TCR_Public/020125.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Friday, January 25, 2002, Vol. 6, No. 18     

                          Headlines

ACME METALS: Seeks Extension of Exclusive Period to February 11
ALGOMA STEEL: Noteholders & USWA Nominees Assured of Board Seats
AMERIGAS PARTNERS: Posts Improved Results in FY 2001
APPLICA INC: S&P Assigns B+ Bank Loan Rating with Stable Outlook
BETHLEHEM STEEL: Reports Improved Liquidity Position in Q4 2001

BRILL MEDIA CO.: Fails to Make Interest Payment on Senior Notes
BURLINGTON: Wants to Continue & Enter Risk Management Agreements
CNC: S&P Hatchets Certs. 1994-1 Ratings after Kmart Downgrades
CALICO COMMERCE: Arthur F. Knapp Discloses 6% Equity Stake
CHIQUITA BRANDS: Seeks Extension of Removal Period Until March 8

CLASSIC VACATION: Selling Assets to Expedia for $5MM + Debts
CLASSIC VACATION: CVGAC's Tender Offer Extended to Feb. 15
COMDISCO INC: Committee Taps Mr. Fortgang as Bankruptcy Counsel
COMDISCO INC: M. Scanlan and V. Gallegos Disclose Equity Stakes
CRESCENT OPERATING: Terminates Asset Sale Agreement with CEI

CRESCENT REAL: S&P Puts Low-B Equity Ratings on Watch Negative
CRESCENT REAL ESTATE: Eyes Pre-Pack Bankruptcy to Solve Problems
ENA UPSTREAM: Case Summary & 20 Largest Unsecured Creditors
ENRON CORP: Trizechahn Seeks Payment of $1.6MM Postpetition Rent
ENRON CORPORATION: Kenneth L. Lay Resigns as Chairman and CEO

EUROPEAN POWER: Fitch Downgrades $95MM Trust Notes Ratings to D
EXODUS COMMS: Bringing-In Richard Ellis as Real Estate Broker
FANSTEEL INC: Obtains Court Approval of First Day Motions
FOUNTAIN VIEW: Snukal Retires as CEO But Stays as Board Member
HEARTLAND TECHNOLOGY: Misses Payments & Considers Debt Workout

ICG COMMS: Court Extends Lease Decision Period Until April 10
IT GROUP: Court Allows Debtors to Use Existing Bank Accounts
KMART CORP: Fitch Junks Pass-Through Trusts 1995 K-1 & K-2
KMART CORP: Fitch Junks Secured Lease Bonds as Default Looms
KMART CORP: Dorel to Continue Shipping After Court Assurance

LTV CORP: Terminating Non-Union Retiree Benefits as of Jan. 31
LTV CORPORATION: Steel Debtor Agrees to Sell Warren Coke Plant
LAIDLAW INC: Court Okays Dresdner Kleinwort as Investment Banker
LOEWS CINEPLEX: Nov. Quarter Operating Revenues Drop to $175MM
MARINER POST-ACUTE: Hires Montgomery McCracken as Local Counsel

MCWATTERS MINING: Creditors & Shareholders Approve CCAA Plan
PAC-WEST: S&P Further Junks Ratings Over Liquidity Concerns
PACIFIC GAS: Seeks Okay to Ink Triparty Indenture Trustee Pact
PANAMSAT: S&P Assigns BB Rating to $1.25BB Sr. Secured Bank Loan
PENNZOIL-QUAKER: Will Release Q4 & Full-Year Results on Feb. 5

PLANVISTA: Agrees to Terms of New Bank Facility & Debt Workout
POLAROID CORP: Intends to Continue Current Severance Program
PSINET INC: Gets Okay to Sell Back IMSG Shares for $1.7 Million
QUALMARK CORP: Fails to Comply with Nasdaq Equity Requirement
SKEENA CELLULOSE: NWBC Withdraws $150MM Restructuring Plan Offer

SUN HEALTHCARE: Seeks Approval to Hire Ernst & Young as Advisors
TELIGENT: Senior Lenders Support Fixed Wireless Successor Firm
TELIGENT: Court Fixes Feb. 20 Bar Date for Administrative Claims
TERADYNE: S&P Assigns BB- Corp. Credit & Sr. Unsecured Ratings
TRI-UNION: S&P Concerned About Uncertainty of Asset Sale Outcome

UNITEDGLOBALCOM: Receives Valid Tenders of Notes & Consents
U.S. STEEL CORP: S&P Places Low-B Ratings On Watch Negative
WHEELING-PITTSBURGH: Wins Nod to Sell Prudential Stock at Market

* BOOK REVIEW: George Eastman: Founder of Kodak and the
               Photography Business

                          *********

ACME METALS: Seeks Extension of Exclusive Period to February 11
---------------------------------------------------------------
Acme Metals, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware to further extend
their Exclusive Periods.  The Debtors wish to enlarge their
Exclusive Period within which to propose and file a plan of
reorganization through February 11, 2002 and their Exclusive
Period within which to solicit acceptances of that Plan through
April 15, 2002.

The Debtors wish to promote reorganization through negotiation.
In this regard, they are asking the Bankruptcy Court to afford
them additional time to arrive at a consensual plan. The Debtors
assert that the requested extension will provide them with the
necessary time to determine whether its creditors are best
served by a sale of substantially all of its assets or a
recapitalization of its business.

Acme Metals filed for chapter 11 bankruptcy protection on
September 28, 1998. Brendan Linehan Shannon, Esq. and James L.
Patton, Esq. at Young, Conaway, Stargatt & Taylor represent the
Debtors in their restructuring effort. When the company filed
for protection from its creditors, it listed assets of $813
million and liabilities of $541 million.


ALGOMA STEEL: Noteholders & USWA Nominees Assured of Board Seats
----------------------------------------------------------------
Algoma Steel Inc. (TSE: ALG) announced that the Ontario Superior
Court of Justice ordered that the seven nominees of the
Noteholder group and the three nominees of the United
Steelworkers of America shall become directors of the Company
upon implementation of Algoma's Plan of Arrangement.  The seven
nominees of the Noteholders are:

   William E. Aziz - Mr. Aziz has been a senior operating
     executive with several Ontario companies in the service,
     retail, transportation and technology sectors, specializing
     in rebuilding situations.

   David Baird - Mr. Baird is a senior counsel at the Toronto
     office of Torys LLP, with leading expertise in the
     restructuring of public companies.

   Michael E. Cahr - Mr. Cahr is the President and Chief
     Executive Officer of Ikadega, Inc., an Illinois-based
     provider of information content storage and data transfer
     architecture.

   Benjamin C. Duster - Mr. Duster is a Managing Director and
     head of the Financial Restructuring Group of Leary, Masson
     & Associates, based in Atlanta, Georgia.

   Patrick J. Lavelle - Mr. Lavelle has an extensive background
     in both business and government, including as Chairman of
     the Export Development Corporation and Chairman of the
     Business Development Bank of Canada.

   James J. Lawson - Mr. Lawson is a partner in the corporate
     department of the Toronto office of Torys LLP and, prior to
     joining Torys, was a senior executive in the telecom
     industry.

   Robert J. Milbourne - Mr. Milbourne is the Principal at
     Milbourne & Company, based in Vancouver, and was formerly
     the Chief Operating Officer and a director of Stelco Inc.

The three nominees of the United Steelworkers of America are:

   John Kallio - Mr. Kallio is a Loader at Algoma's Plate and
     Strip Finishing and a current director of Algoma Steel.

   Murray Nott - Mr. Nott is a Senior Product Development
     Associate at Algoma Steel and a current director of Algoma
     Steel.

   Doug Olthuis - Mr. Olthuis is the United Steelworkers of
     America's Area Co-ordinator for Northwestern Ontario.

Algoma Steel expects its Plan of Arrangement to be fully
implemented and effective within the next few days.

Algoma Steel Inc., based in Sault Ste. Marie, Ontario, is
Canada's third largest integrated steel producer.  Revenues are
derived primarily from the manufacture and sale of rolled steel
products, including hot and cold rolled sheet and plate.

DebtTraders reports that Algoma Steel Inc.'s 12.375% bonds due
2005 (ALGOMA) currently trade in the low 20s. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ALGOMAfor  
real-time bond pricing.


AMERIGAS PARTNERS: Posts Improved Results in FY 2001
----------------------------------------------------
AmeriGas Partners, L.P., the largest retail propane distributor
in the United States, based on retail sales volume, reported
that total revenues for fiscal 2001 (ended September 30, 2001)
from retail propane sales increased $238.1 million reflecting
(1) a $182.1 million increase as a result of higher average
selling prices and (2) a $56.0 million increase as a result of
the higher retail volumes sold.  Wholesale propane revenues
increased $61.9 million reflecting higher average prices and
greater sales associated with product cost management
activities. Cost of sales increased $207.7 million as a result
of higher per unit propane product costs and the greater retail
and wholesale volumes sold.

Total margin increased $90.6 million due to the impact of
higher-than-normal average retail unit margins and, to a lesser
extent, the greater retail propane volumes sold. Retail propane
unit margins in Fiscal 2001 benefited from gains on derivative
hedge instruments and favorably priced supply arrangements.

Operating income for fiscal 2001 was $133.8 million, whereas in
fiscal 2000 the Company's operating income was $90.2 million.

AmeriGas Partners, L.P. is a publicly traded limited partnership
formed under Delaware law on November 2, 1994. The Company
serves approximately 1.3 million residential, commercial,
industrial, agricultural and motor fuel customers from
approximately 700 district locations in 46 states. Operations
are located primarily in the East Coast, Southeast, Midwest,
Mountain Central and West Coast regions of the United States.

Business is principally conducted through the Company's
subsidiary, AmeriGas Propane, L.P. and its subsidiary, AmeriGas
Eagle Propane, L.P.  AmeriGas Eagle Propane, L.P. has a less-
than-one percent minority limited partner. Common units, which
represent limited partner interests, are traded on the New York
Stock Exchange under the symbol "APU."

AmeriGas Propane, Inc. is the general partner. The General
Partner is a wholly owned subsidiary of UGI Corporation, a
public company listed on the New York and Philadelphia stock
exchanges. Through various subsidiaries, UGI has been in the
propane distribution business for over 40 years. As of December
11, 2001, the General Partner and its subsidiary Petrolane have
an aggregate 50.7% ownership interest in the Partnership. The
General Partner is responsible for managing operations.

There are three co-registrants: AmeriGas Finance Corp., formed
on March 13, 1995, AmeriGas Eagle Finance Corp., formed on
February 22, 2001 and AP Eagle Finance Corp., formed on April
12, 2001.

As at September 30, 2001, the company's total current
liabilities exceeded its total current assets by about $95
million.


APPLICA INC: S&P Assigns B+ Bank Loan Rating with Stable Outlook
----------------------------------------------------------------
Standard & Poor's changed its rating outlook on Applica Inc. to
stable from positive. In addition, Standard & Poor's assigned
its single-'B'-plus senior secured bank loan rating to the
company's $205 million revolving credit facility due December
2005. The bank facility will be used for general corporate
purposes. At the same time, Standard & Poor's affirmed its
single-'B'-plus corporate credit and senior secured debt
ratings, as well as its single-'B'-minus subordinated debt
rating.

At December 31, 2001, total debt was $226 million.

The outlook revision is based on weaker-than-expected sales for
the important fourth quarter holiday selling season and the
challenging retail environment for home appliances.

The ratings reflect Miami Lakes, Florida-based Applica Inc.'s
leveraged financial profile, as well as its participation in the
small household appliance industry, which is mature. Standard &
Poor's attributes a high level of business risk to this industry
because of its relatively low margins and intense competition.
These factors are partially mitigated by the strength of the
Black & Decker brand name and the company's good cost structure.

Applica announced that, because of the current recession, sales
for the fourth quarter ended December 31, 2001, would be
approximately $210 million, about 10% below the similar period
in 2000. In addition to a previously announced $15 million
fourth quarter after-tax charges for cost reduction and debt
refinancing, the company may take an additional charge of about
$12 million (after tax) for a product recall and devaluation of
the Argentinean peso. Nevertheless, Applica has reduced its
inventory by $60 million in 2001, which has helped produce cash
flow partially used for the retirement of debt.

The company's bank loan is a $205 million senior secured
revolving credit facility. The facility is rated single-'B'-
plus, the same as the corporate credit rating. The rating is
based on preliminary terms and conditions and is subject to
review once full documentation is received. Borrowings under the
facility are limited to borrowing-base availability in a formula
depending on the company's inventory and accounts receivable.
The facility is secured by substantially all of the company's
domestic assets, which may provide some measure of protection to
lenders. However, 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.

                       Outlook: Stable

Standard & Poor's expects Applica to stem its sales declines and
to focus on margin improvement over the intermediate term while
maintaining credit protection ratios appropriate for the rating.


BETHLEHEM STEEL: Reports Improved Liquidity Position in Q4 2001
---------------------------------------------------------------
Bethlehem Steel reported improved liquidity at December 31,
2001, comprising cash, cash equivalents, and funds available
under bank credit arrangements, of $276 million compared with
$60 million at September 30, 2001.

As previously reported, in conjunction with its Chapter 11
filing, the company obtained a $450 million debtor-in-possession
(DIP) financing with General Electric Capital Corporation
(GECC). Initial proceeds from the financing were used to
repurchase $260 million in accounts receivable that had been
sold under a previous credit facility. Also, the $290 million
the company had borrowed under its inventory credit facility
remains outstanding as secured debt.

                         2001 Review

"2001 was an extremely challenging year for the domestic steel
industry and Bethlehem", said Robert 'Steve' Miller, Chairman
and CEO of Bethlehem Steel. "[Wednes]day, we reported a loss
from operations (excluding net unusual non-cash charges) of $169
million and $494 million for the fourth quarter and year 2001.
Looking ahead, however, we believe the domestic steel market
will change for the better as the economy rebounds and steel
imports are reduced.

"There are signs that the U.S. economy is beginning to
strengthen. The manufacturing sector appears to have bottomed
out in December. Our order entry is improving and we, and others
in the industry, have announced price increases for first
quarter deliveries. Although auto sales are expected to be
sluggish in the first half of the year, we anticipate growing
strength in the demand for steel by the middle of the year as
the economy continues to improve and customers replenish
depleted inventories.

"In early March, President Bush is expected to announce his
actions to remedy the substantial injury caused to the domestic
steel industry by the flood of imported steel. Five of six
commissioners of the International Trade Commission recommended
tariffs as high as 40 percent to address the injury. We believe
the imposition of maximum tariffs is appropriate and necessary
to reduce the levels of unfairly traded steel imports into the
United States. We also believe that the elimination of
inefficient, high cost steel capacity both here and abroad is
essential to better balance global steel demand.

"Bethlehem is continuing to pursue various strategic
alternatives, including possible consolidation opportunities.
Additionally, we are working to develop a reorganization plan to
preserve production at Bethlehem's low cost, high quality steel
assets and jobs for our employees. We expect to have adequate
financial resources to sustain operations during the year 2002
while pursuing these opportunities."

Bethlehem's fourth quarter of 2001 loss from operations of $169
million (excluding $351 million in non-cash charges discussed
below) compares to a loss from operations for the fourth quarter
of 2000 of $116 million (excluding a $6 million non-cash charge
for closing our slab mill at Burns Harbor). These operating
results decreased from a year ago mainly as a result of
significantly lower realized prices and shipments. Prices, on a
constant mix basis, were down by about 7%, and shipments
declined by about 169,000 tons. Additionally, fourth quarter
2001 results include about $27 million in costs related to the
unscheduled outage and repair of "D" blast furnace at its Burns
Harbor Division. "D" blast furnace is currently producing at
scheduled capacity.

For the fourth quarter of 2001, Bethlehem reported a net loss of
$547 million including unusual non-cash items totaling $351
million. In the fourth quarter, the company recorded impairment
losses of about $344 million to write off the goodwill
associated with its 1998 acquisition of Lukens Inc., the 110"
plate mill at Burns Harbor, and a portion of its Chicago Cold
Rolling facility. In addition, the company recorded a $7.5
million charge for employee benefit related costs for the
previously announced reduction in its salaried non-represented
workforce.

Excluding unusual items discussed below, its loss from
operations for 2001 was $494 million compared to a loss from
operations of $96 million for 2000. This increased loss was
primarily due to lower realized prices and lower shipments,
partially offset by cost reductions. Prices, on a constant mix
basis, declined by about 8% and shipments were lower by about
764,000 tons. Despite a 12% reduction in raw steel production,
the company was able to reduce overall cost structure
sufficiently that its operating cost per net ton shipped was
about the same in 2000 and 2001.

For the year 2001, Bethlehem's net loss was $1,950 million
including net unusual charges totaling $1,356 million
principally from the fourth quarter non-cash charges mentioned
above and the $984 million non-cash charge to fully reserve
Bethlehem's deferred tax asset recorded in the second quarter.
Net unusual gains in 2000 were $21 million ($17 million after-
tax) for gains on the sale of assets net of a charge for closing
our slab mill at Burns Harbor. Excluding unusual items,
Bethlehem's net loss for 2001 was $594 million compared with a
loss of $135 million for 2000.

                         Bethlehem's Future

"Bethlehem has excellent steel facilities capable of producing
high quality, low cost products to serve the requirements of our
most demanding customers," said Mr. Miller. "Our goal is to
ensure that our competitive facilities remain a key part of the
North American steel industry. In order to accomplish that,
however, we need a modern, flexible labor agreement with the
USWA and a solution to our almost $5 billion retiree pension and
healthcare obligations. Chapter 11 provides us with a structured
process to achieve those required changes."

DebtTraders analysts Daniel Fan and Blythe Berselli advise that
Bethlehem Steel Corporation's 10.375% bonds due 2003 was last
quoted at a price of 13.0. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=BTHSTL


BRILL MEDIA CO.: Fails to Make Interest Payment on Senior Notes
---------------------------------------------------------------
Brill Media Company LLC announced that it failed to make a cash
interest payment of $6.3 million on its Senior Notes on
December 17, 2001.  The Company and Mr. Brill are actively
exploring alternatives to restructure the capital of the
Company.

Revenues for the three months ended November 30, 2001 were $10.9
million, a $.9 million or 8% decrease from the prior comparative
period. For the current quarter, Stations' revenues represented
$4.2 million and Newspapers' revenues represented $6.7 million.

Stations' revenues decreased $.4 million, or 10%, from the prior
comparative period and the Newspapers' revenues decreased $.5
million, or 7%, from the prior comparative period. Both
decreases were due to general economic conditions in the
Company's markets, including weaker demand for advertising and
the general state of affairs following the terrorist attacks of
September 11, 2001.

Operating expenses for the three months ended November 30, 2001
were $10.9 million, which remained relatively unchanged from the
prior comparative period.

As a result of the above, operating income for the three months
ended November 30, 2001 was $.1 million, a decrease of $.8
million or 94% from the prior comparative period.

Other expense for the three months ended November 30, 2001 was
$4.1 million, which remained unchanged from the prior
comparative period.

Net loss for the three months ended November 30, 2001 was $4.1
million, an increase in loss of $0.9 million or 26% over the
prior comparative period. This was primarily due to a reduction
in revenue while maintaining adequate operational resources.

