TCR_Public/020121.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Monday, January 21, 2002, Vol. 6, No. 14     


AMF BOWLING: Wins Nod to Modify 2nd Amended Reorganization Plan
ADVANTICA RESTAURANT: Noteholders Form Unofficial Committee
ALARIS MEDICAL: Completes Retirement of 7-1/4% Convertible Bonds
ALLEGHENY HEALTH: Reaches Settlement with Parties in Litigation
BETHLEHEM STEEL: Court OKs Sale of Assets to Conectiv for $9.5MM

BRIDGE INFORMATION: Court Allows Reliastar $3.4MM Secured Claim
BURLINGTON INDUSTRIES: Sets-Up Miscellaneous Asset Sale Protocol
CHAMPION BOATS: Receives Offer from Blue Deep Ltd. to Buy Assets
CHAPARRAL: Gets Default Notice of Obligations with Shell Capital
CHIPPAC INC: Expects to Raise $20MM Capital To Meet Waiver Pact

CLAIMSNET.COM INC: Violates Nasdaq Minimum Equity Requirement
COINMACH: S&P Assigns Low-B Ratings On Highly Leveraged Profile
CONSECO INC: S&P Removes Downgraded Ratings from CreditWatch
CONSECO INC: Repurchases Additional $34MM 2002 Maturities Debts
CONTINENTAL AIRLINES: Will Begin 4.5% Conv. Notes Public Offer

EB2B COMMERCE: Acquires Bac-Tech Systems for $250K + 3M Shares
ENRON CORP: Signs-Up Miller Thomson as Special Counsel in Canada
ENRON ENERGY SVS: Case Summary & Largest Unsecured Creditors
ENRON CORP: National City Bank Appointed to Creditors' Committee
ENRON CORP: Court Okays UBS' Bid for Wholesale Trading Business

ENTERTAINMENT TECH: Reduces Total Liabilities by 32% in FY 2001
FARMLAND INDUSTRIES: Weak Financial Measures Spur S&P Downgrades
FIRST WAVE MARINE: Texas Court Confirms Plan of Reorganization
FOUNTAIN PHARMA: Park Street Discloses 66.7% Equity Stake
GENERAL BINDING: Names Don Civgin as Senior Vice Pres. & CFO

GLOBALNET INC: Enters Into Merger Agreement with Titan Corp.
HALO INDUSTRIES: Court Okays Sale of Assets to Beanstalk Group
HAMPTON INDUSTRIES: Considering Liquidation of Remaining Assets
IT GROUP: S&P Drops Ratings to D Following Chapter 11 Filing
INNOVATIVE CLINICAL: Expects to Close Merger Pact with CNS Today

JACOBSON STORES: Court Okays Use of Cash Collateral to Jan. 26
KMART CORP: S&P Junks Rating as Suppliers Withhold Shipments
KMART CORP: Fitch Junks Funding's Secured Bonds Series F and G
KMART: Fitch Junks Pass-Thru Trusts, Series 1995 K-1 & 1995 K-2
KMART CORP.: Deathwatch Continues & Maybe They File Today

KAISER ALUMINUM: S&P Junks Ratings In Wake of Debt Workout Talks
LAIDLAW INC: Will Delay Filing of Financial Results for FY 2001
LERNOUT & HAUSPIE: Holdings Debtors Resolves Dispute with Ingram
LEVEL 3: Will Provide Cox with Broadband Infrastructure Services
LODGIAN INC: Taps PKF Consulting to Appraise Assets & Business

MCLEODUSA: Expiry Date for Exchange Offer Moved to January 30
MULTI-LINK: Can't Meet Nasdaq Net Asset Listing Requirement
NATIONSRENT: Proposes Key Employee Retention & Severance Plans
OWENS CORNING: Court Fixes April 15 Bar Date for General Claims

PRECISION AUTO: Sells Mexican Assets to Shell Autoserv for $2.7M
SEPRACOR INC: Jennison Associates Discloses 10.4% Equity Holding
SERVICE MERCHANDISE: Gets OK to Conduct GOB Sales in 215 Stores
SUN HEALTHCARE: Court Extends Solicitation Period to March 7
SUNRISE TECHNOLOGIES: Equity Falls Short of Nasdaq Requirement

TSI TELECOMMUNICATION: S&P Assigns B+ to Corporate Credit Rating
TRANSTECHNOLOGY CORP: Balance Sheet Upside-Down By $5.5 Million
U.S. INDUSTRIES: Reports $524 Million in Net Loss in FY 2001
UNITED SHIPPING: Reincorporates as Velocity Express Corporation
WINSTAR COMMS: Agrees to Pay Adequate Assurance Deposit to AT&T

* BOND PRICING: For the week of January 21 - 25, 2002


AMF BOWLING: Wins Nod to Modify 2nd Amended Reorganization Plan
AMF Bowling Worldwide, Inc., and its debtor-affiliates sought
and obtained the Court's approval of certain modifications to
the Plan, which are necessary to reallocate the value of the
estates in order to ensure full compliance with the so-called
"cram down" provisions of the Bankruptcy Code, and to correct
and/or implement certain technical changes to the Plan.

Dion W. Hayes, Esq., at McGuireWoods LLP in Richmond, Virginia,
submits that the modifications requested are of a nature that do
not require re-solicitation of the Plan because:

A. they are designed to reallocate value in a way which will
   result in increased value over the value that would have
   been available to unsecured creditors had the version of
   the Plan that presently is on file been confirmed by the
   Court, and

B. they do not adversely and materially impact upon the rights
   of or distributions to creditors or interest holders,
   including, as is relevant here, the Senior Lenders.

The three primary modifications to the Plan that the Debtors are
proposing are:

A. The Debtors currently expect cash balances to be
   approximately $17,100,000 more than the estimate that was set
   forth in the Disclosure Statement for the period ended on
   December 31, 2001. Accordingly, the Debtors were able to
   increase the amount of the Senior Lender Cash Distribution
   and satisfy the Senior Lender Claims, virtually in full,
   without having to distribute all of the New AMF Common
   Stock to the Senior Lenders. Thus, instead of receiving a
   pro rata share of warrants to purchase 12% of the
   fully-diluted shares of New AMF Common Stock, the unsecured
   creditors holding Allowed Claims in Classes 4 (Unsecured
   Claims), 5 (Tort Claims) and 6 (Senior Subordinated Note
   Claims), will now be entitled to receive a pro rata share
   of warrants to purchase 15% of the fully-diluted shares of
   New AMF Common Stock and 500,000 shares of New AMF Common
   Stock, which represents 5% of the New AMF Common Stock.
   These modifications will effect a reallocation of
   distributable value to the affected unsecured classes of
   approximately $12,700,000, from $9,600,000 to $22,300,000,
   thereby increasing the total unsecured dividend in all.

B. The Debtors have eliminated the $3,000,000 to be paid to the
   Senior Lenders in respect of the Senior Lender Origination
   Fee, a fee that the Creditors' Committee has challenged.
   The only Cash distribution the Senior Lenders will receive
   will be the Senior Lender Cash Payment, which will now
   aggregate $286,700,000 as opposed to the original estimate
   of $272,600,000.

C. The third modification to the Plan was made in response to a
   request of the New York State Attorney General's Office.
   This modification provides that the injunction provision
   carves out governmental units' rights to pursue regulatory
   and police action against one or more of the Debtors, to
   the extent not prohibited by applicable law.

Mr. Hayes contends that re-solicitation of the Plan is not
required as a result of the proposed modifications as the
reorganization value available for distribution to unsecured
creditors will be increased by the proposed modifications and
include, arguably, a better currency in the form of common
equity, as opposed to warrants. Whereas under the previously
proposed Plan, holders of Allowed Unsecured Claims, Tort Claims
and Senior Subordinated Notes Claims, would have received a 1.6%
recovery, if the modifications proposed herein are approved,
such creditors will now receive a 3.7% recovery under the Plan
as modified. Mr. Hayes points out that such creditors will share
in a pot of distributable value of stock and warrants, as
opposed to warrants alone, having a value of $22,300,000 or
$12,700,000 more than previously anticipated. As to such
Classes, the proposed modifications can only be characterized as
a material, positive improvement in treatment. As to the Senior
Lenders, Mr. Hayes believes that the modifications are neither
material nor adverse as the total distribution to Class 2 is in
fact slightly higher. Moreover, the composition of the Senior
Lenders' recovery is weighted slightly higher in Cash and
slightly lower in New AMF Common Stock.

Although the Debtors have made minimal technical changes to the
Plan that do not relate to the modifications discussed above,
Mr. Hayes asserts that it is evident that such Plan
modifications are technical in nature and not material and
therefore do not require re-solicitation of votes from
previously accepting creditors. (AMF Bankruptcy News, Issue No.
15; Bankruptcy Creditors' Service, Inc., 609/392-0900)   

ADVANTICA RESTAURANT: Noteholders Form Unofficial Committee
A group of holders of 11-1/4% Senior Notes due 2008 of Advantica
Restaurant Group, Inc. (OTCBB:DINE) have formed an unofficial
committee seeking to oppose the proposed exchange offer
described in a registration statement filed by Advantica with
the SEC on December 28, 2001.

As proposed, Advantica would offer to exchange up to
$204,050,000 12-3/4% Senior Notes due 2007 issued by it and its
Denny's Holdings, Inc. subsidiary for up to $265,000,000 of the
outstanding 11-1/4% Senior Notes due 2008 issued by Advantica.
The current members of the committee hold approximately $200
million of Senior Notes in the aggregate and expect the
committee membership to increase as bondholders become aware of
the existence of the committee.

In a letter to Advantica, the committee indicated that while its
members are not opposed to a deleveraging transaction of some
type, the elimination of $60 million in principal proposed by
Advantica is not appropriate or fair to bondholders. The
committee has offered to negotiate a more balanced and
comprehensive approach to deleveraging. Senior Note holders can
contact either of the following two committee members, Robert
Davenport at Cerberus Capital (212) 891-2100 or Eric Johnson at
Conseco Capital Management (317) 817-2112, if you are interested
in participating on the committee. An organizational
teleconference for Senior Note holders will be held on January
18 at 11:30a.m. (EST).

One of the nation's largest restaurant companies, Advantica
Restaurant Group (formerly Flagstar) plans to undergo its fifth
name change (to Denny's) after selling its Coco's and Carrows
chains. Its Denny's is the country's largest full-service family
restaurant chain at more than 1,800 units. Coco's serves bakery
items at about 480 locations, and Carrows offers family dining
at about 140 restaurants. Advantica sold its Hardee's and
Quincy's Family Steakhouse chains after emerging from Chapter 11
in 1998 and exited the quick-service restaurant business in 1999
by selling the El Pollo Loco chain.

ALARIS MEDICAL: Completes Retirement of 7-1/4% Convertible Bonds
ALARIS Medical Inc., (AMEX:AMI) has completed the previously
announced retirement of the remaining amount of its 7-1/4
percent convertible debentures which were due Jan. 15, 2002.

All principal and interest amounts due were deposited with the
trustee for payment to holders pursuant to the indenture.

Separately, the company announced that its wholly owned
operating subsidiary, ALARIS Medical Systems Inc., has completed
an SEC-registered exchange offer for all of its outstanding $170
million of 11-5/8 percent Senior Secured Notes due Dec. 1, 2006.

ALARIS Medical Inc., through its wholly owned operating company,
ALARIS Medical Systems Inc., is a leading developer,
manufacturer and provider of integrated intravenous infusion
therapy and patient monitoring instruments and related
disposables, accessories and services. ALARIS Medical's primary
brands, ALARIS(R), IMED(R) and IVAC(R), are recognized
throughout the world. ALARIS Medical's products are distributed
in more than 120 countries worldwide. In addition to its San
Diego world headquarters and manufacturing facility, ALARIS
Medical also operates manufacturing facilities in Creedmoor,
N.C.; Basingstoke, U.K.; and Tijuana, Mexico. Additional
information on ALARIS Medical can be found at

                          *   *   *

As reported in the October 23, 2001, edition of Troubled Company
Reported, Standard & Poor's raised its junk ratings on ALARIS
Medical Inc., and its operating company, ALARIS Medical Systems
Inc., to the low-B territory, following the company's
announcement of its planned refinancing of its operating
company's existing bank facility.

Also, at the same time, Standard & Poor's affirmed its single-
'B'-plus senior secured debt rating on ALARIS Medical Systems.
In addition, Standard & Poor's withdrew its single-'B' senior
secured bank loan rating, since proceeds from the senior secured
notes have repaid this debt.

The action followed the completion of ALARIS' bank loan
refinancing, which had increased the company's financial

ALLEGHENY HEALTH: Reaches Settlement with Parties in Litigation
Pennsylvania Attorney General Mike Fisher announced that the
parties involved in the litigation surrounding the bankruptcy of
Allegheny Health Education and Research Foundation (AHERF) have
reached a proposed settlement, which will be presented next
month to the Federal District Court in Pittsburgh for its

In February 2000, Fisher's Office, Tenet HealthSystem
Philadelphia and two charitable organizations filed a court
complaint seeking the return of $78.5 million in charitable
assets.  Following an exhaustive forensic audit, Fisher's
Charitable Trusts and Organizations Section detailed the
withdrawal of funds from individual restricted endowments that
the Attorney General contended were improperly used to keep the
ailing health system afloat.

In this first phase of the settlement, more than $20 million
will be reimbursed to the endowments that are now being
controlled by three non-profit foundations, Philadelphia Health
and Education Corporation (PHEC), Franklin Health Trusts and
West Penn Allegheny Health System.

"We fought hard to recover as much funds as possible for these
charitable endowments," Fisher said.  "I am pleased that we were
able to return millions to these charitable endowments, which
will fund vital medical research and improve the health of

If approved by the Orphans' Courts in Philadelphia and Allegheny
County, the recovery would be roughly divided between PHEC (55
percent), Franklin Health Trust (35 percent) and Allegheny
General Hospital endowments (10 percent).  The funds would be
distributed to the individual endowments on a prorated basis.

In the first phase, the settlement would provide $24.5 million
to the Attorney General's Office and the charitable
organizations.  The Attorney General's Office and its co-
plaintiffs would immediately receive $20.5 million and another
$4 million over the next four years.  Also, the settlement would
reimburse the costs of the Commonwealth's forensic audit and
Tenet's legal fees, subject to Orphans' Court approval.  In
addition, Fisher said there could be future recoveries of as
much as $10 million as other claims are settled in the complex
bankruptcy case.

In September 1999, Fisher filed a claim in Bankruptcy Court that
scrutinized AHERF's finances from July 1, 1997 to July 21, 1998.  
The claim contended that money was improperly taken from the
hospital system's restricted funds and transferred to its
general operating account.  There, the restricted funds were
commingled with other funds and used for various purposes,
primarily the operating needs of the AHERF hospitals.  The
majority of affected endowments were in Southeastern

On July 21, 1998, AHERF and its Southeastern Pennsylvania
institutions filed for bankruptcy.  Following the bankruptcy,
the southeastern hospitals were sold to Tenet Healthcare Corp.,
a for-profit company.  The system's medical school is now
independent and managed by Drexel University.  Under an earlier
agreement drafted by the Attorney General's Office, the
remaining charitable assets for the southeastern institutions
were placed in the two newly formed non-profit organizations.

Unrelated to the civil litigation, Fisher in March 2000 filed
criminal charges against three AHERF officials accusing them of
illegally taking the endowment money to prop up the ailing
medical system.  Next month, former AHERF Chief Executive
Officer Sherif Abdelhak is scheduled to face trial on more than
700 charges related to the removal of endowment funds.  In
September 2001, former AHERF Chief Financial Officer David
McConnell was admitted to an ARD program for first offenders.  
He was placed on 12 months probation, required to complete 150
hours of community service and required to pay $16,700 in
restitution for one count of theft related to the purchase of a
luxury sports box.  Charges against McConnell that he helped
raid the endowments were dismissed following a lengthy
preliminary hearing, as were the charges against former AHERF
General Counsel Nancy Wynstra.

A copy of the proposed settlement is available on the Attorney
General's website at

BETHLEHEM STEEL: Court OKs Sale of Assets to Conectiv for $9.5MM
Bankruptcy Judge Lifland approved the sale of Bethlehem Steel
Corporation's assets to Conectiv Mid-Merit for $9,562,798.

Conectiv Mid-Merit remains to hold the highest and best offer
for the Debtors' property, which includes certain real property,
easements, and Nitrogen Oxide Emission Reduction Credits.  Thus,
Court approves the Agreement and the transactions contemplated
by the Debtors and Conectiv Mid-Merit, in all respects.
(Bethlehem Bankruptcy News, Issue No. 8; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

BRIDGE INFORMATION: Court Allows Reliastar $3.4MM Secured Claim
Reliastar Life Insurance Company and Bridge Information Systems,
Inc. and its debtor-affliates are parties to an agreement
granting Reliastar a first deed of trust and security interest
to a real property located at 717 Office Parkway, in St. Louis,
Missouri 63141.  Both parties agree that Reliastar's deed
constitutes a valid and perfected lien and security interest
which secures the Debtors' indebtedness to Reliastar.

Judge McDonald puts his stamp of approval on the stipulation
between the Debtors, the Official Unsecured Creditors' Committee
and Reliastar, which provides that:

  (i) Reliastar's claim is allowed as a perfected secured claim
      against the Escrowed Proceeds in the amount of $3,467,127
      plus additional interest accruing thereon from and after
      December 18, 2001 at the rate of $722 per day.  The
      Allowed Amount is comprised of the following components:

         (a) principal in the amount of $3,056,407;

         (b) accrued interest through and including December 18,
             2001 in the amount of $210,723;

         (c) late charges in the amount of $22,157;

         (d) a prepayment penalty in the amount of $122,257;

         (e) attorneys' fees and expenses through and including
             December 18, 2001 in the amount of $55,585.

   (ii) The Debtors are authorized and directed to pay
        Reliastar's Claim from the Escrowed Proceeds promptly on
        or after December 28, 2001.  However, the parties
        further agree, and the Court orders, that if the Debtors
        tender payment to satisfy Reliastar's Claim on or before
        December 31, 2001, the Allowed Amount shall be
        discounted by $12,500 and by the post-December 18
        attorneys' fees;

  (iii) The Travelers Deed of Trust is released from the
        Escrowed Proceeds; (Bridge Bankruptcy News, Issue No.
        24; Bankruptcy Creditors' Service, Inc., 609/392-0900)   

BURLINGTON INDUSTRIES: Sets-Up Miscellaneous Asset Sale Protocol
Burlington Industries, Inc., and its debtor-affiliates maintain
a diverse array of assets -- including real, personal and
intangible property in connection with the day-to-day operation
of their businesses.

According to Rebecca L. Booth, Esq., at Richards, Layton &
Finger PA, in Wilmington, Delaware, some of these assets are no
longer necessary for the successful operation and reorganization
of the Debtors' businesses.  As a result, Ms. Booth informs
Judge Walsh, the Debtors anticipate that during the pendency of
these cases, they will attempt to sell a number of these assets
that are either unproductive or nonessential.  Ms. Booth
explains that these sales will involve non-core assets, which,
in most cases, are of relatively de minimis value compared to
the Debtors' total asset base.  Nevertheless, Ms. Booth
observes, many of these asset sales may constitute transactions
outside of the ordinary course of the Debtors' businesses that
typically would require individual Court approval.

But, Ms. Booth contends that requiring Court approval of each
such miscellaneous asset sale would be administratively
burdensome to the Court and costly for the Debtors' estates,
especially in light of the small size of the assets involved in
these transactions.  "In certain cases, the costs and delays
associated with seeking individual Court approval of a sale
potentially would eliminate, or substantially undermine, the
economic benefits of the transaction," Ms. Booth relates.

