TCR_Public/020128.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Monday, January 28, 2002, Vol. 6, No. 19     

                          Headlines

AAI.FOSTERGRANT: S&P Drops Ratings to D After Missed Payment
AMR CORP: S&P Keeps Low-B Ratings on CreditWatch Negative
AMERICA WEST: S&P Will Evaluate Plans to Resolve Watch Status
ANN TAYLOR: S&P Affirms Low-B Ratings on High Sales Expectations
BEAR STEARNS: Fitch Drops Series 1993-4 Class B-5 to D from CCC

BETHLEHEM STEEL: Wants Exclusive Period Extended through July 31
CAPITOL COMMUNITIES: Must Restructure Debt to Improve Results
COMDISCO: Panel Taps Latham to Replace Wachtell as Co-Counsel
CONSTELLATION BRANDS: S&P Rates New $200 Million Notes at B+
DELTA CASUALTY: S&P Assigns R Financial Strength Rating

DIGITAL LAVA: Sets January 30 Record Date Re Plan of Liquidation
ELCOTEL INC: Sells All Non-Cash Assets to Gores for $2.1 Million
ENRON: Trading Creditors Seek Appointment of Trustee for ENA
EXODUS COMMS: Cisco Systems Demands Payment of Postpetition Rent
FAR WEST INSURANCE: S&P Revises Financial Strength Rating to R

FEDERAL-MOGUL: Court Extends Exclusive Period Until August 1
FITNESS INNOVATIONS: Case Summary & Largest Unsecured Creditors
FLEMING CO: Fitch Places Low-B Ratings on Watch Negative
GENEVA STEEL: Files "Chapter 22" Petition in District of Utah
ICG COMMS: Asks Court to Extend Removal Period through May 8

IPI INC: Will Hold Special Shareholders' Meeting on Thursday
IT GROUP: Secures Okay to Maintain Use of Cash Management System
INTEGRATED HEALTH: Seeks Sixth Extension of Exclusive Periods
KEY TRONIC: Defaults on Credit Facility's Financial Covenants
KMART CORP: Pays $76 Million Pre-Petition Claim to Fleming

KMART: Recoton Identifies $6.9MM Accounts Receivable with Debtor
LTV CORPORATION: Court Okays Dewey Ballantine as Trade Counsel
LAIDLAW: Wins Nod to Hire Spencer Stuart as Search Consultants
LODGIAN: Obtains Okay to Continue Use of Cash Management System
MBC HOLDING: Commences Trading on OTC Bulletin Board Today

MARINER POST-ACUTE: Signs-Up CDL, P.C. as Bankruptcy Co-Counsel
MCCRORY: Wants Plan Filing Exclusive Period Stretched to April 7
MEDICALOGIC: Files for Chapter 11 Protection in Wilmington
MEDICALOGIC: Case Summary & 20 Largest Unsecured Creditors
METALS USA: Court Okays Akin Gump as Committee's Counsel

MOTIENT CORP: Begins Trading on OTCBB Under New MTNTQ Symbol
NATIONAL STEEL: S&P Ratchets Ratings Down a Notch to Junk Level
NATIONSRENT: US Trustee Appoints Unsecured Creditors' Committee
NET2000 COMMS: Wants Lease Decision Period Extended to March 15
NETWORK COMMERCE: Sells FreeMerchant.com Assets to Digital River

NORTHWEST AIRLINES: S&P Keeps Low-B Ratings on CreditWatch Neg.
OLYMPUS HEALTHCARE: Seeks Approval to Extend Exclusive Periods
OWENS CORNING: Posts Improved Operating Results in Q4 2001
PACIFIC GAS: Intends to Assume Main Line Extension Contracts
PACIFIC GAS: Says TURN's Allegations Not Supported by Facts

PEN HOLDINGS: Files for Chapter 11 Reorganization in Tennessee
PEN HOLDINGS: Chapter 11 Case Summary
PSINET INC: Taps Staubach Company to Dispose of 4 Properties
REPUBLIC TECHNOLOGIES: Steelworkers Ratify New Labor Agreement
RESEARCH INC: Commences Reorganization Under Chapter 11 in Minn.

RESEARCH INCORPORATED: Chapter 11 Case Summary
ROADHOUSE GRILL: Landlords File Involuntary Chapter 11 in FL
SUN HEALTHCARE: Seeks OK to Hire Marla Eskin as Special Counsel
SUNBEAM AMERICAS: Lease Decision Hearing Scheduled for Tomorrow
SUPERVALU: Q3 Net Sales Drop 15% Due to Impact of Restructuring

TELIGENT INC: Venture Asset to Manage Sale of 20 Central Offices
TRANSFINANCIAL: Shareholders Accept Plan of Complete Dissolution
TREND-LINES INC: Working Capital Deficit Swells to $38.7 Million
TRITON NETWORK: Will File Certificate of Dissolution by Jan. 31
VYTALTEK SECURITY: Court Extends Plan Filing Deadline to March 4

WASHINGTON GROUP: Plan Declared Effective on January 25
WEIRTON STEEL: S&P Hatchets Junk Ratings Down to Default Level
WILLIAMS CONTROLS: Net Operating Losses Continue in FY 2001

* BOND PRICING: For the week of January 28 - February 1, 2002

                          *********

AAI.FOSTERGRANT: S&P Drops Ratings to D After Missed Payment
------------------------------------------------------------
Standard & Poor's lowered its single-'B'-minus corporate credit
rating and triple-'C'-plus senior unsecured rating for
Aai.FosterGrant Inc. to 'D'. The rating action reflects the
company's missed interest payment on January 15, 2002, on its
10.75% senior notes.