Revenues for the nine months ended November 30, 2001 were $33.8
million, a $1.8 million, or 5%, decrease from the prior
comparative period. For the year to date, Stations' revenues
represented $13.0 million and Newspapers' revenues represented
$20.8 million.

Stations' revenues decreased $.8 million, or 6%, from the prior
comparative period and the Newspapers' revenues decreased $1.0
million, or 5%, from the prior comparative period. Both
decreases were again due to general economic conditions in the
Company's markets, including weaker demand for advertising and
the general state of affairs following the terrorist attacksof
September 11, 2001.

Operating expenses for the nine months ended November 30, 2001
were $32.1 million, which remained relatively unchanged from the
prior comparative period.

As a result of the above, operating income for the nine months
ended November 30, 2001 was $1.7 million, a decrease of $1.9
million or 53% from the prior comparative period.

Other expense for the nine months ended November 30, 2001 was
$11.9 million, a $.1 million or 1% increase from the prior
comparative period.

Net loss for the nine months ended November 30, 2001 was $10.4
million, an increase in loss of $2.2 million or 26% over the
prior comparative period. This difference is primarily due to a
decrease in revenues and interest income reflective of reduced
cash levels.

The Company's ability to pay interest on the Senior Notes and
the Senior Secured Facility when due, and to satisfy its other
obligations, depends upon its future operating performance, and
its ability to obtain funding from other sources, and will be
affected by financial, business, market, technological,
competitive and other conditions, developments, pressures, and
factors, many of which are beyond the control of the Company.
The Company is highly leveraged, and many of its competitors are
believed to operate with much less leverage and to have
significantly greater operating and financial flexibility and
resources.

Due to weakened economic conditions, the contraction of the
financial markets and the general state of affairs following the
terrorist attacks of September 11, 2001, the Company did not
have sufficient cash available to make its semi-annual interest
payment on the Senior Notes of $6.3 million on December 17,
2001. The Company was notified by the Trustee of the Senior
Notes that continued failure to make the interest payment would
constitute an event of default under the terms of the Indenture.
Following an event of default, the Indenture permits the Trustee
or the Holders of 25% in aggregate principal amount of the
Senior Notes to declare the entire principal amount of the
Senior Notes plus accrued interest, due and payable immediately.
In addition, as of January 14, 2002, the Company failed to
comply with certain covenants related to earnings coverage
contained in the Senior Secured Facility.  As a result, the
Senior Secured Facility and certain other debt obligations would
be in default and may be accelerated under the terms of their
respective loan agreements.

Brill Media Company, LLC is a diversified media enterprise that
acquires, develops, manages and operates radio stations,
newspapers and related businesses in middle markets. As of
November 30, 2001, the Company owns, operates or manages
thirteen radio stations serving four markets located in
Pennsylvania, Kentucky/Indiana, Colorado and
Minnesota/Wisconsin. The Company's newspaper businesses operate
integrated newspaper publishing, printing and print advertising
distribution operations, providing total-market print
advertising coverage throughout a thirty-six-county area in the
central and northern portions of the lower peninsula of
Michigan. This operation offers a two-edition daily newspaper,
twenty-three weekly publications, two monthly real estate
guides, two web offset printing operations for Newspapers'
publications and outside customers and three private
distribution systems. Mr. Brill founded the business and began
its operations in 1981. The Company's overall operations,
including its sales and marketing strategy, long-range planning
and management support services are managed by Brill Media
Company, L.P., a limited partnership indirectly owned by Mr.
Brill.


BURLINGTON: Wants to Continue & Enter Risk Management Agreements
----------------------------------------------------------------
Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger PA,
in Wilmington, Delaware, tells the Court, that Burlington
Industries, Inc., managed various risks by entering into a
variety of derivative contracts such as commodity (including
cotton, wool and other raw materials), foreign exchange and
interest derivative contracts, including forward contracts,
options, swaps, caps and future contracts -- Risk Management
Transactions.  Mr. DeFranceschi says the Debtors routinely
entered into such contracts under standard master agreements,
including the International Swap Dealers Association Master
Agreement.

According to Mr. DeFranceschi, the Debtors analyzed their
present need for such Risk Management Transactions and concluded
that the continuation of existing Risk Management Transactions
and the entry into new Risk Management Transactions in a manner
consistent with the Debtors' pre-petition practices is
reasonable and necessary to limit financial risks and volatility
-- such as the risk that variations in the price of raw
materials, currency exchange rates or interest rates will
adversely affect the Debtors.

Mr. DeFranceschi contends that the Debtors should be permitted
to continue and enter into new Risk Management Transactions in
the ordinary course of business, without the need to apply for
Court approval.  However, Mr. DeFranceschi informs Judge Walsh
that several counterparties, with which the Debtors previously
engaged for Risk Management Transactions, terminated such
contracts on or shortly after the Petition Date.  "The Debtors
are concerned that past and potential counterparties will not do
business with the Debtors without specific authorization for
such transactions from this Court," Mr. DeFranceschi explains.

Mr. DeFranceschi illustrates the three Primary Risk Management
Transactions:

(A) Raw Material Contracts

     As a manufacturer of softgoods for apparel and interior
furnishings, the Debtors routinely enter into contracts to
purchase raw materials, such as cotton and wool.  In order to
protect themselves from the volatility in the market for such
materials, the Debtors may enter into a variety of different
financial derivative contracts, including forward contracts,
swaps and option contracts, or a combination of such contracts.
The Debtors enter into such contracts pursuant to standard
agreements that essentially allow them to "lock in" a specified
price for their raw materials.

     For example, the Debtors routinely enter into forward
contracts with respect to cotton and wool.  Under such
contracts, the Debtors agree to pay a certain amount of a raw
goods supplier for materials to be delivered at a specified
future date.  This type of contract ensures that the Debtors can
fix the price for key commodities used in the Debtors'
businesses, thus locking in prices regardless of fluctuations in
market prices -- and accordingly ensuring cost predictability
for such materials and corresponding profit forecasting.

(B) FX Facilities

     The Debtors routinely enter into contracts to buy and sell
products in foreign countries.  When the Debtors purchase
products from foreign vendors, the Debtors sometimes must agree
to pay for such goods in the currency of such vendor.  In such a
situation, the Debtors assume the risk that the U.S. dollar may
decline in value, thus reducing the "buying power" of the U.S.
dollar and effectively increasing the costs of such products to
the Debtors.  Because of this risk, the Debtors often may be at
a competitive disadvantage in the overseas market.  In addition,
the Debtors make sales to customers in foreign currencies and as
such assume the risk that the U.S. dollar may strengthen in
value, thus reducing the "buying power" of the foreign currency
and effectively reducing receipts from those sales.

     To reduce their exposure to fluctuations in foreign
currency exchange rates, the Debtors may enter into FX
facilities under which the Debtors can fix the amount of U.S.
dollars that the Debtors are required to pay or are entitled to
receive at a specified future date according to the value at
which the U.S. dollar is trading at the time the Debtors enter
into a contract to buy or sell products overseas.  By entering
into the FX facilities, the Debtors will be able to reduce their
exposure to fluctuations in foreign currency exchange rates and
thereby enter into contracts in the currency of the vendor or
customer. Because of these protections against foreign currency
rate volatility that a foreign exchange facility provides,
companies that conduct business internationally routinely enter
into FX facilities.

     Importantly, the Debtors do not use FX facilities as an
investment or profit-making enterprise, but rather seek to enter
into such facilities to protect themselves from market
fluctuations.  Essentially, the FX facilities that the Debtors
seek to initiate or continue should be viewed as currency
insurance policies, enabling the Debtors to compete without
assuming the risks traditionally associated with currency
fluctuations for customer/vendor transactions.

(C) Interest Rate Swap Agreements

     In the ordinary course of business, the Debtors enter into
interest rate swap agreements to alter the interest rate risk
profile of outstanding debt, thus altering the Debtors' exposure
to changes in interest rates.  In a typical interest rate swap,
one counterparty pays a fixed rate while the other assumes a
floating interest rate based on the amount of the principal of
the underlying debt.  The underlying debt, referred to as the
"notional amount" of the swap, does not change hands, only the
interest payments are exchanged.

     The Debtors continuously monitor developments in the
capital markets and only enter into such swap transactions with
established counterparties having investment-grade ratings.
Exposure to individual counterparties is controlled, and thus
the Debtors consider the risk of counterparty default to be
negligible. (Burlington Bankruptcy News, Issue No. 6; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


CNC: S&P Hatchets Certs. 1994-1 Ratings after Kmart Downgrades
--------------------------------------------------------------
Standard & Poor's lowered its ratings on five classes of CNC
Pass-Through Certificates Series 1994-1. The ratings remain on
CreditWatch with negative implications, where they were placed
on Jan. 18, 2002.

The rating actions are the result of the recent downgrades of K-
Mart Corp., (Standard & Poor's 'D' rating) that filed a petition
for reorganization under Chapter 11 of the U.S. Bankruptcy Code
on Jan. 22, 2002. The collateral consists of a pool of credit
leases with significant exposure to K-Mart Corp. The ratings of
the certificates are highly dependent on the ratings of the
underlying credit tenants. The certificates benefit from
subordination and a $1.5 million reserve account.

There are 58 outstanding loans with an aggregate principal
balance of $136.1 million, down from 68 loans with an aggregate
outstanding balance of $196.1 million at issuance. The loans are
fully amortizing with an average loan balance of $2.3 million
and a weighted average coupon of 9.37%.

Most of the credit leases are not triple net bondable leases.
Significant tenant exposure, expressed as a percentage of
aggregate principal balance, includes K-Mart Corp. ('D') at 46%;
Wal-Mart (double-'A') at 38%; and Food Lion (triple-'B'-minus)
at 11%. Other tenants include Rite Aid (single-'B'); Winn Dixie
(triple-'B'-minus); and Walgreens (single-'A'-plus). Two Food
Lion and one Walgreens space are vacant, comprising 1.33% of the
pool.

Standard & Poor's will continue to monitor the transaction
closely.

        Ratings Lowered And Remain On Creditwatch Negative

     CNC Pass-Through Certificates Series 1994-1

          Class       Rating

                    To        From      Credit Enhancement

          A-1       BB+/Watch Neg  A/Watch Neg    20%
          A-2       BB+/Watch Neg  A/Watch Neg    20%
          A-3       BB+/Watch Neg  A/Watch Neg    20%
          B         B/Watch Neg    BBB/Watch Neg  13%
          C         CCC/Watch Neg  BB/Watch Neg    6%


CALICO COMMERCE: Arthur F. Knapp Discloses 6% Equity Stake
----------------------------------------------------------
Arthur F. Knapp beneficially owns 2,120,071 shares of the common
stock of Calico Commerce, Inc. representing 6.0% of the
outstanding common stock of that Company.  Mr. Knapp holds sole
voting and dispositive powers.  The aggregate amount of funds
required to purchase the 2,120,071 shares was approximately
$2,617,129, which was paid out of the reporting person's
personal funds.  The stock was purchased for investment
purposes.

Calico Commerce, Inc. (OTCBB:CLIC) is a provider of interactive
selling software for organizations selling complex products or
services. As reported on Dec. 17, 2001, in the Troubled Company
Reporter, Calico Commerce may seek protection under Chapter 11
of the U.S. Bankruptcy Code to facilitate the sale of
substantially all its assets to PeopleSoft.


CHIQUITA BRANDS: Seeks Extension of Removal Period Until March 8
----------------------------------------------------------------
James H.M. Sprayregen, Esq., at Kirkland & Ellis, tells Judge
Aug that Chiquita Brands International, Inc., is party to
various prepetition lawsuits.  Bankruptcy Rule 9027 gives
Chiquita a short time within which to decide whether to transfer
any prepetition lawsuits to the Southern District of Ohio for
continued litigation and ultimate resolution of the underlying
claim.

The Plan contemplates that all claims will be resolved according
to the Plan's terms.  However, there is always a remote
possibility that the Plan might not be confirmed.  If the Plan
were not confirmed for some bizarre reason, the Debtors do not
want to throw away their right to make transfer and removal
decisions.

Against this backdrop, and purely for protective purposes, the
Debtors sought and obtained an extension of their time within
which to elect to remove any prepetition lawsuit against them to
their home court in Cincinnati through the conclusion of the
March 8 Confirmation Hearing. (Chiquita Bankruptcy News, Issue
No. 5; Bankruptcy Creditors' Service, Inc., 609/392-0900)   


CLASSIC VACATION: Selling Assets to Expedia for $5MM + Debts
------------------------------------------------------------
Classic Vacation Group, Inc. (AMEX: CLV), a value-added provider
of customized vacation products, said it has entered into an
agreement to sell substantially all of the assets and the
liabilities of its Classic Custom Vacations subsidiary to
Expedia, Inc. (Nasdaq: EXPE) for $5.0 million in cash and the
assumption by Expedia(R) of approximately $47 million of CLV's
debt.

In connection with the transaction, Three Cities Research, Inc.
(TCR), the company's principal note holder, and Thayer Equity
Investors III, L.P. (Thayer), the company's principal
shareholder, have agreed to provide a payment of $0.26 per share
to CLV's public shareholders. The transactions are anticipated
to be completed late in the first quarter of 2002.

In the agreement, Expedia will assume and then retire Classic
Vacation Group's $47 million of debt including accrued interest
by issuing shares of Expedia common stock to the note holders.
After receiving payment on the debt, TCR and Thayer have agreed
to contribute a portion of the proceeds they will receive to the
company's public shareholders in the form of a $0.26 per share
cash payment without requiring them to tender or otherwise
dispose of their shares. TCR and Thayer have agreed to extend
their announced tender offer to allow the Expedia transaction to
proceed, and have agreed to terminate the tender offer within
one business day after consummating the sale of the debt.

After the completion of the sale of Classic Custom Vacations,
Classic Vacation Group has agreed to liquidate and distribute
any remaining assets to CLV shareholders. At this time, the
company cannot assure that any proceeds will be available for
distribution, and it is possible that the liquidation process
could take up to six months or more to complete before any such
liquidating distribution to shareholders can be made. Under New
York law, the sale of the Classic Custom Vacations assets and
the liquidating distribution will require the vote of two-thirds
of CLV shareholders at a special meeting of shareholders at a
place and time to be announced. However, Thayer and TCR together
own greater than two-thirds of the currently outstanding shares
of CLV and have entered into agreements with Expedia that they
will vote in favor of these transactions.

"We have been working hard to come up with an alternative
transaction to the $0.15 per share tender offer for the public
shareholders," said Debbie Lundquist, Classic Vacation Group
chief financial officer. "With the agreement by TCR and Thayer
to provide a payment to the public shareholders, this
transaction ensures that the public shareholders will receive at
least $0.26 per share."

"This is a great opportunity for Classic Custom Vacations," said
Ron Letterman, Classic Vacation Group president and chief
executive officer. "As part of Expedia, Classic will have the
resources it needs to continue to build its premier vacation
brand. It also gives travel agents and consumers the financial
assurance they require during these challenging times. With
Expedia's resources we can strengthen our travel agent
relationships by providing them with expanded product offerings,
as well as online access and tools to increase their sales.
Travel agents can trust that Classic remains committed to the
travel agency distribution system."

After the sale to Expedia, Letterman will remain as president of
Classic Custom Vacations, a division of Expedia, and Lundquist
will be named chief operating officer of the division. Rosa
Buettner, senior vice president-sales, Lois Shore, senior vice
president-marketing, Larry Flinders, executive vice president-
operations, and Travis Shook, chief information officer, will
continue with the division in their present capacities.
Classic's offices will remain in San Jose, Calif.

Expedia, Inc., operates Expedia.com, an independent, leading
online travel service in the United States with localized
versions in Europe and Canada. Expedia is ranked as the seventh
largest travel agency in the U.S. according to Travel Weekly
Magazine. Expedia.com also is available under Travel on the
MSN(R)network of Internet services.

Expedia, Expedia.com, and the airplane logo are either
registered trademarks or trademarks of Expedia, Inc. in the
United States, Canada and/or other countries. Microsoft and MSN
are either registered trademarks or trademarks of Microsoft
Corporation in the United States and/or other countries. Classic
Custom Vacations is a registered trademark of Classic Custom
Vacations, Inc. in the United States.


CLASSIC VACATION: CVGAC's Tender Offer Extended to Feb. 15
-----------------------------------------------------------
Three Cities Research, Inc., announced that the pending tender
offer by CVG Acquisition Corporation for shares of Classic
Vacation Group, Inc. (Amex: CLV) has been extended until 5:00
p.m., New York City time, on Friday, February 15, 2002, in order
to permit completion of a purchase by Expedia, Inc., of Classic
Vacation Group notes held by two entities principally owned by a
Three Cities fund.  The tender offer will be withdrawn when the
note purchase takes place.

CVG Acquisition Corporation is wholly owned by CVG Investment
LLC, which in turn is 80% owned by Three Cities Fund III, L.P.
and 20% owned by Thayer Equity Investors III, L.P.  In its
tender offer, CVG Acquisition Corporation offered to purchase
all the Classic Vacation Group shares which Three Cities or
Thayer did not already own for $0.15 per share.  The tender
offer, as previously extended, was scheduled to expire at 5:00
p.m., New York City time, on January 25.

Classic Vacation Group announced its agreement to sell its
principal subsidiary to Expedia, Inc., to be followed by
liquidation of Classic Vacation Group.  In connection with that
transaction, Expedia will acquire Classic Vacation Group notes
from CVG Investment LLC and another entity owned by Three Cities
Fund III in exchange for Expedia shares with a value equal to
the principal and accrued interest with regard to those notes.  
The agreements contemplate that the Expedia shares will be sold
shortly after they are received.  When that occurs, Three Cities
will pay Classic Vacation Group's public shareholders $0.15 per
share, and Thayer will pay the Classic Vacation Group public
shareholders $0.11 per share, without requiring the public
shareholders to tender or otherwise dispose of their shares.  
The public shareholders will also receive whatever per share
amount is distributed by Classic Vacation Group when it is
liquidated.

A spokesman for Three Cities Research said, "As part of the
transaction, Expedia will purchase Classic Vacation Group debt
from entities principally owned by one of our funds for the full
principal and accrued interest with regard to that debt, which
will total approximately $47 million.  When that happens, one of
those entities will be withdrawing a $0.15 per share tender
offer for Classic Vacation Group shares.  In order to be sure
the public shareholders of Classic Vacation Group will not be
hurt by the withdrawal of that tender offer, when our fund
receives payment for the debt, it will pay $0.15 per share to
the public shareholders of Classic Vacation Group, without
requiring them to tender or otherwise dispose of their shares.

"The public shareholders of Classic Vacation Group will also be
receiving $0.11 per share from Thayer Equity Investors, III, out
of a payment we had agreed to make to Thayer if the tender offer
were withdrawn to accommodate another transaction.  In addition,
they will receive their share of whatever is available for
distribution upon liquidation of Classic Vacation Group after it
sells Classic Custom Vacations to Expedia.  Therefore, the
public shareholders will receive substantially more as a result
of the Expedia transaction than they would have received if the
Three Cities tender offer were completed."

At the close of business on January 22, 2002, 1,313,551 shares
had been tendered in response to the tender offer.