Thus, to lessen these burdens and costs, the Debtors seek the
Court's approval of the proposed procedures to complete asset
sales falling within certain specified economic parameters.  
"The Debtors propose to utilize the Miscellaneous Sale
Procedures to obtain more expeditious and cost-effective review
by interested parties, in lieu of individual Court approval, of
certain sales involving smaller, less-valuable, non-core assets
outside the ordinary course of business," Ms. Booth explains.  
All other sale transactions outside of the ordinary course of
the Debtors' businesses would remain subject to individual Court
approval, Ms. Booth emphasizes.

In general, Ms. Booth explains, the Miscellaneous Sale
Procedures will apply only to asset sale transactions outside
the ordinary course of business involving, in each case:

(a) the transfer of:

      (i) less than $1,000,000 in Net Consideration, on account
          of the assets to be sold, or

     (ii) less than $5,000,000 in Net Consideration, if the
          transaction involves only the transfer of Equipment
          and the fair market value of each piece of Equipment
          is less than $150,000; and

(b) aggregate cure costs of less than $200,000 in connection
    with the assumption and assignment of any related executory
    contracts and unexpired leases.

In addition, Ms. Booth continues, parties-in-interest will
receive notice of proposed transactions under the Miscellaneous
Sale Procedures and have an opportunity to object to such

The Sale Notices would be served on these Interest Parties:

    (1) the primary parties representing the interests of
        unsecured creditors of the Debtors' estates (i.e., the
        U.S. Trustee and counsel to the Creditors' Committee);

    (2) the primary secured creditors in these cases (i.e.,
        counsel to the Secured Lenders);

    (3) the other parties with potential interests in the assets
        at issue (i.e., the known holders of liens, claims,
        encumbrances and other interests in the assets); and

    (4) the parties to executory contracts and unexpired leases
        proposed to be assumed and assigned if any.

The Debtors contend that this manner of notice is appropriate
and fully preserves necessary due process rights.  Ms. Booth
also assures the Court that the Secured Lenders, the Creditors'
Committee and the U.S. Trustee will each be provided a report
every three months itemizing the De Minimis Sales consummated.
"Each of those parties will have a further opportunity to raise
any concerns at that time if they deem it necessary," Ms. Booth

Furthermore, Ms. Booth adds, the Miscellaneous Sale Procedures
also permit the Debtors to engage in certain de minimis asset
sales outside of the ordinary course of business without further
notice to parties in interest or approval from the Court.

Ms. Booth makes it clear that the Miscellaneous Sale Procedures
specifically are not intended to encompass routine sales of
inventory, surplus equipment, production by-products or scrap
material that, prior to the Petition Date, the Debtors
conducted, and continue to conduct, in the ordinary course of
their businesses.  The Debtors contend that these Ordinary
Course Sales are clearly ordinary course transactions and,
therefore, do not require further Court approval or the review
of other parties pursuant to the Miscellaneous Sale Procedures.

Pursuant to the terms of the Debtors' post-petition financing
agreement, Ms. Booth reminds the Court that the Debtors are
prohibited from selling assets "except for:

  (i) sales of inventory, fixtures and equipment in the ordinary
      course of business,

(ii) dispositions of surplus, obsolete or damaged equipment no
      longer used in production,

(iii) sales of Foreign Factoring Receivables which shall at no
      time exceed in the aggregate the Dollar equivalent of
      $15,000,000 based on the applicable Exchange Rate at any

(iv) sales in arm's length transactions, at fair market value
      and for cash in an aggregate amount not to exceed
      $25,000,000, and

  (v) following the sales permitted by clause (iv) above, sales
      in arm's length transaction, at fair market value and for
      cash in an aggregate amount not to exceed an additional

Accordingly, Ms. Booth notes, the Miscellaneous Sale Procedures
are permitted under the Post-petition Credit Agreement because:

  (a) sales of any Equipment under the Miscellaneous Sale
      Procedures generally will qualify as sales of "surplus,
      obsolete or damaged equipment no longer used in
      production", and

  (b) the Debtors currently do not believe that the aggregate
      amount of other sales consummated under the Miscellaneous
      Sale Procedures will exceed the limits established by
      Section 6.11(iv) and (v) of the Post-petition Credit
      Agreement. (Burlington Bankruptcy News, Issue No. 6;
      Bankruptcy Creditors' Service, Inc., 609/392-0900)   

CHAMPION BOATS: Receives Offer from Blue Deep Ltd. to Buy Assets
Blue Deep Ltd., a subsidiary of Global Link Technologies Inc.
(OTC: GBLK), announced that it has made an offer to purchase the
real estate, equipment, molds, tools and intellectual property
of Champion Boats, Inc., leaving the trustee for the bankruptcy
estate with between $3,000,000 and $4,000,000 in other assets
and unliquidated claims to dispose of for the benefit of both
the secured and unsecured creditors.  The acquisition by Blue
Deep Ltd. would assure that the manufacture of the Champion and
Back Country Powerboat lines would remain in the existing
Mountain Home, Arkansas plant, which it has offered to purchase.  
The Company, if successful in its bid for the desired assets,
will begin building its 2003 model year boats this summer after
the completion of substantial improvements to the plant.

The Company also announced that tentative arrangements have been
worked out to hire Wally Arndt as the Plant Manager, if the
Bankruptcy Court accepts the Blue Deep Ltd. offer.  When fully
operational the Company will employ between 120 and 170 workers,
many of whom are expected to be former employees of Champion
Boats, Inc.  In addition, the Company intends to use many of the
local vendors in Mountain Home who were suppliers to Champion
prior to it being forced into bankruptcy.  Finally, to
demonstrate its faith in the Champion and Back Country lines of
boats and to continue to support the loyal customers of Champion
and Back Country boats, the Company plans to provide a five-year
hull, stringer and transom warranty on all Champion and Back
Country boats manufactured for the model years 1998 through

At this time the company also is announcing that its termination
of the Equipment purchase announced in October of 2001.  The
selling parties were unable to deliver clear and marketable
title; therefore, the purchase could not be consummated.  
Additionally the company is re-evaluating its decision to
purchase commercial real estate.  Current economic forecasts
indicate the real estate industry as a whole will suffer in the
short term as a result of tightening credit and lease defaults.  
Management is presently re-evaluating the commercial real estate
industry in order to determine if this is a profitable direction
for the company.

CHAPARRAL: Gets Default Notice of Obligations with Shell Capital
Chaparral Resources, Inc., (OTCBB: CHAR) received a notice of
the occurrence of additional events of default and a notice
accelerating the payment of $37,289,628 in outstanding
principal, interest, and other fees and expenses due under the
Company's existing loans with Shell Capital Inc.  Shell Capital
Services Limited, as facility agent, also initiated legal
proceedings against the Company in the United Kingdom and
against one of the Company's subsidiaries in the Isle of
Guernsey to enforce Shell Capital's rights under the Loan

The Default Notice addresses various events of default in
addition to those previously disclosed by the Company on
November 1, 2001, including:  the Company's failure to pay
$1,000,800 in principal and $1,676,395 in interest due under the
Loan Agreement on December 31, 2001; the Company's failure to
pay a $24,000 agency fee due to Shell Capital Services Limited
on January 1, 2002; certain accounts payable of Closed Type JSC
Karakudukmunay, in the amount of $3,873,994 as of November 30,
2001, which are in excess of 90 days past due; failure of the
Company to pay $30,000 in Delaware franchise tax due on December
1, 2001; and KKM's failure to pay local salaries for November
2001 on a timely basis.

As previously reported, the Company was already in default of
the Loan Agreement for the following: failure to pay or
refinance the outstanding principal and accrued interest in the
amount of approximately $3,339,490 under the Company's bridge
loan with Shell Capital, originally due on September 30, 2001;
failure to achieve project completion by September 30, 2001;
failure to keep the Company's common stock listed on one of the
three major stock exchanges (Nasdaq, NYSE, or Amex); and certain
accounts payable of the Company and KKM in excess of 90 days
past due.  In addition, KKM had entered into a short-term debt
arrangement with another financial institution, which has since
been repaid.  The Company also failed to make an interest
payment in the amount of $189,280 due on September 28, 2001,
which has since been repaid.

As a result of the Company's failure to repay the bridge loan,
the shares of preferred stock in the Company's subsidiary,
Central Asian Petroleum (Guernsey) Limited, which were issued to
Shell Capital to induce it to enter into the bridge loan, were
converted entitling Shell Capital to 40% of the distributable
profits of CAP(G).  There are no such distributable profits at
the present time.

The Acceleration Notice demands that the Company immediately pay
the entire outstanding principal amount plus all interest and
other fees payable under the Loan Agreement or Shell Capital
Services Limited, as facility agent, will pursue available
remedies under the Loan Agreement.  Such remedies include taking
ownership of the Company's investment in the Karakuduk Field.
The Company is evaluating its rights under its various
agreements with Shell Capital to consider what course of action
the Company should pursue.

The Company also announced that it has signed a letter of intent
with Burren Energy, Plc, ( regarding a  
possible combination of the two companies.  Burren is a
privately held UK based international oil and gas company
engaged in oil production and development in the Caspian Region
and West Africa.  Burren is also engaged in the shipping and
trading of a variety of oil and oil products.  The Company and
Burren will engage in a detailed evaluation of the assets of
both companies, including an independent determination of the
relative values of each company and the form and capital
structure of the combined entity.  Any transaction will be
subject to a satisfactory resolution or restructuring of the
Company's existing agreements with Shell Capital, the
negotiation and execution of a definitive agreement with Burren,
and the approval of the boards of directors and shareholders of
both companies.  No assurance can be given that any such
resolution or restructuring of the Company's agreements with
Shell Capital, or that the conclusion of a business combination
with Burren, can be achieved.

Chaparral Resources, Inc. is an international oil and gas
exploration and production company.  The Company participates in
the development of the Karakuduk Field through KKM of which it
is the operator.  The Company owns a 50% beneficial ownership
interest in KKM with the other 50% ownership interest being held
by Kazakh companies, including KazakhOil, the government-owned
oil company.

CHIPPAC INC: Expects to Raise $20MM Capital To Meet Waiver Pact
On December 31, 2001, ChipPAC Inc., entered into an amendment to
its senior credit facilities according to which its senior
lenders waived compliance with certain financial covenants.  
The senior lenders waived compliance with the minimum interest
coverage ratio which must be maintained, the maximum leverage
ratio permitted and the maximum senior leverage ratio permitted
for calculation periods ending from and including December 31,
2001 to and including December 31, 2002.

As a condition to this waiver, ChipPAC agreed to raise at least
$20 million of net proceeds of permitted junior capital and to
prepay a portion of its senior credit facilities on or prior to
March 1, 2002 in an aggregate principal amount equal to the
greater of (i) $20 million and (ii) 50% of those net proceeds.
If the Company does not complete an offering and repayment prior
to March 1, 2002, the waiver expires on that date and ChipPAC
will be in violation of its senior credit facilities, including
covenants regarding the minimum interest coverage ratio, the
maximum leverage ratio and the maximum senior leverage ratio. If
the transaction providing ChipPAC with the net proceeds is a
registered offering of securities and if the Securities and
Exchange Commission reviews that offering, then the Company has
up to March 31, 2002 to apply those net proceeds and remain in
compliance with its senior credit facilities.

ChipPAC expects to be able to obtain permitted junior capital in
an amount which is sufficient to meet the terms of the amendment
in a timely fashion. However, there can be no assurance that the
Company will be successful in doing so.

CLAIMSNET.COM INC: Violates Nasdaq Minimum Equity Requirement
------------------------------------------------------------- inc., (Nasdaq: CLAI; BSE: CLA), a leading provider
of Internet-based business-to-business solutions for the
healthcare industry, received a Nasdaq Staff Determination on
January 9, 2002 indicating that the Company fails to comply with
either the minimum $2,000,000 net tangible assets or the minimum
$2,500,000 stockholders' equity requirement for continued
listing set forth in Marketplace Rule 4310(c)(2)(B), and that
its securities are, therefore, subject to delisting from The
Nasdaq SmallCap Market.  The Company has requested a hearing
before a Nasdaq Listing Qualifications Panel to review the Staff
Determination.  There can be no assurance the Panel will grant
the Company's request for continued listing. The Company's
request for a hearing with the Panel will stay the delisting of
the Company's Common Stock pending the Panel's decision.

Should the Company be unable to reach a successful conclusion
with regard to continued listing on The Nasdaq SmallCap Market,
the Company intends for its stock to be traded via the OTC
Bulletin Board (OTCBB). inc. is a leading provider of Internet-based,
business-to- business solutions for the healthcare industry,
including distinctive, advanced ASP technology for online
healthcare transaction processing. Headquartered in Dallas, offers proprietary systems that are distinguished
by ease of use, customer care, security and measurable cost
advantages. trades on the Nasdaq SmallCap under
the symbol "CLAI" and on the Boston Stock Exchange under the
symbol "CLA".  More information on can be found at
the Company's newly redesigned web site

COINMACH: S&P Assigns Low-B Ratings On Highly Leveraged Profile
Standard & Poor's assigned its double-'B'-minus senior secured
debt rating to Coinmach Corp.'s new $395 million secured bank
facility. At the same time, the single-'B' senior unsecured
rating was assigned to the company's proposed $400 million notes
due 2010, to be issued under Rule 144A.

Additionally, Standard & Poor's affirmed its double-'B'-minus
corporate credit rating, its single-'B' senior unsecured debt
rating, and its double-'B'-minus senior secured rating for

Proceeds from the new issue and bank facility will be used to
refinance existing debt.

The outlook is stable.

Total rated debt is about $795 million.

The assignment of the bank loan rating and senior unsecured debt
rating are subject to review of final documentation. The senior
unsecured rating is two notches below the corporate credit
rating reflecting its junior position relative to the firm's
secured debt. The bank facility is rated the same as the
corporate credit rating and is secured by substantially all
assets of the company. While the facility derives strength from
its secured position, based on Standard & Poor's simulated
default scenario, it is not clear that a distressed enterprise
value would be sufficient to cover the entire loan facility.

The ratings reflect Coinmach's position as the largest supplier
of coin-operated laundry equipment services in the highly
fragmented and regional laundry industry, with a strong presence
in California, the New York metropolitan area, and the Mid-
Atlantic, Southeast, and Southwest regions. The ratings also
reflect the company's stable and fairly predictable cash flow
stream. These factors are offset by a highly levered financial

Although the company has participated heavily in the
consolidation of the industry, Standard & Poor's expects the
firm to moderate its aggressive acquisition activity over the
near term, and focus on internal growth instead.

In July 2000, Coinmach Laundry Corp. (the parent of Coinmach
Corp.), along with GTCR Golder Rauner LLC, a private investor
group, took the company private. GTCR Golder Rauner, through its
affiliate, CLC Acquisition Corp., acquired all of Coinmach
Laundry's common shares for about $188 million. In line with
Standard & Poor's expectations, this transaction did not result
in any incremental debt incurred by Coinmach Laundry Corp. or
Coinmach Corp.

Despite the weakened economy, Coinmach's consistent, stable
revenue stream and cash flows demonstrate the constant demand
and recession resistant nature of its services. As such, key
financial ratios remain in line with the rating and Standard &
Poor's expectations. The operating margin (before depreciation
and amortization) for the 12 months ended Sept. 30, 2001 was in
the high 20% area. EBITDA to interest was about 2.5 times, and
total debt to EBITDA was about 4.2x for the corresponding
period. These financial measures remain relatively unchanged
from prior periods.

                      Outlook: Stable

Standard & Poor's expects Coinmach to maintain its position as
the leading provider of coin-operated laundry equipment services
for multifamily properties. The overall financial profile
remains commensurate with the current rating as the company
recognizes cost savings, increased returns, and cash flow
resulting from its recent acquisitions.

CONSECO INC: S&P Removes Downgraded Ratings from CreditWatch
Standard & Poor's removed from CreditWatch and lowered its
various ratings on Conseco Inc., and its insurance subsidiaries.
The outlook is stable.

These rating actions follow a review of Conseco's insurance
operations as well as the parent company's progress in reducing
debt and increasing financial flexibility. Conseco has made
considerable progress in reducing debt over the past 18 months,
largely through the sale of non-strategic assets. However, there
is the expectation that the current weakness in the economy will
reduce Conseco's flexibility in making further planned debt
reductions. Standard & Poor's believes that in 2002, there will
be increased reliance on dividends from insurance operations to
support the needs of the parent.

Financial leverage, interest coverage, operating earnings, and
operating cash flow remain in line with Standard & Poor's prior
expectations. Nevertheless, further asset sales will be
necessary for the parent to continue to meet its debt-reduction

The lowering of the financial strength ratings on Conseco Inc.'s
life insurance subsidiaries is directly linked to the rating
action on Conseco. Standard & Poor's continues to believe that
these subsidiaries maintain an appropriate level of
capitalization and a good level of liquidity.

Standard & Poor's has elected not to take any rating actions on
Conseco Finance Corp. and its units at this time. Rather,
pending further review, these ratings will remain on CreditWatch
with negative implications, where they were placed on Dec. 11.,

Discussions with senior management are continuing and are
focusing on Conseco and Conseco Finance Corp.'s efforts to raise
cash to meet the finance units' 2002 debt maturities. In
addition, Standard & Poor's will continue to closely monitor
asset-quality trends, especially in the manufactured housing
loan portfolio. Standard & Poor's expects to complete its review
within 30-45 days.

                        Outlook: Stable

Standard & Poor's believes Conseco's insurance operations'
operating earnings and capitalization will remain at or above
that of the rating level, but Conseco could experience increased
pressure to sell strategic assets to meet debt repayment

          Ratings Removed From Creditwatch And Lowered

                                         To             From
     Conseco Inc.
       Counterparty credit rating        B/Stable       B+
       Senior debt rating                B              B+
       Preferred stock rating            CCC            CCC+
     Bankers Life & Casualty Co.
     Conseco Annuity Assurance Co.
     Conseco Direct Life Insurance Co.
     Conseco Health Insurance Co.
     Conseco Life Insurance Co.
     Conseco Life Insurance Co. of NY
     Conseco Medical Insurance Co.
     Conseco Senior Health Insurance Co.
     Conseco Variable Insurance Co.
     Manhattan National Life Insurance Co.
     Pioneer Life Insurance Co.
       Counterparty credit rating        BB+/Stable     BBB-
       Financial strength rating         BB+            BBB-

           Ratings Removed From Creditwatch And Affirmed

     Conseco Inc.
       Commercial paper rating           B

DebtTraders reports that Conseco Inc's 10.500% bonds due 2004
(CNC8) currently trade in the low 50s. See  
real-time bond pricing.

CONSECO INC: Repurchases Additional $34MM 2002 Maturities Debts
Conseco, Inc., (NYSE:CNC) updated its report of 2002 public debt
repurchases, announcing that since the company's December 6,
2001 report, it has repurchased an additional $34 million of
2002 maturities.

On December 6, the company reported that it had repurchased $232
million of 2002 maturities since June 30, 2001. Since then, an
additional $34 million of Conseco Finance public debt has been
repurchased. These additional repurchases bring the total amount
of 2002 maturities retired early to $266 million, $148 million
for Conseco, Inc. and $118 million for its subsidiary Conseco
Finance Corp. This amount is 30% of all Conseco and Conseco
Finance public debt due in 2002.

The company confirmed that these transactions have all occurred
at a discount to face value, but it has not disclosed the
average discount.

The Conseco, Inc. public debt is a single issue that matures in
October. Of the remaining $296 million of Conseco Finance public
debt, approximately $125 million matures in June; the balance
matures in September.

