the initial stage of our
investigation."

Greenberg Traurig represents the Retirees' Committee and
petitioned the court in December on behalf of the retirees'
group as they first sought a formal voice in the bankruptcy
process.

The Polaroid Retiree Committee includes Karl Farmer of
Hampstead, N.H., with 30 years of service; Paul Hegarty of
Arlington, Mass., with 40 years of service; Richard Sarvas of
Norfolk, Mass., with 24 years of service; Anne O'Neil of
Lexington, Mass., with 31 years of service and Les Embry of
Milton, Mass., with 24 years of service.

                            *  *  *

DebtTraders reports that Polaroid Corporation's 11.500% bonds
due 2006 (PRD3) (an issue in default) are trading between 9 and
10. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=PRD3


PRECISION SPECIALTY: Wants Lease Decision Time Pushed to May 14
---------------------------------------------------------------
For the second time, Precision Specialty Metals, Inc. asks the
U.S. Bankruptcy Court for the District of Delaware to further
extend its time to decide whether to assume, assume and assign
or reject leases.

The Debtor is currently a party to three pre-petition non-
residential real property leases, which serves as its national
sales offices.

Currently, the Debtor is utilizing a DIP financing facility
expiring on the earlier of March 31, 2002. The DIP financing
agreement contains an affirmative covenant requiring the Debtor
to adhere to a specified timetable for the sale of its assets or
capital stock. Upon the sale of its assets or capital stock, the
Debtor expects to assume and assign or reject the Unexpired
Leases, depending upon the structure of the sale. The Debtor
hopes to complete such a sale as soon as possible.

At this time, the debtor is unable to make a reasoned decision
as to whether to assume, assume and assign, or reject the
unexpired Leases prior to the January 14, 2002 deadline.

If the requested extension is not granted, the Debtor will be
compelled either to assume long-term liabilities for rent,
creating substantial administrative expense claims, or to
forfeit the Unexpired Leases prematurely.

For this reason, the Debtor wishes to extend the time within
which it must assume or reject the Unexpired Leases through May
14, 2002.

Precision Specialty Metals is a specialty steel conversion mill
engaged in re-rolling, slitting, cutting and polishing stainless
steel and high-performance alloy hot band into standard or
customized finished thin-gauge strip and sheet product. The
Company filed for Chapter 11 petition on June 16, 2001 in the
U.S. Bankruptcy Court for the District of Delaware. Laura Davis
Jones, Esq., at Pachulski, Stang, Ziehl, Young & Jones P.C.
represents the Debtor on its restructuring efforts.


RURAL/METRO: Dismisses Arthur Andersen & Hires PwC as Auditors
--------------------------------------------------------------
On January 2, 2002, Rural/Metro Corporation dismissed Arthur
Andersen LLP as its independent public accountants. The Company
intends to engage PricewaterhouseCoopers, LLP as its new
independent  public accountants.  The decision to change the
Company's accounting firm was recommended and  approved by the
Company's Audit Committee of the Board of Directors and approved
by the Company's  Board of Directors.

Andersen issued a letter dated October 31, 2000 summarizing
material weaknesses in certain aspects  of the Company's
internal controls that were noted during Andersen's audit of the
Company's financial statements for the fiscal year ended June
30, 2000.  The letter recommended examination  and augmentation,
as appropriate, of certain aspects of the Company's internal
control procedures,  including the following: (1) the Company's
reserve analysis for the allowance for doubtful accounts,  
including the quarterly procedures to be performed in the
reserve analysis and the involvement of additional management
personnel in such analysis; (2) the Company's assessment of
asset  realization, including the Company's application of
relevant accounting pronouncements, and the  involvement of
additional field operational personnel in such assessment on a
quarterly basis; (3)  the Company's risk management function,
including its analysis, documentation, and procedures related to
workers' compensation and general liability reserves; and (4)
the Company's compliance with documentation and billing
procedures, including training, supervision, and internal audit
functions  pertaining to such procedures.

The Audit Committee of the Company's Board of Directors, the
Board of Directors, and management discussed the recommendations
with Andersen. The Company indicates that it has taken steps to
address each internal control recommendation. Although Andersen
provided the Company with a summary of internal control
recommendations developed in connection with the audit of the
Company's financial statements for the fiscal year ended June
30, 2001, none of the underlying conditions  were determined by
Andersen to represent material weaknesses.  The Company has
authorized Andersen to respond fully to any inquiries of
PricewaterhouseCoopers, LLP concerning the internal control
recommendations.