COMDISCO INC: Committee Taps Mr. Fortgang as Bankruptcy Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of Comdisco, Inc.,
and its debtor-affiliates proposes to retain Chaim J. Fortgang
as its counsel in these chapter 11 cases, on an hourly basis at
a rate of $750 per hour.

Committee Chair Randolph Thornton, from Citibank N.A., tells the
Court that among the professional services Mr. Fortgang may be
called to render are:

  (a) advisory, strategy and decision-making associated with
      negotiating the proposed sale transactions in conjunction
      with other advisors;

  (b) advising the Committee with respect to a plan of
      reorganization which may be proposed;

  (c) advocating the Committee's position in pleadings and in
      court appearances;

  (d) representing the Committee with respect to other
      transactions which may be proposed;

  (e) assisting in the examination of the Debtors' affairs and
      review of the Debtors' operations; and

  (f) attending hearings, and generally advocating positions and
      performing other professional services which further the
      interests of the creditors represented by the Committee.

Mr. Thornton assures the Court that Mr. Fortgang will work
closely with Latham & Watkins -- the Committee's proposed co-
counsel -- so as not to duplicate efforts on behalf of the
Committee.

The Committee intends to reimburse Mr. Fortgang of actual
expenses incurred in connection with the case that are not fixed
and routine overhead expenses.  Among other things, these
expenses include: telephone and telecopier toll and other
charges, mail and express mail charges, special or hand delivery
charges, document processing, photocopying charges, travel
charges, expenses for "working meals", computerized research,
and transcription costs.

Chaim J. Fortgang, Esq., informs Judge Barliant that he does not
represent any interest adverse to the Debtors or to their
estates in the matters upon which he is to be engaged.  "I do
not hold any claims against the Debtors and I will not represent
any party-in-interest in these Chapter 11 cases except for the
Committee," Mr. Fortgang swears.

According to Mr. Fortgang, he is a "disinterested person" as the
term is defined in Section 101(14) of the United States
Bankruptcy Code. (Comdisco Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   


COMDISCO INC: M. Scanlan and V. Gallegos Disclose Equity Stakes
---------------------------------------------------------------
Melissa L. Scanlan and Victoria Gallegos each hold trustee
positions in the Dorene Pontikes Trust, which in turn holds
shares of the common stock of Comdisco, Inc.  Ms. Scanlan
exercises sole voting and dispositive powers with respect to the
following shares: 163,302 shares directly held, 14,443 shares
held by the Alexa Scanlan Trust and 9,093 shares held by the
Kellen Scanlan Trust.  Ms. Scanlan shares voting and dispositive
powers with respect to 165,120 shares held by the Pontikes
Family Foundation and 11,440,650 shares held by the Dorene
Pontikes Trust. Ms. Scanlan has shared dispositive power over
284,000 shares held in a trust in which she has a remainder
interest.

Ms. Gallegos exercises sole voting and dispositive powers over
112,624 shares held by the Victoria Gallegos 1995 Trust. Ms.
Gallegos shares voting and dispositive powers with respect to
165,120 shares held by the Pontikes Family Foundation and
11,440,650 shares held by the Dorene Pontikes Trust.
Ms. Gallegos has shared dispositive power over 284,000 shares
held in a trust in which she has a remainder interest.

Prior to May 8, 2001, the power to vote and direct the
disposition of the shares owned by the Dorene Pontikes Trust and
the Non-Exempt Marital Trust formed under the will of Kenneth N.
Pontikes was held by Nicholas K. Pontikes. Until that time, the
Dorene Pontikes Trust was included in a group Schedule 13D and
amendments thereto filed with the SEC by Mr. Pontikes. On May 8,
2001, pursuant to a power of appointment, Mr. Pontikes removed
all trustees of the two trusts, including himself, and appointed
Ms. Scanlan and Ms. Gallegos trustees of the Dorene Pontikes
Trust and as two of three trustees of the NEMT. To vote or
dispose of securities in the trusts, the trustees must act by
majority vote. Ms. Scanlan and Ms. Gallegos may each be deemed
beneficial owners of the holdings of the Dorene Pontikes Trust
and the NEMT. Mr. Pontikes retains a right to appoint and remove
the trustees of these trusts and thus has a right to acquire
voting and dispositive power and therefore may also be deemed to
beneficially own the shares held by the trusts.

The Dorene Pontikes Trust and the NEMT have each sold or
otherwise disposed of shares since May 8, 2001.  All Shares
owned by the NEMT have been sold or distributed, and it is
expected that the Dorene Pontikes Trust will make additional
sales and distributions. As it presently stands Melissa L.
Scanlan beneficially owns an aggregate of 12,076,608 shares of
the common stock of Comdisco, Inc. representing 7.95% of the
outstanding common stock of that Company.  Victoria Gallegos
beneficially owns an aggregate 12,002,394 shares, representing
7.90% of the outstanding common stock of Comdisco, Inc.  The
Dorene Pontikes Trust beneficially owns 11,440,650 shares,
representing 7.53% of the outstanding common stock of the
Company.


CRESCENT OPERATING: Terminates Asset Sale Agreement with CEI
------------------------------------------------------------
Crescent Operating, Inc., (OTCBB:COPI.OB) announced the
termination of its agreement with Crescent Real Estate Equities
Company (NYSE:CEI)(CEI) for the purchase and sale of assets and
stock. The Purchase Agreement had been described as part of the
restructuring proposal in Crescent Operating, Inc.'s most recent
proxy statement.

As part of the restructuring proposal, CEI had committed to make
a $10 million capital contribution to the Company's wholly owned
subsidiary Crescent Machinery, in the form of preferred stock,
which along with capital from a third party investment firm was
expected to put Crescent Machinery on solid financial footing.
Unfortunately, Crescent Machinery has not escaped the impact
from the recessionary economic environment. Particularly post
September 11th, the equipment rental and sales business has been
affected by the overall reduction in national construction
levels. CEI advised the Company that it was unwilling to make
the additional investment that it believes would be necessary to
provide adequate capitalization of Crescent Machinery and to
satisfy lender concerns. Crescent Machinery continues to work
with its lenders and the third party investor, but there is no
assurance that an acceptable agreement can be reached. Also, as
a result of the termination, Crescent Operating will not move
forward with the previously announced rights offering.

Without the closing of the Purchase Agreement included in the
restructuring proposal, it is expected that Crescent Operating
will be unable to continue as a going concern or to satisfy the
principal conditions to the closing of its previously announced
restructuring plan. CEI has advised the Company that it still
desires to acquire the Company's Hospitality and Land
Development segment assets, and the Company is in discussions
with CEI to reach a mutually acceptable resolution, such as a
pre-packaged bankruptcy or other restructuring.

Crescent Operating is a diversified management company which
through various subsidiaries and affiliates, owns, leases or
operates a portfolio of assets consisting primarily of three
business-class hotels, five luxury resorts and spas, an interest
in a temperature controlled logistics operating company, an
interest in three residential developments, and an equipment
sales and leasing business.


CRESCENT REAL: S&P Puts Low-B Equity Ratings on Watch Negative
--------------------------------------------------------------
Standard & Poor's placed its ratings on Crescent Real Estate
Equities Co., and Crescent Real Estate Equities L.P. on
CreditWatch with negative implications.

The CreditWatch placement reflects uncertainty following
Crescent's announced termination of its agreement to purchase
certain assets of Crescent Operating Inc. (COPI), an unrated,
publicly traded company formed by Crescent. As a result of this
termination, it is uncertain if COPI will be able to continue as
a going concern. The CreditWatch placement impacts $600 million
in public senior unsecured debt and preferred securities of
Crescent.

Crescent is expected to acquire certain COPI assets
(resort/hotel lease interests in eight of Crescent's
resort/hotel properties and the voting stock of Crescent's
residential development corporations) either through a
prepackaged bankruptcy or through a foreclosure, which should
ultimately support Crescent's simplification efforts. Crescent
(with undepreciated book value of assets of $4.7 billion at
Sept. 30, 2001) recently announced net asset write-downs of
$74.8 million for the fourth quarter of 2001 as a result of the
agreement termination. In addition to this write-down,
Crescent's income statement for the fourth quarter of 2001 will
include an $18 million charge attributed to estimated costs
related to COPI's assumed bankruptcy.

COPI (with assets of $988 million) is currently Crescent's
largest lessee, accounting for about 8% of Crescent's total
revenues and 22% of funds from operations through its operations
of Crescent's hotels/destination resorts/spas, temperature-
controlled logistics, and residential development activities.
COPI also operates an equipment sales and leasing business that
does not have any direct operational or financial ties to
Crescent. Crescent continues to evaluate structures regarding
the operating interests of AmeriCold, currently held by COPI.

Crescent's leverage and coverage measures are expected to be
modestly negatively impacted by the COPI filing or foreclosure.
In addition, Crescent management's fairly aggressive financial
policy regarding share repurchases remains an additional credit
concern. The company repurchased over $280 million of common
stock during 2000, $77 million during 2001, and has over $400
million remaining on an existing board-authorized repurchase
program. While current on-balance-sheet fixed-charge coverage is
acceptable for the rating category at 2.4 times, this measure
declines to about 2.0x if off-balance-sheet investments are
fully consolidated. In addition, debt service and fixed-charge
coverage measures are expected to decline over the next year,
due to weakened fundamentals of the company's high-end
residential and resort/hotel businesses, which have been
operated within COPI, and softness in its core Houston and
Dallas office markets. The extent of the decline in coverages is
also somewhat dependent on the size of the company's ultimate
share repurchases and how they are financed. Additionally, the
company faces the near-term maturity of some low-coupon debt in
September 2002, which is likely to be refinanced at a higher
rate, further pressuring coverage measures.

Standard & Poor's will meet with Crescent management shortly to
assess the credit impact of a COPI bankruptcy or foreclosure
upon Crescent. This CreditWatch placement, which implies that
the ratings could be lowered or affirmed, is expected to be
resolved in the next few months, as COPI works through either a
bankruptcy or foreclosure and as the complete business and
financial impact to Crescent is clearer.

               Ratings Placed On Creditwatch
                With Negative Implications

     Issue                                To              From

  Crescent Real Estate Equities Co.

     Corporate credit rating             BB/Watch Neg    BB
     $200 mil. 6 3/4% preferred stock    B/Watch Neg     B

   Crescent Real Estate Equities L.P.

     Corporate credit rating             BB/Watch Neg    BB
     $150 mil. 6 5/8% senior unsecured
        notes due 2002                   B+/Watch Neg    B+
     $250 mil. 7 1/8% senior unsecured
        notes due 2007                   B+/Watch Neg    B+


CRESCENT REAL ESTATE: Eyes Pre-Pack Bankruptcy to Solve Problems
----------------------------------------------------------------
Crescent Real Estate Equities Company (NYSE:CEI) said that it
has terminated its agreement with Crescent Operating, Inc.
(COPI) to purchase certain assets.

According to John C. Goff, Chief Executive Officer, "As you
know, in June 2001 Crescent entered into an agreement with COPI,
the cornerstone of which was Crescent's intended purchase of the
resort/hotel lease interests in eight of our resort/hotel
properties and the voting stock of our residential development
corporations. Included in our original proposal to COPI was our
commitment to make a $10 million capital contribution to
Crescent Machinery in exchange for convertible preferred stock,
which along with capital from a third party investment firm was
expected to put its machinery business on solid financial
footing. Unfortunately, Crescent Machinery has not escaped the
impact from the recessionary economic environment. Particularly
post September 11th, the equipment rental and sales business has
been affected by the overall reduction in national construction
levels. We believe that in order to provide adequate
capitalization of Crescent Machinery and satisfy lender
concerns, substantial additional capital would have to be
contributed. We are unwilling to make this non-core investment.
Crescent Machinery continues to work with its lenders and third
party investors, but there is no assurance that Crescent
Machinery will be able to reach an acceptable agreement with its
lenders to allow it to continue operations."

"Without the closing of the asset purchase agreement, COPI will
not be able to continue as a going concern or satisfy the
principal conditions to the closing of its previously announced
restructuring plan. Having said that, we are still committed to
acquiring these assets and are working with COPI to reach a
mutually acceptable resolution such as a pre-packaged bankruptcy
but, if necessary, through a foreclosure. What this means,
however, is that we will have to record different results than
we would have if the contractual asset purchase agreement had
been completed as originally planned," Goff added.

Goff further stated, "Over the course of the last two years, we
have focused on simplifying our strategy, proactively exiting
non-core and non-strategic investments and strengthening our
balance sheet. Integral to that strategy is the acquisition of
certain COPI assets. However, our current plan results in an
impact to our 2001 comparative FFO of $73.8 million, which falls
into three categories. $41.1 million relates to COPI's liquidity
shortfall primarily due to COPI's inability to consummate its
intended recapitalization plan. Another $18.0 million relates to
estimated costs we expect to incur in connection with the
assumed COPI bankruptcy. The remaining $14.7 million relates to
our re-valuation of the resort/hotel leases and interests in
residential development corporations, as the original values
were only appropriate assuming the proposed asset purchase
agreement."

With respect to the operating interest in AmeriCold that COPI
owns, REIT tax rules prohibit Crescent from acquiring or owning
the interest directly. Crescent, therefore, is evaluating
structures that will permit Crescent's shareholders to obtain
the value of that interest through a $15 million investment by
Crescent. Crescent expects that it would be a condition to the
acquisition that COPI use those proceeds to retire debt.

Goff concluded, "While we are disappointed that the original
proposal to resolve COPI is no longer viable, we are confident
in Crescent's ability to acquire the desired assets in a timely
manner. This will enable us to manage our resort/hotel and
residential development investments more efficiently and should
also lead to more predictable overall earnings in the future.
After acquiring the assets, we will have completed the strategic
initiatives that we laid out in 1999. Pursuant to our strategic
plan, Crescent will continually move toward becoming a company
with 80% to 90% of its assets in the office sector. We expect to
target office property acquisitions as well as selectively
develop office properties in markets where we either currently
have achieved or plan to achieve a dominant position. We remain
bullish on our stock and since initiation of the common share
repurchase program have repurchased over $350 million, or 18.8
million shares. We believe our net asset value, considering the
current economic environment, is in the $24 to $26 range."

                2001 and 2002 FFO Guidance

Crescent expects its 2001 FFO, before the non-recurring charges
and other adjustments related to COPI, to be in the range of
$2.25 to $2.27 per share. Including the non-recurring charges
and other adjustments related to COPI, Crescent expects its 2001
FFO to be in the range of $1.45 to $1.47 per share.

Crescent is revising its 2002 FFO guidance from the previously
issued range of $2.15 to $2.30 per share to a range of $2.00 to
$2.30 per share due to the continued uncertainty in the economy.
The $.15 per share reduction in the low end reflects a broader
range of both office property same-store NOI growth (now 0% to
4%) and average occupancy (now 90% to 93%) as well as adjusting
for flat resort/hotel revenue per available room. The 2002 FFO
range excludes the potential positive impact of any future
investments or share repurchase activity.

Crescent Real Estate Equities Company (NYSE:CEI) is one of the
largest publicly held real estate investment trusts in the
nation and, through its subsidiaries, owns and manages some of
the country's most desirable properties. Its portfolio consists
primarily of 75 office buildings totaling over 28 million square
feet located in six states and 26 sub-markets primarily in the
southwestern U.S., as well as world-renowned luxury resorts and
spas and upscale residential developments.


ENA UPSTREAM: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: ENA Upstream Company LLC
        1400 Smith Street
        Houston, Texas 77002

Bankruptcy Case No.: 02-10232-ajg

Type of Business: The Debtor purchases and holds assets for
                  ENA's purchases at the wellhead and buys,
                  sells, transports and gathers natural gas.

Chapter 11 Petition Date: January 18, 2002

Court: Southern District of New York (Manhattan)

Judge: Arthur J. Gonzalez

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

                          -and-

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

Total Assets: $79,141,963

Total Debts: $78,130,735

Debtor's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Linder Oil Company,         Trade Debt             $3,680,970
A Partnership
1800 Carol Sue Ave.,
Ste. 6A
Gretna, LA 70056-4114
Ph: 504-392-2004
Fax: 504-392-3243

Forest Oil Corporation      Trade Debt             $2,832,513
1660 Broadway
Suite 2200
Denver, CO 80202
Ph: 303-812-1400
Fax: 303-812-1602

Bluebird Energy, Inc.       Trade Debt             $1,289,168
P. O. Box 14907
Irving, TX 75014-0907
Ph: 972-401-0752
Fax: 972-443-6450

Q-West Energy Company       Trade Debt             $1,147,821
P. O. Box 970-490
Dallas, TX 75397-0490
Ph: 972-233-8191
Fax: 972-991-0704

KCS Medallion Resources,    Trade Debt               $653,718
Inc.
7130 S. Lewis Ave.
Ste. 700
Tulsa, OK 74136-5489
Ph: 918-488-8283
Fax: 918-488-8182

KCS Energy Service Inc.     Trade Debt              $602,539
5555 San Felipe
Ste. 1200
Houston, TX 77056
Ph: 713-877-8006

St. Mary's Production, LLC  Trade Debt              $420,892
1717 Woodstead Ct.
Ste. 207
The Woodlands, TX 77380
Ph: 281-367-8697
Fax: 281-364-4919

Energy Resource             Trade Debt              $221,974
Technology, Inc.

Riceland Petroleum          Trade Debt              $200,818
Company

Fairways Offshore           Trade Debt              $187,061
Exploration, Inc.

Magnum Hunter Production,   Trade Debt              $115,808
Inc.

ProGas, Inc.                Trade Debt              $111,026

Ralaco Ventures             Trade Debt              $105,163

Discovery Gas               Trade Debt               $94,179
Transmission, LLC

Stone Energy Corporation    Trade Debt               $89,806

ANR Pipeline Company        Trade Debt               $81,179

EXCO Resources, Inc.        Trade Debt               $71,515

Louis Dreyfus Natural       Trade Debt               $66,403
Gas Corp.

W&T Offshore, Inc.          Trade Debt               $60,471

KCS Resources, Inc.         Trade Debt               $36,801


ENRON CORP: Trizechahn Seeks Payment of $1.6MM Postpetition Rent
----------------------------------------------------------------
TrizecHahn Office Properties, Inc., and Enron Corporation are
parties to four leases of non-residential real property in
Houston, Texas:

    (a) Three Allen Center,

    (b) Two Allen Center,

    (c) Continental Center I (600 Jefferson Street), and

    (d) 500 Jefferson Street.

Jay R. Indyke, Esq., at Kronish Lieb Weiner & Hellman, in New
York, New York, tells Judge Gonzalez that the Debtors have
neither assumed nor rejected the Leases.

Mr. Indyke further informs the Court that to date, the Debtors
have not paid the rent and other amounts reserved under the
Leases for the post-petition period from December 2, 2001
through December 31, 2001, amounting to $1,651,657.

According to Mr. Indyke, the Debtors continue to occupy the
Leased Premises, or retain the right to attempt to assume and
assign the Leases during its chapter 11 case.  "In short, the
Debtors are availing of current services and prospects for
economic gain without making current payment," Mr. Indyke notes.