             2002 Public Debt Maturities & Repurchases
                             $ millions

                   Conseco, Inc.  Conseco Finance Consolidated

  2002 public debt
   as of 6/30/01      450             414             864

   thru 12/6/01      (148)            (84)           (232)

   12/6 - 1/16         0             (34)            (34)
                   ------------  ---------------  ------------

  Total repurchased
   so far            (148)           (118)           (266)
                   ============  ===============  ============

2002 public debt
   as of 1/16/02      302             296             598

DebtTraders reports that Conseco Finance's 8.700% bonds due 2026
(CNC9) are trading between 20.5 and 24. See  
real-time bond pricing.

CONTINENTAL AIRLINES: Will Begin 4.5% Conv. Notes Public Offer
Continental Airlines, Inc. (NYSE: CAL), the fifth largest
airline in the U.S., announced the pricing of an offering of
$175 million of 4-1/2% Convertible Notes due January 2007.  The
Notes will be convertible at a price of $40 per share of
Continental common stock and will not be redeemable prior to
January 2005.  Continental expects the issuance and delivery of
the Notes to occur on January 23, 2002.

Salomon Smith Barney Inc., is acting as sole bookrunner for the
offering.  When available, copies of the prospectus supplement
and prospectus relating to the offering may be obtained from
Salomon Smith Barney, 388 Greenwich Street, New York, New York,
10013.  These documents will also be filed with the Securities
and Exchange Commission and will be available at the SEC's
website at

Continental intends to use the net proceeds from the offering
for general corporate purposes.

Continental Airlines is the fifth largest airline in the U.S.,
offering more than 2,000 departures daily to 126 domestic and 89
international destinations.  Operating hubs in New York,
Houston, Cleveland and Guam, Continental serves more
international cities than any other U.S. carrier, including
extensive service throughout the Americas, Europe and Asia.

The Notes and the shares to be issued upon conversion of the
Notes will be issued pursuant to a shelf registration statement
that was previously filed. This press release shall not
constitute an offer to sell or a solicitation of an offer to buy
the Notes or shares of Continental common stock.  An offering
of the Notes and shares of Continental common stock will be made
only by means of a prospectus.  The prospectus shall not
constitute an offer to sell or the solicitation of an offer to
buy, nor shall there be any sale of these securities, in any
state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such state.

EB2B COMMERCE: Acquires Bac-Tech Systems for $250K + 3M Shares
Effective January 2, 2002, eB2B Commerce, Inc. acquired Bac-Tech
Systems, Inc., a New York City-based privately held company
through the merger of Bac-Tech with and into the Company. The
acquisition was completed pursuant to an Agreement and Plan of
Merger, dated January 2, 2002, among the Company, Bac-Tech, and
Robert Bacchi and Michael Dodier (Bacchi and Dodier, are the
sole stockholders of Bac-Tech, and referred to here as the
Selling Stockholders).

Pursuant to the Merger Agreement, the Company paid an aggregate
of $250,000 in cash and issued an aggregate of 3,000,000 shares
of common stock, par value $.0001 per share, of the Company and
95,000 shares of Series D convertible preferred stock, par value
$.0001 per share, of the Company to the Selling Stockholders.
Each share of Preferred Stock outstanding, inclusive of any
dividend accrued on such share, is automatically convertible
into 52.631578 shares of common stock (an aggregate of 5,000,000
shares of common stock) upon the Company receiving stockholder
approval of its acquisition of Bac-Tech and/or the issuance of
Preferred Stock in connection therewith; provided, however, that
if by November 30, 2002 the Company does not obtain such
stockholder approval, the Preferred Stock shall be redeemable,
at the option of the holders thereof, for $10.00 per share in
cash, plus all accrued and unpaid dividends from the date of
issuance through November 30, 2002.  The Company also issued
promissory notes in the aggregate amount of $600,000, inclusive
of principal and interest, to the Selling Stockholders. The
Notes are payable in three equal installments on each of May 2,
2003, January 1, 2004 and January 1, 2005. The Notes and all
amounts due are secured by a security interest granted pursuant
to a Security Agreement, dated January 2, 2002, between the
Company and each of the Selling Stockholders. Pursuant to the
Merger Agreement the Selling Stockholders may also receive
payments of up to an aggregate of $200,000 n the event the
Company achieves certain financial performance targets in the
year 2002 as set forth therein.

The Company determined the amount of consideration based upon a
review of Bac-Tech's historical results, projected results, and
the synergy of the operations of Bac-Tech with the operations of
the Company. The consideration for the acquisition was funded
through the private placement of notes and warrants to
accredited investors that raised $2,000,000 of gross proceeds
for the Company.

All of the shares of common stock that were issued in connection
with the acquisition of Bac-Tech were issued in reliance upon an
exemption from registration under the Securities Act. As a
result, these shares may not be offered or sold in the U.S.
absent registration or an applicable exemption from the
registration statement requirements of the Securities Act. In
accordance with the Merger Agreement, the Company entered into a
Registration Rights Agreement in which the Company agreed,
subject to certain conditions, to include all of the shares of
common stock and common stock underlying Preferred Stock issued
to the Selling Stockholders in the Company's next amendment to
its Registration Statement on Form SB-2, and all pre- and post-
effective amendments thereto. The Company also granted the
Selling Stockholders one demand registration and piggy back
registration rights in connection with any future registration
statements filed by the Company under the Securities Act.

On January 2, 2002, the Company entered into three-year
employment agreements with each of the Selling Stockholders. The
Employment Agreements provide for Mr. Bacchi to serve as the
Company's Chief Operating Officer and as a member of its
executive committee and for Mr. Dodier to serve as the Executive
Vice President-Sales. The agreements provide for, among other
things, the Selling Stockholders to receive an annual base
salary of $165,000 and granting of options to purchase 500,000
shares of common stock at an exercise price of $0.19 per share.
The Employment Agreements also contain restrictions on the
Selling Stockholders competing with the Company for the term of
the agreements and for one year thereafter, as well as
provisions protecting the Company's proprietary rights and

In addition, as additional consideration for the consummation of
the merger, the Selling Stockholders, by separate agreements
dated January 2, 2002, agreed not to compete with the Company
for a period of four years from and after the date thereof.

eB2B Commerce (formerly DynamicWeb Enterprises) is the provider
of business-to-business (B2B) e-commerce services and software
for facilitating buyer-supplier transactions took its present
form when investor Commonwealth Associates engineered a reverse
acquisition between two B2B e-commerce companies with histories
of losses -- privately held eB2B Commerce and publicly traded
DynamicWeb Enterprises. eB2B creates electronic marketplaces for
specific vertical industries, including sporting goods and drug
stores. The company's customers include retailers Rite Aid, Best
Buy, and Linens & Things. Chairman Peter Fiorillo owns about 35%
of the company. As at September 30, 2001, the company had a
working capital deficit of about $1.3 million.

ENRON CORP: Signs-Up Miller Thomson as Special Counsel in Canada
Enron Corporation, and its debtor-affiliates ask Judge Gonzalez
for an order approving the employment of Miller Thomson LLP, as
special counsel in Canada, nunc pro tunc to Enron's Petition

According to Martin A. Sosland, Esq., at Weil, Gotshal & Manges
LLP, in New York, Miller Thomson is well-qualified and able to
represent the Debtors in connection with their Canadian

The Debtors intend to compensate Miller Thomson pursuant to the
firm's customary hourly rates, which are adjusted from time to
time.  Currently, Miller Thomson's hourly rates in Canadian
currency are:

         $200 to $575 for partners and counsel
         $115 to $350 for associates
          $45 to $195 for paraprofessionals

In addition, Mr. Sosland notes, Miller Thomson regularly charges
for reimbursement of out-of-pocket expenses including
secretarial overtime, travel, copying, outgoing facsimiles,
document processing, court fees, transcript fees, long distance
phone calls, postage, messengers, overtime meals and

Larry B. Robinson, Esq., a member of the firm of Miller Thomson
LLP, informs Judge Gonzalez that the firm intends to apply to
the Court for allowance of compensation and reimbursement of
expenses in accordance with the applicable provisions of the
Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and
the local rules of the United States Bankruptcy Court for the
Southern District of New York and orders of this Court for all
services performed and expenses incurred after the Petition

Mr. Robinson also assures the Court that the firm does not
represent any entity other than the Debtors in connection with
these chapter 11 cases.  Mr. Robinson asserts that Miller
Thomson is a "disinterested person" as that term is defined in
section 101(14) of the Bankruptcy Code.  "Although the firm has
in the past represented, currently represents, and may in the
future represent entities that are claimants or interest holders
of the Debtors, these representations are only in matters
totally unrelated to these pending chapter 11 cases," Mr.
Robinson swears. (Enron Bankruptcy News, Issue No. 8; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

ENRON ENERGY SVS: Case Summary & Largest Unsecured Creditors
Debtor: Enron Energy Services North America, Inc.
        aka The Bentley Company
        aka Enron Energy Services West, Inc.
        1400 Smith Street
        Houston, TX 77002

Bankruptcy Case No.: 02-10007-ajg

Type of Business: The Debtor finances and builds infrastructure
                  improvement projects such as financing and
                  building transformers.

Chapter 11 Petition Date: January 2, 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


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

Total Assets: $53,312,389

Total Debts: $77,080,518

Debtor's 20 Largest Unsecured Creditors:

Entity                               Claim Amount
------                               ------------
Grand Piping                         $2,403,500
411 Grand Street
Brooklyn, NY 11211
ph: 718-963-0960
fax: 718-963-9484

M. A. Mortenson                      $1,095,019
700 Meadow Lane North
Minneapolis, MN 55442
ph: 763-522-2100
fax: 763-287-5430

CAL-AIR Inc.                           $953,273
12393 Slauson Ave.
Los Angeles, CA 90606
ph: 562-464-3200
fax: 562-698-8301

The Trane Company                      $936,013
P.O. Box 845053
Dallas, TX 75284
ph: 972-406-6000
fax: 972-243-1398

AIRCO Mechanical Inc.                  $733,802
5720 Alder Avenue
Sacramento, CA 95828
ph: 916-381-4523
fax: 916-386-0350

United Utilities                       $692,628
P.O. Box 276108
Sacramento, CA 95827
ph: 916-852-6616
fax: 916-852-6617

Encompass                              $686,355
P.O. Box 6278
Arlington, ,TX 76005
ph: 817-226-3345

Technical Solutions & Services         $676,201
110 E. Queenwood Rs STE C
Morton, IL 61550
ph: 309-266-8774
fax: 309-266-8424

Applied Energy Management Inc.         $537,716
14 Pine Street
Stockbridge, MA 01262
ph: 413-298-3400
fax: 413-298-5475

Aqualine Resources Inc.                $499,281
77 Rumford Ave., Suite 1
Waltham, MA 02453
ph: 800-617-0007
fax: 781-894-5455

Sridharon Raghavachari                $488,397
4914 W. Forest Hill Ave.
Franklin, WI 53132

Bassett Mechanical                    $436,354
1215 Hyland Ave.
Kaukauna, WI 54130
ph: 920-759-2500
fax: 920-759-2501

Action Electric Co. Inc.              $381,164
2600 Collins Springs Dr.
Smyrna, GA 30080
ph: 404-799-3551
fax: 404-799-9983

AVCA Corporation                      $355,217
P.O. Box 711461
Cincinnati, OH 45271
ph: 419-893-2222
fax: 419-893-6115

GCD International Pty. Ltd.           $352,330
34 Gilbert Park Dr.
Knoxfield, Victoria 3180
ph: 61-3-9764-1733
fax: 61-3-9764-1523

Gartner & Associates                  $349,342
5606 N. 99th St.
Omaha, NE 68134
ph: 402-572-6969
fax: 402-572-0449

SLI Lighting Solutions                $320,675
P.O. Box 414201
Boston, MA 02241
ph: 781-828-2948
fax: 781-828-2012

York International Corporation        $303,442
P.O. Box 640064,
Pittsburgh, PA 15264
ph: 717-771-7890
fax: 717-771-7440

Sun Industries                        $285,694
7291 Heil Ave.
Huntington Beach, CA 92647
ph: 714-596-4511
fax: 714-596-3821

Dreicor Inc.                          $274,611
P.O. Box 565
Hendersonville, NC 28793
ph: 828-693-4266
fax: 828-692-8232

ENRON CORP: National City Bank Appointed to Creditors' Committee
National City Corporation (NYSE: NCC), responding to prior
reports in the news media, confirmed that a subsidiary, National
City Bank, in its capacity as successor trustee for certain
subordinated Enron debt, has been appointed to the Official
Committee of Unsecured Creditors of Enron Corp., et al.  The
Committee is charged with acting in the best interest of the
unsecured creditors.  National City Bank assumed its role as
successor trustee shortly after Enron's Chapter 11 bankruptcy

Separately, National City affirmed that it has no credit
exposure to Enron or related entities.  As previously announced,
National City expects to release its fourth quarter and full
year financial results Tuesday, January 22, 2002.

National City Corporation is a financial holding company
headquartered in Cleveland, Ohio.

ENRON CORP: Court Okays UBS' Bid for Wholesale Trading Business
UBS Warburg announced that its bid for Enron's North American
wholesale electricity and natural gas trading business has been
approved by the United States Bankruptcy Court in New York.  
Completion of the transaction is subject to approval under Hart-
Scott-Rodino and by the Federal Energy Regulatory Commission.

"This is a unique opportunity for UBS Warburg as this
technology-based trading business leverages the firm's worldwide
strengths of trading, market making and risk management," said
John P. Costas, chief executive officer of UBS Warburg.  "We
look forward to reestablishing the business and to providing
clients with superior service."

Terms of the proposed transaction call for Enron to receive a
royalty calculated as a percentage of the income of the
business.  UBS Warburg will assume none of Enron's past, current
or future liabilities or trading positions.

UBS Warburg is the investment banking group of UBS AG (NYSE:
UBS), one of the largest financial services firms in the world
with 71,000 employees in more than 40 countries.  UBS Warburg is
a leader in equities, corporate finance, M&A advisory and
financing, financial structuring, fixed income issuance and
trading, foreign exchange, derivatives and risk management.

ENTERTAINMENT TECH: Reduces Total Liabilities by 32% in FY 2001
Entertainment Technologies & Programs Inc. (OTCBB:ETPI),
announced that it has filed its annual report on Form 10-KSB.
The annual report for the fiscal year ended Sept. 30, 2001
reflects the company's continuing restructuring efforts to
return the company's focus on its core businesses -- Nitelife
Military Entertainment Inc., and Performance Sound and Light

The company continues to focus on its restructuring efforts,
including the elimination of non-core and unprofitable business
units and associated liabilities. President George C. Woods
stated, "The degradation in the financial condition of ETPI has
been significant over the past few years. While our financial
results as reflected in our current 10-KSB are still negative, I
believe we have made significant steps towards the completion of
our restructuring efforts. Our focus will continue to be on
eliminating unprofitable businesses and reducing indebtedness.
Although our restructuring efforts are not yet complete, we will
continue to work hard to complete such efforts in FY 2002 in
order to properly position the company for future growth and

During fiscal year 2001, the company:

     --  Eliminated approximately $1,400,000 in unprofitable

     --  Reduced total liabilities by approximately $2,000,000
         or 32%;

     --  Reduced net loss by approximately $762,000 or 33%;

     --  Reduced general and administrative expenses by
         approximately $1,000,000 or 34%;

     --  Reduced interest expense by approximately $200,000 or

     --  Reduced the number of employees by approximately 31%
         from 35 to 24;

     --  Implemented a program by the board of directors to tie
         new management's salaries to financial performance;

     --  Strengthened its board of directors with the addition
         of Gabriel Albert Martin and George C. Woods.

                      Core Operations

In FY 2001, Nitelife's revenues decreased approximately
$1,014,000, primarily due to the closure of Vision Quest Inc., a
subsidiary of Nitelife. As a result, and with the implementation
of cost and expense controls, Nitelife's income from operations
increased approximately $250,000, from a net loss of
approximately $109,000 in FY 2000 to a profit of approximately
$140,000 in FY 2001.

Due to the company's inability to provide adequate working
capital to PS&L in FY 2001, which restricted PS&L's ability to
purchase inventory for sale, PS&L suffered a reduction in
revenues of approximately $163,000, from approximately $769,000
in FY 2000 to $606,000 in FY 2001. PS&L's income from operations
decreased approximately $128,000 from a loss of $113,000 in FY
2000 to a loss of $241,000 in FY 2002. Based on its current
capitalization and restructuring efforts, management believes
that PS&L will be profitable in FY 2002 and will show
substantial improvements in revenues, income from operations and
earnings before interest expense, taxes, depreciation and
amortization in FY 2002.

                    Non-Core Operations

On Nov. 15, 2001, the company's board of directors directed
management to explore the sale or closure of the company's non-
core and unprofitable operations, which includes the company's
Hero's Family Fun Centers. Management closed its Hero's Family
Fun Center located in Channelview, Texas, in the first quarter
of FY 2002. For the year ended Sept. 30, 2001, the company's
amusement operations experienced a $293,000 decrease in revenues
from approximately $722,000 in FY 2000 to approximately $429,000
in FY 2001. Contributing to this reduction in revenues was the
company's transfer of its unprofitable Hero's waterpark
operations, located in Midland, Texas, to the ETPI 2000 Trust
for the extinguishment of liabilities associated with this
asset. Though Hero's operations, including the waterpark,
continued to experience a significant loss from operations in FY
2001 in the amount of approximately $541,000, this amount was
substantially less than the loss from operations experienced in
FY 2000 in the amount of approximately $935,000.

As reported on a Form 8-K, filed on Jan. 10 with the SEC, the
company completed an exchange of approximately 10,425,000 shares
of the company's common stock to retire approximately $834,000
of securitized equipment lease obligations.

FARMLAND INDUSTRIES: Weak Financial Measures Spur S&P Downgrades
Standard & Poor's lowered its corporate credit rating on
Farmland Industries Inc. to double-'B'-minus from double-'B'-
plus. At the same time, the preferred stock rating is lowered to
single-'B'-minus from single-'B'-plus. The double-'B'-plus
preliminary shelf rating is withdrawn. All ratings are removed
from CreditWatch.

Simultaneously, Standard & Poor's assigned its double-'B' rating
to Farmland's proposed $500 million senior secured credit
facility. The secured facility is comprised of a $350 million
revolving credit facility maturing in 2007 and a $150 million
senior term loan facility maturing in 2004. The revolving
facility is secured by a first lien on Farmland and certain
material subsidiaries' accounts receivables and inventory and a
second lien on all other assets. The term loan facility is
secured by a first lien on all other assets of Farmland and the
material subsidiaries (except the petroleum refinery) and a
second lien on the accounts receivables and inventory.
Additionally, there will be a security interest in the general
intangibles of the firm and its subsidiaries. This security
interest in the intangibles will be shared, pari passu, with
both the term loan facility and the revolving credit facility.

The outlook is negative.

The bank loan rating is one notch higher than the corporate
credit rating because Standard & Poor's is reasonably confident
of full recovery of principal. This is based on our analysis of
the structure of the asset-based loan (which provides close
monitoring and control of the inventories and accounts
receivables), the borrowing base formula and the advance
formula. The advance rate is tied to the net orderly liquidation
valuation (net OLV) of the assets. The value of the discrete
assets after net OLV should provide sufficient strength for full
recovery of principal. In addition, the discrete assets,
securing the term loan facility, provide more than sufficient
recovery of principal even when deeply discounted.

The downgrade reflects the continuing challenging market
conditions for agricultural-inputs, that have resulted in weak
operating performance and the related impact on Farmland's
financial measures. Management has taken steps to improve
operating performance by divesting non-core assets and focusing
on its core business; improving margins through cost savings
initiatives; reducing corporate expenses by about $40 million;
and reducing debt by about $270 million in fiscal 2001. However,
Standard & Poor's does not expect credit protection measures
will improve to their prior levels over the intermediate term.
Additionally, if financial measures, quarter over quarter,
(calculated on a last 12-month basis) do not show improvement,
the rating could be further lowered.