SAFETY-KLEEN: Dai-Ichi Seeks Allowance & Payment of $1.8MM Claim
----------------------------------------------------------------
The Dai-Ichi Kangyo Bank, Ltd., appearing through Frederick B.
Rosner of the Wilmington firm of Cozen O'Connor, as local
counsel, and Stuart Hirshfield of the New York firm of Dewey
Ballantine LLP as lead counsel, ask Judge Walsh for an order (i)
granting the Bank an allowed administrative expense claim in the
amount of $1,869,042; and (ii) directing Safety-Kleen Corp., and
certain of its subsidiaries and affiliates to pay the
administrative expense claim now.

On August 10, 1999, Mr. Rosner reports that the Debtors entered
into an Insurance and Claims Handling Agreement with Laidlaw
Transportation, Inc., a subsidiary of Laidlaw, Inc. An addendum,
dated January 18, 2000 extended the effective period of the ICHA
and changed certain of its terms. As supplemented by the
Addendum, the ICHA provides, among other things, that the
Debtors are responsible for the payment of insurance claims,
including workers' compensation claims, made against the Debtors
up to $250,000 per occurrence. While the ICHA obligates Laidlaw
to arrange for payment of such claims if they are valid, the
ICHA also obligates the Debtors to reimburse Laidlaw for all
such payments.

The Debtors were authorized, by Judge Walsh's order dated June
13, 2000, to continue certain prepetition employee benefit
programs, which includes workers' compensation and insurance
programs under the ICHA, and to pay certain prepetition employee
obligations, including payment of those prepetition workers'
compensation claims for which the Debtors are obligated to
reimburse Laidlaw. Laidlaw assigned certain of its rights under
the ICHA to the Bank pursuant to that certain Assignment
Agreement dated as of January 8, 2001. The Bank now asserts an
allowed administrative expense claim based upon its rights to
payment under the Assignment.

On November 20, 2000, and again on March 1, 2001, Laidlaw
presented to the Debtors an invoice and demand for payment of
Deductible Obligations due under the terms of the ICHA and the
Addendum. The Invoices show a total outstanding balance of
unpaid Deductible Obligations in the amount of $1,869,042, which
amount includes both postpetition insurance claims and
prepetition workers' compensation claims that the Debtors were
authorized to pay according to the Benefits Order.

Despite being obligated to pay the Deductible Obligations under
the ICHA and Addendum, and despite being fully authorized to do
so under the Bankruptcy Code and the Benefits Order, the Debtors
refused to pay the outstanding balance of Deductible
Obligations. Following the Debtors' refusal to pay, Laidlaw
issued two drafts against the Letter of Credit, as Laidlaw is
entitled to do under the ICHA and the Addendum. The Bank has on
both occasions honored the Sight Drafts and has to date made
total payments of $1,869,042 to Laidlaw.

On January 8, 2001, the Bank and Laidlaw entered into the
Assignment. Under the Assignment, among other things, Laidlaw
assigned to Movant its rights to payment or reimbursement under
the ICHA and under applicable bankruptcy and nonbankruptcy law,
including the assignment of any related cause of action or claim
held by Laidlaw against the Debtors.

Under these facts, Mr. Rosner on behalf of the Bank asks Judge
Walsh to enter an order that (i) allows the Bank's
administrative claim against the Debtors in the amount of
$1,869,042; and (ii) compels the Debtors to pay such amount to
Movant within ten days of the entry of such order.  To support
these requests, Mr. Rosner argues that courts have developed a
two-prong test to determine whether a creditor's right to an
administrative expense claim has been established. Under the
applicable case law, a creditor asserting an administrative
claim must establish that the debt arose from a postpetition
transaction between the creditor and the debtor in possession,
and the transaction in which the debt arose substantially
benefited the estate, or was "actual and necessary" to the
preservation of the estate.

Mr. Rosner assures Judge Walsh that the Bank's claim clearly
satisfies both prongs of the test.

The Debtors elected to continue to receive benefits under the
ICHA and the Addendum. Because of this conduct by the Debtors,
the continuation of the ICHA, which was entered into
prepetition, should be recognized as a postpetition transaction
between Laidlaw and the Debtors. When a debtor-in-possession
elects to continue to receive benefits under an insurance policy
and has not exercised its statutory or contractual right to
terminate the policy, there is no additional requirement of a
"positive postpetition act" to establish that the transaction
occurred postpetition. Accordingly, the transaction obligating
the Debtors to pay the Deductible Obligations is deemed to have
occurred postpetition; therefore, the Debtors are obligated to
pay such obligations as an administrative expense.