Mr. Indyke argues that TrizecHahn is entitled to these post-
petition amounts owed under the Leases:

      Three Allen Center                $1,111,894
      Two Allen Center                     331,891
      600 Jefferson                        122,632
      500 Jefferson                         85,241
                                        ----------
      Total                             $1,651,657

In addition, Mr. Indyke explains that the Leases provide for
interest charges on late rent payments from the date such
payments are due until paid.  The Leases further entitles
TrizecHahn to recover from the Debtors reasonable attorneys'
fees and expenses incurred in enforcing rent provisions of the
Leases, Mr. Indyke adds.

In the event the Debtors rejects the Leases, Mr. Indyke argues
that such rejection should deemed effective only upon the date
the Debtors actually vacate the Leased premises and surrenders
possession of those properties to TrizecHahn.  Through the time
of its surrender, TrizecHahn asks Judge Gonzalez to require the
Debtors to timely pay all post-petition rent and other amounts
arising and due under the Leases including administrative
expense for all such amounts.

Accordingly, TrizecHahn also asks the Court to compel the
Debtors to immediately pay all post-petition amounts including
an administrative expense for all such amounts. (Enron
Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


ENRON CORPORATION: Kenneth L. Lay Resigns as Chairman and CEO
-------------------------------------------------------------
Enron (OTC: ENRNQ) announced that Kenneth L. Lay has resigned as
Chairman of the Board and Chief Executive Officer of Enron Corp.  
Mr. Lay, who will also retire as an Enron employee, will remain
on the company's Board of Directors.  The Board, in cooperation
with the Creditors' Committee in Enron's bankruptcy, is in the
process of selecting a restructuring specialist to join the
company who will assist in Enron's efforts to emerge from
bankruptcy and, on an interim basis, serve as acting chief
executive officer.

"This was a decision the Board and I reached in cooperation with
our Creditors' Committee," said Mr. Lay.  "I want to see Enron
survive, and for that to happen we need someone at the helm who
can focus 100 percent of his efforts on reorganizing the company
and preserving value for our creditors and hard-working
employees.  Unfortunately, with the multiple inquiries and
investigations that currently require much of my time, it is
becoming increasingly difficult to concentrate fully on what is
most important to Enron's stakeholders."

The Board intends to promptly focus on the selection of a new
chairman.

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

DebtTraders reports that Enron Corp.'s 7.875% bonds due 2003
(ENRON1) are trading between 16 and 18. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ENRON1


EUROPEAN POWER: Fitch Downgrades $95MM Trust Notes Ratings to D
---------------------------------------------------------------
Fitch, the international rating agency, downgraded the Secured
rating of the US$95 million Trust Notes issued by European Power
Limited Company (EPLC) to 'D' from 'CC', and removed the rating
from Rating Watch Negative.

EPLC was effectively a risk transfer vehicle for Enron Corp
(ENE), and the only source of funds for debt service and equity
distributions under the terms of the transaction were payments
received from ENE, now rated 'D', under the swap agreement.

EPLC has no security over or recourse to the cash flows of the
individual projects (in Italy, Poland and Turkey) whose
performance indirectly affected payment on the notes. The rating
of the notes has therefore been lowered to reflect the
bankruptcy of the economic obligor, ENE and the absence of off-
setting collateral.


EXODUS COMMS: Bringing-In Richard Ellis as Real Estate Broker
-------------------------------------------------------------
Exodus Communications, Inc., and its debtor-affiliates ask for
permission to employ and retain CB Richard Ellis, Inc. as their
real estate broker, nunc pro tunc to October 23, 2001.

Adam W. Wegner, the Debtors Adviser for Corporate and Legal
Affairs, relates that on October 23, 2001, the Debtors entered
into an Exclusive Listing Agreement effective until October 22,
2002, with CB Richard Ellis, an international real estate broker
with nearly 10,000 employees in 250 offices around the world.
Pursuant to the Agreement, the Debtors engaged CB Richard Ellis
as the exclusive agent to dispose of the Debtors' interest in:

A. 31,000 square feet of shell space located in an IDC leased by
     the Debtors at 300 Boulevard East, Weehawken, New Jersey;
     and

B. the 204,517 square foot IDC located at Two Gatehall Drive,
     Parsippany, New Jersey.

Mr. Wegner contends that these Facilities are not necessary for
the Debtors' ongoing business operations and therefore represent
an unnecessary financial drain on the resources of the chapter
11 estates. Due to significant excess capacity in the IDC
market, the Debtors believe that the space at these facilities
is no longer necessary or important to their ongoing operations
or plan of reorganization.

David Schenkel, Managing Director of CB Richard Ellis Inc.,
tells the Court that pursuant to the Agreement, the Firm has
agreed to use reasonable commercial efforts to sublease or
assign the Facilities. In particular, the Firm has and will
continue to provide the following services to the Debtors:

A. on-site inspection and evaluation;

B. market research reports;

C. comprehensive financial analysis; preparation and
     distribution of marketing materials and promotional
     literature;

C. marketing and promotion of the Facilities in accordance with
     the standard methods and procedures customarily employed by
     brokerage firms in connection with the marketing of similar
     space;

D. solicitation of potential qualified tenants;

E. arranging for and performing personal tours of the Facilities
     for prospective tenants; and

F. performing such other services as are reasonably requested by
     the Debtors in furthering the marketing of the Facilities
     for sublease or assignment.

According to Mr. Schenkel, in connection with the sublease or
assignment of the Facilities, the Firm has agreed to accept fees
on a commission basis. In particular, the Firm has agreed to a
multi-tiered compensation arrangement and will earn a commission
of 4% of the aggregate value of the total sublease or assignment
obligation. In the event a cooperating broker is used, the Firm
shall earn 1.5% of the aggregate value of total sublease or
assignment obligation not to exceed $1,000,000. In addition, the
cooperating broker shall earn 5% of the aggregate value of total
sublease or assignment obligation not to exceed $2,500,000. The
Firm has agreed that the commission will be earned upon the
Closing, as defined in the Agreement, of the sublease or
assignment.

Any commission earned by the Firm pursuant to the terms of the
Agreement will be paid as follows:

A. One half of the commission shall be due and payable upon
     execution of the sublease, assignment and/or termination
     agreement by all parties, receipt of consent from Master
     Landlord and Debtors receipt of any security deposit and/or
     prepaid rent.

B. The balance of the commission shall be due and payable three
     months thereafter.

If the proposed tenant's obligation to pay rent phases in over
time, Mr. Schenkel states that the Debtors' obligation to pay
the second half of the commission shall be prorated, and paid
out when the tenant starts to pay rent on each portion of the
Facilities. In the event the proposed tenant abandons the
Facilities prior to 100% occupancy, the Firm shall not be
entitled to receive its remaining commission.

The Debtors believe that the fees of the Firm are fair and
reasonable in light of customary industry practice, market rates
both in and out of chapter 11 proceedings and the scope of work
to be performed pursuant to its retention.

Mr. Schenkel assures the Court that insofar as he has been able
to ascertain, the Firm has no connection with the Debtors, their
creditors, or any other party in interest, or their respective
attorneys or accountants, except as follows:

A. The Firm is an international real estate services company
     with 10,000 employees in nearly 250 offices in 44
     countries. The Firm's clients include many institutions and
     commercial corporations, some of which may be creditors or
     otherwise involved in these chapter 11 proceedings. As a
     result, the Firm has, had or may in the future have
     business relationships with one or more of the entities
     involved in this proceeding, and may in the future
     represent entities, which are claimants herein in matters
     totally unrelated to these pending Chapter 11 Cases. For
     example, a review of the notice list and other lists
     provided by Debtors' counsel identifies numerous companies
     with whom the Firm has conducted business in the past and
     is conducting business presently, including, for example:
     Goldman Sachs International; Morgan Stanley Dean Witter;
     Oppenheimer Funds; The TCW Group; Latham & Watkins;
     Morrison & Foerester; Orrick, Herrington & Sutcliffe;
     Pillsbury Winthrop; AT&T; Oracle Corporation; Turner
     Construction; Cabot Industrial Properties; Cisco Systems;
     Sun Microsystems; and Skadden Arps Slate Meagher & Flom.
     None of the Firm's services to those or any other entities,
     to my knowledge, have any relationship to the Debtors or
     the Chapter 11 Cases.

B. An affiliate of Debtors, Exodus Internet Limited in the
     United Kingdom (a company not in bankruptcy) has entered
     into a European Real Estate Consultancy Agreement with CB
     Hillier Parker, an affiliate of CBRE in the United Kingdom.

C. The Firm and Exodus Communications, Inc. are co-defendants in
     a lawsuit pending in the United States District Court for
     the District of New Jersey captioned Team Resources, Inc.
     v. Exodus Communications, Inc. et al., Case Number
     00-CV-4754 (AJL). The Firm and the Debtors have not
     asserted claims against each other in this proceeding.
     (Exodus Bankruptcy News, Issue No. 12; Bankruptcy
     Creditors' Service, Inc., 609/392-0900)


FANSTEEL INC: Obtains Court Approval of First Day Motions
---------------------------------------------------------
Fansteel Inc., (OTC Bulletin Board: FNST) announced that its
Chapter 11 Case and those of its U.S. subsidiary debtors in
possession, each of which were commenced on January 15, 2002,
will now be administered in the United States District Court for
the District Of Delaware, by Judge Joseph Farnan.  Pursuant to
court orders entered on January 17 and 22, the Company and its
affiliated Debtors' have obtained approvals for a variety of
"First Day Motions", including approval of interim DIP
Financing, of its cash management systems, of payments for
employee wages and benefits, and of payments to critical
vendors.

As previously announced, Fansteel has entered into an agreement
with the CIT Group/Commercial Services Inc., whereby CITCS has
agreed to purchase receivables of the Company for a purchase
price of up to $10 million. The agreement with CITCS is subject
to bankruptcy court approval and the results of a public auction
to be held in Delaware at 10:00 A.M. on February 27, 2002.  A
hearing to approve "bidding procedures' is scheduled to commence
at 12:30 P.M. on February 14, 2002.

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

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

Fansteel and its subsidiaries continue to operate their
businesses in the U.S. and abroad.  Fansteel's non-U.S.
subsidiaries, including those in Mexico and the Caribbean, are
not part of the filing.  Fansteel intends to continue to
manufacture, market and distribute its core products and to
provide customer service and support for these products.  In
accordance with applicable law and court orders, pre-petition
claims against Fansteel and its U.S. subsidiaries will be frozen
pending court authorization of payment or consummation of a plan
of reorganization.


FOUNTAIN VIEW: Snukal Retires as CEO But Stays as Board Member
--------------------------------------------------------------
Fountain View, Inc., a leading operator of 49 long-term care
facilities with approximately 5,000 patients and 6,000 employees
in California and Texas, announced the voluntary retirement of
Robert Snukal as Chief Executive Officer after years of building
the Company into a leader in its industry.

"We thank Bob for all his dedication, achievement and hard work
and wish him the best in the future," said Fountain View's Chief
Restructuring Officer, Dennis Simon of Crossroads LLC.

Mr. Snukal, whose retirement is effective immediately, remains a
major shareholder, will continue to serve on the Board of
Directors and will be a consultant to the Company.  "This change
will permit me to attend to my health and to spend more time
with my family, will relieve me of administrative matters while
allowing me to focus on initiatives vital to Fountain View's
long-term success in my new role as a consultant to the firm,"
Mr. Snukal said.

Fountain View said that it has begun a search for a new CEO.  
William Scott continues as the Company's Chairman.

The Company also announced the hiring of Jose Lynch for the new
position of President.  Initially, he will focus on the
oversight of all the Company's Texas operations.  Mr. Lynch
currently is senior vice president of long-term care operations
in California for Mariner Health Network, and his previous
operational experience includes roles at Country Villa, a Los
Angeles company with 19 long-term care facilities, and at
Beverly Enterprises, the Arkansas-based operator of 783 skilled
nursing facilities, assisted living centers, home care and
hospice agencies, and outpatient therapy clinics throughout the
United States.

"We are fortunate to have Jose joining our team," said Mr.
Simon.  "As Jose works together with our excellent existing
team, we expect continued substantial achievements in our
operations in the future."

"Fountain View is a leader in this industry, and I am excited
about the potential to help take it to even greater heights,"
said Mr. Lynch.  "I look forward to working with and being a
part of such a highly respected industry team."

Last October, Fountain View filed for Chapter 11 protection
under the U.S. Bankruptcy Code, citing its inability to resolve
a litigation that resulted in a lien being placed on its bank
accounts.  The Chapter 11 filing was necessary to ensure
continuation of patient care, the Company said.  "While we have
made significant achievements in the past three months and our
latest quarterly profitability has risen significantly and is
encouraging, much still remains to be done," Mr. Simon said.

Fountain View is a leading operator of long-term care facilities
and a leading provider of a full continuum of post-acute care
services, with a strategic emphasis on sub-acute specialty
medical care.  The Company operates a network of facilities in
California and Texas, including 43 skilled nursing and six
assisted living facilities.  In addition to long-term care, the
Company provides a variety of high-quality ancillary services
such as physical, occupational and speech therapy and pharmacy
services.


HEARTLAND TECHNOLOGY: Misses Payments & Considers Debt Workout
--------------------------------------------------------------
Heartland Technology (Amex: HTI) said that it did not make the
interest and principal payments due on December 31, 2001 in
respect of a $550,000 promissory note maturing on that date.  
Pursuant to a subordination agreement among the holder of that
note, the company and certain other creditors of the company,
the company has 60 days from December 31, 2001 to make the
payments under this note.  The failure to cure the payment
default before the expiration of the 60 day period would permit
the holders of other notes of the company aggregating $9,650,000
in principal amount to declare their respective notes to be
immediately due and payable.

In addition, the company said that it did not make payments of
interest and principal on maturity of six of its 13%
Subordinated Notes maturing between December 22, 2001 and
January 14, 2002 and aggregating $1,725,000 in principal, and to
make payments of interest due December 31, 2001 on three other
13% Subordinated Notes maturing in February, March and October
of this year having an aggregate principal amount of $650,000.  
Under the terms of 13% notes, if the company does not make any
payment of overdue interest within five days after written
demand is made by the holder or does not make a payment of
principal when due, then the holder may declare the entire
balance of the notes immediately due and payable.  At this time,
no written demand for payment has been received from the holders
of these notes by the company.

The company also disclosed that it has received written demand
for payment of approximately $1,201,273 in interest and
principal under a guaranty made by the company of a promissory
note owing by one of its indirect subsidiaries, HTI Z Corp.
(formerly Zecal Corp.), to Zecal, Inc. in connection with the
purchase of the assets of Zecal, Inc. in April, 1998.

The company stated that it is considering its options for
restructuring its outstanding indebtedness, but could give no
assurances that it will reach agreement with its creditors.

This discussion of the effects of the payment defaults and the
rights of the holders and other creditors of the company are
qualified in their entirety by reference to the full text of the
promissory notes and other agreements referred to above.  Copies
of forms of the promissory notes and other agreements have
previously been filed by the company as exhibits to its periodic
securities filings with the Securities Exchange Commission and
may be viewed free of charge by interested parties at
http://www.sec.gov


ICG COMMS: Court Extends Lease Decision Period Until April 10
-------------------------------------------------------------
ICG Communications, Inc. and its subsidiaries and affiliated
Debtors, represented by Timothy R. Pohl, Esq., at Skadden, Arps,
Slate, Meagher & Flom, ask Judge Walsh to further extend the
time within which the Debtors may assume or reject their
unexpired leases of nonresidential real property until the
earlier of (a) ninety days through and including until April 10,
2002, and (b) the effective date of a plan of reorganization for
the Debtors, subject to the rights of each lessor under such
leases to move the Court to shorten the Extension Period and
specify a period of time in which the Debtors must determine
whether to assume or reject a particular unexpired lease.

For purposes of this Motion, the Debtors announce that the term
"unexpired Leases" includes any agreement entered into in
connection with or related to the leases, to the extent that
such ancillary agreement constitutes lease of non-residential
real property within the meaning of section 365 of the
Bankruptcy Code.  This Motion is not an admission by the Debtors
that any document denominated a "lease" constitutes a lease of
non-residential real property within the meaning of section 365
of the Bankruptcy Code.

In addition to leases of nonresidential property, the Debtors
are party to thousands of non-exclusive right of entry
agreements, indefeasible right to use agreements, and
collocation agreements, which grant the Debtors access to
physical property owned by third parties for purposes of
installing, maintaining and repairing their telecommunications
cable and associated equipment or the right to utilize property
nominally owned by a third party. Out of an abundance of
caution, and to ensure that the extension of time requested in
this Motion applies to all such Use Agreements, if any such Use
Agreement is ultimately determined by this Court to be a lease
of non-residential real property within the meaning of section
365 of the Bankruptcy Code, the Debtors include the Use
Agreements in the scope of this Motion.

As of the date of this Motion, the Debtors are lessees with
respect to over 900 unexpired leases of nonresidential real
property. Most, if not all, of the Unexpired Leases are for
equipment facilities, telecommunications switch sites,
warehouses and offices at which the Debtors operate their
businesses.

The Unexpired Leases and the premises covered thereby thus are
integral to the Debtors' continued operations as they proceed
toward a successful reorganization.  Since the Petition Date,
the Debtors have taken a number of steps to stabilize their
businesses and lay the foundation for a successful
reorganization. The Debtors' management and advisors have been
aggressively pursuing strategic alternatives that may benefit
the creditors of these entities, and have been creating a
long-term business plan upon which a reorganization plan will
ultimately be premised. The Debtors have also moved
expeditiously to reject numerous executory contracts and
unexpired leases to date.

The Debtors' ultimate decision whether to reject, assume, or
assume and assign particular Unexpired Leases, as well as the
timing of such rejection, assumption, or assumption and
assignment, depends in large part on the final structure of the
Debtors pursuant to the plan of reorganization that is currently
being negotiated with the Creditors' Committee and drafted by
the Debtors, and the completion of the analysis of each
individual lease. This process is well underway, but is not yet
complete; the Debtors expect to file a reorganization plan in
the very near future.

The Debtors submit that it is prudent and appropriate to decide
whether each of the Unexpired Leases that have not been assumed
or rejected to date pursuant to their reorganization plan.

Section 365(d)(4) of the Bankruptcy Code provides for the
establishment of a deadline for the assumption or rejection of
unexpired nonresidential leases, and permits an extension of the
deadline for "cause". The term "cause" is not defined in the
Bankruptcy Code. In determining whether cause exists for an
extension of the assumption or rejection time period, courts
rely on several factors, including the following:

       a. Whether the leases are primary assets and the decision
to assume or reject such leases would be central to a plan of
reorganization;

       b. Whether the debtor has had sufficient time to analyze
its financial situation and the potential value of its assets in
terms of its reorganization strategy; and

       c. Whether the lessor continues to receive postpetition
rental payments.

These three factors are amply satisfied in these cases. First,
the premises governed by the unexpired leases are numerous and
contain equipment facilities, telecommunications switch sites,
warehouses and offices that are essential to the operation and
ultimate reorganization of the Debtors' businesses.  Second, the
Debtors are not in a position to assume or reject each of the
unexpired leases because the Debtors have not completed
negotiating and drafting their plan of reorganization. Third,
the Debtors generally are current on their postpetition rental
obligations under the unexpired leases and have the financial
wherewithal to remain so. Accordingly, ample "cause" exists to
grant the requested extension period.