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

Farmland Industries is one of the largest agricultural
cooperatives in North America with about 600,000 members. The
firm operates in three principal business segments: fertilizer
production; pork processing, packing and marketing; and beef
processing, packing and marketing. The company also engages in
petroleum refining, feed manufacturing, and grain origination
and merchandising through its joint venture with Archer Daniels
Midland Co.

Results have been negatively impacted by a number of factors
including a depressed market for nitrogen products because of
extremely high prices in early 2001, extremely wet weather
during the key spring planting season, and changes in farmer's
buying practices because of extremely low commodity prices. In
the firm's meat processing operations, management is focusing on
cost-saving opportunities to improve this low-margin commodity
business' yields.

Financial measures are weak and represent the cyclical trough
for the cooperative, with EBITDA to interest of about 1.6 times,
operating margin (before depreciation and amortization) of 2.0%,
and total debt to EBITDA of 5.5x for the fiscal year ended
August 30, 2001. Standard & Poor's expects that credit  
protection measures will improve in fiscal 2002 as Farmland
continues to focus on its core operations.

                        Outlook: Negative

Although Standard & Poor's expects that Farmland's performance
will improve in fiscal 2002, market conditions remain difficult.
If credit measures remain weak for the rating during fiscal
2002, the ratings could be further lowered.

FIRST WAVE MARINE: Texas Court Confirms Plan of Reorganization
First Wave Marine, Inc., announced that its Plan of
Reorganization was confirmed by the U.S. Bankruptcy Court for
the Southern District of Texas.

In connection with the confirmation, First Wave announced that
the Company's current senior secured lender has agreed to
provide the Company with a post-confirmation $10 million
revolving line of credit and an $8 million term loan. The
Company estimates that it will conclude its post-confirmation
financing and emerge from bankruptcy on or about January 31. The
new credit facility, combined with the exchange of all of First
Wave's $90 million of Senior Notes for 96.7% of the common stock
of the Company, dramatically improves the Company's balance
sheet, financial strength and competitiveness.

First Wave President Grady Walker said, "Confirmation of this
Plan represents the achievement of our goal to successfully
restructure the Company. We are very grateful for the loyalty
and support of our customers, employees, vendors and lenders
during our restructuring. This support made it possible for us
to maintain our excellent vendor network, to keep our employees
working and to continue to provide the same high quality and
uninterrupted service our customers expect from us. As a result,
we are emerging poised and ready to exploit our new financial
strength to better serve the evolving needs of our customers."

First Wave is a leading provider of shipyard and related
services, with five shipyards in the Houston-Galveston area. The
Company provides repair, conversion, new construction, and
related services for barges, boats, ships, offshore rigs, and
other vessels in the offshore and inland marine industries.

FOUNTAIN PHARMA: Park Street Discloses 66.7% Equity Stake
Park Street Acquisition Corporation has reported the beneficial
ownership of 66.7% of the outstanding common stock of Fountain
Pharmaceutical, Inc.  Park Street holds sole power over voting
and disposition of the stock and has indicated that such stock
ownership was acquired for the purpose of acquiring control of
the Company and seeking one or more strategic acquisitions.  In
connection therewith, Park Street Acquisition Corporation may
recommend and/or vote in favor of one or more proposals which
would amend the Company's Certificate of Incorporation and for
the appointment of directors.

Park Street's holding consists of 3,500,000 shares of Class A
common stock and 2,000,000 shares of convertible Preferred Stock
which converts into 1,264,151 shares of Class A common stock.

On December 28, 2001, Mr. Brendon Rennert entered into a Pledge
and Escrow Agreement with Robert Smith to obtain the funds for
the acquisition of the securities. Pursuant to the terms of the
Loan Agreement, the shares of the Company's common stock and
preferred stock are collateral for the collection of the loan in
the aggregate amount of $350,000 which is due March 30, 2002
with interest at 6% per annum.

Fountain Pharmaceuticals had a very small sphere of influence.
The troubled company, which had relied largely on loans from
chairman James Schuchert, Jr., ran out of time and money. Before
suspending operations and transferring its assets instead of
facing foreclosure, it primarily developed "cosmeceuticals"
based on its proprietary drug-delivery technology -- man-made
microscopic spheres carry pharmaceuticals that are released when
applied to the skin. The technology was used in sunscreens,
lotions, and moisturizers under the Celazome and LyphaZone
brands. Fountain Pharmaceuticals is looking for a buyer for its
public shell.

GENERAL BINDING: Names Don Civgin as Senior Vice Pres. & CFO
General Binding Corporation (Nasdaq: GBND) announced that Don
Civgin will be joining the Company as its Senior Vice President
and Chief Financial Officer on January 21, 2002.

Mr. Civgin had previously been with Montgomery Ward, a $3
billion privately-held retailer with 250 stores, since 1997,
when he was recruited as part of their restructuring team and
then held the successive positions of Senior Vice President-
Finance and Senior Vice President-Merchandise Operations. In
these positions, he was responsible for capital markets
activities, strategic and financial planning, merchandise
planning and analysis, tax, treasury, accounts payable, and
vendor relations.

From 1995-1997, Mr. Civgin was Vice President and Treasurer of
Alliant Foodservice, Inc., a $5 billion national foodservice
distributor, and was responsible for corporate finance
activities, financial community relationships, real estate, and
treasury. Prior to Alliant, Mr. Civgin had broad-based finance
and business development experiences at various companies
including Itel Corporation, Amoco Production Company and
Northwest Industries, Inc.

"We are pleased to have a seasoned financial executive with
Don's wealth of experience in finance and business development,"
said Dennis Martin, GBC's Chairman, President and CEO. "With his
background and commitment to excellence, Don will be
instrumental in helping us execute our continuous improvement
programs to drive growth, profitability and shareholder value
for GBC."

GBC is an innovative global technology leader in document
finishing, film lamination, visual communications and paper
shredder products. GBC's products are marketed in over 115
countries under the GBC, Quartet, Ibico, VeloBind and Pro-Tech
brands and are used in the commercial, business, educational,
home office and governmental markets.

As reported in the Troubled Company Reporter on January 17,
2001, Standard & Poor's placed its low-B ratings for General
Binding Corp., on CreditWatch with negative implications.

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

GLOBALNET INC: Enters Into Merger Agreement with Titan Corp.
On January 6, 2002, GlobalNet, Inc., a Nevada Corporation, The
Titan Corporation, a Delaware Corporation, and T T III
Acquisition Corp., a Nevada corporation and wholly owned
subsidiary of Titan, entered into an Agreement and Plan of
Merger under which Titan will be merged with and into GlobalNet
and GlobalNet will be the surviving corporation in the Merger.  
Each share of GlobalNet's common stock (other than dissenting
shares) outstanding immediately prior to the Effective Time will
be converted into such number of shares of Titan's common stock
equal to the Exchange Ratio, plus cash in lieu of fractional

The Exchange Ratio will be determined based upon the average
closing sale price of Titan common stock for the 20-consecutive
trading day period ending on the fifth trading day prior to
GlobalNet's shareholders' meeting to vote on adoption of the
Merger Agreement. The Exchange Ratio is subject to a
collar ranging from $25.625 to $27.625. If the Titan Average
Trading Price is $21.125 or less, Titan can elect to reset the
Exchange Ratio, and if the Titan Average Trading Price is
$33.150 or more, GlobalNet can elect to reset the Exchange
Ratio. If the Exchange Ratio is not reset at the price levels
described above, the parties may terminate the Merger Agreement.

On January 4, 2002, the last trading day prior to the public
announcement of the Merger Agreement, the closing sale price per
share of Titan common stock as reported in the New York Stock
Exchange, Inc. ("NYSE") Composite Transactions was $24.57.
Moreover, on that date approximately 32,320,878 shares of
GlobalNet common stock were issued and outstanding and
approximately 65,966,332 shares of Titan common stock were
issued and outstanding.

The Merger is intended to be treated for U.S. federal income tax
purposes as a non-taxable reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended.
Titan intends to account for the Merger using the purchase

The Merger Agreement includes customary pre-closing covenants
regarding the operation of its business. Moreover, GlobalNet has
agreed to: (i) take all actions required to cause the redemption
of its outstanding $2 million convertible note or cause such
note to be converted by the holder into shares of GlobalNet
common stock; (ii) cause all "in the money" options to purchase
shares of GlobalNet common stock which are outstanding
immediately prior to the Effective Time to be assumed by Titan
and become exercisable thereafter for shares of Titan common
stock; and (iii) cause all warrants to purchase shares of
GlobalNet common stock which are outstanding immediately prior
to the Effective Time to be converted by the holders thereof
into shares of GlobalNet common stock, or exchanged by such
holders for an equivalent warrant to purchase shares of Titan
common stock.

Consummation of the Merger is subject to certain conditions,
including, without limitation, (i) approval of the Merger
Agreement by the holders of a majority of GlobalNet's
outstanding common stock, (ii) the receipt of all requisite
consents and approvals by public and governmental authorities,
(iii) the receipt by Titan of the consent of its lenders to the
Merger (and the transactions contemplated thereby), (iv) the
listing on the NYSE of the shares of Titan common stock issuable
in the Merger, (v) the absence of a Material Adverse Effect
involving GlobalNet or Titan, and (vi) other customary closing

In connection with the Merger Agreement, certain management-
shareholders and an affiliated family limited partnership
beneficially owning approximately 32% of the outstanding
GlobalNet common stock have entered into agreements to vote
their shares of GlobalNet common stock in favor of the Merger
under certain circumstances.

Furthermore, prior to the Effective Time, GlobalNet's Chairman
and Chief Executive Officer, Chief Financial Officer, Chief
Operating Officer, and President, respectively, will enter into
amendments to their existing employment agreements to provide
for continuation of their employment and certain incentive
payments based upon the financial performance of GlobalNet
during fiscal year 2002.

Upon termination of the Merger Agreement under certain
circumstances, Titan is entitled to receive a $1.4 million fee
and reimbursement of up to $250,000 of professional advisory
fees and expenses incurred in connection with the Merger.

On January 6, 2002, GlobalNet and Titan entered into a secured
note purchase agreement pursuant to which Titan has agreed to
loan to GlobalNet up to $5.0 million for working capital
purposes. Of this $5.0 million amount, Titan has agreed to fund
$3.0 million not later than January 10, 2002. In connection with
the loan, the above-referenced management shareholders and
affiliated family limited partnership have agreed to pledge all
of their shares of GlobalNet common stock as collateral
security. If the Merger Agreement is terminated under certain
circumstances, all borrowings then outstanding under the note
purchase agreement will become due and payable within 30 days.

There can be no assurance whether the Merger will be consummated
or, if consummated, as to the timing thereof.

GlobalNet, Inc. provides international voice, data and Internet
services over a private IP network to international carriers and
other communication service providers in the United States and
Latin America. As at June 30, 2001, the company had a working
capital deficit of about $7 million, and a total shareholders'
equity deficit of $3 million.

HALO INDUSTRIES: Court Okays Sale of Assets to Beanstalk Group
HALO Industries, Inc. (OTC Bulletin Board: HMLOQ), a promotional
products industry leader, announced that the U.S. Bankruptcy
Court in Wilmington, Delaware, has approved the sale of its
Troy, MI-based business and the stock of HALO Canada, Inc., its
wholly owned subsidiary, to The Beanstalk Group.

Terms of the transactions were not disclosed. The company
expects to close these transactions within the next four
business days.

"This is great news for HALO and once again demonstrates
enthusiastic support from the Creditors Committee and the
Bankruptcy Court," said Marc S. Simon, HALO's president and
chief executive officer.  "The sale of these businesses will
significantly contribute to our transformation into a healthy
viable business by substantially eliminating our bank debt and
reducing our dependence on a single, high revenue account."

The Bankruptcy Court has also approved an extension through
April 30 of HALO's $31 million DIP credit facility.  "The
completion of The Beanstalk Group transaction will significantly
lessen our need for DIP financing," said Simon.  "However, we
have pursued this course of action as a necessary contingency."

HALO's Troy, MI business includes satellite offices in Orlando,
FL and Norfolk, VA.  HALO Canada has offices in Toronto,
Vancouver and Calgary.  HALO acquired both the Troy, MI business
and HALO Canada though the acquisition of Creative Concepts in
Advertising in January 1997.

The Beanstalk Group, with nearly 100 professionals around the
globe, is the world's leading licensing management agency and
consultancy.  With offices in New York, Detroit, Los Angeles and
London, Beanstalk offers clients the opportunity to execute
strategic licensing programs with global reach. Current
Beanstalk clients include AT&T, The Coca-Cola Company, Harley-
Davidson, Ford Motor Company, The Stanley Works, Mary-Kate and
Ashley, McDonald's, and Master Lock. For more information,
please visit

HALO Industries, Inc. (OTC Bulletin Board: HMLOQ), based in
Deerfield, IL with offices worldwide, is a promotional products
leader and brand marketing organization. For more information,
please visit

HAMPTON INDUSTRIES: Considering Liquidation of Remaining Assets
Hampton Industries, Inc., (Amex: HAI) announced that its common
stock was delisted by the American Stock Exchange. Hampton
recently sold most of its product lines and inventories and
discontinued substantially all of its apparel operations.

Hampton also reported that it filed a Termination of
Registration on Form 15 with the Securities and Exchange
Commission and does not plan to continue filing financial

Hampton further announced that, subject to resolution of
outstanding litigation and claims, its board of directors is
currently seeking to sell the Company's remaining assets,
primarily real estate, and considering liquidation subject to
shareholder approval.

IT GROUP: S&P Drops Ratings to D Following Chapter 11 Filing
Standard & Poor's lowered its ratings on IT Group Inc. to 'D'
and removed them from CreditWatch.

The downgrade follows the firm's announcement that it has filed
for protection from its creditors under Chapter 11 of the U.S.
Bankruptcy Code. IT Group's credit quality has deteriorated in
recent months due to weak operating performance, failure to
reduce high debt levels, and a severe liquidity situation.

The company also announced that it has signed a letter of intent
with Shaw Group Inc. (BBB-/Stable/--) regarding a proposed
transaction in which Shaw would acquire substantially all of IT
Group's assets for about $105 million and the assumption of
certain liabilities.

IT Group is a leading provider of environmental consulting,
engineering and construction, remediation, and facilities
management services.

          Ratings Lowered and Removed from CreditWatch

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

INNOVATIVE CLINICAL: Expects to Close Merger Pact with CNS Today
Chairman of the Board of Innovative Clinical Solutions, Ltd.,
Mr. Michael T. Heffernan has directed a notification to the
stockholders of that Company advising them of further
developments in the pending merger of its subsidiary, Clinical
Studies, Ltd.  with Comprehensive Neuroscience, Inc.  Under the
Merger Agreement ICSL has agreed to exchange all of the stock of
its subsidiary, Clinical Studies, Ltd. for shares of common
stock of Comprehensive Neuroscience, Inc., a privately held

Recently, litigation has arisen involving the management
agreements related to two of CSL's clinical research sites. The
parties have agreed to establish an additional escrow to address
the risks associated with this litigation. Although the Company
believes that the resolution of the litigation related to these
two clinical research sites will not materially diminish the
amount of CNS stock issued to the Company upon the closing of
the transaction, the nature of the litigation and the additional
escrow increases the possibility that the number of shares of
CNS stock ultimately received by ICSL and ICSL's percentage
ownership interest in CNS will be reduced.

The modifications to the escrow and certain other matters are
set forth in a First Amendment to Agreement and Plan of Merger
dated and effective December 31, 2001. The First Amendment,  has
been approved by the Board of Directors and the same ICSL
stockholders that approved the Merger Agreement by written
consent have confirmed in writing their approval of the Merger
notwithstanding the changes contemplated in the First Amendment.

ICSL expects to consummate the Merger on or about January 21,

Innovative Clinical Solutions, Ltd., headquartered in
Providence, Rhode Island, provides services that support the
needs of the pharmaceutical and managed care industries.
Innovative Clinical Solutions is trying to reposition itself
after filing for Chapter 11 bankruptcy protection and
restructuring. The company has sold its physician practices and
medical service businesses; it also sold its clinical trial
support division, which served pharmaceutical and biotechnology
companies, to IMPATH. The company is now focused on its network
management services, which include managed care contracting and
disease management, although it may sell this division as well.
Investment firm EQSF Advisers owns almost half of the company.

JACOBSON STORES: Court Okays Use of Cash Collateral to Jan. 26
Jacobson Stores Inc., (Nasdaq: JCBS) said it has obtained
authorization from the U.S. Bankruptcy Court to use cash
collateral through January 26, 2002.

The company said the court's action allows it to use cash from
operations to purchase merchandise and maintain business
operations in its 23 stores while continuing negotiations with
its bank group, led by Fleet Retail Finance, Inc., of Boston, to
develop a longer-term financing arrangement.

Jacobson's, a leading regional specialty store chain, filed a
Chapter 11 petition for reorganization on January 15, 2002, with
the United States Bankruptcy Court for the Eastern District of
Michigan, Southern Division, in Detroit.  Subject to court
approval, the company announced plans to close five under-
performing stores and eliminate 520 associate positions in them.  
These five facilities are Columbus and Toledo, Ohio, and
Clearwater, Osprey and Tampa, Florida.

Jacobson's currently operates 23 specialty stores in Michigan,
Ohio, Indiana, Kentucky, Kansas and Florida.  The Company's web
site is located at

KMART CORP: S&P Junks Rating as Suppliers Withhold Shipments
Standard & Poor's lowered its ratings on Kmart Corp. and unit
Kmart Financing I. All ratings remain on CreditWatch with
negative implications, where they were placed January 14, 2002.

Since Standard & Poor's most recent downgrade on January 14,
which cited concerns regarding vendor confidence, two factoring
companies, which provide intermediary financing for suppliers,
have begun advising their clients to withhold shipments to

Management's lack of communication regarding the company's plans
has increased Standard & Poor's concerns that the company could
implement a financial strategy with high risk for creditors.

      Ratings Lowered and Remaining on CreditWatch Negative

     Kmart Corp.                         TO              FROM
       Corporate credit rating           CCC-            B-
       Senior secured debt               CCC-            B-
       Senior unsecured debt             CCC-            B-
       Shelf registration:
        Senior unsecured         prelim. CCC-    prelim. B-
     Kmart Financing I
       Corporate credit rating           CCC-            B-
       Preferred stock                   C               CCC-

DebtTraders reports that K Mart Corp's 8.375% bonds due 2022
(KMART6) are trading between 57 and 50. See  
real-time bond pricing.

KMART CORP: Fitch Junks Funding's Secured Bonds Series F and G
Kmart Funding Corporation's secured lease bonds $96.6 million
series F and $20.9 million series G are downgraded to `CCC' from
`B+' by Fitch. Series A, B, C, D and E have previously been paid
in full.

The series F and series G certificates will also remain on
Rating Watch Negative. The rating downgrades follow Fitch's
review and downgrade of Kmart's corporate credit on Jan. 16,
2002. The transaction closed August 1994.

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

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

KMART: Fitch Junks Pass-Thru Trusts, Series 1995 K-1 & 1995 K-2
Kmart Corporation Pass-Through Trusts, $67.0 million Series 1995
K-1 and $82.0 million Series 1995 K-2 are downgraded to 'CCC'
from 'B+' by Fitch.

In conjunction with the downgrade, both classes of certificates
are also placed on Rating Watch Negative. The rating action
follows Fitch's review of the transaction as a result of the
revision of Fitch's corporate rating of Kmart. The transaction
closed in May 1995.