It is also clear - at least to the Bank and Mr. Rosner - that
Laidlaw's performance under the ICHA and the Addendum has
directly and substantially benefited the bankruptcy estates. The
Debtors have admitted as much in the Benefits Motion, stating
that the postpetition continuation of the prepetition employee
benefit programs was "necessary -- indeed critical" to continued
operation of the Debtors' businesses and to their successful
reorganization. Moreover, other courts have recognized that the
continuation of employee insurance programs is vital to the
reorganization process, and thus substantially benefits the
estate.  The Bank, standing in the shoes of Laidlaw by virtue of
the Assignment, is able to satisfy both prongs of the test for
establishing an administrative expense claim. (Safety-Kleen
Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service,
Inc., 609/392-0900)    


THORN MEDIA: Chapter 11 Case Summary
------------------------------------
Debtor: Thorn Media Inc.
        100 Enterprise Drive
        Kingston, NY 12401
        dba Total Sports Publishing  

Bankruptcy Case No.: 01-38020-cgm

Chapter 11 Petition Date: December 18, 2001

Court: Southern District of New York (Poughkeepsie)

Judge: Cecelia G. Morris

Debtor's Counsel: Arthur Goldstein
                  Todtman, Nachamie, Spizz & Johns, P.C.
                  425 Park Avenue
                  New York, NY 10022
                  Tel: (212) 754-9400
                  Fax: (212) 754-6262

Estimated Assets: $500,000 to $1 million

Estimated Debts: $1 million to $10 million


UNDERWRITERS GUARANTEE: Receivership Spurs S&P Rating Cut
---------------------------------------------------------
Standard & Poor's revised its financial strength rating on
Underwriters Guarantee Insurance Co., to 'R' from single-'Bpi'
after it was placed into receivership for rehabilitation by
order of the Second Judicial Circuit Court in Leon County, Fla.

The Florida Department of Insurance, Division of Rehabilitation
and Liquidation, is the court-appointed receiver.

Headquartered in Miami, Fla., UGIC (NAIC: 21431) writes mainly
private-passenger auto liability and auto physical damage, with
a specialization in nonstandard auto insurance. UGIC is covered
by the Florida Insurance Guaranty Association.

In assigning its single-'Bpi' rating to UGIC, Standard & Poor's
cited the company's limited business scope, weak operating
performance, and a volatile reserve development ratio.

An insurer rated 'R' is under regulatory supervision owing to
its financial condition. During the pendency of the regulatory
supervision, the regulators may have the power to favor one
class of obligations over others or pay some obligations and not
others. The rating does not apply to insurers subject only to
nonfinancial actions such as market conduct violations.


UNISOURCE INSURANCE: S&P Assigns R Financial Strength Rating
------------------------------------------------------------
Standard & Poor's assigned its 'R' financial strength rating to
Unisource Insurance Co. (Unisource) after the company consented
to and was placed into liquidation by the Leon County Florida
2nd Judicial Circuit Court.

Unisource was a Florida-domiciled corporation that transacted
primarily medical malpractice insurance business in Florida.  If
an insurer or self insurance fund authorized to write workers'
compensation insurance is declared insolvent and placed into
liquidation, the Florida Worker's Compensation Insurance
Guaranty Association (FWCIGA) is triggered to provide insurance
coverage for Florida residents.  FWCIGA covers the full amount
of the original policy.

An insurer rated 'R' is under regulatory supervision owing to
its financial condition.  During the pendency of the regulatory
supervision, the regulators may have the power to favor one
class of obligations over others or pay some obligations and not
others.  The rating does not apply to insurers subject only to
nonfinancial actions such as market conduct violations.


W.R. GRACE: Zonolite's Move to Dismiss Chap. 11 Case Draws Fire
---------------------------------------------------------------
Responding with a scholarly analysis of case law, the Official
Committee of Unsecured Creditors of W. R. Grace & Co.,
represented by Lewis Kruger and Kenneth Pasquale at Stroock &
Stroock & Lavan LLP, put the Committee's objections to the
Zonolite Claimants' Motion to Dismiss these bankruptcy cases
before the Court.