The requested extension will not prejudice the lessors of the
properties subject to the unexpired leases because:

       a. the Debtors are currently making required payments of
monthly rent attributable to the period following the date of
the Debtors' chapter 11 filing;

       b. the Debtors have the financial ability and intend to
timely perform all of their obligations under the Unexpired
Leases as required by the Bankruptcy Code; and

       c. in all instances, the Debtors propose to give
individual lessors the express right to ask Judge Walsh to fix
an earlier date by which the Debtors must assume or reject an
unexpired lease, in accordance with the Bankruptcy Code, without
shifting the burden of proof to the lessor.

The Debtors assure Judge Walsh that courts overseeing large
chapter 11 cases routinely have granted more than one extension
of the assumption or rejection time period.

Judge Walsh, reviewing this Motion, agrees with the Debtors'
assessment of the facts and this case and grants the requested
extension. (ICG Communications Bankruptcy News, Issue No. 16;
Bankruptcy Creditors' Service, Inc., 609/392-0900)  


IT GROUP: Court Allows Debtors to Use Existing Bank Accounts
------------------------------------------------------------
The IT Group, Inc., and its debtor-affiliates request that all
banks at which the Bank Accounts are maintained be authorized
and directed to continue to administer the Bank Accounts as such
accounts were maintained pre-petition, without interruption and
in the usual and ordinary course, and to pay any and all checks,
drafts, wires or ACH transfers issued on the Bank Accounts on
account of any claims arising on or after the Petition Date so
long as sufficient funds are in said Bank Accounts.

Harry J. Soose, the Debtors' Senior Vice President, Chief
Financial Officer and Principal Financial Officer, relates that
prior to the Petition Date, the Debtors maintained, more than
250 domestic bank accounts located in various states through
which IT Group managed cash receipts and disbursements for the
Debtors' entire corporate enterprise. Additionally, certain
Debtors and certain non-debtor affiliates of the Debtors have
accounts in banks in twelve foreign countries.

Mr. Soose submits that the Debtors routinely deposit, withdraw
and otherwise transfer funds to, from and among the Bank
Accounts by various methods, including check, wire transfer,
automated clearing house (ACH) transfer and electronic funds
transfer. The Debtors complete thousands of transactions per
month through the Bank Accounts. The Debtors believe that all of
the Domestic Bank Accounts, whether located within or outside
the District of Delaware, are held at financially-stable banking
institutions with FDIC or FSLIC insurance, or other appropriate
deposit protection insurance.

Mr. Soose believes that under the circumstances of the cases, it
would be appropriate for this court to grant a waiver of the
United States Trustee's requirement that the Bank Accounts be
closed and that new post-petition bank accounts be opened. If
enforced in these cases, such requirements would cause
substantial disruption in the Debtors' business, thereby
impairing their efforts to reorganize and pursue other
alternatives to maximize the value of their estates. Therefore,
in order to avoid delays in payments to administrative
creditors, to ensure as smooth a transition into chapter 11 as
possible with minimal disruption and to aid the Debtors and all
of the Non-Debtor Affiliates in their collective efforts to
successfully and rapidly complete these cases, Mr. Soose deems
it important that the Debtors be permitted to continue to
maintain their existing Bank Accounts and, if necessary, open
new accounts.

Gary A. Rubin, Esq., at Skadden Arps Slate Meagher & Flom LLP in
Wilmington, Delaware, assures the Court that the Debtors
represent that if the relief requested in this Motion is
granted, they will not pay, and each of the banks at which the
Bank Accounts are maintained will be directed not to pay, any
debts incurred before the Petition Date other than as authorized
by this Court. The Debtors continue to work closely with each of
the banks that maintains Bank Accounts against which checks are
drawn in order to ensure that appropriate procedures are in
place so that checks issued prior to the Petition Date, but
presented after the Petition Date, will not be honored absent
approval from this Court.

"Motion granted," Judge Walrath rules. (IT Group Bankruptcy
News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-
0900)  


KMART CORP: Fitch Junks Pass-Through Trusts 1995 K-1 & K-2
----------------------------------------------------------
Kmart Corporation Pass-Through Trusts, $65.3 million series 1995
K-1 and $82 million series 1995 K-2 are downgraded to 'CC' from
'CCC' by Fitch. In conjunction with the downgrade, both classes
of certificates will remain on Rating Watch Negative.

The rating action follows Fitch's review of the transaction in
light of the bankruptcy filing of Kmart Corporation (Kmart). The
'CC' rating reflects Fitch's opinion that default of some kind
seems probable.

The certificates are currently collateralized by an assignment
of rents on 16 properties guaranteed by absolute net leases to
Kmart, in which Kmart is obligated to pay rental payments with
no setoff, abatement or reduction. One of the properties is
vacant and no longer operating as Kmart.

Fitch downgraded its corporate ratings of Kmart to 'D' from
'CCC' after the company announced its plan to reorganize under
Chapter 11 bankruptcy protection. The certificates will be
monitored closely as Kmart exercises its option to affirm or
reject its lease obligations in bankruptcy court on the 16
properties in this pool.

DebtTraders reports that KMart Corp.'s 8.375% bonds due 2004
(KMART5) are trading between 45 and 48. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=KMART5for  
real-time bond pricing.


KMART CORP: Fitch Junks Secured Lease Bonds as Default Looms
------------------------------------------------------------
Kmart Funding Corporation's secured lease bonds $96.6 million
series F and $20.9 million series G are downgraded to 'CC' from
CCC' 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 of this transaction in light of the bankruptcy filing of
Kmart Corporation. The 'CC' rating reflects Fitch's opinion that
default of some kind seems probable.

The certificates are currently collateralized by an assignment
of rents on 24 properties guaranteed by absolute net leases to
Kmart, in which Kmart is obligated to pay rental payments with
no setoff, abatement or reduction. The properties originally
consisted of 19 Kmart stores, four former Builders Square stores
and one apparel warehouse location.

Fitch downgraded its corporate ratings of Kmart to 'D' from
'CCC' as it announced that its plan to reorganize under Chapter
11 bankruptcy protection. The certificates will be monitored
closely as Kmart exercises its option to accept or reject its
lease obligations in bankruptcy court on the 24 properties in
this pool.


KMART CORP: Dorel to Continue Shipping After Court Assurance
------------------------------------------------------------
Dorel Industries Inc. (TSE: DII.A, DII.B; NASDAQ: DIIBF)
provided details on its exposure to Kmart in light of the
retailer's announcement that the retail giant had filed for
Chapter 11 bankruptcy protection.

Dorel expects that it will incur an additional expense of no
more than $0.05 per share related to its outstanding receivables
from Kmart. This expense will be booked in the Company's
December 31, 2001 results, to be released in February. The
Company also confirmed that despite this event, it is
maintaining its recently released earnings per share guidance
for the 2002 fiscal year of $1.90 to $2.00 per share.

The Company stated that its current accounts receivable exposure
was limited due to the effective use of credit insurance and the
close monitoring of the Kmart account. Going forward, Dorel
intends to work with Kmart and continue shipping, once
satisfactory assurances are obtained from the bankruptcy
courts.

Mr. Martin Schwartz, President and Chief Executive Office of
Dorel stated, "We have enjoyed an excellent relationship with
Kmart over the years and are hopeful that today's filing under
the bankruptcy protection laws will allow Kmart to address its
problems. We expect Kmart to once again be a strong partner
going forward."

Dorel Industries Inc. is a rapidly growing, consumer products
manufacturer specializing in three product areas. Dorel's
product offerings include juvenile products such as infant car
seats, strollers, high chairs, toddler beds, cribs, infant
health and safety aids, play-yards and juvenile accessories; a
wide variety of ready-to-assemble (RTA) furniture for home and
office use; and home furnishings such as metal folding
furniture, chairs, tables, bunk beds, futons and step stools.

Dorel employs approximately 3,800 people in nine countries.
Major North American facilities are located in Montreal, Quebec;
Cornwall, Ontario; Columbus, Indiana; Wright City, Missouri;
Tiffin, Ohio; Dowagiac, Michigan; Cartersville, Georgia and
Canton, Massachusetts. The Company's major divisions in the
United States include Cosco, Ameriwood and Safety 1st. In
Canada, Dorel operates Ridgewood and Dorel Home Products.
European operations are carried out through Maxi-Miliaan B.V. in
the Netherlands as well as Dorel (U.K.) in the United Kingdom.


LTV CORP: Terminating Non-Union Retiree Benefits as of Jan. 31
--------------------------------------------------------------
The LTV Corporation and its debtor-affiliates seek authority to
terminate certain retiree benefit plans for those individuals
that the Retirees' Committee is authorized to represent:

       1)  The LTV Health Care Plan;

       2)  The LTV Life Insurance Plan;

       3)  The Welfare Benefit Plan for Retirees of New
           Kensington or the Coal Mining Companies - Plan of
           Insurance Benefits for Hourly Paid Employees of New
           Kensington Plant; and

       4)  The Donner-Hanna Welfare Benefit Plans.

Due to severe liquidity constraints, the Debtors have idled
their integrated steel assets and begun the process of seeking
to sell these and other assets to third parties, as outlined in
the APP.  Because the Debtors have no encumbered assets
available to pay retiree benefit claims incurred for services
rendered to nonunion retirees after January 31, 2002, the
termination of those benefits is necessary for the successful
implementation of the APP and, ultimately, the confirmation of
the Debtors' plan o reorganization.

As of September 2001, the Debtors provided health coverage and
other retiree benefits to approximately 13,100 nonunion
retirees, and approximately 55,000 union retirees, their spouses
or surviving spouses, and/or other eligible dependants under a
number of different benefit plans.  Although the benefit plans
generally are contributory, meaning that participants pay a
portion of the costs of the plans, the vast majority of the
costs associated with the benefit plans are borne by the
Debtors.

The December 31, 2000 actuarial present value of the Debtors'
future costs for the benefit plans is approximately $1.5
billion.  For the calendar year ending December 31, 2000, the
benefit plans had a cash cost to the Debtors of approximately
$131 million, of which approximately $23 million represents the
Debtors' costs for the benefit plans on the account of nonunion
retirees.  As such, the benefit plans, including benefit plans
covering nonunion retirees, impose significant financial
obligations on the Debtors' estates.

In light of the idling and cessation of production at their
integrated steel business, their overall deteriorating financial
condition, the APP goal of selling these businesses and related
assets and the unavailability of funds to make payments of
retiree benefits after January 31, 2002, the Debtors have
determined that it is necessary to terminate the retiree benefit
programs covering nonunion retirees in order to permit them to
preserve and maximize the value of their estates in connection
with the implementation of the APP.

Termination of retiree benefit obligations is described by the
Debtors as "fair and equitable", insofar as it gives all
unsecured creditors the opportunity to share in the distribution
of the Debtors' limited assets, and insofar as the Debtors
already have reached an agreement with the Union to limit
retiree benefits paid to Union retirees.

The APP contemplates, and the APP budget reflects, amounts to
pay (a) current and accrued payroll for active employees, (b)
wages and benefits for active employees that the Debtors expect
will continue in the Debtors' employ for varying periods of
time, (c) incurred but not reported medical claims for active
and retired employees for a certain period of time, and (d)
healthcare and COBRA administration costs.  The APP budget does
not allocate any funds for the payment of retiree benefits to
nonunion retirees after January 31, 2002.  Likewise, none of the
funds advanced under the Tubular and Copperweld facilities are
available to pay retiree benefits for nonunion retirees.

The nonunion retirees continue to accrue claims to the detriment
of other creditors.  While the APP budget provides for certain
retiree and COBRA benefits and IBNR claims in the short term, it
does not provide for payment of retiree benefits on behalf of
nonunion retirees after January 31, 2002.  Accordingly, without
termination of retiree benefits, the Debtors will be unable to
implement the APP.

The Debtors have met with the 1114 Committee and presented it
with a proposal to modify the retiree benefits for the retirees
represented by the Committee.  At the meeting, the Debtors also
reviewed their financial status and the APP with the Committee.  
The Debtors and the Committee have agreed to meet again;
however, the Debtors have begun the process by bringing this
Motion. (LTV Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service, Inc., 609/392-00900)


LTV CORPORATION: Steel Debtor Agrees to Sell Warren Coke Plant
--------------------------------------------------------------
LTV Steel Company, Inc., (OTC Bulletin Board: LTVCQ) said that
it has agreed to sell its Warren (Ohio) Coke Plant to Warren
Coke Corporation, an affiliate of Tonawanda Coke Corporation of
Tonawanda, New York.  Terms of the sale were not disclosed.  The
sale is subject to approval of the U.S. Bankruptcy Court and to
higher or better offers submitted prior to a hearing in
bankruptcy court scheduled for January 30, 2002.

LTV said that the sale must be consummated by January 31, 2002.  
LTV currently is maintaining the Warren Coke Plant in a "hot
idle", or operable, condition.  The Company does not have the
necessary funding under the Asset Protection Plan budget to
maintain the hot idle status beyond January 31.  If LTV is
unable to consummate a sale by January 31, the Warren facility
will be converted to a cold idle status, rendering it unsaleable
as an operating coke plant.

"We are very pleased that the Warren Coke Plant will again
provide jobs and economic vitality to the local community.  We
hope this sale bodes well for the future of our other integrated
steel assets and the re-employment of our people," said Glenn J.
Moran, LTV's chairman and chief executive officer.

LTV said that it is continuing its efforts to secure a new owner
for its Chicago Coke Plant. However, if a sale is not completed
by January 31, the Company will convert the facility to cold
idle status.

The Warren Coke Plant employed approximately 200 people.  Annual
production capacity is 500,000 tons.


LAIDLAW INC: Court Okays Dresdner Kleinwort as Investment Banker
----------------------------------------------------------------
Laidlaw Inc., and its debtor-affiliates obtained the authority
from Judge Kaplan to retain and employ Dresdner Kleinwort
Wasserstein, Inc., as successor in interest to Wasserstein
Perella & Co., as financial advisor and/or investment
banker in the Debtors' chapter 11 cases.

Notwithstanding the approval of the Fee Structure, Judge Kaplan
emphasizes that Dresdner's fees and expenses in these cases
shall be subject to approval of the Court upon proper
application.  "It is provided, however, that the approval of
Dresdner's fees and expenses shall be subject to the standards
contained in section 328(a) of the Bankruptcy Code and not
subject to review for reasonableness under section 330 of the
Bankruptcy Code," Judge Kaplan rules.

The Court makes it clear that the United States Trustee retains
all rights to object to Dresdner's interim and final fee
applications (including expense reimbursement) on grounds
including, but not limited to, the reasonableness standard
provided in section 330 of the Bankruptcy Code.

Judge Kaplan states that any Transaction Fees shall be paid to
Dresdner at the time of closing of the applicable transaction;
provided, however, that:

  (a) the Transaction Fees and the other fees and expenses shall
      be subject to approval of the Court upon proper
      application by Dresdner;

  (b) the Monthly Advisory Fees, the Opinion Fee and any other
      fees and expenses in addition to any Transaction Fees
      shall be paid to Dresdner only upon Court approval or in
      accordance with any other procedures for the compensation
      of professionals established by the Court in these cases;
      and

  (c) Dresdner will promptly return any fees and expenses paid
      to Dresdner, but subsequently disapproved by the Court, to
      the Debtors. (Laidlaw Bankruptcy News, Issue No. 13;
      Bankruptcy Creditors' Service, Inc., 609/392-0900)  


LOEWS CINEPLEX: Nov. Quarter Operating Revenues Drop to $175MM
--------------------------------------------------------------
Loews Cineplex Entertainment Corporation, operating as a Debtor-
in-Possession, saw operating revenues of approximately $174.8
million for the three months ended November 30, 2001 were $17.3
million lower than the three months ended November 30, 2000. Box
office revenues for the three months ended November 30, 2001 of
approximately $123.2 million were $10.5 million lower, and
concession revenues of approximately $45.9 million were $6.0
million lower in comparison to the three months ended November
30, 2000. These decreases in operating revenues were due
primarily to the significant number of theatres closed/disposed
of subsequent to September 1, 2000 which primarily were
overlapping theatre locations and underperforming theatres,
including older, obsolete theatres that contributed only
minimally to cash flow from operations or were operating at a
loss, coupled with lower attendance volume at existing locations
(which were negatively impacted in the short term by the tragic
events of September 11, 2001 in the New York and Washington,
D.C. metropolitan areas).

This overall decrease in revenues is net of additional revenues
of approximately $14.0 million primarily from new theatre
openings and an improvement in admission revenues per patron of
$0.20 for the three months ended November 30, 2001.

Net loss for the three months ended November 30, 2001 was
$61,276, as compared to the net loss of $185,895 for the same
three months of 2000.

Operating revenues of approximately $627.4 million for the nine
months ended November 30, 2001 were $35.1 million lower than the
nine months ended November 30, 2000. Box office revenues for the
nine months ended November 30, 2001 of approximately $440.6
million were $18.9 million lower, and concession revenues of
approximately $164.5 million were $13.2 million lower in
comparison to the nine months ended November 30, 2000. These
decreases were due primarily to the same causes as those cited
above for the three month period. This overall decrease in
revenues is net of additional revenues of approximately $48.2
million primarily from new theatre openings and an improvement
in admission revenues per patron of $0.16 and concession revenue
per patron of $0.03 for the nine months ended November 30, 2001.

Net loss for the nine months ended November 30, 2001 was
$115,654, as compared to the net loss of $280,745 for the same
period of 2000.


MARINER POST-ACUTE: Hires Montgomery McCracken as Local Counsel
---------------------------------------------------------------
The Mariner Post-Acute Network, Inc. Debtors and the Mariner
Health Group Debtors seek to employ Montgomery, McCracken,
Walker & Rhoads, LLP in Wilmington, Delaware as their local
bankruptcy co-counsel, nunc pro tunc as of Friday, January 4,
2002, in connection with the commencement and prosecution of
numerous adversary proceedings the Debtors intend to file
seeking to recover preferences, fraudulent conveyances, or other
avoidance actions.

Pursuant to Section 327(a) of the Bankruptcy Code, Debtors
request approval to employ Montgomery, McCracken as its present
Delaware bankruptcy counsel, Richards, Layton & Finger, is
currently unable to pursue the volume of adversary proceedings
anticipated for filing due to the press of other MPAN projects
and the substantial legal representations it has undertaken for
other firm clients. Due to the number of suits to be filed, and
the January 17, 2002 deadline for the filing of these adversary
proceedings, the Debtors find it necessary to seek additional
Delaware counsel for this purpose.

Powell, Goldstein, Frazer & Murphy; Stutman, Treister & Glatt;
and Richards, Layton & Finger have discussed the division of
responsibilities regarding representation of the Debtors with
regard to these adversary proceedings and will make every effort
to avoid and/or minimize duplication of effort between the four
firms.

The Debtors have selected Montgomery, McCracken as co-counsel
because of the firm's extensive experience and knowledge in the
practice of bankruptcy law, because of its expertise, experience
and knowledge practicing before this Court, because of its
proximity to the Court and because of its ability to respond
quickly to emergency hearings and other emergency matters before
the Court. The Debtors believe that Montgomery, McCracken is
well qualified to represent them with respect to preference
matters in a most efficient and timely manner.