The certificates are currently collateralized by an assignment
of rents on 16 properties guaranteed by absolute net leases to
Kmart Corporation (Kmart), in which Kmart is obligated to pay
rental payments with no setoff, abatement or reduction. Although
one of the properties is vacant and no longer operating as
Kmart, the ratings of this transaction depend entirely on the
rating of Kmart's senior debt obligations. Fitch downgraded its
ratings of Kmart to 'CCC' from 'B+' and placed the rating on
Rating Watch Negative.

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

KMART CORP.: Deathwatch Continues & Maybe They File Today
A chapter 11 filing by Kmart Corporation will be the largest
retail bankruptcy case in history, eclipsing Federated's 1990
record-setting filing.  Many business, legal and financial
professionals are convinced the filing is imminent and have
people staked-out at the Bankruptcy Clerk's offices in Detroit,
Manhattan, and Wilmington, Delaware, waiting for Kmart
Corporation's chapter 11 petitions to appear . . . maybe

                        Holiday Filings

Martin Luther King Day -- today -- is an ideal day for a multi-
billion dollar retailer to file for bankruptcy.  All of the
banks and financial markets are closed.  On a legal holiday, the
company doesn't face the risk that an employee will walk into a
bank, try to cash a paycheck and be told by a confused or
nervous bank official that the check's no good.  A holiday or
weekend filing allows a large company entering the chapter 11
process to do everything that needs to be done to maintain a
business-as-usual atmosphere the next business day.  

Federated Department Stores, Inc., and Allied Stores
Corporation, the owner of Bloomingdale's and other department
store chains, filed for bankruptcy on Martin Luther King Day,
January 15, 1990.  Federated's legal team, led by David G.
Heiman, Esq., and Richard M. Cieri, Esq., at Jones, Day, Reavis
& Pogue, carefully prepared for that holiday filing.  The
Bankruptcy Clerk's office opened it's doors to receive
Federated's 88 separate chapter 11 petitions, and The Honorable
J. Vincent Aug, Jr., took the bench to issue the emergency
orders necessary to maintain a business as usual atmosphere an
from employees' and customers' perspectives.  

Woodward & Lothrop, Inc. (the Alfred Taubman-controlled Woodies
and Wanamaker's chains), counseled by Marc Abrams, Esq., at
Willkie, Farr & Gallagher, found MLK Day an ideal day to file
for bankruptcy in 1994.  

Zale Corporation 's trip into bankruptcy started on a Sunday
night in January when lawyers caught-up with a bankruptcy judge
doing his grocery shopping.  

Holiday and weekend chapter 11 filings minimize marketplace
chaos for mega-debtors.

A filing in January is also the least disruptive in the a retail
supply chain.  An October or November filing, for example, for a
retailer that's trying to reorganize rather than liquidate,
would be devastating.  It's impossible to run a retail business
with bare shelves.  

R.H. Macy & Co., Merry-Go-Round Enterprises, Carter Hawley Hale,
and a long list of other retailers have sought refuge from
creditors in January chapter 11 filings.  

Non-retail companies find weekend chapter 11 filings beneficial
too.  Enron Corp., for example, commenced its bankruptcy cases
at 5:00 a.m. on a Sunday morning as Martin J. Beinenstock, Esq.,
and his team of professionals at Weil, Gotshal & Manges
delivered Enron's chapter 11 petitions to the Bankruptcy Court

                  Kmart's Silence Continues

Kmart won't give any hint about when and where it'll file.  
Kmart is silent about most everything else too.  The continuing
silence just fuels speculation and rumor . . . making vendors
and factors more and more nervous and determined not to ship
goods on credit until the after the petitions are filed.  
Shipments to Kmart after a bankruptcy filing would be accorded
an administrative priority, standing in line for payment ahead
of all unsecured debt incurred prepetition.  That administrative
priority gives Kmart suppliers a multi-billion dollar measure of
financial comfort, putting their post-bankruptcy claims high on
the food chain in the event of a liquidation.  

"It would appear to me that bankruptcy is becoming a self-
fulfilling prophecy," bankruptcy veteran James Harris, president
and CEO of Seneca Financial Group, a financial advisory group in
Greenwich, Conn., told the Associated Press Friday.  Harris adds
that if Kmart does decide to file, the retailer should do so
sooner rather than later.  

John Baugh, an analyst at Wachovia Securities, reports that lawn
and garden products supplier Scotts Co., has stopped shipping to
Kmart.  Kmart accounts for 10% of Scotts' annual sales, Mr.
Baugh relates.  Scotts won't comment further.  

                    Exactly How Big Is Kmart?

Kmart's sells over $30 billion of merchandise annually from its
2,113 discount stores located in each of the 50 United States,
Puerto Rico, the U.S. Virgin Islands and Guam.  The Company
disclosed on January 10, 2002, that holiday sales were
disappointing and break-even results are the best to expect for
the fourth quarter.  For the four-week period ended January 2,
2002, net sales decreased 1.0% on a same-store basis.  Total net
sales were $5.524 billion, essentially level with $5.539 billion
for the same period last year.  Net sales for the 48-week period
ended January 2, 2002, were flat on a same-store basis.  Total
net sales were $34.091 billion, a decrease of 1.0% from $34.444
billion for the same period last year.   

On this news, Moody's, Standard & Poor's and Fitch cut Kmart's
debt and credit ratings to junk levels.  These downgrades will
increase Kmart's cost of borrowing money.  In the bond markets,
Kmart's 12.5% Notes due 2005 now trade in the low-50's.  If you
don't think Kmart will file and that it will make the interest
payment on these notes due on March 1, that's an investment
that'll yield over 20%.  

Kmart shares, of course, have plummeted to all-time lows, and
Kmart stock was kicked-out of the S&P 500 index last week.   If
you think that there's value for shareholders following a
chapter 11 filing, think again.  Unless and until all creditors
are paid in full, the bankruptcy code doesn't allow junior
equity interests to recover value from an estate.  Every decline
in the price of Kmart's bonds is a clear signal from the debt
markets that Kmart shares are likely to be out of the money at
the conclusion of any chapter 11 restructuring.

                  Working Capital Financing

Kmart's October 31, 2001, balance sheet shows $17 billion in
total assets, $4.1 billion in available working capital ($9.5
billion of current assets available to pay $5.4 billion of debt
coming due within the next year), and more than $5 billion of
positive shareholder equity.

Currently, Kmart obtains working capital financing under two
credit agreements providing access to $1.6 billion of revolving
credit.  Press reports say that Kmart's board decided to fully
draw-down all available funds under that unsecured credit
facility.  Many bankruptcy pros interpret that cash-hoarding
move as a move toward a chapter 11 filing.  The Chase Manhattan
Bank serves as the Agent for a consortium of undisclosed lenders
under a 3-year $1.1 billion facility.  Lawyers at Simpson
Thacher & Bartlett represented Chase when that jumbo financing
agreement was put in place in 1999.  

On January 10, Kmart said it is "review[ing] its current and
prospective liquidity position and business plan for the 2002
and 2003 fiscal years, and in that regard, is in discussions
with its lenders regarding its existing and possible
supplemental financing facilities."  Reading between the lines,
that sounds a lot like debtor-in-possession financing to many
seasoned bankruptcy professionals.

Friday, a "source close to the lending negotiations," told
Reuters that J.P. Morgan Chase & Co. Inc., is arranging a $1.5
financing pact for Kmart.  Other news reports say the J.P.
Morgan is working on a $2 billion secured financing facility.  
Talks are still going on, but nothing has been finalized,
Reuters source said.  J.P. Morgan is unlikely to extend $1.5
billion in loans without ample collateral to secure repayment.  
DIP financing speculators say that a new secured financing
facility wouldn't seem likely because Kmart and J.P. Morgan
would have difficulty explaining to its unsecured creditors in a
subsequent bankruptcy how that pledge of assets was a good deal.  

Loan Pricing Corp. started spreading the word Friday that GE
Capital is pulling a DIP Loan Facility together for Kmart.  

                      Hello, Mr. Adamson

James B. Adamson was elected non-executive Chairman of the Board
of Directors effective last week, and will now "serve as the
principal liaison between the Board and the Company's senior
management as Kmart continues to address its current financial
and operational challenges."  Kmart's president, Mark S.
Schwartz, left last week.  Charles Conaway, remains as Kmart's

Mr. Adamson brings first-hand bankruptcy experience from his
days when he led Flagstar through its chapter 11 bankruptcy
proceeding.  Flagstar, the largest operator of Denny's and
Hardee's restaurants, emerged from bankruptcy as Advantica.  
Advantica isn't anything to brag about.  DINE shares, issued to
old Flagstar bondholders to compromise and settle their claims,
steadily fell from $11.50 to less than $2 since issued under
Flagstar's Chapter 11 Plan.

Mr. Adamson knows the benefits a chapter 11 filing could bring
to Kmart at this juncture:

     (1) payments on prepetition debt and interest payments stop

     (2) during this breathing spell from creditors, management
         can focus on fixing the broken parts of Kmart's

     (3) a new DIP financing facility provides Kmart with
         immediate access to fresh working capital;

     (4) it is cheaper for Kmart to walk-away from unprofitable
         leases in a chapter 11 setting than any other setting;

     (5) the company can sort though each and every contract and
         deal it's signed over the years and terminate those
         that don't deliver value to the company; and

     (6) under a plan of reorganization, Kmart's balance sheet
         can be substantially deleveraged.  

Certainly, no management team at any company aspires to file for
bankruptcy.  Kmart, in fact, successfully avoided a chapter 11
filing roughly two years when many outside observers thought
there was no other option.

                    Kmart's Professionals

Dresdner Kleinwort Wasserstein reportedly was called-in last
week to advise Kmart.  "We don't comment on rumor and
speculation,'' Kmart spokesman Jack Ferry told a Reuters
reporter who asked for confirmation of that fact.  DrKW serves
as financial advisor to many high-profile chapter 11 cases.  The
consummate professional, DrKW won't confirm or deny the

Skadden, Arps, Slate, Meagher & Flom has served as long-time
counsel to Kmart.  Skadden lawyers Jack Butler, Esq., and David
Kurtz, Esq., are two of the best retail bankruptcy lawyers
around.  It seems unlikely Kmart would look for legal counsel
anywhere else.  

PricewaterhouseCoopers LLP is Kmart's independent auditor.

               Significant Parties-in-Interest

The Chase Manhattan Bank, according to,
serves as the Agent for a consortium of undisclosed lenders
under various credit agreements, including a 3-year $1.1 billion
facility.  Lawyers at Simpson Thacher & Bartlett represented
Chase when that jumbo financing agreement was put in place in

Fleming Companies, Inc., supplies all of Kmart's "Big K" and
"Super K" stores with their pantry merchandise under a Five-Year
Agreement dated February 2, 2001.  The Agreement explicitly
states its purpose and objectives: to create a strategic
alliance between Fleming and Kmart to merchandise, procure and
distribute pantry and supermarket products in the most cost
efficient manner [and] to provide for the joint exploration,
evaluation, and implementation of practices and procedures to
reduce total supply chain costs and allow each party to  
equitably share the benefits of such practices and procedures.  
Termination of the Fleming Agreement requires 12-months' notice
from either side, except (i) if Kmart's purchases decline by 30%
or Kmart closes 30% of its stores, in either of which event,
Fleming can walk or (ii) in the event of a change in control of
the other party.

Martha Stewart Living Omnimedia granted Kmart the exclusive
right to sell the Martha Stewart Everyday products under a
seven-year agreement that runs through 2008.  ``We haven't
experienced any difficulties yet,'' Martha Stewart says in this
week's edition of Newsweek magazine, ``But a company in
reorganization poses certain problems for us in terms of our
brand and our growth rate,'' Ms. Stewart says.  Sharon Patrick,
president and chief executive of Martha Stewart Living, on
Wednesday told Reuters that her company's not looking to cancel
the contract in the event of a chapter 11 filing.

Kmart continues to guarantee certain lease-related obligations
for Borders Group, The Sports Authority and OfficeMax, which
were spun-off from Kmart years ago.  The present value of those
lease guarantee obligations is around $350 million.  

Landlords number in the thousands.  Unsecured creditors number
in the tens of thousands.  

                   Kurt Barnard's Soundbite

Long-time retail commentator Kurt Barnard, president of
Barnard's Retail Consulting Group, weighed-in last week telling
a Reuters reporter, "Kmart is still in deep trouble regardless
of the management changes."

KAISER ALUMINUM: S&P Junks Ratings In Wake of Debt Workout Talks
Standard & Poor's lowered its ratings on Kaiser Aluminum &
Chemical Corp. and placed them on CreditWatch with negative

The actions follow the company's announcement that it intends to
begin discussions with noteholders to review its options for
addressing its near-term debt maturities and overall capital

At the same time, Standard & Poor's placed its ratings on
Kaiser's parent company, MAXXAM Inc. and MAXXAM's Pacific Lumber
Co. subsidiary on CreditWatch with negative implications.

Standard & Poor's had expected Kaiser would continue to make
asset sales to meet its burdensome debt maturities or that it
would possibly refinance the outstanding bonds to improve its
capital structure and financial flexibility. The company
recently sold an 8.3% interest in its Queensland Alumina Ltd.
alumina refinery. The sale, combined with proceeds from
electrical power sales in the Pacific Northwest, would have been
enough to retire the 9-7/8% notes maturing February 15, 2002.

However, Kaiser continued to be adversely affected by the
recession and depressed aluminum prices as well as by ongoing
legacy issues. In addition, the company continues to be plagued
by asbestos liabilities, and is experiencing an increase in the
number of asbestos related claims and possible payment
settlements. Kaiser currently has accrued a total liability of
approximately $633 million versus insurance receivable of
approximately $501 as of September 30, 2001.

Kaiser was able to extend the maturity under its bank credit
facility to August 1, 2002, due to the completion of the asset

Nevertheless, continued weak market conditions and the resulting
poor cash flow of its assets, continue to strain the company's
financial flexibility.

Standard & Poor's will continue to monitor the company's
progress in restructuring its balance sheet.

          Ratings Lowered and Placed on CreditWatch
                  with Negative Implications

     Kaiser Aluminum & Chemical Corp.        To          From
        Corporate credit rating              CCC          B
        Senior unsecured debt                CCC          B
        Subordinated debt                    CC           CCC+
        Senior unsecured shelf debt (prelim.)CCC          B

DebtTraders reports that Kaiser Aluminum & Chemicals' 10.875%
bond due 2006 (KAISER3) currently trade in the low 90s. See  
real-time bond pricing.

LAIDLAW INC: Will Delay Filing of Financial Results for FY 2001
Laidlaw Inc., (TSE:LDM) announced that it will be unable to file
its audited results for the fiscal year ended August 31, 2001 by
the filing date required under the Securities Act (Ontario).

The preparation and filing of the financial statements was
delayed as a result of the ongoing litigation involving
Laidlaw's bondholders, Laidlaw and certain other defendants,
including Laidlaw's auditors. As a result of the agreement in
principle to settle this litigation, Laidlaw will now seek the
approval of the bankruptcy court in the U.S. to, among other
things, retain its auditors for purposes of performing the
audit. Laidlaw anticipates filing the financial statements on or
before April 30, 2002.

In June, 2001, Laidlaw Inc., and five of its subsidiary holding
companies - Laidlaw Investments Ltd., Laidlaw International
Finance Corporation, Laidlaw One, Inc., Laidlaw Transportation,
Inc. and Laidlaw U.S.A., Inc. filed voluntary petitions for
reorganization under Chapter 11 of the U.S. Bankruptcy Code in
the United States Bankruptcy Court for the Western District of
New York. At the same time, Laidlaw Inc. and Laidlaw Investments
Ltd. filed cases under the Canada Companies' Creditors
Arrangement Act in the Ontario Superior Court of Justice in
Toronto, Ontario. Pursuant to this reorganization, Laidlaw and
the relevant subsidiaries currently operate under a stay of
proceedings. Laidlaw's plan of reorganization, as filed,
contemplates no distribution of value to holders of Laidlaw's

Due to the late filing of the financial statements, Laidlaw's
securities may be subject to a cease trade order affecting
certain members of management and insiders of Laidlaw. However,
if Laidlaw fails to file its financial statements by March 18,
2002, a cease trade order may be issued affecting all of
Laidlaw's securities.

In accordance with OSC Policy 57-603, Laidlaw intends to satisfy
the provisions of the alternate information guidelines until it
has satisfied its financial statement filing requirements by
filing with the relevant securities regulatory authorities
throughout the period in which it is in default, the same
information it provides to all of its creditors at the times the
information is provided to the creditors and in the same manner
as it would file a material change report pursuant to the
Securities Act (Ontario).

Laidlaw Inc. is a holding company for North America's largest
providers of school and intercity bus transportation, municipal
transit, patient transportation and emergency department
management services.

DebtTraders reports that Laidlaw Inc.'s 6.720% bonds due 2027
(LAIDLAW4) are trading in the low 50s. See  
real-time bond pricing.

LERNOUT & HAUSPIE: Holdings Debtors Resolves Dispute with Ingram
L&H Holdings USA, Inc., one of the debtors and debtors-in-
possession in Lernout & Hauspie Speech Products N.V. and
Dictaphone Corp.'s Chapter 11 cases, asks Judge Wizmur for entry
of an order authorizing L&H Holdings, together with its non-
debtor subsidiary, L&H Applications USA, Inc., to enter into a
Settlement Agreement with Ingram Micro, Inc. and its subsidiary,
Ingram Micro, Inc. Canada.

                     The Distribution Agreements

Dragon Systems, Inc., the predecessor of L&H Holdings, and
Ingram entered into a certain Distribution Agreement, dated
December 17, 1997. In addition, L&H Applications (d/b/a Lernout
& Hauspie) entered into a certain Distribution Agreement with
Ingram, dated November 1, 1998. Pursuant to the Distribution
Agreements, Ingram acted as a distributor for certain computer
software programs developed by L&H in North America, and L&H
routinely invoiced Ingram for products delivered to Ingram.
Pursuant to the Distribution Agreements, Ingram was entitled to
certain deductions from these invoices related to returns,
customer rebates and co-operative marketing programs.

The Debtors remind Judge Wizmur that she entered a First Day
Order authorizing L&H Group to honor pre-petition customer
obligations. Through this Order, Judge Wizmur authorized the
members of the L&H Group to honor pre-petition obligations and
pay pre-petition claims arising under their customer programs,
including, but not limited to, such rebates, warranties, service
plans and cooperative marketing programs, in the ordinary course
of business.

After several months of reviewing and reconciling invoices, L&H
and Ingram have agreed that, in the aggregate, Ingram owes
$1,530,000 to L&H (i.e., $1,020,000 to L&H Holdings and $510,000
to L&H Applications) for software delivered to Ingram pursuant
to the Distribution Agreements. L&H believes that the
transactions contemplated by the Settlement Agreement are in the
ordinary course of business and authorized by the Customer
Programs Order. Ingram, however, has requested, out of an
abundance of caution, that L&H Holdings obtain court approval to
enter into the Settlement Agreement.

                        The Settlement

Thus, L&H Holdings seeks authority to enter into a Settlement
Agreement by and between L&H Holdings, L&H Applications and
Ingram providing for, among other things:

       (a) payment of $1,530,000 in the aggregate to L&H (i.e.,
           $1,020,000 to L&H Holdings and $510,000 to L&H

       (b) release of certain claims;

       (c) termination of the Distribution Agreements; and

       (d) retention by Ingram of approximately 21,000 units of
           obsolete versions of L&H software, the destruction of
           which would require the use of funds of the
           bankruptcy estate.

More specifically, the Settlement Agreement provides:

      1) Payment to L&H Holdings. Ingram will pay to L&H
Holdings $1,020,000 as payment in full accord and satisfaction
of all amounts L&H Holdings claims or could claim due to L&H
Holdings by Ingram and all amounts Ingram claims or could claim
due to Ingram by L&H Holdings for all transactions related to
any Ingram accounts that originated or otherwise relate to
events occurring prior to and including the effective date of
the Settlement Agreement.