To the Committee, the most telling aspect of the Motion filed by
the Zonolite Attic Insulation Claimants seeking to dismiss these
bankruptcy cases is that it is brought by a single group of
claimants, not by the Official Committee of Property Damage
Claimants, on which a representative for these claimants sits.
The Motion, filed eight months after these cases were commenced
and after the ZAI Claimants have made various attempts to press
their claims within the bankruptcy cases, is a disingenuous
attempt to advance the ZAI Claimants' own litigation position
and maintain it as a class action. The Unsecured Committee
claims that the Zonolite Claimants' Motion lacks any basis in
fact and law and it should be denied.

By their Motion, the ZAI Claimants ignore the facts and the
applicable law and argue that these bankruptcy cases were filed
in bad faith. They argue that W.R. Grace is a "financially
healthy company" and, relying almost exclusively on a single,
inapposite case, that these bankruptcy cases were filed "seeking
to improperly use bankruptcy simply to rapidly conclude
litigation it faced." Although the Debtors have repeatedly
acknowledged in their various submissions to the Court that they
filed for bankruptcy protection to resolve the huge volume of
asbestos claims asserted against them, that fact does not render
this a bad faith filing, as the ZAI Claimants apparently
believe. Indeed, it is impossible to conclude on this record, in
which it is undisputed that the Debtors are overwhelmed by
present and future asbestos claims, that these bankruptcy cases
were improperly filed. Simply put, Congress sanctioned asbestos-
related bankruptcies for companies like Grace by adopting 11
U.S.C. Sec. 524(g). If Congress did not wish to make bankruptcy
an available option to resolve asbestos liabilities, there would
have been no need to amend the Code to provide for a trust and
an injunction specifically for that purpose.

The ZAI Claimants propose that Grace should manage the onslaught
of asbestos liability claims as business as usual. That would be
economically and judicially inefficient and makes no sense. The
ZAI Claimants do not dispute the information previously
presented by Grace as to the sheer volume of the asbestos
claims, pending and expected, against the Debtors. In fact, one
would be hard pressed to hear most personal injury asbestos
creditors state that the volume of claims is somehow
"manageable" by these Debtors outside of the bankruptcy process.

What the Creditors' Committee believes is presented here is a
group of claimants looking to press their particular claims
against the Debtors in the manner that they desire, without the
constraints provided by the bankruptcy process. And, while all
creditors, including those represented by the Committee, would
prefer to have their claims paid in full, today, all creditors
will need to seek that result through the bankruptcy process.
The ZAI Claimants' attempts to do otherwise should be denied.
             
            The ZAI Claimants Motion To Dismiss
               Should Be Denied Because These
         Bankruptcy Cases Were Not Filed In Bad Faith

The ZAI Claimants argue that Grace is a "financially healthy
company" that filed its bankruptcy case "in bad faith" and is
"seeking to improperly use bankruptcy simply to rapidly conclude
litigation it faced." They argue so in order to try to squeeze
these bankruptcy cases into the narrow holding of In re SGL
Carbon Corp., 200 F.3d 154 (3rd Cir. 1999).  However, the
Committee says, there are no relevant similarities between the
situation in SGL Carbon and those here; SGL Carbon is
inapposite. The creditors committee of SGL Carbon filed a motion
to dismiss the bankruptcy, arguing that the filing was a
litigation tactic intended to frustrate the antitrust claims.
After a hearing, the district court presiding over the
bankruptcy case denied the motion. The Court of Appeals for the
Third Circuit reversed, holding that the antitrust claims did
not present a threat to SGL Carbon's continued successful
operations, and that bankruptcy protection was unnecessary until
such time, if ever, as a judgment against it became imminent.
However, the Third Circuit explicitly noted that "[i]t is well
established that a debtor need not be insolvent before filing
for bankruptcy protection."

In comparing SGL Carbon with the Jones-Manville case, the Third
Circuit observed that while asbestos plaintiffs had recovered
nearly $4 million in punitive damages from Johns-Manville prior
to the filing, the litigation against SCG Carbon was in its
"nascent stages;" that while Johns-Manville faced some 16,000
asbestos lawsuits with a "staggering" number more to follow over
the next 20-30 years, SGL Carbon faced a finite number of suits;
and that although certain creditors sought to dismiss the Johns-
Manville case, they did so after sixteen months, in response to
a collapse of negotiations, as compared to the committee in SGL
Carbon which moved promptly and not for purposes of "strategic
motivations."