Montgomery, McCracken intends to apply to the Court for
allowance of compensation and reimbursement of expenses in
accordance with the Court's Stipulated Order Revising Interim
Compensation Procedures dated January 11, 2001. The Debtors
propose to compensate Montgomery, McCracken at its customary
hourly rates in effect from time to time. The principal
professionals and paraprofessionals designated to represent the
Debtors and their current standard hourly rates are as follows:

            John Francis Gough        $395.00
            Natalie D. Ramsey         $325.00
            Richard G. Placey         $295.00
            Noel C. Burnham           $295.00
            Robert M. Bovarnick       $295.00
            Joanne Semeister          $245.00
            John H. Newcomer, Jr.     $235.00
            Christa A. Fabiani        $185.00
            Jennifer Taylor           $150.00
            Matthew Kelsey            $140.00
            Isabel Wehbe              $110.00

Natalie D. Ramsey, partner of the law firm of Montgomery,
McCracken, advises that Montgomery, McCracken has previously
provided legal services to two of the Debtors, Prism Rehab
Systems, Inc. and Pinnacle Advisory Group, during their pre-
petition operations but no services have been provided to these
Debtors since the filing of their bankruptcy cases.

Ms. Ramsey reveals in her affidavit that Montgomery, McCracken
has in the past represented, currently represents, or may in the
future represent, the following parties in interest, who are
current clients or affiliates thereof, in matters wholly
unrelated to the preference litigation: PricewaterhouseCoopers,
AmeriSource (now AmeriSourceBergen), EMC Corporation, U.S. West
(Quest), Mellon Mortgage Company, Department of Housing & Urban
Development. Ms. Ramsey believes that Montgomery, McCracken is a
"disinterested person" as that term is defined in Section  
101(14) of the Bankruptcy Code, as modified by Section 1107(b)
of the Bankruptcy Code.

The Debtors submit that, to the best of their knowledge, the
partners and associates of Montgomery, McCracken do not have any
connection with or any interest adverse to the Debtors, their
creditors, or any other party in interest, or their respective
attorneys, except as set forth in the motion and affidavit.
(Mariner Bankruptcy News, Issue No. 24; Bankruptcy Creditors'
Service, Inc., 609/392-0900)  


MCWATTERS MINING: Creditors & Shareholders Approve CCAA Plan
------------------------------------------------------------
McWatters Mining Inc., said that its secured and unsecured
creditors and shareholders voted overwhelmingly in favor of the
Company's Plan of Compromise and Arrangement and Reorganization
of Indebtedness and Liabilities and of Share Capital pursuant to
the Companies' Creditors Arrangement Act (Canada) and the
Companies Act (Quebec) (the Plan) in special meetings held
earlier to approve the Plan.

For each class of creditors, approval by a majority in number
representing not less than 66-2/3% in value of the claims of the
class of creditors represented at the applicable meeting was
required.

Results of each creditor class meeting vote:

    * Banks -100% of creditors representing 100% in value of the
claims of the Banks who were represented at the meeting voted in
favour of the Plan. These creditors will receive, in full and
final satisfaction of their claims, a cash payment equal to $2.4
million on the implementation date of the Plan, with the balance
owing (approximately $4.4 million plus interest) to be paid in
instalments commencing in March 2004 and ending in December
2005.

    * Secured Debenture Holders -100% of creditors representing
100% in value of the claims of the Secured Debenture Holders who
were represented at the meeting voted in favor of the Plan.  
These creditors will receive, in full and final satisfaction of
their claims, a cash payment equal to $1.44 million and
debentures to be issued by McWatters pursuant to the Plan (the
Gold-Linked Convertible Debentures) in an aggregate amount of
$0.96 million on the implementation date of the Plan.

    * Legal Hypothecs Holders -100% of creditors representing
100% in value of the claims of the Legal Hypothec Holders who
were represented at the meeting voted in favor of the Plan.  
These creditors will receive, in full and final satisfaction of
their claims, an aggregate cash payment of $2.775 million on the
implementation date of the Plan.

    * Unsecured Creditors - approximately 98% of creditors
representing approximately 81% in value of the claims of the
Unsecured Creditors who were represented at the meeting voted in
favour of the Plan.  These creditors will receive, in full and
final satisfaction of their claims, on the implementation date
of the Plan, a number of new common shares of the Company at a
price of $0.10 per new common share, up to a maximum of 50% of
the value of their claims from a pool of 148,000,000 new common
shares and, for each new common share received, one right to be
used towards the acquisition of Gold-Linked Convertible
Debentures, the whole as described in the Plan.  Unsecured
Creditors were also given the opportunity to participate in a
$200,000 pool by receiving a cash payment of a maximum of
$2,000, in full and final satisfaction of their claims, pursuant
to the terms of the Plan.

For each class of shareholders, approval by 3/4 of the holders
of shares of each class who were represented at the respective
special meeting was sought.

Results of each shareholder class meeting vote:

    * Preferred Shareholders - approximately 99.5% of the votes
cast at the meeting of preferred shareholders voted in favour of
the Plan. Each preferred share will be exchanged for 1.29388 new
common share of the Company and, for each new common share
received, one right to be used towards the acquisition of Gold-
Linked Convertible Debentures, the whole as described in the
Plan.

    * Common Shareholders - approximately 99.5% of the votes
cast at the meeting of common shareholders voted in favour of
the Plan. Each common share will be exchanged for 0.28122 new
common share of the Company and, for each new common share
received, one right to be used towards the acquisition of Gold-
Linked Convertible Debentures, the whole as described in the
Plan.

"We are very pleased with [Wednes]day's voting results which
indicate a clear support for all the work that was accomplished
since February 14 of last year" said Mrs. Claire Derome,
President and CEO of McWatters.  "None of this could have been
possible without the strong support of all of McWatters'
stakeholders. We now look forward to putting our new business
plan into effect and  proceeding with the expansion of the
Sigma-Lamaque open pit mine" added Mrs. Derome.

The Plan must now be ratified by the Superior Court of Quebec at
a hearing scheduled to occur on January 28, 2002.  Subject to
receiving court approval and satisfactory discretionary relief
from the relevant securities authorities and subject to the
satisfaction or waiver of all other conditions precedent to the
implementation of the Plan including the entering into of
several contracts, implementation of the Plan is scheduled
to occur on or about February 28, 2002.

Creditors are reminded that in order to participate in the
implementation of the Plan, a proof of claim together with a
statement of account (an invoice or an affidavit) in support of
their claim must be filed with the monitor, Richter & Associes
Inc., by no later than February 20, 2002.  If a proof of claim
is not filed by February 20, 2002, the claim will be forever
barred. For further information, creditors should contact
Richter & Associes Inc. at (514) 934-3497.

Detailed information on the rights to acquire Gold-Linked
Convertible Debentures and on the Gold-Linked Convertible
Debentures is contained in the Company's information circular
dated December 17, 2001.

McWatters is an important Canadian gold producer, with reserves
of 1.7 million ounces of gold and total resources of 6.8 million
ounces of gold. McWatters is also involved in developing an
extensive portfolio of exploration properties.  For additional
information, visit the Company Web site at
http://www.mcwatters.com


PAC-WEST: S&P Further Junks Ratings Over Liquidity Concerns
-----------------------------------------------------------
Standard & Poor's lowered its corporate credit and senior
secured bank loan ratings on Pac-West Telecomm Inc. to triple-
'C' from single-'B'-minus. The rating on the $150 million senior
unsecured notes due 2009 was also lowered to double-'C' from
triple-'C'. The ratings remain on CreditWatch with negative
implications.

The downgrade is based on Standard & Poor's increased concerns
that Pac-West may be challenged to have adequate funding for its
business plan beyond 2002 despite having taken measures to
reduce capital spending and overhead over the past year to
conserve capital. Pac-West is projected to have cash usage in
2002 of about $20 million, against an estimated $70 million in
cash and $30 million in bank availability at the end of 2001.
However, liquidity could become even tighter if the company is
unable to renew its $40 million bank facility, which expires in
June 2002, or obtain alternative financing during 2002.

Standard & Poor's is concerned that Pac-West's liquidity,
irrespective of the bank facility expiring, may not provide
sufficient cushion against significant execution risks because
of its exposure to Internet service providers (ISPs) and
reciprocal compensation, change in strategy, and weak
fundamentals of the competitive local exchange carrier (CLEC)
business.

Pac-West is a facilities-based CLEC that operates in seven
states in the West. It provides bundled voice, collocation, and
data services to ISPs and small and medium enterprises (SMEs).
The company's business model remains highly risky because it
still derives more than 60% of its revenues from reciprocal
compensation, whose rate will drop by 50% over the next 18
months, and ISPs, a segment that is expected to undergo further
consolidation. Pac-West's revised strategy is to shift its focus
to SMEs from ISPs, and concentrate on fewer geographical
markets.

The rating on the unsecured notes is two notches below the
corporate credit rating because the concentration of bank debt
and capital lease obligations relative to Standard & Poor's
assessed realizable value of assets exceeds 30%.


PACIFIC GAS: Seeks Okay to Ink Triparty Indenture Trustee Pact
--------------------------------------------------------------
Pacific Gas and Electric Company and the Indenture Trustee ask
the Court to enter an order, (i) authorizing the Debtor to enter
into the Tri-Party Agreement with the Indenture Trustee and
Wilmington Trust Company, (ii) appointing Wilmington Trust
Company as successor trustee under the Indenture, and (iii)
granting such other and further relief as is just.

The Bank of New York is the Indenture Trustee under the
Indenture, dated as of September 1, 1987, as supplemented by two
supplemental indentures (collectively, the Indenture), among
Pacific Gas and Electric Company and the Indenture Trustee. BNY
Western Trust Company (BNY Trust), an affiliate of the Indenture
Trustee, is the successor trustee pursuant to the First and
Refunding Mortgage, dated December 1, 1920, among the Debtor,
Mt. Shasta Power Corporation, Mercantile Trust Company (San
Francisco) and The National City Bank of New York, as
supplemented by fourteen supplemental indentures (collectively,
the Secured Indenture).

The Indenture Trustee submits that the filing of the bankruptcy
petition by PG&E triggered an ongoing event of default under the
Indenture. Such an alleged event of default under the Indenture
creates a conflict of interest for the Indenture Trustee.
Section 310(b)(1) of the Trust Indenture Act of 1939, as amended
by the 28 Trust Indenture Reform Act of 1990 (collectively, the
Trust Indenture Act), provides that an indenture trustee has a
conflict of interest if securities issued pursuant to an
underlying indenture are in default and "such trustee is trustee
under another indenture under which any other securities . . .
of an obligor upon the indenture securities are outstanding."
The Trust Indenture Act requires that a trustee with a conflict
of interest either resolve the conflict of interest or resign
within 90 days after identifying the conflict of interest,
provided the conflict of interest has not been cured, waived or
otherwise eliminated.

The Indenture Trustee determined that it was not possible to
resolve the conflict of interest resulting from BNY Trust's
position as trustee under the Secured Indenture. Therefore, on
July 3, 2001, the Indenture Trustee provided written notice of
its resignation as Indenture Trustee to the Debtor under the
terms of the Indenture.

Pursuant to Section 610(a) of the Indenture, the Indenture
Trustee's resignation does not become effective until the
acceptance of appointment by the successor Trustee in accordance
with Section 611 [of the Indenture]" which requires, among other
things, that the successor trustee satisfy the eligibility
requirements to be trustee under the Indenture.

The eligibility requirements require that the successor trustee
(i) is a corporation organized and doing business under the laws
of the United States, any State, or the District of Columbia,
(ii) is authorized under applicable law to exercise corporate
trust powers, (iii) have a combined capital and surplus of at
least $50,000,000, (iv) is subject to supervision or examination
by federal or state authorities, and (v) have its corporate
trust office in the borough of Manhattan, City of New York.

The magnitude of the utility's case made it difficult for the
Indenture Trustee to find an eligible successor trustee that did
not have a conflict of interest. After a diligent search, the
Indenture Trustee believes it has found a suitable successor
trustee -- Wilmington Trust Company, a state chartered
commercial bank organized and existing under the laws of the
State of Delaware. It is the only entity that is willing to
serve as successor trustee. Wilmington Trust Company satisfies
the Eligibility Requirements, with one exception: it does not
have a corporate trust office in Manhattan, although it has a
"drop agency" in Manhattan for the purpose of facilitating
payments and transfers.

The Debtor and the Indenture Trustee believe that Wilmington
Trust Company should be appointed successor trustee
notwithstanding the lack of a corporate trust office in
Manhattan. The Indenture Trustee and the Debtor believe that
Wilmington Trust Company's lack of a corporate trust office in
New York will not have a material adverse effect on the
noteholders. In addition, since the notes currently outstanding
are represented by global notes held by a securities depository,
the Debtor and the Indenture Trustee do not believe that the
existence of a corporate trust office in Manhattan is a material
requirement. Ownership of beneficial interests in the global
notes is shown on, and transfers are effected through, the
depository's book-entry registration and transfer system and
thus a New York registrar and transfer agent is not necessary.

Subject to this Court's approval, the Debtor, the Indenture
Trustee and Wilmington Trust Company are prepared to enter into
an Agreement of Resignation, Appointment and Acceptance (the
Tri-Party Agreement). Under the Tri-Party Agreement, and subject
to Court approval, Wilmington Trust Company will be appointed
successor trustee. The Indenture Trustee will assign all of its
rights, powers and trusts as trustee under the Indenture to
Wilmington Trust Company.

The Bank of New York is the Indenture Trustee under the
Indenture, dated as of September 1, 1987, as supplemented by two
supplemental indentures (collectively, the Indenture), among
Pacific Gas and Electric Company and the Indenture Trustee.

There are currently five series of notes outstanding under the
Indenture under which The Bank of New York is the Indenture
Trustee. As of the Petition Date the Debtor was, and still is,
indebted for the following amounts:

(a) in the aggregate liquidated amount of $2,207,250,000.00 on
    account of outstanding principal consisting of:

    (1) $680,000,000.00 aggregate principal amount of 7.375%
        Senior Notes due 11/1/2005,

    (2) $1,240,000,000.00 aggregate principal amount of floating
        rate notes due 10/31/01,

    (3) $147,250,000.00 aggregate principal amount of Medium
        Term Notes, Series B,

    (4) $76,000,000.00 aggregate principal amount of Medium Term
        Notes, Series C and (v) $64,000,000.00 aggregate
        principal amount of Medium Term Notes, Series D; and

(b) in an aggregate liquidated amount of $40,361,072.64 on
    account of outstanding interest as of the Petition Date.

The Debtor issued certain mortgage bonds pursuant to the Secured
Indenture under which BNY Trust is the successor trustee. The
mortgage bonds are secured by first-priority security interests
and liens on virtually all of the Debtor's assets. (Pacific Gas
Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   


PANAMSAT: S&P Assigns BB Rating to $1.25BB Sr. Secured Bank Loan
----------------------------------------------------------------
Standard & Poor's assigned its double-'B' bank loan rating to
PanAmSat Corp.'s $1.25 billion senior secured credit facility,
and assigned its single-'B' rating to the company's proposed
$500 million senior unsecured note offering. These ratings were
simultaneously placed on CreditWatch negative.

At the same time, the rating on PanAmSat's $750 million senior
unsecured notes was raised to double-'B' from double-'B'-minus,
reflecting the notes' prospective ranking in the company's
capital structure. In addition, all other ratings on PanAmSat
and its parent, Hughes Electronics Corp., which owns 81% of
PanAmSat, remain on CreditWatch negative, pending the outcome of
Hughes' proposed merger with EchoStar Communications Corp.
(B+/Watch Pos/--). As Standard & Poor's has indicated
previously, the likely corporate credit rating on an
EchoStar/Hughes/PanAmSat or EchoStar/PanAmSat merger would be
either 'BB-' or 'B+', and PanAmSat's corporate credit rating
would be equalized with that of its parent. The notching on the
rating on PanAmSat's bank loan and senior secured and unsecured
notes will not change, absent further changes in the company's
capital structure.

PanAmSat's new credit facility consists of a six-year $400
million term loan, a six-year $600 million term loan, and a $250
million revolving credit facility. The facility is secured by
substantially all of the company's tangible and intangible
assets. Amortization of the term loans does not begin until
2004. A number of financial covenants exist, including an
initial 5 times total debt-to-EBITDA ratio. The majority of the
company's assets and cash flow, aside from some older
satellites, reside at the same level as the bank creditors. The
existing $750 million and proposed $500 million senior unsecured
notes also reside at this level. As part of the bank
transaction, the $750 million senior notes will receive the same
collateral and covenant package as the bank creditors, and will
be pari passu in right of payment. Thus, the rating on these
notes is the same as the bank loan rating.

On a pro forma basis, about $1.75 billion of secured debt will
be present in the company's capital structure. The proposed $500
million senior unsecured notes are notched down twice from the
company's corporate credit rating, reflecting the significant
level of secured debt in the capital structure. The rating on
the secured creditors has been notched up once from the
corporate credit rating, reflecting Standard & Poor's belief
that adequate value exists for a full recovery of these loans
under a distressed scenario. This is based on PanAmSat's
investment-grade business profile, its high-margin cash flows,
stable base of long-term contracts from largely creditworthy
customers, $5.84 billion backlog, scarce orbital slots, and 21
satellites in orbit. At Sept. 30, 2001, the net book value of
its satellites and other property plant and equipment was $3.2
billion. The satellite assets, which cost about $250 million to
build and insure, are depreciated on a straight-line basis
between 10 and 15 years. The company has spent more than $2
billion upgrading its fleet over the past few years.

The ratings on PanAmSat will remain on CreditWatch until the
outcome of the EchoStar transaction is known.

           Ratings Assigned Placed on CreditWatch Negative

     PanAmSat Corp.                            RATING
       $1.25 billion bank loan                 BB
       $500 million senior unsecured notes     B


         Rating Raised and Remaining on CreditWatch Negative

     PanAmSat Corp.                           TO    FROM
       $750 million senior unsecured notes    BB    BB-

            Ratings Remaining on CreditWatch Negative

     Hughes Electronics Corp.                 RATING
       Corporate credit rating                BB+/B
       Commercial paper                       B
     PanAmSat Corp.
       Corporate credit rating                BB-


PENNZOIL-QUAKER: Will Release Q4 & Full-Year Results on Feb. 5
--------------------------------------------------------------
Pennzoil-Quaker State Company (NYSE: PZL) said that it will
release fourth quarter and full year 2002 results before the
market opens on Tuesday, February 5, 2002.  The company will
host a conference call at 9:00 a.m. CST that same day to discuss
the earnings release and other matters of interest to the
financial community. The conference call can be heard live at
http://www.pennzoil-quakerstate.comand will be available for  
replay two weeks thereafter.

The company also said that it will incur a pretax charge of up
to $20 million in the fourth quarter, in addition to the
restructuring expenses previously announced in June.  The new
charges are asset impairments resulting from the write-off of
certain receivables related to the Chapter 11 bankruptcy filing
of K-Mart, and charges related to the company's operations in
Argentina due to that country's currency devaluation.

Excluding special charges, the company reiterated its comfort
with the current fourth quarter and full year 2001 consensus
earnings estimates of 17 cents per share and 64 cents per share,
respectively, for its recurring, continuing operations.