       Payment to L&H Applications. Ingram will pay to L&H
Applications $510,000 as payment in full accord and satisfaction
of all amounts L&H Applications claims or could claim due to L&H
Applications by Ingram and all amounts Ingram claims or could
claim due to Ingram by L&H Applications for all transactions
related to all Ingram accounts that originated or otherwise
relate to events occurring prior to and including the effective
date of the Settlement Agreement.

       Releases. L&H Holdings and L&H Applications, on the one
hand, and Ingram, on the other hand, will release and discharge
one another and each of their respective affiliated
subsidiaries, parent corporations, successors, assigns,
officers, directors, partners, employees, agents, servants,
representatives, and attorneys, and each of them, from any
and all claims related to L&H's accounts with Ingram through and
including the effective date of the Settlement Agreement.

       Ingram's Retention Of Inventory. Ingram will retain
approximately 11,750 units of obsolete Dragon Naturally Speaking
inventory, which if not retained by Ingram, L&H Holdings would
destroy or sell at a sharp discount. Ingram will retain
approximately 9,600 units of obsolete L&H Applications
inventory, which if not retained by Ingram, L&H Applications
would destroy or sell at a sharp discount.

       Delivery Of Inventory To Certain Parties. Ingram will
deliver, as designated by L&H, certain inventory in its
possession to other distributors of L&H software.

       Termination Of Distribution Agreements. The Distribution
Agreements will be terminated upon the effective date of the
Settlement Agreement.

                Execution of settlement agreement is
           permissible as a reasonable business decision.

The Bankruptcy Code provides that the debtor "may use, sell or
lease, other than in the ordinary course of business, property
of the estate." Additionally, the Debtor assures Judge Wizmur
that the Bankruptcy Code section 105(a) allows her to "issue any
order, process, or judgment that is necessary or appropriate to
carry out the provisions of the Code." The Distribution
Agreements (and payments due thereunder) are excluded from the
sale of L&H's Speech and Language Technologies business.

Courts generally approve the execution of the use of property
outside of the ordinary course of business if the debtor
demonstrates a sound business justification for such use. Once
L&H Holdings articulates valid business justifications in
support of the settlement, "[t]he business judgment rule 'is a
presumption that in making a business decision the directors of
a corporation acted on an informed basis, in good faith and in
the honest belief that the action was in the best interests of
the company.'"  L&H Holdings believes that it has sound business
justification for entering into the Settlement Agreement. L&H
and Ingram have reconciled their respective accounts and agreed
upon the amount that Ingram should pay to L&H on account of
their invoices. However, without Judge Wizmur's approval, Ingram
will not tender the funds to L&H Holdings and L&H Applications.

The Third Circuit has also stated that a court should consider
four criteria in striking the balance between the value of the
claim and the value of the compromise to the estate: (1) the
probability of success in litigation; (2) the likely
difficulties in collection; (3) the complexity of the litigation
involved, and the expense, inconvenience and delay attending it;
and, (4) the paramount interest of the creditors. Moreover, "in
reviewing a settlement proposal, [the court] need not engage in
a trial of the merits, for the purpose of settlement is
precisely to avoid such a trial."  The settlement between L&H
Holdings and Ingram fulfills all of the requirements necessary
for court approval.

The proposed settlement serves the interests of the creditors of
L&H Holdings in several respects. The reconciliation process
took several months and involved the review of hundreds of
transactions pursuant to the Distribution Agreements. L&H and
Ingram are finally in agreement on the amount owed by Ingram
pursuant to the Distribution Agreements. If the Settlement
Agreement is executed, L&H Holdings' bankruptcy estate will
receive $1,020,000.  For all these reasons, this settlement
agreement should be approved. (L&H/Dictaphone Bankruptcy News,
Issue No. 17; Bankruptcy Creditors' Service, Inc., 609/392-0900)  

LEVEL 3: Will Provide Cox with Broadband Infrastructure Services
Level 3 Communications, Inc. (Nasdaq: LVLT) announced it has
signed multiple agreements to provide Cox Communications with
broadband infrastructure services that support the company's
779,000 residential and business high-speed Internet customers.  
The agreements enable Cox to provide high-speed Internet
services over its own nationwide Internet Protocol (IP) network.

Under the terms of the agreements, Cox has purchased
(3)CrossRoads Internet access and (3)Center Colocation service
in five major U.S. markets to connect its subscribers to the
public Internet, other networks and content providers.  Cox also
is using Level 3's OC-48 (3)Link Private Line and metropolitan
dark fiber services to connect its regional data centers and
metropolitan fiber-optic networks to the Level 3 network.

"We're pleased that Cox Communications has chosen to use many of
Level 3's broadband services to support the creation of its own
high-speed network, and look forward to immediately helping the
company serve its customers in North America," said Neil Hobbs,
group vice president for Level 3.  "We believe our network,
provisioning and operational capabilities are unsurpassed in the
industry, and give us a strong competitive advantage in meeting
the needs of companies like Cox."

"We chose Level 3 primarily because of its network quality and
provisioning capabilities," said Scott Hatfield, chief
information officer for Cox Communications.  "We were very
impressed with Level 3's ability to turn up the services very
quickly at a time when our need was great.  Level 3 was able
to activate more than 10 gigabits of Internet access in less
than a week at interface speeds up to 2.5 gigabits per second.  
As a result, we're now able to offer services over our own high-
speed nationwide IP network."

"Level 3's scalable, multi-conduit network infrastructure
provides the building blocks that enable our customers to design
and manage their own high-speed networks, while taking advantage
of the technology and cost advantages Level 3 is uniquely
positioned to offer our customers," added Hobbs.

"Level 3 consulted with us for more than six months on a
contingency plan we prepared as we were exploring the
possibility of designing our own network infrastructure," said
Stephen J Naidyhorski, senior network engineer for Cox
Communications.  "We were impressed with Level 3's flexibility
and responsiveness during this process, and their ability to
quickly activate our new broadband backbone once we made the
decision to design our own network."

Level 3 (Nasdaq: LVLT) is a global communications and
information services company offering a wide selection of
services including IP services, broadband transport, colocation
services and the industry's first Softswitch based services.  
Its Web address is

                         *   *   *

As reported in the Oct. 16, 2001, edition of Troubled Company
Reporter, Standard & Poor's placed its junk ratings of Level 3
Communications Inc., on CreditWatch with negative implications.

The CreditWatch placement, according to the report, follows
Level 3's announcement that it had amended its modified Dutch
tender offer for a portion of its unsecured debt securities. The
amendments increased the maximum tender offer amount to $2.86
billion aggregate face amount of debt at maturity, with the
discount to face ranging from 85% to 52%. The $1.05 billion
aggregate tender would be funded from cash on hand, and would
reduce the company's outstanding debt from its current $8
billion level, with an accompanying savings on interest expense.

In addition, the international rating agency did not consider
the tender offer to be coercive. It said, "Given the company's
current and anticipated level of cash balances that will remain
subsequent to the completed offer, bondholders do not face the
prospect of imminent default by Level 3 if they do not
participate in the exchange. The  deletion of cash required by
the offer results in some  deterioration in the company's near-
term liquidity and  associated financial profile; under Standard
& Poor's definition of a coercive exchange an improvement needs
to be demonstrated."

LODGIAN INC: Taps PKF Consulting to Appraise Assets & Business
Lodgian, Inc., and its debtor-affiliates sought and obtained an
order from the Court authorizing the employment and retention of
PKF Consulting to serve as their real estate and business
appraisers in connection with these chapter 11 cases.

Adam C. Rogoff, Esq., at Cadwalader Wickersham & Taft in New
York, New York, relates that in its capacity as real estate and
business appraisers, PKF Consulting will continue to provide the
appraisal services that it has provided to the Debtors prior to
the Commencement Date. The appraisal services may include, but
will not be limited to the following:

A. Conducting and market value appraisals for the hotels in
   which the Debtor has an interest,

B. counseling the Debtor as to current market conditions and the
   outlook concerning expected performance trends for the
   locations in which the Debtor has a hotel, and other
   related services.

Mr. Rogoff believes that the services of PKF Consulting as real
estate and business appraisers are necessary in order to enable
the Debtors to execute their duties as debtors and debtors in
possession. Notably, PKF Consulting shall provide expert advice
and testimony to the Debtors regarding the valuation of the
Debtors' hotel operations and properties. PKF Consulting is well
qualified to perform the real estate and business services and
the Debtors know of no reason why PKF Consulting should not be

In accordance with PKF's historical billing practices with the
Debtors, R. Mark Woodworth, Executive Vice President of PKF
Consulting, relates that the Debtors have agreed to pay the firm
as compensation for its services a fixed-fee of $4,600 per
property appraised or $349,600 for all of the Debtors
properties. The basis for any such fixed fee or hourly rate
negotiation and adjustment will be the hourly rate ranges which
will be no greater than the hourly rates charged to PKF's non-
bankruptcy clients. Any subsequent time required for meetings
with counsel, investment advisors, bank groups, etc. will be at
the standard hourly rates of the individuals involved, which
currently are:

      Executive and Senior Vice Presidents     $275-350
      Vice Presidents                           175-275
      Associates                                120-175
      Consultants                               100-110

Mr. Woodworth contends that PKF Consulting is a "disinterested
person", as defined in the Bankruptcy Code and that the
partners, principals, and employees of PKF Consulting do not
have any connection with the Debtors, their creditors, or any
other party in interest, or their respective attorneys. (Lodgian
Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service,
Inc., 609/392-0900)  

MCLEODUSA: Expiry Date for Exchange Offer Moved to January 30
McLeodUSA Incorporated (Nasdaq:MCLD), one of the nation's
largest independent competitive local exchange carriers,
announced that it has extended the expiration date of its
previously announced exchange offer for McLeodUSA outstanding
senior notes. As a result of the extension, the exchange offer
is now scheduled to expire at 5:00 p.m., New York City time, on
January 30, 2002.

As previously announced, McLeodUSA has not paid the scheduled
January 1, 2002 interest payment on its $750 million 11-3/8%
Senior Notes due 2009, nor the January 15, 2002 interest
payments on its $150 million 12% Senior Notes due 2008 and its
$225 million 9-1/4% Senior Notes due 2007. The payment of
interest under the terms of these senior notes is subject to a
30-day grace period.

Consummation of the previously announced exchange offer and the
related recapitalization requires, among other matters, the
agreement of at least 95% of the holders of approximately $2.9
billion of McLeodUSA senior notes to complete the transaction in
an out-of-court proceeding. Negotiations with the ad hoc
committee of holders of McLeodUSA senior notes regarding the
exchange offer and recapitalization are continuing, but there
can be no assurances that such negotiations will result in a
transaction acceptable to both the committee and the company.
Any agreement with the committee, if an agreement were to be
reached, could result in material changes to the terms of the
proposed restructuring.

Additionally, there can be no assurance that McLeodUSA will be
able to obtain the requisite consents from bondholders prior to
the expiration of the exchange offer or the grace periods for
the failure to pay interest on its senior notes. If such
requisite consents are not received by such time as set forth in
the exchange offer, as extended, McLeodUSA has reserved all of
its rights to pursue any and all of its strategic alternatives.

As of 5:00 p.m., New York City time, on January 15, 2002,

     (i) $24,483,000 of McLeodUSA 10-1/2% Senior Discount Notes
         due March 1, 2007,

    (ii) $19,119,000 of McLeodUSA 9-1/4% Senior Notes due July
         15, 2007,

   (iii) $2,194,000 of McLeodUSA 8-3/8% Senior Notes due March
         15, 2008,

    (iv) $5,165,000 of McLeodUSA 9-1/2% Senior Notes due
         November 1, 2008,

     (v) $9,790,000 of McLeodUSA 8-1/8% Senior Notes due
         February 15, 2009,

    (vi) $4,110,000 of McLeodUSA 12% Senior Notes due July 15,

   (vii) $4,777,000 of McLeodUSA 11-1/2% Senior Notes due May 1,

  (viii) $12,416,000 of McLeodUSA 11-3/8% Senior Notes due  
         January 1, 2009

had been tendered for exchange.

In addition, as of 5:00 p.m., New York City time, on January 15,
2002, holders of approximately $956,185,000 in aggregate
principal amount of McLeodUSA senior notes had informed
McLeodUSA that they did not intend to tender their senior notes
in the exchange offer, and that they did not intend to consent
to the Company's recapitalization as currently proposed.

McLeodUSA provides integrated communications services, including
local services, in 25 Midwest, Southwest, Northwest and Rocky
Mountain states. The Company is a facilities-based
telecommunications provider with, as of September 30, 2001, 393
ATM switches, 58 voice switches, 437 collocations, 520 DSLAMs,
over 31,000 route miles of fiber optic network and 10,700
employees. McLeodUSA is traded on The Nasdaq Stock Market under
the symbol MCLD. Visit the Company's web site at

DebtTraders reports that McLeodusa Inc.'s 11.375% bonds due
January 1, 2009 (MCLD2) are trading between 24.5 and 25.5. See  
real-time bond pricing.

MULTI-LINK: Can't Meet Nasdaq Net Asset Listing Requirement
Multi-Link Telecommunications, Inc. (Nasdaq: MLNK, MLNKW), a
provider of integrated voice messaging services for small
businesses, announced that it had achieved record EBITDA of
$523,000 before write-offs and provisions for the fourth fiscal
quarter ended September 30, 2001.

Revenues for the three months ended September 30, 2001 decreased
to $2,596,000 compared to $3,022,000 for the same period in
2000, a decrease of 14%.  This decrease was largely the result
of the closure of the residential telesales division in March of
2001 as we began to focus exclusively on B2B messaging
customers.  Gross profit margins were 79% in both years.
However, despite the decline in revenues, reduced costs lead to
27% higher EBITDA of $523,000 compared to $411,000 in 2000.  Net
loss in 2000 was $173,000 compared to a net loss in 2001 of
$4,383,000 after the write down of intangible and fixed assets.

At September 30, 2001, the company had $450,000 of cash and no
available borrowing facilities.  Adverse conditions in the
equity markets and the fall in the price of its common stock
since mid 2000 have made it impossible for the company to raise
additional cash.  Its debt service obligations in the quarter
ended September 30, 2001 included $176,000 of net interest
expense and $240,000 principal repayment.  This total is
approximately equal to the cash generated through its operations
in the quarter.  To meet these debt service obligations the
company has virtually eliminated capital expenditures, reduced
central overheads and significantly reduced expenditure on sales
and marketing personnel to a level where normal customer
attrition now exceeds new revenue generated each month.  As a
result, fourth quarter revenues fell 9% or $261,000 from the
prior quarter ended June 30, 2001.

To reverse this trend to achieve positive revenue growth will
require additional cash resources to invest in B2B sales and
marketing activities.  To provide the necessary cash resources
the company's investigating the sale of certain non-core
business assets and seeking a deferral of lease payments due to
equipment lenders in 2002.  There can be no assurance that the
company will be successful in selling assets or achieving a
deferral of debt service, in which case revenues will likely
continue to decline slowly.

                    Unified Messaging Launch

The company has been looking forward to the positive impact that
it expects the launch of Unified Messaging will have on revenues
for some considerable time. Despite extensive cooperation with
Glenayre towards this goal, the Unified Messaging technology is
still not ready for deployment throughout its customer base.  
The company cannot accurately predict when this technology will
become available, or if we will have the necessary financial
resources to purchase the equipment upgrades when it is

                  New B2B Marketing Strategy

In view of the delay in launching Unified Messaging Service, the
company has created a new and simplified voice messaging service
bundle targeted at small business customers with 2-9 employees.  
Since launching its new service package in November 2001 the
company is closing a considerably higher percentage of sales
presentations and average revenue per sale has increase by over
50%. It is encouraged by the reception it is receiving for this
service bundle and believe that it may offer the company the
opportunity to broaden its distribution base to include
independent agents for the first time.

            Failure to Meet NASDAQ SmallCap Market
                    Listing Requirements

Based on its current stock price and balance sheet net assets,
the company no longer meets the minimum requirements for listing
of shares on the NASDAQ SmallCap market.  At the present time
its has not been notified by NASDAQ of any intention to delist
its shares and will work to avoid such action if it is so
notified.  However, there can be no assurance that the company
will be successful in, which case trading in its shares may move
to the OTC Bulletin Board sometime in 2002.

Multi-Link Telecommunications is a part of the US messaging
services market -- a segment that industry analysts predict will
grow to more than $10 Billion as Unified Messaging replaces
voice messaging.  Multi-Link specializes in providing messaging
solutions for small businesses, a growing and highly profitable
segment.  Currently operating in eight markets, today Multi-Link
has more than 100,000 subscribers.  Over the next five years,
the Company plans to create a nationwide footprint through
strategic acquisitions of voice messaging companies.  To this
base of customers, Multi-Link will offer enhanced services,
including Unified Messaging -- which is a new services that will
store all messages, in all mediums, in one mailbox, that's
accessible by phone or online -- all for a modest premium over
the price of basic voice mail.

NATIONSRENT: Proposes Key Employee Retention & Severance Plans
NationsRent Inc., and its debtor-affiliates believe that two Key
Employee Programs will provide the incentives necessary to
retain key employees, while taking into account the financial
constraints and obligations to creditors incumbent upon Debtors;
and are well within the ranges of financial incentives approved
by courts under programs for similarly-situated chapter 11
debtors. The Debtors believe that implementation of the Key
Employee Programs will reduce attrition and maintain their core
group of key employees during their restructuring. In
particular, the Key Employee Programs are designed to provide
the Debtors' key employees with competitive financial incentives
to remain in their current positions with the Debtors through
the effective date of a plan of reorganization in these cases
and assume the additional administrative and operational burdens
imposed on the Debtors by these chapter 11 cases.

Michael J. Merchant, Esq., at Richards Layton & Finger P.A. in
Wilmington, Delaware, relates that the Debtors developed the Key
Employee Programs prior to the Petition Date with extensive
assistance from their outside compensation consultants, Ernst &
Young LLP. The Debtors are optimistic that their creditor
constituencies will support approval of these programs, and the
benefits they are designed to provide. In light of the
substantial value that the continued loyalty and efforts of the
Debtors' key employees will provide to their reorganization, the
Debtors believe that the Key Employee Programs will benefit
significantly their respective estates and creditors.

The Debtors' need to implement key employee retention and
severance programs is particularly immediate and exigent

A. The Debtors' chapter 11 filings, which followed a significant
   period of financial difficulty precipitated by the dramatic
   softening of the equipment rental market and the resulting
   decline in the market price of Debtors' common stock, has
   rendered unavailable any equity-based compensation for key

B. The Debtors' preexisting compensation arrangements, even with
   equity-based incentives available, were designed to be
   competitive with industry norms and did not consider the
   additional pressures and uncertainty associated with a
   bankruptcy filing.

According to Mr. Merchant, providing compensation incentives is
particularly important because the Debtors' industry is
extremely competitive, and major competitors aggressively
recruit qualified candidates for positions in management and
sales. The Debtors believe that, without an adequate retention
program in place, the Debtors' competitors and other prospective
employers in other industries would quickly target the Debtors'
most qualified employees and offer them new career
opportunities. The Debtors' key employees would be lateral
recruiting targets even in an ideal environment; and in the
bankruptcy context, the Debtors' key employees undeniably are at
risk of being successfully recruited by competitors.

Mr. Merchant tells the Court that the Debtors cannot afford to
lose their key employees, many of whom possess valuable
institutional knowledge that would be difficult to replace. If
key employees are lost, it would be difficult, costly and
time-consuming for the Debtors to attract qualified replacements

A. Due to the uncertainty created by the filing of these chapter
   11 cases, recruiting replacements of the caliber of
   employees who leave may be exceptionally difficult.