The Third Circuit also distinguished SGL Carbon from other mass
tort debtors which properly sought bankruptcy protection, noting
that a large number of pending or potential claims also
contributed to two other mass tort related bankruptcy petitions.
The 1985 bankruptcy petition of the A.H. Robins Company came
only after "the Company had settled 9,238 claims for
approximately $530,000,000" and "still faced over five thousand
pending cases. Similarly, at the time it filed for bankruptcy
Dow Corning Corporation faced 440,000 potential claimants which
had resulted in the filing of more than "19,000 individual
silicone-gel breast implant lawsuits and at least 45 putative
silicone-gel breast implant class actions."

The facts of these cases are a far cry from SGL Carbon.  The ZAI
Claimants' suggestion that Grace's filing was "merely a
litigation tactic" -- as was the case in SGL Carbon -- is simply
preposterous.  Unlike SGL Carbon, which faced a mere handful of
claims, Grace is currently facing tens of thousands of asbestos-
related claims (as was Johns-Manville at the time of its
filing), and, prior to the filing, the number of claims against
Grace 0was increasing at an alarming rate. While, historically,
Grace was able to manage its substantial volume of asbestos-
related litigation, the number of claims filed in the immediate
months prior to bankruptcy rose dramatically as other companies
(a number of which were Grace's codefendants in asbestos
litigation) also filed for bankruptcy protection. Unlike SGL
Carbon, which could manage a handful of antitrust claims outside
of bankruptcy, but very much like Johns-Manville, Grace cannot
be forced to manage and defend tens of thousands of claims
without sustaining significant damage to its business.

Totally unlike SGL Carbon, which had reserves that far exceeded
its worst-case litigation exposure, Grace's public filing for
the period ending just prior to the Chapter 11 filings reflects
reserves of approximately $1.0 billion for their asbestos-
related liability which (assuming that reserve is intended to
cover the Zonolite claims), might not even cover the liability
to the ZAI Claimants, let alone the outstanding tens of
thousands of personal injury claims and other property damages
claims pending and expected to be filed against the Debtors.
Grace's 10Q for the period ended March 31, 2001 states that
Grace was a defendant in over 65,000 asbestos-related lawsuits,
of which 17 asserted property damage claims, including those in
respect of Zonolite attic fill insulation, and the remaining
lawsuits consisted of nearly 130,000 claims for personal injury.
The ZAI Claimants previously submitted briefs to this Court
asserting that "many thousands, or even millions, of
homeowners/residents now living in homes with current asbestos
contamination of which they are entirely ignorant." In that
pleading, the ZAI Claimants estimated that the cost of asbestos
removal from each of these homes would cost between $1,000 and
$10,000. Thus, according to the ZAI Claimants' own numbers, even
if there were only one million homes that required removal at a
cost of $1,000/home, the liability would exceed $1 billion. Of
course, a worst case scenario, according to the ZAI Claimants'
estimation, could result in liability to these claimants alone
in excess of $10 billion. When one then considers the sheer and
undisputed volume of personal injury asbestos claims, plus other
property damage claims, pending and expected to be filed against
the Debtors, the lack of merit in the ZAI Claimants' position
becomes apparent.

Moreover, in SGL Carbon, the motion to dismiss was brought by
the official committee of unsecured creditors, representing the
interest of all creditors in that case. In contrast, the present
motion is brought by a single creditor group with its own
litigation agenda and "strategic motivations." Here, to the
contrary, the Creditors Committee, on behalf of all the
unsecured creditors (other than asbestos claimants), opposes the
motion to dismiss. Moreover, the PD Committee on which a ZAI
Claimants' representative sits did not file this motion. Indeed,
far from taking the position that Grace is still a "healthy"
company, the PD Committee has sought authority to prosecute
certain fraudulent transfer claims arising from its 1996 and
1998 corporate restructurings, predicated on the fact that the
debtor was insolvent then as a result of its asbestos
liabilities.

The timing of the Motion also demonstrates that the ZAI
Claimants are using the motion as a litigation tactic to advance
their interests against the Debtors. The bankruptcy case was
filed on April 2, 2001. For nearly eight months the ZAI
Claimants sought to promote their agenda in these cases, by, for
example, opposing the Debtors' motions for a preliminary
injunction and for a case management order, respectively, and
seeking instead to have its litigation proceed before the
Judicial Panel on Multidistrict Litigation, where the ZAI
Claimants' cases were pending prior to the Chapter 11 filings.
During all that time, the ZAI Claimants did not seek dismissal
of the bankruptcy case. Although no court has yet decided any of
these motions, the ZAI Claimants apparently have little faith in
their previously stated positions. They therefore have now
switched tracks, eight months after these cases were filed, to
seek to dismiss the bankruptcy case based upon information all
of which was publicly available at the time of Grace's Chapter
11 filings.