"Obviously, the additional charges announced [Wednes]day are in
light of very recent developments and are the appropriate,
conservative actions to implement.  We are hopeful that K-Mart
is successful in its reorganization and expect to maintain a
relationship with them," said James J. Postl, president and
chief executive officer of Pennzoil-Quaker State Company.  
"Regarding 2002, we are positive about our prospects.  I expect
that our earnings will exceed $1 per share for the full year
under the new accounting standards and that cash flow will be
strong."

Pennzoil-Quaker State Company is a leading worldwide automotive
consumer products company, marketing over 1,300 products with 20
leading brands in more than 90 countries.  The company markets
Pennzoilr and Quaker Stater brand motor oils, the number one and
number two selling motor oils in the United States.  Jiffy Lube,
a wholly owned subsidiary of Pennzoil-Quaker State Company, is
the world's largest fast lube operator and franchiser.

                         *   *   *

In October 2001, Fitch rated Pennzoil-Quaker State Company's
$250 million senior unsecured note issue 'BB-', while it
maintained 'BB+' senior secured notes ratings.

According to the international rating agency, Pennzoil's credit
profile will remain weak given higher operating costs for
Pennzoil, lower volumes in the lubricants and consumer products
segment, and increased debt levels. Despite the weaker credit
profile, the additional security given to the existing senior
noteholders and new bank lenders is a significant benefit and is
reflected in the above secured ratings. The level of
subordinated debt included in the capital structure also
enhances the secured note holders' positions. Security includes
all U.S. intangible assets, inventory, and accounts receivables
not sold in the securitization program.


PLANVISTA: Agrees to Terms of New Bank Facility & Debt Workout
--------------------------------------------------------------
PlanVista Corporation (NYSE: PVC) said that it has agreed to
terms for a new credit facility with its existing lending group
and a bank restructure, resulting in a significant reduction of
its debt.  The Company expects the credit facility and
restructure to take effect within thirty (30) days, subject to
documentation satisfactory to lenders and agreements with other
noteholders.  This transaction will strengthen PlanVista
Solutions' position as an industry leader in medical cost
containment and provides greater financial and operating
flexibility.

The new credit facility has a term of two years and is subject
to interest at prime plus 1%, with monthly payments of interest
commencing in the first quarter of 2002 and nominal quarterly
amortization of principal commencing in June 2002.  Under the
terms of the restructure agreement, PlanVista Solutions will
exchange approximately $28.6 million of bank debt for equity in
the form of convertible preferred securities that cannot be
exercised until 18 months after closing the transaction.  In
connection with the debt restructure, an existing non-bank
subordinated note in the amount of $5 million will automatically
convert into common equity.  Company management indicated that,
as of closing, its total debt is expected to be $40-45 million,
which is approximately half of its debt as of 2001 year end.

Company management indicated that it will initiate efforts to
redeem the preferred securities within 6-9 months.  If the
securities are not redeemed within 18 months, their provisions
will allow the holders thereof to acquire 51% of the Company
utilizing a conversion rate of not less than $1.80 per share.  
The amount of the conversion and conversion rate may increase on
or before closing.

According to PVC Chairman and Chief Executive Officer Phillip S.
Dingle, "This is a milestone in our strategic turnaround
program, as we have now completed our divestiture and
restructure activities.  The support represented by our lending
group's commitment will allow us to build upon a solid
foundation with a strengthened balance sheet and significantly
reduced debt, and will eliminate uncertainty about PlanVista
Solutions.  It also allows us to focus on executing our business
plan, growing revenues, and continuing to improve operating
results.  Equally important, from our shareholders' perspective,
the proposed restructure does not cause immediate dilution or
damage our value proposition."

Dingle added, "Whereas the competition used our balance sheet
against us during 2001, we have now leveled the playing field.  
The competitive advantage we maintain by and through our
superior products and services, technology, and work force make
this a good day for PlanVista."

The Company expects to file an 8K containing additional
restructure terms which, among other things, provide that
holders of the preferred stock will be entitled to receive
dividends at a rate per annum equal to 10% during the first year
and 12% thereafter, in each case compounded and payable
quarterly in additional preferred stock (i.e., "pay-in-kind" or
"PIK") issued at the same conversion rate.  Preferred
shareholders will also acquire representation on PVC's Board of
Directors and can initially appoint three out of seven
directors.  If the Company fails to achieve certain agreed upon
quarterly performance benchmarks, experiences a payment default
on the remaining bank debt, or fails to redeem the preferred
stock within 18 months, preferred shareholders may appoint four
of the seven directors and will be given the right to
participate in shareholder votes as if their shares were
converted.

Company management indicated it will provide earnings guidance
for 2002 and release its fourth quarter 2001 financial results
on February 19, 2002.

PlanVista Solutions is a leading health care technology and
product development company, providing medical cost containment
for health care payers and providers through one of the nation's
largest independently owned full- service preferred provider
organizations.  PlanVista Solutions provides network access,
electronic claims repricing, and claims and data management
services to health care payers and provider networks throughout
the United States. Visit the company's Web site at
http;//www.planvista.com


POLAROID CORP: Intends to Continue Current Severance Program
------------------------------------------------------------
Polaroid Corporation and its debtor-affiliates seek the Court's
authority to continue its current severance program for current
employees.

Greg M. Galardi, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP, in Wilmington, Delaware, recounts that the Court previously
approved the Severance Program for Employees terminated on or
before December 31, 2001.  Under the Severance Program, Mr.
Galardi reiterates, the Terminated Employee would be paid
accrued, but unpaid vacation pay in a lump sum.  Moreover, Mr.
Galardi continues, the Debtors (at their sole option) may offer
either:

  (a) four weeks of salary paid over time in line with standard
      Debtor payroll practices and one month of medical health
      benefits at Employee rates from the date of Termination,
      or

  (b) an approved leave of absence with pay and benefits for
      four weeks following termination.

Mr. Galardi further states that the Debtors were granted
authority to implement the Severance Program, provided that the
cost of the Severance Program for those Employees terminated
between October 20, 2001 and December 31, 2001 did not exceed
$5,700,000.

As of December 30, 2001, Mr. Galardi says, the Debtors expect to
have terminated 416 employees.  "The total cost of the Severance
Program for the 416 Employees terminated between October 20,
2001 and December 30, 2001 is expected to equal $2,400,000," Mr.
Galardi estimates.

Mr. Galardi tells the Court that the Debtors intend to continue
headcount reductions through the first quarter of 2002.  To that
end, Mr. Galardi relates, the Debtors expect to sever up to an
additional 500 employees prior to March 31, 2002.  "The Debtors
expect the cost of the Severance Program for those Employees
terminated between December 30, 2001 and March 31, 2002 to equal
$3,300,000," Mr. Galardi informs Judge Walsh.

Mr. Galardi points out that the cost of extending the Severance
Program through March 31, 2002 will not exceed the cost that was
expected to be incurred under the Severance Program for the
period ending December 30, 2001.  "This cost saving is primarily
attributable to the large number of voluntary terminations by
Employees to date," Mr. Galardi remarks.  Under the Severance
Program, Mr. Galardi explains, Employees who voluntarily
terminate employment are not eligible for severance.

According to Mr. Galardi, the Debtors' ability to continue a
rational headcount reduction without provoking mass Employee
defections is contingent upon the Debtors' ability to offer
their Employees a reasonable severance program.  "Unless the
Severance Program is extended for an additional three months,
the Debtors face the prospect of a demoralized workforce
becoming increasingly distracted," Mr. Galardi warns.

The Debtors assert that the implementation of the Severance
Program is essential to their ability to retain the existing
employees.  "Finding new and qualified employees would be
extremely difficult since they are busy seeking to sell all or
part of their assets," Mr. Galardi explains. (Polaroid
Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


PSINET INC: Gets Okay to Sell Back IMSG Shares for $1.7 Million
---------------------------------------------------------------
Interactive Marketing Systems Group Pty Limited (IMSG) made a
Buy-Back Offer to PSINet, Inc., to buy back and cancel 90
percent of the IMSG shares they hold in connection with the
liquidation of its assets and a voluntary winding-up of its
affairs. The Buy-Back Offer expired at 1:00 a.m. New York City
time January 21, 20022 (the Acceptance Deadline).

In order to meet the Acceptance Deadline, the PSINet Debtors
sought and obtained an Emergency Order from the Court, pursuant
to 11 U.S.C. Secs. 363(b), (f) and 1146(c) authorizing PSINet to
sell shares it owns of IMSG back to IMSG free and clear of
liens, claims, interests and transfer taxes and authorizing all
actions by the Debtors necessary to effectuate the Sale, the
exit of their investment in IMSG, and IMSG's related windup.

PSINet expects that by selling its IMSG shares, it will fetch
approximately US$1,708,8083 (AU$3,317,569) for its estate, based
on the offered price of AU$3,378.38 per Series A Converting
Preference Share and the exchange rate on December 22, 1999 of
AU$1.0 = US$0.65. Payment for the shares sold would be made on
January 28, 2002.

PSINet would sell 90 percent and retain ten percent of the
Preference Shares it currently holds, but because these retained
shares will be stripped of their liquidation preference as part
of the Buy-Back Offer, they will be pari passu with ordinary
shares. As the equivalent of ordinary shares, PSINet would
retain a 2.18 percent ownership interest (on a fully-diluted
basis) in IMSG. These retained shares would have value based on
IMSG's and its subsidiaries' remaining undistributed assets,
which include intellectual property of an unknown market value
owned by IMSG's U.S. subsidiary, Sharinga Networks, Inc. that
IMSG is seeking shareholder approval to liquidate in a sale to
Sharinga's co-founders or another bidder before January 30,
2002.

If PSINet does not accept the Buy-Back Offer, it fears that the
1,091 Preference Shares it currently holds will be stripped of
their existing liquidation preferences without PSINet's consent.
If this happens, the Shares will be significantly devalued with
no corresponding compensation to PSINet.

PSINet would like to (a) accept the Buy-Back Offer, (b) vote the
Shares by proxy in favor of all related actions necessary for
IMSG to consummate the Buy-Back Offer and windup its business,
and (c) take all actions necessary to effectuate the Sale and
exit its investment in IMSG.

IMSG is an Australian company (ACN 093 381 894) in the business
of providing internet and virtual private network services. IMSG
owns a U.S. subsidiary called Sharinga Networks, Inc. The Shares
PSINet holds constitute 20 percent of the Preference Shares
outstanding. PSINet acquired these Shares for investment
purposes on December 22, 1999 for AU$3,000,000 (US$1,938,7624).

While IMSG has not been profitable as an operating business,
IMSG recently collected on a significant litigation judgment and
thus has AU$29.5 million surplus cash above its capital
requirements. Despite the availability of this cash for business
operations, IMSG's Board has recommended to shareholders that
IMSG wind up its affairs and distribute this cash and IMSG's
other assets.

It is the Debtors' understanding that the Committee does not
oppose the Sale.

The Debtors submit that PSINet's decision to sell the Shares
pursuant to the Buy-Back Offer is an exercise of reasonable
business judgment. The amount that PSINet will receive for the
Shares, i.e. approximately US$1.7 million, is approximately
equal to PSINet's initial investment. If PSINet does not accept
the Buy-Back Offer, it expects that its distribution under the
windup will be significantly less, because the Preference Shares
will stripped, by a vote of the holders of the other Preference
Shares, of the liquidation preference they currently have
(stripping the preference from all of the Preference Shares is a
condition to consummation of the Buy-Back Offer). PSINet's 20
percent holding of the Preference Shares series does not rise to
the level at which PSINet could block a stripping vote by the
requisite number of holders (75 percent). Moreover, PSINet
believes that the offering price for the Shares under the Buy-
Back Offer is a fair valuation of them. PSINet accepts the view
of the IMSG Board (which contains a member elected by the
holders of the Preference Shares), that IMSG has no clear way to
profitability. In PSINet's business judgment, the Shares are at
their maximum value now and should be sold at this time for the
benefit of its estate.

In PSINet's view, the Buy-Back Offer represents substantial
value to its estate inasmuch as it provides favorable terms for
the disposition of the Shares at a price that represents fair
and reasonable consideration having a certain value. (PSINet
Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   


QUALMARK CORP: Fails to Comply with Nasdaq Equity Requirement
-------------------------------------------------------------
QualMark Corporation (Nasdaq:QMRK) is a world leader in
designing, manufacturing and marketing HALT (Highly Accelerated
Life Testing) and HASS (Highly Accelerated Stress Screening)
systems. QualMark provides America's largest corporations with
products that improve product reliability and allow them to get
to market faster.

QualMark said that it has requested a hearing to appeal a Nasdaq
staff determination that the Company's common stock is subject
to potential delisting from the Nasdaq SmallCap Market. On
January 17, 2002, the Company received a letter from Nasdaq
notifying the Company of Nasdaq's intent to delist the Company
as of January 25, 2002. The delisting notification stated that
the Company was no longer in compliance with either the minimum
$2,000,000 in net tangible assets or $2,500,000 in stockholders
equity requirement for continued listing on the Nasdaq SmallCap
Market under Marketplace Rule 4310C(2)(B).

QualMark is appealing the Nasdaq determination and will be
presenting a plan to the Nasdaq for achieving the requirements
for continued listing. Under Nasdaq rules a hearing request will
stay the delisting of the Company's securities pending the
Panel's decision. The Company is requesting an oral hearing
allowing the common stock to continue to trade on the Nasdaq
SmallCap Market. There can be no assurances that Nasdaq will
grant the Company's request for continued listing. If Nasdaq
should not rule in favor of the Company, QualMark intends for
its stock to be traded on the OTC Bulletin Board.

QualMark Corporation, headquartered in Denver, Colorado, is a
leader in designing, marketing, and manufacturing accelerated
life testing systems providing America's largest corporations
with products that improve product reliability and allow them to
get to market faster. The Company has installed more than 400 of
its proprietary testing systems in 18 countries and operates six
of its own testing and consulting ("ARTC") facilities in Denver,
Colo., Santa Clara, Calif., Farmington Hills, Mich., Hopkinton,
Mass., Huntington Beach, Calif., and Winter Park, Fla. QualMark
has also formed international ARTC alliances in the United
Kingdom, Ireland, Germany, the Netherlands, Italy, France and
Sweden. The Company also offers engineering services and
products that complement the core technologies of QualMark and
other test equipment providers.


SKEENA CELLULOSE: NWBC Withdraws $150MM Restructuring Plan Offer
----------------------------------------------------------------
NWBC Timber and Pulp Limited has withdrawn its $150 million
restructuring plan offer for Skeena Cellulose Inc. (SCI).

Daniel Veniez, NWBC's President and Chief Executive Officer said
that the company is "satisfied that all reasonable avenues have
been thoroughly explored". By renewing the exclusivity
arrangement with the same party that it has been in negotiations
with since last October, the Ministry of Competition, Science
and Enterprise has effectively closed the door to other
alternatives, the company stated.

"Our proposal was not a quick fix, but represented a long term
commitment to revitalize the company, and by extension, provide
the basis for an economic recovery in the Northwest", stated
Veniez. "We carefully developed a $150 million renewal plan that
would allow Skeena to look to the future with confidence, and
are proud of our efforts, and grateful for the support of the
people of Northwest British Columbia", said Veniez.

NWBC's Chairman, George S. Petty, stressed that NWBC is
"surprised and very distressed" with the governments choice and
approach to the Skeena matter.

Mr. Petty indicated that despite the outcome of the Skeena
project, "We support the BC Government's fundamental policy
direction".

"Premier Campbell's commitment to undoing the fiscal,
institutional, and regulatory straightjacket imposed by the
previous 10 years of NDP rule was one of the reasons why we
returned to BC, and one we support", stated Mr. Petty. The
Forest Practices Code has been particularly damaging to the
industry in BC and is directly responsible for a cumulative
addition of $250 million in cash costs to Skeena during the
1990's.


SUN HEALTHCARE: Seeks Approval to Hire Ernst & Young as Advisors
----------------------------------------------------------------
Sun Healthcare Group, Inc., and its debtor-affiliates seek the
Court's authority to employ Ernst & Young as its medical
compliance, risk and quality management advisors, nunc pro tunc
to November 1, 2001.

Etta R. Wolfe, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, tells Judge Walrath that Ernst & Young's
services are vital to the Debtors' ability to meet various
federal compliance and quality improvement obligations.  "Ernst
& Young is well-qualified to perform the services and the
Debtors know of no reason why they should not be retained," Ms.
Wolfe adds.

Ms. Wolfe states that Ernst & Young will assist the Debtors in
complying with its Corporate Integrity Agreement obligations and
that the Firm is expected to:

  (i) address the Debtors' need for clinical quality improvement
      by providing comprehensive performance measures which
      enable quality improvement targets to be identified;

(ii) generate facility-specific reports immediately usable by
      clinical and administrative managers in order to improve
      facility operations;

(iii) address the Debtors' need for corporate integrity by
      introducing software which will help prevent false claims;

(iv) provide reports that assist executives with the
      identification of strengths and weaknesses of particular
      facilities, regions and managers;

  (v) address the Debtors' need for fair reimbursement by
      helping to identify inaccurate reporting of a patient's
      clinical status.

Ms. Wolfe tells the Court that both parties have acknowledged
the validity of a pre-petition claim filed by Ernst & Young for
pre-petition real estate advisory services in the amount of
$4,000,000.  "However, if the Debtors' application to retain
Ernst & Young will be approved by the court, Ernst & Young will
waive the Pre-petition claim," Ms. Wolfe says.

Ms. Wolfe further reports that the Debtors propose to compensate
Ernst & Young for its services from the assets of its estate.
Ms. Wolfe lists down the terms of payment that has been agreed
upon between the Debtors and Ernst & Young:

  (i) the engagement will be for a minimum of one year, after
      which time the Debtors will have the option of renewal for
      an additional year;

(ii) monthly fees will be based on all inclusive rate of $500
      per month per facility, based upon a total facility count
      of approximately 250, that will be billed at the first of
      each month.  Second year fees will be $450 per facility
      per month;

(iii) an invoice was due and payable on January 2, 2002 in the
      amount of $125,000 for work performed in November 2001,
      plus additional fees for facilities up and running with
      Ernst & Young's services during January 2002.  On February
      1, 2002, a second invoice will be due and payable for work
      performed in December 2001 plus additional fees for all
      facilities using Ernst & Young during February 2002.
      Thereafter, an invoice will be due and payable monthly
      based upon the flat monthly rate;

(iv) out-of-pocket expenses relating to any work undertaken
      will be charged separately and will include, but not
      limited to, such items as travel costs, lodging costs, as
      well as fees for any time incurred in considering or
      responding to discovery requests or participating as a
      witness or otherwise in any legal, regulatory or other
      proceeding as a result of the performance of the services;

  (v) the Debtors will have available 1,800 hours of
      professional time during the engagement relating to
      customization and periodic updating of software,
      orientation and training of the Debtors' employees,
      implementation assistance, as well as monthly advisory
      assistance.  Additional project specific hours may be
      incurred at the Debtors' specific request and be billed
      separately at an average hourly rate of between $250 and
      $320.