B. Hiring new employees likely would require the Debtors to pay
   significant signing bonuses, relocation expenses and
   executive search fees.

C. The process of identifying replacement employees could be
   time-consuming, resulting in key positions remaining
   unfilled for a significant period of time.

During this period, Mr. Merchant believes that management's
attention inevitably would be diverted at a time when all
efforts should be focused on operating the Debtors' businesses
and completing the reorganization process. In addition,
operations will likely suffer because the departure of key
employees could erode customer confidence in the Debtors.
Finally, the loss of key employees is likely to lead to further
attrition as a result of either employees following their
colleagues to the same new employer, the instability and
impairment of morale engendered by the departure of critical
employees or increased demands on other key employees while
positions remained unfilled.

Mr. Merchant informs the Court that the Retention Bonus Plan has
been designed to facilitate and improve the retention of the
Debtors' key employees at various levels while the Severance
Plan is designed to provide job security in an uncertain
environment to certain of the Debtors' key employees. The
proposed retention incentives and job security assurances have
been designed with the overarching objective of improving the
retention of key employees to the maximum extent possible at a
reasonable cost. Ernst & Young has advised the Debtors that the
retention measures and severance provisions proposed herein
offer incentives and assurances comparable to those provided to
employees with similar positions and experience at comparable
companies and similar arrangements that have been approved and
successfully implemented for employees of comparable chapter 11

The Debtors estimate that the Retention Bonus Plan covers 380
key employees at an annual cost of approximately $8,500,000, or
less than approximately one and a half percent of the Debtors'
annual consolidated revenues in 2000. Under the Retention Bonus
Plan, Mr. Merchant explains that Key Employees are classified
into different "bands" based on their level of responsibility
and role within the company. A Key Employee's Retention Bonus
will be calculated based on such Key Employee's base salary in
effect as of the date of the Key Employee's participation
multiplied by a number that varies depending on the band in
which a particular employee is classified. Key Employees in
Retention Bonus Plan bands 1 and IA will receive one-third of
their Retention Bonus on January 31, 2002, with the remaining
two-thirds paid on the earlier of December 31, 2002 or the
Emergence Date. Key Employees in the other tiers of the
Retention Plan will receive their Retention Bonus in three equal
installments on January 31, 2002, June 30, 2002 and the earlier
of December 31, 2002 or the Emergence Date. A Key Employee must
be employed in good standing on the due date of an installment
of the Retention Bonus to receive payment of that installment,
and this schedule of payments provides Key Employees an
incentive to remain employed with the Debtors.

Mr. Merchant submits that the Severance Plan establishes
severance benefits for 120 of the Key Employees in the event of
involuntary termination without cause of such Key Employees on
or prior to the date that is one year after the first to occur

A. the effective date of a plan or plans of reorganization;

B. the date of consummation of the sale of substantially all of
   the assets of the Debtors;

C. the date that Debtors is merged, consolidated or reorganized
   into or with any other entity; and

D. the date of consummation of a change in control transaction
   described in a report or proxy statement with the SEC
   disclosing that a change in control of Debtors either will
   occur in the future or has occurred.

Mr. Merchant contends that the Severance Plan will likely have
an immaterial economic impact on the Debtors and their
respective estates given that the Debtors have no present
intention to involuntarily terminate a significant number of the
Key Employees and, in fact, need to retain these Key Employees
to ensure the Debtors' successful reorganization on an expedited

The Severance Plan obligates Debtors to make a lump sum payment
to certain Key Employees in the event of Employment Loss,
defined as either:

A. an actual termination of the Key Employee's employment
   without Cause; or

B. a termination initiated by the Key Employee in response to a
   material change in position, duties or responsibilities; a
   material reduction in salary or benefits; or a requirement
   that the Key Employee relocate his or her primary residence
   to a location more than 50 miles away from his or her
   current principal office location.

Mr. Merchant tells the Court that the lump sum payment would
equal the Key Employee's monthly Base Salary multiplied by a
Severance Award Factor. If a Key Employee becomes eligible to
receive payments under both the Severance Plan and any severance
agreement that the Key Employee may also have with Debtors, the
Key Employee may only receive the greater of the two payments
and is not entitled to receive both payments. Key Employees also
receive benefits for a period after the termination of
employment equal to 1 year multiplied by the applicable
Severance Award Factor under the Severance Plan. In addition,
Key Employees that were covered by Debtors' directors and
officers insurance policies will continue to be covered by such
policies for the 3 years following Employment Loss.

Mr. Merchant assures the Court that each component of the Key
Employee Programs is designed to address specific employee
retention and severance needs and is structure that have been
approved for retention and severance programs in similar chapter
11 cases. The Debtors believe the proposed retention and
severance measures are necessary to maintain the services of the
Key Employees during the reorganization process and maximize the
Debtors' financial performance and employee effectiveness.

The Debtors believe that the implementation of the Key Employee
Programs will accomplish a sound business purpose and assist the
Debtors in their reorganization efforts. Based on their own
experience and the experience of their advisors, their
evaluation of available alternatives and the specific
information and analyses provided by Ernst & Young, the Debtors
believe that the provisions of the Key Employee Programs
proposed herein will achieve the intended purpose of keeping the
Debtors' valuable employees employed and focused on the goal of
a successful reorganization throughout the pendency of these
chapter 11 cases. (NationsRent Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

OWENS CORNING: Court Fixes April 15 Bar Date for General Claims
                    FOR THE DISTRICT OF DELAWARE

In re:                               :  Chapter 11
OWENS CORNING, et al.,               :  Case No. 00-03837 (JFK)
             Debtors.                :  Jointly Administered


On October 5, 2000, the following Debtors (each a "Debtor" and
collectively the "Debtors") commenced cases under chapter 11 of
the title 11 of the United States Code (the "Bankruptcy Code")[.  
]  A [] complete list of certain of the Debtors' current and
former business and legal names can be obtained by calling
1-866-773-8653 or by visiting the website at

PLEASE TAKE NOTICE THAT on November 27, 2001 the United States
Bankruptcy court for the District of Delaware issued an Order
establishing April 15, 2002 at 4:00 p.m. prevailing Pacific time
(the "General Claims Bar Date") as the last date and time to
file a proof of claim against any of the Debtors.


You MUST file a proof of claim if you have a claim against a
Debtor that: (a) arose prior to October 5, 2000 including but
not limited to claims based upon; (i) the purchase of products
by, or the provision of any services to, any of the Debtors;
(ii) property damage arising from the presence of asbestos-
containing or other products in buildings; (iii) acts or
omissions by any of the Debtors including without limitation
claims based on indemnification, contribution, reimbursement,
subrogation and guarantees; (iv) environmental liabilities;
and/or (v) the sale, manufacture, distribution, installation
and/or marketing of products by any of the Debtors, including
without limitation underground or above-ground storage tanks,
roofing shingles, vinyl siding, metal siding and products
containing glass fibers, synthetic vitreous fibers, asphalt
and/or resins; and (b) is not an Excluded Claim (as hereinafter

Under Section 101 (5) of the Bankruptcy code and as used in this
Notice, the word "claim" means; (a) a right to payment, whether
or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matures, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured; or (b) a
right to an equitable remedy for breach of performance if such
breach gives rise to a right to payment, whether or not such
right to an equitable remedy is reduced to judgment, fixed,
contingent, matures, unmatured, disputed, undisputed, secured or
unsecured.  Because of this broad definition, acts or omissions
of the Debtors that arose before October 5, 2000 may give rise
to claims against them notwithstanding that such claims may not
have matured or become fixed or liquidated prior to such date.

CLAIMS.  Whether or not such claims (a) have been resolved or
are subject to resolution, pursuant to a settlement agreement,
including but not limited to a National Settlement Program
("NSP") Agreement, or (b) are based on a judgment, but does
apply to asbestos-related claims for contribution, indemnity,
reimbursement or subrogation.  Asbestos-related personal injury
claims and asbestos-related wrongful death claims will be
subject to a separate claim submission process.  Asbestos-
related personal injury claims and asbestos-related wrongful
death claims should not be filed at this time.


You should not file any proof of claim that is an Excluded
Claim.  "Excluded Claims" include the following types of Claims:

An asbestos-related personal injury claim or asbestos-related
wrongful death claim, whether or not such claim (a) has been
resolved or is subject to resolution pursuant to a settlement
agreement, including but not limited to a National Settlement
Program ("NSP") Agreement or (b) is based on a judgment:
A claim that already has been properly filed with the Clerk of
the United States Bankruptcy court for the district of Delaware
or the Claims Agent (as defined below):

     A claims that is (i) listed on the Debtors' amended
Schedules; (ii) not described in the Amended Schedules as
"disputed," "contingent," or "unliquidated"; and (iii) in the
same amount and of the same priority as set forth in the Amended
Schedules; An administrative expense of any Debtor's chapter 11
case under section 503(b) of the Bankruptcy Code; A claim of an
employee of any of the Debtors for deferred compensation; A
claim of a retired employee of any of the Debtors for retirement
benefits, including deferred compensation, pension and medical
benefits; A claim of an employee of any of the Debtors for pre-
petition worker's compensation benefits; and A claim that has
been subject to a bar date established by Order of the Court  
other than the General claims Bard Date Order.

A more complete list of Excluded Claims can be obtained by
calling 1-866-773-8653 or by visiting the website at


To file a claim, you must do the following;

     Return your completed Proof of Claim Form(s) to the Claims
Agent no later than 4:00 p.m. prevailing Pacific time, April 15,
2002.  Proof of Claim forms will be deemed filed only when
actually received by the Claims Agent.  Proof of Claim Forms
submitted by electronic submission or by facsimile will not be
accepted and will not be deemed filed.

     Proof of Claim Form(s) should be sent to the Claims Agent
at the following address:

     Claims Agent
     In re Owens Corning, et al.
     C/o Robert L. Berger & Associates LLC
     16161 Ventura Boulevard
     PMB 517
     Encino, Ca 91436


If you assert claims against more than one of the Debtors, you
must file a separate Proof of Claim form asserting each such
claim against the appropriate Debtor.  If you file a single
Proof of Claim Form asserting a claim against more than one
Debtor, your claim will be deemed to have been filed against the
first Debtor identified only.  All additional identified Debtors
will be disregarded.



To obtain a Proof of Claim Form: (a) call:  1-866-773-8653; or
(b) visit the website at

                      BY ORDER OF THE COURT,


                           SAUL EWING LLP,
                       Attorneys for the Debtors
                       and Debtors-in-possession

Pharmaceutical Formulations, Inc. (OTC Bulletin Board: PHFR)
announced that its common stock has returned to trading on the
OTC Bulletin Board, effective Wednesday, January 16.

The Company continues to pursue a recapitalization plan to
increase the value of its common equity.  The Company expects to
file an S-1 registration statement with the Securities and
Exchange Commission in the near future. The proposed rights
offering was substantially described in the proxy statement
for the 2001 annual meeting.

ICC Industries Inc., the holder of approximately 74.5 million
shares (approximately 87%) of the common stock of PFI, is a
major international manufacturer and marketer of chemical,
plastic and pharmaceutical products with 2000 sales in excess of
$1.6 billion.

PRECISION AUTO: Sells Mexican Assets to Shell Autoserv for $2.7M
Lou Brown, the CEO of Precision Auto Care, Inc. (PACI) (Nasdaq:  
PACI), announced that PACI has sold assets owned by its Mexican
subsidiaries to Shell Autoserv Mexico, S.A. de C.V., for $2.7
million with the potential of earning more in the event that
certain contingencies are met. "The sale of our Mexican assets
to Shell Autoserv will enable the management team to focus more
on operations with better growth and financial return
opportunities. The Mexican operation required a great deal of
management attention, effort and expense." Robert Falconi,
PACI's CFO said that the money generated from the sale had
already been earmarked to be used to pay interest on the
Company's senior debt and to liquidate other liabilities.
"PACI's senior lenders have been very patient with the Company
and we are happy to be able to pay them interest that is due."

Precision Auto Care, Inc.'s affiliate, Precision Tune Auto Care,
Inc., (PTAC) is the world's largest franchisor of auto care
centers, with over 500 operating centers as of January 17, 2002.  
PTAC franchises Precision Tune Auto Care centers around the

According to Troubled Company Reporter - October 4 Edition,
Precision Auto Care is negotiating extensions of its Senior
Debt. However, the report said, in the event that the Company
would be unable to accomplish its strategic objectives or would
be otherwise unable to generate revenues sufficient to cover
operating expenses and pay other debt, the Company would not be
able to sustain operations at the current level. This would
require the Company to further reduce expenses and liquidate
certain assets.

SEPRACOR INC: Jennison Associates Discloses 10.4% Equity Holding
Jennison Associates LLC beneficially owns 8,103,648 shares of
the common stock of Sepracor Inc.  This amount represents 10.40%
of the outstanding common stock of the Company, and Jennison
Associates LLC holds sole voting and shared dispositive powers
over the stock.  

Jennison Associates LLC furnishes investment advice to several
investment companies, insurance separate accounts, and
institutional clients. As a result of its role as investment
adviser of the Managed Portfolios, Jennison may be deemed to be
the beneficial owner of the shares of Sepracor's common stock
held by such Managed Portfolios.  Prudential Financial, Inc.
owns 100% of equity interests of Jennison.  As a result,
Prudential may be deemed to have the power to exercise or to
direct the exercise of such voting and/or dispositive power that
Jennison may have with respect to Sepracor's common stock held
by the Managed Portfolios.

Jennison does not file jointly with Prudential, as such, shares
of the Sepracor's common stock reported to the SEC on Jennison's
13G may be included in the shares reported on the 13G filed by

These shares were acquired in the ordinary course of business.

The company develops and commercializes new, patented forms of
existing pharmaceuticals by purging them of nonessential -- or
even deleterious -- molecules. Compared to their traditional-
compound counterparts, Sepracor's products (called improved
chemical entities, or ICEs) can reduce side effects, provide new
uses, and improve safety, performance, and dosage. Sepracor
focuses its ICE efforts on gastroenterology, neurology,
psychiatry, respiratory care, and urology. The firm is also
developing its own new drugs to treat infectious diseases and
central nervous system disorders. As at Sept. 30, 2001, the
company's balance sheet was upside-down by around $230 million.

SERVICE MERCHANDISE: Gets OK to Conduct GOB Sales in 215 Stores
Service Merchandise Company, Inc. (OTC Bulletin Board: SVCDQ)
announced that in connection with the wind-down of its business
operations, it has received Court approval to immediately
commence going-out-of-business sales through which it will
liquidate the inventory in more than 200 stores, its warehouses
and other inventory locations.  The Court also authorized
Service Merchandise to enter into an agency agreement with a
joint venture composed of SB Capital Group, LLC, Gordon Brothers
Retail Partners LLC and The Ozer Group LLC to perform the store-
closing sales and related activities.

"We believe the agreement reached with the SB Capital, Gordon
Brothers and Ozer Group consortium presents the best means to
maximize the value of the Company's merchandise for the benefit
of its creditors, and limit administrative costs," said Service
Merchandise Chairman and Chief Executive Officer Sam Cusano,
noting that the joint venture agency agreement was reached
through a competitive bidding and auction process that concluded
early this week.  Mr. Cusano said that store closing sales will
begin on January 19, 2002.

The agency agreement also contains a retention and severance
plan for store employees that will be entirely funded by the
liquidation agent as an expense of the Company's GOB sales.  The
program involves approximately 8,300 store employees who will
continue through the duration of the GOB sales and whose
services are essential to the winding down and liquidation
process. "Service Merchandise's store-level employees play an
extremely critical role in ensuring the success of the store
closing sales, and we are very pleased that they will be
provided this important benefit," Mr. Cusano said.

At Friday's hearing in the U.S. Bankruptcy Court for the Middle
District of Tennessee, the Company also received Court approval
to extend the period in which it has the exclusive right to file
a plan of liquidation in its Chapter 11 cases.  Friday's order
extended the exclusivity period to file the Company's plan to
September 30, 2002, and further extended the Company's exclusive
right to solicit acceptances of its plan to November 30, 2002.  
The Company said that it plans an initial distribution to its
creditors by year-end, and expects that shareholders will not
receive any distribution on account of their common stock.

In addition to the GOB sales, the wind-down will include the
disposition of Service Merchandise's real estate portfolio
consisting of 70 fee-owned properties and 150 unexpired leases.  
The Court Friday approved an extension of the deadline to reject
or assume unexpired leases for 19 properties until September 30,
2002 with the balance of the Company's leaseholds having
deadlines tied to the confirmation and effectiveness of the plan
of liquidation.

In other action, the Court also approved the Company's motion
requesting termination of the stay of certain avoidance actions
previously asserted by the Company that in light of the wind-
down are critical to maximizing creditor recoveries.  The Court
also continued the corporate-level retention program for
approximately 188 employees until the January 29, 2002 omnibus
hearing, pending earlier resolution by the Company, its Debtor-
in-Possession Lenders and the Creditors' Committee.

Service Merchandise, which commenced its Chapter 11 cases in
March 1999, announced on January 4, 2002 that with the consensus
of its post-petition lenders and the Official Committee of
Unsecured Creditors, it would wind-down ongoing business
operations.  The Company reported that although its business
plan performance exceeded expectations in the prior two years,
disappointing 2001 financial results primarily attributable to
the combined effects of the events of September 11, the
resulting loss of consumer confidence and the soft economy
generally weakened the Company's financial and liquidity
position, precluding it from completing its planned business
reorganization and emergence from Chapter 11.

Service Merchandise, a specialty retailer focusing on fine
jewelry, gifts and home decor products, has recently operated
218 stores in 32 states.

SUN HEALTHCARE: Court Extends Solicitation Period to March 7
Sun Healthcare Group, Inc., and its debtor-affiliates' exclusive
right to solicit acceptances of their proposed plan of
reorganization is now extended until March 7, 2002. (Sun
Healthcare Bankruptcy News, Issue No. 30; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   

SUNRISE TECHNOLOGIES: Equity Falls Short of Nasdaq Requirement
Sunrise Technologies International, Inc. (Nasdaq: SNRS)
announced that it has received notification from Nasdaq that an
oral hearing will be held on February 14, 2002 in Washington
D.C. on the Company's appeal of Nasdaq's decision to deny the
Company's request for continued listing on the Nasdaq National

Meanwhile, the Company is continuing to pursue financing options
that, if finalized, will address the issues in Nasdaq's
delisting notice.

Nasdaq has informed the Company that it did not comply with
either the minimum $4 million net tangible assets or the minimum
$10 million stockholders' equity requirement for continued
listing set forth in Marketplace Rule 4450 (a) (3). In addition,
Nasdaq has informed the Company that fees for the listing of
additional shares have not been paid, the Company does not
comply with marketplace rule 4310(c), and the Company did not
issue a proxy statement nor hold an annual meeting of
shareholders for the fiscal year ended December 31, 2000, as
required by the marketplace rules 4350(e) and 4350(g).

Sunrise Technologies International, Inc. is a refractive surgery
company based in Fremont, California, that has developed
holmium:YAG laser-based systems that utilize a patented process
for shrinking collagen developed by Dr. Bruce Sand in correcting
ophthalmic refractive conditions.

TSI TELECOMMUNICATION: S&P Assigns B+ to Corporate Credit Rating
Standard & Poor's assigned its single-'B'-plus corporate credit
and senior secured bank loan ratings to TSI Telecommunication
Services Inc. At the same time, Standard & Poor's assigned its
single-'B'-minus rating to TSI's $245 million planned senior
subordinated note issue due 2012.