The SCG Carbon court correctly distinguished asbestos and mass
tort bankruptcy cases from the matter before it. Not only is the
scope of the possible liability enormous in the asbestos
context, but significantly, Congress has expressed its intention
that Chapter 11 is an appropriate option for companies, like
Grace, facing massive asbestos liabilities. In adopting section
524(g) of the Bankruptcy Code, Congress enacted a procedure,
modeled after the Johns-Manville case, premised in the formation
of a trust established to compensate future claimants, and the
issuance of an injunction barring asbestos claimants form suing
the debtor. The fact that Congress amended the Bankruptcy Code
to specifically provide a mechanism enabling the Debtors to
obtain relief from asbestos liability completely undercuts the
ZAI Claimants' argument that there is something improper about
Grace, faced with escalating and endless asbestos claims,
seeking such protection in Chapter 11 proceedings. For all of
these reasons set forth above, the Creditors Committee
respectfully requests that this Court deny the Motion. (W.R.
Grace Bankruptcy News, Issue No. 17; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


WINSTAR COMMS: Wins Nod to Hire Kelley Drye's as Special Counsel
----------------------------------------------------------------
Winstar Communications, Inc., and its debtor-affiliates sought
and obtained Court approval to employ Kelley Drye & Warren as
special counsel effective nunc pro tunc to the Petition Date.

Timothy R. Graham, Winstar's Executive Vice President and
General Counsel,  tells the Court that the Debtors seeks to
employ Kelley Drye for the performance of certain legal services
necessary during these Chapter 11 cases, as well as for the
recovery of access charges owing to the Debtors by AT&T, which
is being litigated in a class action suit seeking the recovery
of approximately $4,500,000 in charges. The firm was chosen by
the Debtors because of its extensive knowledge of the legal
issues arising in the telecommunications industry and its
experience in conducting class action litigation. Attorneys at
the firm also have a long-standing relationship with the Debtors
and are familiar with the Debtors' business operations and
regulatory affairs.

The professionals at Kelley Drye are rendering these services to
the Debtors:

A. Representing the Debtors in the AT&T Litigation,
       other ongoing litigations and any related settlement
       negotiations.

B. Providing legal advice and performing legal services with
       respect to the Debtors' regulatory affairs other than
       regulatory matters handled by the Debtors' previously
       retained special counsel in the continued operation of
       their businesses and management of their properties.

Aside from the customary reimbursement of actual necessary
expenses incurred by the Firm, the Debtors will compensate
Kelley Drye's professionals based on these hourly rates:

         Counsel and Partner        $310 to $425
         Associates                 $145 to $290
         Paralegals and Clerks      $105 to $130

Danny E. Adams, Esq., a partner of Kelley Drye and a member of
its Telecommunications Practice Group, informs the Court the
firm is a creditor of the Debtors and holds, as of the Petition
Date, a general unsecured claim in the amount of $205,304.04 for
legal services provided prior to the Petition Date. The firm has
timely filed a proof of claim against the Debtors regarding this
claim.

Mr. Adams clarifies that by accepting continued employment by
the Debtors, Kelley Drye does not waive its existing claim as a
creditor.

Mr. Adams assures the Court that the Firm does not represent or
hold interest materially adverse to the interest of the Debtors
and their estates with respect to matters on which the firm is
to be employed. However, in matters related to the Debtors,
Kelley Drye represents HSBC Bank USA as Successor Indenture
Trustee for two series of public notes issued by the Debtors;
Lexington Charles L.P. as landlord for an unexpired non-
residential real property lease with the Debtors; Light Trade
Inc. as contract party and creditor of the Debtors as well as
potential bidders for the assets of the Debtors. (Winstar
Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service,
Inc., 609/392-0900)  


WORLDTEX INC: Delaware Court Confirms Plan of Reorganization
------------------------------------------------------------
Worldtex, Inc., (OTC Bulletin Board: WTXI) announced that its
plan of reorganization under Chapter 11 of the Bankruptcy Code
had been confirmed by the United States Bankruptcy Court for the
District of Delaware.