Kevin Cornish, Esq., a partner in Ernst & Young, in Atlanta,
Georgia, asserts that Ernst & Young, its partners, principals,
and employees do not have any connection with the Debtors, their
creditors or any other party in interest, or their respective
attorneys.  Mr. Cornish relates that Ernst & Young previously
had a contract with the State of Connecticut Department of
Social Services in which Ernst & Young acted as the Medicaid
intermediary.  However, Mr. Cornish emphasizes that the
Connecticut contract expired in March 2000 and so, Ernst & Young
no longer provides those services.  "Besides, the scope of the
services to be provided by Ernst & Young to the Debtors does not
in any way involve Medicaid issues of the type that were
involved in the Connecticut contract," Mr. Cornish justifies.

Mr. Cornish asserts Ernst & Young is a "disinterested person,"
as such term is defined in section 101(14) of the Bankruptcy
Code.

Since Ernst & Young began performing the Services for the
Debtors upon execution of the Engagement Letter, Ms. Wolfe
explains to Judge Walrath that the relief the Debtors are
seeking be deemed effective nunc pro tunc to November 1, 2001.
(Sun Healthcare Bankruptcy News, Issue No. 30; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


TELIGENT: Senior Lenders Support Fixed Wireless Successor Firm
--------------------------------------------------------------
Teligent Inc., a provider of facilities-based fixed wireless
services, said that Teligent's senior lending group supports a
plan to utilize collateral proceeds to fund a successor company
with the mission of providing fixed wireless services, including
private line, transport, and wholesale services, in addition to
resold services, in all of Teligent's 74 markets.

The successor company, expected to be directly or indirectly
owned by Teligent's senior lenders, will be operated by
Teligent's existing senior management team. The successor
company is expected to have sufficient assets and funding to
reach positive cash flow within approximately two years.

The emergence of the successor company is subject to legal
approvals, including those of the U.S. Bankruptcy Court and
federal and state regulators.

Jim Continenza, Teligent's current COO, is expected to assume
the role of CEO of the successor company. "Our senior lenders
have placed a vote of confidence in our approach and ability to
leverage the assets and grow this business, " said Mr.
Continenza. "We believe the new company will have sufficient
financial resources to aggressively pursue a variety of service
opportunities, particularly wholesale, that leverage the speed,
flexibility, and cost advantages provided by our fixed wireless
technology."

Teligent voluntarily filed for Chapter 11 bankruptcy on May 21,
2001, and is in the process of selling much of its retail
related assets. Teligent recently announced the sale of assets
of a subsidiary company, Executive Conference Inc., for
approximately $60 million.

Based in Herndon, Virginia, Teligent, Inc. is a provider of
fixed wireless broadband communications offering business
customers facilities-based fixed wireless services, including
private line, transport, and wholesale services, in addition to
resold services. Teligent's offerings of regulated services are
subject to all applicable regulatory and tariff approvals.

For more information, visit the Teligent website at:
http://www.teligent.com


TELIGENT: Court Fixes Feb. 20 Bar Date for Administrative Claims
----------------------------------------------------------------

              IN THE UNITED STATES BANKRUPTCY COURT
               FOR THE SOUTHERN DISTRICT OF NEW YORK

          IN RE:                   )   Chapter 11
          TELIGENT, INC., et al.,  )   Case No. 01-12974 (SMB)
                       Debtors.    )   Jointly Administered

               NOTICE OF ADMINISTRATIVE CLAIMS BAR DATE

     BY ORDER OF THE UNITED STATES BANKRUPTCY COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK.

     NOTICE IS HEREBY GIVEN THAT the Court ahs established
February 20, 2002 at 5:00 p.m. (New York Time) as the last day
and time (the "Administrative Claims Bar Date") by which all
persons and entities, including individuals, partnerships,
corporations, estates, trusts and governmental units, holding
Administrative Claims against any of the Debtors must file a
proof of Administrative Claim.  For purposes of this Notice, an
"Administrative Claim" is any claims (as defined in 11 U.S.C. ss
101 (5)) with respect to which a holder intends to seek priority
of payment pursuant to sections 503 and 507 (a)(1) of Bankruptcy
Code, except that holders of the following types of
administrative expense claims need not file requests for
allowance of such Administrative Claims by the Administrative
Claims Bare Date:  (i) administrative claims of (a)
professionals retained pursuant to sections 327 and 328 of the
Bankruptcy Code and (b) the Debtors' prepetition Lenders (as
defined in the Final Order (I)Authorizing the Use of Lenders'
Cash Collateral and (II) Granting Adequate Protection Pursuant
to 11 U.S.C. Secs. 361 and 363 dated June 13, 2001) and (ii) all
fees payable and unpaid under 28 U.S.C. Sec. 1930.  Any person
who asserts an Administrative Claim and wishes to have such
Administrative Claim allowed by the Court and paid by Debtors
must file a proof of such Administrative Claim allowed by the
Court and paid by Debtors must file a proof of such
Administrative Claim either by mailing the original proof of
claim to the United States Bankruptcy Court, re: Teligent, Inc.,
et al., PO Box 95, Bowling Green Station New York, New York
10274, or by hand delivery or overnight courier, to the United
States Bankruptcy court, re: Teligent, Inc., et al., One Bowling
Green, Room 534, New York, New York 10004, so as to be received
on or before February 20,2002 at 5:00 p.m. (New York Time).  All
proofs of Administrative Claims must be submitted in a form in
accordance with the Bankruptcy Code, the Bankruptcy Rules and
the local rules of the United States Bankruptcy Court for the
Southern District of New York.  SHOULD YOU FAIL TO FILE A TIMELY
PROOF OF ADMINISTRATIVE CLAIM, SUCH CLAIM SHALL NOT BE ALLOED BY
THE COURT OR PAID BY THE DEBTORS.

     Kirkland & Ellis                 Kirkland & Ellis
     Citigroup Center                 200 East Randolph Dr.
     153 East 53 rd St.               Chicago, IL 60601
     New York, NY 10022               Matthew N. Kleiman
     James H.M. Sprayregen            Anup Sathy
     Lena Mandel                      Phone:  312-861-2000
     Phone:  212-446-4800             Fax:  312-861-2200
     Fax:  212-446-4900

      Counsel to the Debtors and Debtors in Possession


TERADYNE: S&P Assigns BB- Corp. Credit & Sr. Unsecured Ratings
--------------------------------------------------------------
Standard & Poor's assigned its double-'B'-minus corporate credit
and senior unsecured debt ratings to Teradyne Corp. At the same
time Standard & Poor's assigned its double-'B'-minus rating to
Teradyne's $400 million senior unsecured note issue due 2006.

The outlook is negative.

The ratings on Teradyne reflect the company's good position in
the semiconductor testing industry and moderate capitalization,
offset by substantial volatility in its served market and
substantial ongoing negative cash flows.

Boston, Massachusetts-based Teradyne is a leading supplier of
semiconductor testing machinery (67% of revenues in 2000);
circuit board testing machinery (5%); and backplanes for
electronic products (24%).

Industry conditions have been eroding since late 2000, and
Teradyne reported $1.4 billion sales in 2001, 47% of the $3
billion reported one year earlier. Sales in the December 2001
quarter totaled $220 million, only 27% of the year-earlier
quarter.

The company's semiconductor testing sector, in particular, has
experienced substantial volatility, with quarterly sales running
at 20% of the corresponding period of 2000. The semiconductor
test operations reported a $114 million pretax loss for the
first three quarters of 2001, compared to pretax income of $527
million for the first three quarters of 2000. Circuit board test
equipment sales have also been depressed and unprofitable, while
backplanes have been profitable.

Overall gross margins are likely to be in the range of 5%-15%,
while R&D expenses must remain high to support new product
development initiatives, expected to be around 30% of near-term
sales. R&D expenses were 20% of sales in 2001 and had averaged
12% of sales over the prior three years. The company continues
to support its installed equipment base worldwide, with selling,
general, and administrative expense (SG&A) likely to be around
30%-40% of revenues. EBITDA was negative in 2001, although it
had been $856 million, 28% of sales, in 2000.

Recognizing stressed markets, Teradyne reduced its workforce
three times in 2001, eliminating 22% of its staff. The company
also exited the flash memory test market in the September
quarter. Overall business conditions remain challenging.
Teradyne expects its March 2002 results to be in the same
general range as seen in December, with revenues in the $200
million-$250 million area, while negative cash flows of around
$75 million per quarter are expected to continue.

The company has taken steps to support its financial
flexibility, including the sale of the rated $400 million senior
note issue in October 2001, in addition to a recent $25 million
financing of company-owned buildings. Financial assets of $586
million at December 31, 2001, are expected to meet near- to
intermediate-term operating requirements. Debt of $505 million,
including capitalized leases, was 23% of capital.

                       Outlook: Negative

Teradyne's good industry position and current liquidity should
provide a degree of near-term downside ratings protection.
However, if industry conditions remain depressed beyond the next
few quarters, or if the company's financial profile deteriorates
materially, ratings could be lowered.


TRI-UNION: S&P Concerned About Uncertainty of Asset Sale Outcome
----------------------------------------------------------------
Standard & Poor's revised the CreditWatch rating on Tri-Union
Development Corp.'s corporate credit and senior secured ratings
to developing implications from negative implications. The
ratings were placed on CreditWatch negative on December 7, 2001.

The rating action follows the announcement that during 2002,
Tri-Union plans to sell all, or most, of its Texas and Louisiana
Gulf Coast properties, in addition to its Gulf of Mexico
reserves. These properties constitute 76% of Tri-Union's total
assets. Tri-Union then plans on focusing on its California
properties. The company stated that proceeds would be used for
debt reduction and working capital needs. The developing
CreditWatch implications reflect the uncertainty of the outcome
of the asset sales.

Upon the completion of the asset sales, or a portion of the
asset sales, the ratings on Tri-Union will largely depend on the
company's ability to meet near- and intermediate-term debt
amortization and financial charges, along with an analysis of
the viability of its restructured asset base.

          Ratings Placed On CreditWatch Developing

     Tri-Union Development Corp.
       Corporate credit rating         CCC+
       Senior secured debt             B-


UNITEDGLOBALCOM: Receives Valid Tenders of Notes & Consents
-----------------------------------------------------------
IDT United, Inc., a corporation formed by IDT Venture Capital
Corporation and Liberty UGC Bonds, Inc., a wholly-owned
subsidiary of Liberty Media Corporation (NYSE: L, LMC.B), today
announced that the consent condition has been satisfied with
respect to its cash tender offer and solicitation of consents in
respect of all outstanding $1,375,000,000 10-3/4% Senior Secured
Discount Notes due 2008 of UnitedGlobalCom, Inc.   Under the
terms of the Offer, withdrawal rights have been eliminated.

IDT United has given notice to the depositary that it has
received valid and unwithdrawn tenders of Notes and consents
from holders of at least 66-2/3% in principal amount at maturity
of the outstanding Notes to the amendments to the indenture
pursuant to which the Notes were issued, the termination of the
related pledge agreements and release of all collateral from the
lien of the Notes, the indenture and the pledge agreements and
the waiver of any defaults and events of default that have or
may have occurred under the Notes, the indenture or the pledge
agreements, or which may occur thereunder, and compliance with
the pledge agreements and certain provisions of the indenture.  
UnitedGlobalCom, Inc., has advised IDT United that it will
promptly meet with (a) the trustee under the indenture to sign a
supplemental indenture effecting the amendments to and waiver
under the indenture and (b) the collateral agent under the
pledge agreements to sign a termination agreement with respect
to the pledge agreements.

IDT United has been advised by Mellon Investor Services LLC, the
depositary for the Offer, that, as of 9:30 a.m., New York City
Time, on January 23, 2002, holders of the Notes had validly
tendered and not withdrawn Notes representing $1,010,576,000
aggregate principal amount at maturity of the Notes.

The purchase price for each $1,000 principal amount at maturity
of Notes validly tendered and accepted for purchase will be
$400.  The tender offer is scheduled to expire at 5:00 p.m., New
York City Time, on Friday, February 1, 2002, unless extended.

Notes accepted for purchase pursuant to the Offer will be
promptly paid for by IDT United.

Salomon Smith Barney is the dealer manager and solicitation
agent and Mellon Investor Services LLC is the depositary and
information agent for the tender offer and the solicitation.  
Requests for documentation should be directed to Mellon Investor
Services LLC at 888-788-1979.  Questions regarding the
transaction should be directed to Salomon Smith Barney at 800-
558-3745.

IDT United, Inc. is 33% owned by Liberty Media Corporation.  
Liberty Media Corporation (NYSE: L, LMC.B) holds interests in a
broad range of Domestic and International video programming,
communications, technology and Internet businesses.


U.S. STEEL CORP: S&P Places Low-B Ratings On Watch Negative
-----------------------------------------------------------
Standard & Poor's placed its ratings on United States Steel
Corp., on CreditWatch with negative implications.

These actions follow the recent announcement that United States
Steel Corp., National Steel and its majority shareholder, NKK
Corp. of Japan have entered into an option agreement where U. S.
Steel would acquire NKK's ownership in National Steel
(approximately 53% of National Steel's outstanding shares). The
option expires on June 15, 2002. If the option is exercised, NKK
will receive warrants to purchase shares of United States Steel
common stock in exchange for its National Steel shares. In
addition, United States Steel will, if it exercises the option,
offer to acquire the remaining shares of National Steel in
exchange for equity.

The proposed transaction remains subject to several conditions
including, but not limited to:

    * Governmental actions to limit steel imports that have
depressed markets in the U.S., principally through a strong
remedy under Section 201 of the Trade Act of 1974;

    * The removal by the government of obligations of
steelmakers in the U.S. that may be acquired by other U.S. steel
companies, such as employee-related obligations (also known as
legacy costs);

    * A substantial restructuring of National Steel's debt and
other obligations; and,

    * Negotiation of a new labor agreement that would provide
for meaningful reductions in operating costs.

Standard & Poor's believes that overcoming these obstacles will
prove challenging. However, United States Steel and National
Steel would benefit from consolidation, because it would likely
lead to capacity rationalization of higher cost operations,
result in significant synergies, and allow more effective
competition with encroaching steel minimills.

Although the proposed deal is expected to be an equity
transaction, the CreditWatch placement on United States Steel
reflects Standard & Poor's concern that United States Steel
might ultimately need to increase its debt levels to support
National's operations, which could weaken its financial
profile. Additional risks include the prolonged weakness in the
U.S. steel industry and the negative impact on the company's
financial flexibility.

In completing its review, Standard & Poor's will monitor steel
industry fundamentals and assess the potential impact of cost
savings and trade barriers from the pending U.S. government
reviews, and the ensuing financial profile of both companies.

                    Ratings Placed on CreditWatch
                      with Negative Implications

     United States Steel Corp.                      Ratings
        Corporate credit rating                       BB
        Senior unsecured debt                         BB


WHEELING-PITTSBURGH: Wins Nod to Sell Prudential Stock at Market
----------------------------------------------------------------
Wheeling-Pittsburgh Steel Corporation, requests that Judge Bodoh
authorize and approve the sale of certain shares of common stock
of Prudential Financial, Inc., or WPSC's rights to receive those
shares. WPSC explains that it has been notified that it is
entitled to 84,113 shares of publicly traded common stock of
Prudential Financial, Inc., as a result of the demutualization
of The Prudential Insurance Company of America, with which WPSC
had maintained various insurance policies and programs. Under
the terms of the relevant demutualization plan, such stock is
being held on behalf of WPSC at EquiServe Trust Company, N.A.
WPSC desires to sell such stock at market prices to provide cash
for WPSC's operations.

The Bankruptcy Code permits a debtor to sell property, other
than in the ordinary course of business, where the debtor has
demonstrated a sound business justification for the proposed
sale. The stock  of Prudential Financial, Inc. is not needed for
any business purpose by WPC. The proposed sale will be made in
good faith at readily discernible market prices. WPSC submits
that the sale is in the best interests of WPSC's estate and
should be approved.

Judge Bodoh enters an interim order setting a three-day response
time and authorizes the sale of this stock in the absence of any
objections timely filed and served. (Wheeling-Pittsburgh
Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service,
Inc., 609/392-0900)  


* BOOK REVIEW: George Eastman: Founder of Kodak and the
               Photography Business
-------------------------------------------------------
Author:  Carl W. Ackerman
Publisher:  Beard Books
Softcover:  522 Pages
List Price:  $34.95
Review by Gail Owens Hoelscher
Buy a copy for yourself and one for a colleague on-line at:
http://amazon.com/exec/obidos/ASIN/1893122832/internetbankrupt  

George Eastman was a Bill Gates of his time. This biography of
Eastman (1854-1932) provides a fascinating look at the
inventions, management style, interests, causes, and
philanthropies of one of America's finest scientist-
entrepreneurs. Eastman's inventions transformed photography into
a relatively inexpensive and enormously popular leisure
activity. His company, Eastman Kodak, was one of the first U.S.
firms to mass-produce a standardized product. Along with Thomas
Edison, he ushered in the age of cinematography.

Eastman was born in Waterville, New York. At the age of 23,
while working as a bank clerk, Eastman bought a camera and set
in motion a revolution in photography. At the time,
photographers themselves mixed chemicals to make light-sensitive
emulsions and covered glass plates (called "wet plates") with
the emulsions, taking photographs before the emulsions dried. It
was an awkward, messy and time-sensitive undertaking. Eastman
developed a process using dry plates and in 1884 patented a
machine to produce coated dry plates. He began selling
photographic plates made using his machines, as well as leasing
his patent to foreign manufacturers.

With the goal of reducing the size and weight of photographic
equipment, Eastman then began investigating possibilities for a
flexible firm. He and William E. Walker developed the first such
film, cut in narrow strips and wound on a roller device patented
by Eastman. The Eastman Dry Plate and Film Co. began producing
the film commercially in 1885. In 1888, Eastman patented the
hand-held Kodak camera, designed specifically for roll film and
initially priced at $25. (He made up the word "Kodak" using the
first letter of his mother's maiden name, Kilbourne.)

In 1889, Eastman began working with Thomas Edison, inventor of
the motion picture camera. Edison's increasingly sophisticated
models required a stronger, more flexible transparent film,
which Eastman was able to deliver. He founded Eastman Kodak Co.,
in 1892 and began mass-producing a range of photographic
equipment.

Eastman was an astute businessman. He dealt shrewdly with
competitors and sometimes fell out with former collaborators.
Indeed, some of them filed and won patent infringement lawsuits
against him. He was tireless in his inventing and
entrepreneurial endeavors. In the early days, he often slept in
a hammock at the factory and cooked his own food there. His
mother regularly showed up and insisted that he go home for a
good meal and full night's sleep! Eastman demanded much of his
employees, but no more than de demanded of himself. "An
organization," he said, "cannot be sound unless its spirit is.
That is the lesson the man on top must learn. He must be a man
of vision and progress who can understand that one can muddle
along on a basis in which the human factor takes no part, but
eventually there comes a fall."

This book draws on the contents of 100,000 letters to and from
Eastman's friends, family, investors, competitors, employees,
and fellow inventors, along with Eastman's records and notes on
his various inventions. The result is a meticulously detailed
account of Eastman's myriad interests and hands-on management
style, as well as the evolution of photography and a major 20th-
century corporation.

                          *********

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

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

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

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

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

                          *********

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

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

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

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.  Information
contained herein is obtained from sources believed to be
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The TCR subscription rate is $575 for 6 months delivered via e-
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                     *** End of Transmission ***