The ratings reflect TSI's high leverage, its niche position as
an independent provider of wireless transaction processing, and
its reliance on future growth in roaming transactions in a
consolidating wireless telecommunications market. This is offset
by TSI's leading position as a clearinghouse for wireless
billing transactions, high customer retention and profitability,
free cash flow position, and recurring revenues.

The outlook is stable.

Tampa, Florida-based TSI is an independent provider of
transaction processing services to wireless telecommunications
carriers. Many of these services are critical operational
support functions for carriers, such as clearing billing data
for roaming events and providing call set-up and intelligent
network services through TSI's SS7 network. TSI's software
allows various wireless protocols to work together, enabling
cell-phone users to roam across service areas. Services provided
by the SS7 network include caller ID, call forwarding, billing
validation and local number portability.

The company serves the infrastructure needs of wireless
carriers, operating in an evolving niche market as new wireless
protocols come online and old ones disappear, and wireless
carriers decide whether to adopt and outsource SS7 services.
Complexity related to the completion of roaming calls involving
multiple protocols is expected to remain a component of wireless
usage for the foreseeable future. TSI's software currently
manages all major wireless protocols, and customer retention is
high, providing barriers to new entrants. Still, TSI must remain
at the forefront of new wireless protocols in order to maintain
an advantage over competitors. While the company currently has a
limited number of competitors, new, large entrants may be
attracted by the company's margins.

A key credit risk to TSI's business model is that transaction-
based revenues rely on growth in the number of roaming events.
With the expansion of national wireless footprints and the
future consolidation among wireless carriers expected, roaming
volume growth likely will decelerate. Although TSI has a 70%
share of the North American market for clearing and reporting
net wireless billing positions, critical services that enable
roaming, this unit represents less than 25% of the total
business. While Verizon Wireless represents 20% of revenues,
TSI's customer base is fairly diversified. The company's top 10
customers, including Verizon, represent 45% of revenues.
Mitigating the former parent's revenue concentration, Verizon
has guaranteed a minimum revenue stream per year through 2005,
offering a measure of revenue stability.

On a pro forma basis, TSI will be highly levered with debt-to-
EBITDA expected in the 4 times range for 2001. Operating margins
are good, and the company is expected to generate positive free
cash flow after capital expenditures. The company is required to
use a portion of free cash flow to pay down debt and has
moderate financial flexibility from a $35 million unused line of

The bank loan rating is the same as TSI's corporate credit
rating and reflects a material, but less than full, recovery
advantage over unsecured debt. The bank loan package is
contractually senior to all other debt issues and includes $300
million in secured term loans and a $35 million revolving
line of credit. It is secured by a first priority security
interest in all of the tangible and intangible assets of the
company and has upstream and downstream guarantees from all
material affiliates, which would likely provide some measure of
protection to lenders. With subordinated debt at $245 million,
TSI's capital structure provides a moderate subordinated cushion
for senior creditors of slightly greater than 40% of total debt.

Still, in a distress scenario, Standard & Poor's assumes
declining industry conditions, fully drawn bank lines, falling
revenues and accounts receivables, and depleted cash. Based on a
review of likely cash flow levels in a distressed scenario, it
is not clear that the company's enterprise value would be
sufficient to cover the entire bank loan package. As such,
the bank loan package is not notched up from the corporate
credit rating.

                       Outlook: Stable

TSI is highly levered and faces uncertainties regarding future
transaction growth assumptions, however, the company's good
niche market position, solid operating margins, and positive
free cash flow provide ratings support.

TRANSTECHNOLOGY CORP: Balance Sheet Upside-Down By $5.5 Million
TransTechnology Corporation (NYSE:TT) reported that for the
fiscal 2002 third quarter ended December 30, 2001, it recorded
income from continuing operations of $.1 million compared to $.7
million for the same period last year.

The prior year period included $1.5 million before taxes or $.15
per share after taxes in other income associated with the
resolution of litigation involving the company's Aerospace Rivet
Manufacturer's business. Revenues for the third quarter of
fiscal 2002 increased 1% to $21.4 million from $21.2 million in
the same quarter a year ago.

For the nine months ended December 30, 2001 the company reported
a loss from continuing operations of $2 million compared to a
loss of $.9 million for the same period last year. For the nine
months, operating income before interest and taxes increased 89%
to $7.5 million from $4.0 million for the prior year's nine
months. Revenues for the nine months of the current year
increased 9% to $62.4 million from $57.1 million during the
prior year's nine months.

Following the recognition of a loss from discontinued operations
of $6.3 million, the company reported a net loss for the third
quarter of $6.2 million. The third quarter loss from
discontinued operations included the recognition of an
additional $8.6 million impairment reserve associated with lower
expected net sales values on businesses being divested. For the
nine months ended December 30, 2001 the company reported a loss
from discontinued operations of $58.0 million and a net loss of
$60.0 million.

The company's continuing operations, which consists of the units
formerly referred to as the Aerospace Products segment, reported
a strong increase in new orders received and backlog during the
third quarter. Gross margin increased 3.3 percentage points
while SG&A expenses dropped $.9 million or 15% compared to the
prior year's third quarter.

The company also reported that while its total third quarter
interest expense had decreased to $5.7 million from $8.2 million
in the prior year's quarter, the amount of interest charged to
continuing operations had increased to $2.4 million from $2.0
million in the prior year. Under generally accepted accounting
principles, interest expense is allocated between continuing and
discontinued operations based upon the average book value of
assets in each category. Because the company completed the
divestiture of its Breeze/Pebra and Engineered Components
operations during the current fiscal year, the latter in the
third quarter, the proportion of assets included in the
determination of interest expense recognized for continuing
operations increased when compared to the prior periods,
resulting in a higher interest charge. Additionally, as the
proceeds from asset sales are used to retire senior bank debt
with a lower interest rate than the remaining subordinated debt,
the company's effective interest rate rises when compared to
prior periods.

The company reported that it had expanded its corporate office
restructuring program and would relocate its corporate office
from rented space in Liberty Corner, New Jersey to its Breeze
Eastern manufacturing facility in Union, New Jersey. As a result
of the increased size of the associated reduction in force, the
company increased its estimated severance charge by $.4 million.

Michael J. Berthelot, Chairman, President and Chief Executive
Officer of TransTechnology said, "We are very pleased with
ongoing improvements we see in our continuing operations. Growth
in new orders and backlog bode well for future revenue growth.
Improvements to gross margin and the reduction in SG&A expenses
will allow us to improve the profitability of our operations as
we convert these orders received into revenues."

Mr. Berthelot continued, "We are also making good, but slower
than anticipated, progress on our restructuring and divestiture
program. We have five facilities currently being marketed for
sale, two of which are either under exclusive review or contract
negotiation with qualified potential buyers. Two other units are
under preliminary review by interested parties. While the
restructuring and reduction in size in our corporate office
staff is justified by the reduction in size and breadth of our
go-forward operations, it is nonetheless painful. Upon the
completion of our divestiture program at the end of the fourth
quarter, we expect to have a corporate staff of 8 people
compared to 22 a year ago."

Joseph F. Spanier, Vice President and Chief Financial Officer,
said, "As we have made substantial progress in reducing our
existing credit facilities through the divestiture and
restructuring program, we are now turning our attention towards
refinancing our existing senior and subordinated credit
facilities. It is our plan to refinance our existing senior
credit facility through a new credit facility during our fourth
fiscal quarter. Following that refinancing, we will turn our
efforts towards reducing the amount and cost of our very
expensive subordinated debt."

TransTechnology Corporation designs and manufactures aerospace
products with over 380 people at its facilities in New Jersey,
Connecticut, and California. Total aerospace products sales were
$81 million in the fiscal year ended March 31, 2001. As at
December 30, 2001, the company's liabilities exceed its assets
by $5.5 million.

U.S. INDUSTRIES: Reports $524 Million in Net Loss in FY 2001
U.S. Industries, Inc. (NYSE-USI) reported a loss from continuing
operations for fiscal 2001 of $3.1 million (excluding $176.7
million in after-tax net non-recurring charges and credits,
principally goodwill impairment charges) compared to income of
$59.2 million (excluding $20.5 million of after-tax net non-
recurring charges). Including net non-recurring charges and
credits, the loss from continuing operations was $179.8 million
in fiscal 2001, compared to income of $38.7 million in fiscal

As previously announced, the Board of Directors approved a
formal Disposal Plan for five businesses in connection with the
Company's obligation to pay debt amortization as set forth in
its restructured debt agreements. In connection with the
Disposal Plan, the Company incurred a charge of $232.6 million,
which represented the difference between the historical net
carrying value and the estimated net realizable value of the
Non-Core Assets (Ames True Temper, Spear & Jackson PLC, Lighting
Corporation of America, SiTeco Lighting and the Selkirk Group).
This charge has been included in the loss on disposal of
discontinued operations and the operating results of the Non-
Core Assets have been included in discontinued operations in the
September 30, 2001 financial statements. The Disposal Plan calls
for the sale of the Non-Core Assets over the next 12 months. The
net assets of the Non-Core Assets totaled $491.6 million at
September 30, 2001 and have been included as net assets held for
sale in the September 30, 2001 financial statements.

The Company reported a net loss, including net non-recurring
charges and credits, of $524.6 million for fiscal 2001, compared
to net income of $35.6 million in fiscal 2000. Results for
fiscal 2001 include the estimated loss on disposal of the Non-
Core Assets. Fiscal 2000 includes approximately six months of
operations from the Diversified businesses which were disposed
of in March 2000.

Sales from continuing operations were $1.1 billion, compared to
$1.3 billion in the prior year, excluding sales of $415 million
in fiscal 2000 related to the Diversified businesses. Operating
income before corporate expenses and net non-recurring charges
was $105.2 million, compared to $141.9 million in the prior year
after excluding $35.7 million related to the Diversified
businesses. The current period excludes $105.0 million in net
non-recurring costs while the prior period excludes net non-
recurring charges of $79.7 million. The decrease in fiscal 2001
sales after excluding the Diversified businesses was mainly
attributable to the weaker economy, inventory reduction programs
instituted by major customers, inclement weather and unfavorable
fluctuations in currency exchange rates. The decrease in fiscal
2001 operating income before corporate expenses and net non-
recurring charges and excluding the Diversified businesses was
the result of decreased sales, increased freight and energy
costs and an increase in unabsorbed overhead caused by lower
production levels.

The results of the Non-Core Assets were not included in
continuing operations of the Company. If the Non-Core Assets
were included in the continuing operations of the Company, the
Company would have had sales of $2.5 billion and income from
continuing operations of $38.5 million in fiscal 2001, excluding
net non-recurring charges of $321.6 million, compared to sales
of $3.1 billion and income from continuing operations of $114.2
million for fiscal 2000, excluding net non-recurring charges of
$78.6 million.

The loss from continuing operations for the Company's fourth
quarter was $9.8 million (excluding $50.3 million of after-tax
net non-recurring charges), versus income of $16.7 million
(excluding $27.6 million of after-tax net non-recurring
charges). Including net non-recurring charges, the loss from
continuing operations was $60.1 million compared to a loss of
$10.9 million in the prior year. The net loss, including net
non-recurring charges and losses associated with the Non-Core
Assets, was $277.6 million for the quarter ended September 30,
2001 compared to $54.4 million for the quarter ended September
30, 2000. The net loss for the quarter ended September 30, 2001
and 2000, include after-tax losses attributable to the Non-Core
Assets of $217.5 million and $43.5 million, respectively. The
2001 loss includes the $232.6 million estimated loss on disposal
of the Non-Core Assets.

As previously announced, the Company has sold its Ames True
Temper business and is pursuing the sale of the 12.5% senior
notes and equity interests it received when it sold its
Diversified businesses to SILLC Holdings, LLC. Approximately $46
million of the net proceeds from the Ames transaction will be
deposited in cash collateral accounts for the benefit of the
holders of the Company's Senior Notes due 2003 and 2006 and
certain other creditors. The remainder will be used to
permanently reduce the Company's bank debt.

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

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

UNITED SHIPPING: Reincorporates as Velocity Express Corporation
United Shipping & Technology, in connection with the merger with
Velocity, has changed its name to Velocity Express Corporation.
The Company also reserved the ticker symbol "VEXP" and was to
begin trading on the Nasdaq SmallCap Market under that symbol on
Monday, January 14, 2002. Each share of common stock of the Utah
corporation was converted into one share of common stock, par
value $0.004 per share, of the Delaware corporation. It is not
necessary for shareholders to exchange their existing stock
certificates in the Utah corporation for stock certificates of
the Delaware corporation.

Prior to completion of the reincorporation, the Company
announced that it reached agreements with the holders of at
least two-thirds of the outstanding shares of each series of its
preferred stock whereby the preferred shareholders waived their
rights with respect to the cash redemption features of their
respective preferred stock. These agreements allowed the Company
to reclassifiy the preferred stock from mezzanine debt into
shareholders' equity.

United Shipping and Technology, formerly U-Ship, offers same-
day, on-demand delivery service through its main operating
subsidiary, Velocity Express. In addition to time-sensitive
deliveries, the company provides support services for customers,
including logistics, warehousing, on-site services, fleet
replacement, and international air courier services. United
Shipping and Technology serves the financial, healthcare, and
retail industries through 210 locations in the US and Canada
using a fleet of some 9,000 vehicles. Investment firm TH Lee
Putnam Ventures controls about 33% of United Shipping and
Technology. As at September 29, 2001, the company's total
stockholders' equity deficit stood at around $35 million.

WINSTAR COMMS: Agrees to Pay Adequate Assurance Deposit to AT&T
Mark J. Shapiro, Esq., at Shearman & Sterling in New York, New
York, relates that AT&T provides certain telecommunications and
related service to Winstar Communications, Inc., and its debtor-
affiliates under tariffs, the AT&T service guide and certain
agreements between the parties as applicable. AT&T has
undertaken to estimate the cost of the services desired by the
Debtors, and has concluded that in the aggregate, regular
recurring charges for such services are expected to run
approximately $240,000 per month. Since the filing of the
Debtors' bankruptcy cases, AT&T has continued to provide
telecommunications services to the Debtors, and the Debtors have
filed a certain motion seeking, among other things, to prohibit
utilities from altering, refusing or discontinuing services and
establishing procedures for determining requests for additional
adequate assurance.

The parties have met and conferred in an effort to resolve
disputes concerning the terms under which AT&T will continue to
render their Services. Mr. Shapiro explains that the stipulation
and order is intended to resolve the controversies and set forth
the terms and conditions under which AT&T will provide Services
to the Debtors during the pendency of these chapter 11

The salient terms of the stipulation are:

A. Adequate Assurance Deposit Catch-up Payment: To provide
   adequate assurance of payment to AT&T for the Debtors'
   continued access to and use of AT&T's Services, the Debtors
   shall make the following payments:

     a. Immediately upon the approval by Bankruptcy Court Order
        of the settlement of the litigation between Winstar
        and AT&T pending in the U.S. District Court for the
        Eastern District of Virginia, AT&T shall offset the
        sum of $1,100,000, representing the Debtors' estimate
        of post-petition arrears for service rendered from the
        Petition Date through and including November 30, 2001
        for AT&T Services provided to the Debtors against the
        remaining $1,700,000 owed to Winstar by AT&T pursuant
        to the settlement of the Virginia Litigation. The
        Debtors and AT&T reserve their respective rights with
        respect to the disputed post-petition arrears and
        agree to confer by January 15, 2002 to reconcile any
        such disputes.

     b. Immediately upon the approval by Bankruptcy Court Order
        of the settlement of the Virginia Litigation, AT&T
        shall apply part of the balance of the sums owed by
        AT&T to the Debtors after the offset in the forgoing
        subparagraph to provide AT&T with a security deposit
        in the amount of $120,000, which represents 2 weeks of
        Services provided by AT&T to the Debtors.

     c. Immediately upon  the approval by Bankruptcy Court Order
        of the, settlement of the Virginia Litigation, AT&T
        shall apply part of the balance of the sums owed by
        AT&T to the Debtors after the offset in the forgoing
        subparagraphs to provide AT&T with a prepayment in the
        amount of $120,000, which sums represent payment in
        advance for AT&T Services to be provided during the
        two weeks following the date of each such payment.

     d. Promptly following the application of the sums as set
        forth in the foregoing subparagraphs, AT&T shall pay
        to the Debtors, via wire transfer, the sum of
        $360,000, representing the balance of the Virginia
        Settlement Proceeds.

     e. Commencing no later than December 14, 2001, and
        continuing on every second Friday thereafter, the
        Debtors shall pay AT&T a total of $120,000 which sums
        represent payment in advance for AT&T Services to be
        provided during the two weeks following the date of
        each such payment. Additionally, the Biweekly
        Prepayment shall be adjusted on a retrospective basis
        to reflect actual usage.

     f. Payments to AT&T, including Bi-Weekly Prepayments, shall
        be made on each account via wire transfer, shall be
        directed in the manner prescribed in written
        instructions which AT&T shall provide to the Debtors,
        and shall be accompanied by a contemporaneous written

B. Reconciliation/Adjustments: AT&T and the Debtors agree that
   from time to time, but in any event not later than the 15th
   day of each month beginning on January 15, 2002, that the
   Parties shall confer in order to reconcile and adjust the
   amounts payable pursuant to this Stipulation and Order;

C. Default: If the Debtors fail to make any of the Bi-Weekly
   Prepayments on a Payment Date or any other payments
   provided for in this Stipulation and Order, or otherwise
   fail to comply with any other term contained herein, or in
   any agreement between the Debtors and AT&T, or the tariffs
   filed by AT&T with the FCC or other regulatory bodies with
   respect to the Debtors' post-petition obligations as set
   forth herein, then AT&T is authorized to suspend or
   terminate all Services rendered by AT&T to the Debtors
   unless, within 5 business days after AT&T provides written
   notice of such default to the Debtors, the Debtors cure
   such default.

D. Term. The term of this Stipulation and Order shall expire
   automatically on the earlier of the following:

      a. the Debtors have committed a payment default not cured
            by the expiration of the Cure Period,

      b. the entry of a Bankruptcy Court order converting any of
            the Debtors' cases to a chapter 7 liquidation and
            consensual arrangements for continued Services are
            not made between AT&T and the chapter 7 trustee,

      c. any of the Debtors' case is dismissed, or

      d. an order is entered confirming the Debtors' chapter ii
            plan or authorizing a sale of substantially ail of
            the Debtors' assets, and such order does not provide
            for the assumption and cure of all material
            executory contracts between the Debtors and AT&T.
            (Winstar Bankruptcy News, Issue No. 21; Bankruptcy
            Creditors' Service, Inc., 609/392-0900)  

* BOND PRICING: For the week of January 21 - 25, 2002
Following are indicated prices for selected issues:

Amresco 9 7/8 '05              25 - 26(f)
Asia Pulp & Paper 11 3/4 '05   27 - 29(f)
AMR 9 '12                      91 - 93
Bethlehem Steel 10 3/8 '03     12 - 14(f)
Chiquita 9 5/8 '04             89 - 91(f)
Conseco 9 '06                  48 - 50
Enron 9 5/8 '03                18 - 20(f)
Global Crossing 9 1/8 '04      10 - 12
Level III 9 1/8 '04            48 - 50
Kmart 9 3/8 '06                52 - 54
McLeod 11 3/8 '09              24 - 26(f)
NWA 8.70 '07                   83 - 85
Owens Corning 7 1/2 '05        33 - 35(f)
Revlon 8 5/8 '08               43 - 45
Royal Carribean 7 1/4 '06      82 - 86
Trump AC 11 1/4 '06            64 - 66
USG 9 1/4 '01                  80 - 82(f)
Westpoint 7 3/4 '05            31 - 33
Xerox 5 1/4 '03                91 - 93


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

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

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

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

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


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

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

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

This material is copyrighted and any commercial use, resale or
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