Under Worldtex's plan of reorganization, the Company's debt will
be substantially reduced through the cancellation of all
outstanding principal and all accrued and unpaid interest on its
9-5/8% Senior Notes (approximately $187,000,000), in exchange
for (i) 98% of newly issued common stock in the Company, subject
to dilution from employee options and warrants to existing
stockholders, and (ii) all of its newly-issued 12% preferred
stock, in the aggregate face amount of $30 million.  

In addition, under the plan all existing common stock of
Worldtex will be canceled and a distribution will be made to
former stockholders of (i) 2% of the new common stock, subject
to dilution from employee options and warrants and (ii) warrants
for 10% of the fully diluted new common stock, exercisable at
$73.98 per share, the price at which the holders of the 9-5/8%
Senior Notes will have received a 100% recovery on the principal
amount of the Senior Notes.  No fractional shares or warrants
will be distributed, nor will any payment be made in lieu
thereof.

Effectiveness of the plan of reorganization is subject to, among
other things, implementation of the Company's new credit
facility.  The Company is in the final stages of negotiation
with its new lender and expects the plan of reorganization to
become effective in February 2002.

Worldtex is a market leader in the covered elastic yarn and
narrow elastic fabric markets throughout the Americas and
Europe.  Worldtex supplies a broad range of component products
to the apparel, textile, home furnishings and specialty end-use
markets.


YORK RESEARCH: Seeks to Dismiss Involuntary Bankruptcy Petition
---------------------------------------------------------------
York Research Corporation (Nasdaq: YORK) reported revenues of
$25.4 million and net income of $281,000 for the nine month
period ended November 30, 2001, compared to revenues of
$27.2 million and net income of $2.1 million for the comparable
nine months in the prior year.  For the third quarter ended
November 30, 2001, the Company reported revenues of $7.5 million
and a net loss of $1.3 million compared to revenues of $10.1
million and net income of $751,000 for the comparable quarter in
the prior year.

York filed an answer contesting and seeking to dismiss the
previously reported involuntary bankruptcy petition filed
against it by certain creditors of NAEC on December 20, 2001. If
the bankruptcy court does not dismiss the involuntary petition,
and enters an Order for Relief, York would, unless otherwise
ordered by the bankruptcy court, become a debtor-in-possession
subject to the jurisdiction of the bankruptcy court. The
Bankruptcy Code provides that pending the entry of an Order for
Relief against York, York may continue to use, acquire or
dispose of property as if an involuntary case had not been
commenced.

The Company is continuing to negotiate with the holders of the
Portfolio Bonds, who have not joined in the bankruptcy petition,
and have not exercised any remedies.

York Research Corporation develops, constructs and operates
electric production facilities, including those that utilize
natural gas as fuel to produce thermal and electric power
("cogeneration") or renewable energy projects primarily
converting wind energy into transmittable electric power.


ZIFF DAVIS: Taps Greenhill to Evaluate Debt Refinancing Options
---------------------------------------------------------------
Ziff Davis Media, Inc., announced that it has entered into an
amendment and forbearance agreement with respect to its senior
credit facility with its existing bank lenders that will be in
effect until March 15, 2002.  Ziff Davis Media also said that as
part of the agreement, Willis Stein & Partners III, L.P. and
affiliated funds, the primary investors in its parent company,
have entered into a participation agreement with certain of the
Company's bank lenders under which the Willis Stein funds
acquired a $16 million participation in loans under the
Company's senior credit facility.  At the same time, the lenders
under the senior credit facility have loaned to Ziff Davis Media
an additional $16 million.  The Company has said that it used
the proceeds from this loan to make the $15 million semiannual
interest payment due January 15, 2002 to holders of its $250
million 12% senior subordinated notes due 2010.

As previously disclosed, Ziff Davis Media anticipated that it
would be in default of certain covenants under its senior credit
facility as of October 31, 2001.  Under the terms of the
forbearance agreement, the Company's bank lenders will not
exercise remedies available to them during the forbearance
period.  The Company is currently in discussions with the bank
lenders in an effort to finalize an amendment prior to the
expiration of the forbearance period.  In addition, as part of
the agreement, the revolver commitment has been reduced from $30
million to $20 million (with the unused $10 million continuing
to be unavailable to Ziff Davis Media under the existing terms).  
Lastly, the amendment also allows the Company to change its
fiscal year-end from March 31 to December 31 and the Company has
done so effective December 31, 2001 in order to be consistent
with general media industry practice.

Willis Stein's $16 million loan participation plus any
additional funding under the participation agreement reduces
Willis Stein's $25 million funding commitment to Ziff Davis
Media's ultimate parent company.  The Company anticipates that
in light of the current recessionary environment it will need to
obtain additional funding through either additional investments
or further borrowings under its senior credit facility to meet
its future working capital and debt service requirements.

Ziff Davis said that it has engaged as financial advisors
Greenhill & Co., LLC to assist senior management in evaluating
strategic alternatives for recapitalizing the Company's long-
term debt.  The Company and its advisors have initiated
discussions with its institutional creditors in an effort to
establish a more appropriate long-term capital structure for the
Company.

Robert F. Callahan, Chairman and CEO of Ziff Davis Media, said:  
"Our new senior management team is focused squarely on the
turnaround of this Company. We are making solid progress on the
operating side, and it is now time to begin the process of
reducing our debt burden and providing for more efficient
capital investment into the Company to grow its revenues and
profits.  Ziff Davis Media remains one of the largest magazine
publishers in the U.S., with proven and substantial assets. We
believe that a debt recapitalization will improve our financial
strength and enhance our competitive position."

          Company Now Expects Higher 4th Quarter 2001
                    Restructuring Charge

The Company also said that it now expects to realize a
restructuring charge of up to $275 million in the fourth quarter
of 2001 to cover costs resulting from discontinuing certain
businesses, the consolidation of facilities resulting from
reduced headcount as well as the write-down of long-lived
intangible and other assets to fair value based on current
market conditions.  The Company had previously disclosed in the
quarter ended September 30, 2001 that it expected the
restructuring charge in the fourth quarter to be at least $150
million.  The Company said that it has increased its estimate of
the charge as a result of further restructuring actions and
continued difficult business conditions during the current
economic recession.

           Business Outlook - First Quarter 2002

The Company anticipates that EBITDA for the first quarter of
2002 for Ziff Davis Publishing Holdings, Inc., a restricted
subsidiary under the Company's senior credit agreement, will be
between $2.0 and $5.0 million, or down 82% to 54%, respectively,
versus $10.9 million for the quarterly period ended

March 31, 2001. "We continue to have significant decreases in
advertising pages in many of our publications and visibility for
increases in the near term is limited.  We have therefore
prepared ourselves for continued difficult business conditions
through most of 2002 and we continue to evaluate the Company's
size and cost structure to reflect this environment," said Bart
Catalane, Chief Operating Officer and CFO.

Ziff Davis Media Inc. is the leading information authority for
buying and using technology. In the U.S., Ziff Davis Media
publishes 13 industry-leading business and consumer
publications: PC Magazine, eWEEK, Ziff Davis Smart Business, The
Net Economy, CIO Insight, Baseline, Yahoo! Internet Life,
Electronic Gaming Monthly, Official U.S. PlayStation Magazine,
Computer Gaming World, GameNow, Pocket Games and XBox Nation.
Ziff Davis Media publishes more than 45 titles around the world
through licensing agreements in 30 countries. The company is
also a developer of innovative web sites including PCMag.com and
ExtremeTech.com. It provides custom media solutions through Ziff
Davis Custom Media; industry analyses through Ziff Davis Market
Experts; and state-of-the-art Internet and technology testing
through eTesting Labs. The company also produces conferences,
seminars and webcasts.


* DebtTraders' Real-Time Bond Pricing
-------------------------------------
Issuer               Coupon   Maturity   Bid - Ask Weekly Change
------               ------   --------   --------- -------------
  
Crown Cork & Seal     7.125%  due 2002    76 - 78        +1
Federal-Mogul         7.5%    due 2004    14 - 16         0
Finova Group          7.5%    due 2009  39.5 - 40.5      -2.5
Freeport-McMoran      7.5%    due 2006    71 - 74         0
Global Crossing Hldgs 9.5%    due 2009  11.5 - 13.5      +0.5
Globalstar            11.375% due 2004     7 - 9          0
Levi Strauss & Co     11.625% due 2008    88 - 90         0
Lucent Technologies   6.45%   due 2029    70 - 72        +0.5
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         0
Xerox Corporation     8.0%    due 2027  57.5 - 59.5      +0.5

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

                          *********

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

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

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

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

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

                          *********

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

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

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

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

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

                     *** End of Transmission ***