AMR CORP: S&P Keeps Low-B Ratings on CreditWatch Negative
---------------------------------------------------------
AMR Corp. (BB/Watch Neg/B), parent of American Airlines Inc.
(BB/Watch Neg/B), as expected, reported a substantial fourth-
quarter 2001 net loss ($734 million before federal cash grants
and other special items; $798 million including such items).

Standard & Poor's ratings for both entities remain on
CreditWatch with negative implications, where they were placed
September 13, 2001 (along with those of other rated U.S.
airlines).

The fourth-quarter loss brought AMR's full-year deficit to $1.4
billion before special items ($1.8 billion after such items).
However, as at other U.S. airlines, revenue generation is
gradually improving from a post-September 11, 2001, low point.
AMR's daily cash operating loss, which averaged $8.5 million to
$9 million during the fourth quarter, had declined to an average
of $6 million by December.

Liquidity remains satisfactory, with a year-end cash balance of
$3 billion, an undrawn, recently arranged $1 billion bank line,
and $6 billion of unsecured aircraft. Ongoing cash drain and
liquidity initiatives have lifted total debt to almost $20
billion, from $14 billion at year-end 2000. The company
estimates lease-adjusted net debt to capital at 76% as of
December 31, 2001 (versus 66% a year earlier), still one of the
industry's better leverage ratios.


AMERICA WEST: S&P Will Evaluate Plans to Resolve Watch Status
-------------------------------------------------------------
America West Airlines Inc. (CCC-/Watch Pos/--), a subsidiary of
America West Holdings Corp. (CCC-/Watch Pos/--), disclosed on
January 18, 2002, that it had closed a $429 million term loan
and completed arrangements for over $600 million in concessions,
financing, and financial assistance. At the same time, the
company has paid in full approximately $49 million in previously
deferred aircraft lease payments due on January 16, 2002, the
end of the grace period.

The loan followed a commitment from the Air Transportation
Stabilization Board for a $380 million federal loan guarantee,
which had been received earlier in the week. The loan proceeds
will aid the company's liquidity, enabling it to avoid a Chapter
11 bankruptcy filing. As a result, ratings remain on CreditWatch
with positive implications. Standard & Poor's will evaluate the
company's business plans in the near term to resolve the
CreditWatch status.


ANN TAYLOR: S&P Affirms Low-B Ratings on High Sales Expectations
----------------------------------------------------------------
Standard & Poor's affirmed its double-'B'-minus corporate credit
rating on Ann Taylor Inc. and its single-'B' subordinated debt
rating on Ann Taylor Stores Corp., which is guaranteed by Ann
Taylor Inc. All ratings were removed from CreditWatch, where
they had been placed October 11, 2001. The outlook is stable.

The rating action is based on Standard & Poor's expectation that
the company's sales trends will improve due a recent change in
its merchandising strategy.

The ratings continue to reflect the company's high business
risk, given its participation in the highly competitive and
volatile specialty apparel industry, inconsistent operating
performance, and rapid store growth. These factors are
mitigated, somewhat, by the company's improved merchandising
strategy, inventory management, and financial performance.

Ann Taylor is a leading specialty retailer of better-quality
women's apparel, focused on full wardrobing. After strong sales
and profit performance in 1998 and 1999, operating performance
moderated in 2000 and 2001 due to some poorly received
merchandise and a reduction in consumer spending. Same-store
sales declined 1.0% in 2000 and 7.3% in 2001. Nevertheless, the
company's same-store sales increased 6.6% in December 2001, if
the early Thanksgiving holiday, compared with 2000, is taken
into account. Ann Taylor's operating margin declined to 17.9% in
the trailing four quarters ended Nov. 3, 2001, from 21.6% in the
same period the previous year. Given the weak U.S. economy,
Standard & Poor's believes it will be difficult for Ann Taylor
to improve its operating performance meaningfully in the near
term. Yet Standard & Poor's does not expect any significant
deterioration in credit protection measures.

Credit protection measures have been satisfactory, with EBITDA
coverage of interest at 3.8 times and funds from operations to
total debt of 20%. The company is moderately leveraged, with
total debt to EBITDA at 3.2x. Financial flexibility exists
through a $175 million credit facility; the company had $14.25
million in borrowings under the facility as of November 3, 2001.
Loans outstanding under the credit facility at any time may not
exceed $75 million.

                         Outlook: Stable

Ann Taylor weathered a difficult retail environment in 2001.
Standard & Poor's believes Ann Taylor's solid credit protection
measures and good market position will support the company
through another lackluster year.


BEAR STEARNS: Fitch Drops Series 1993-4 Class B-5 to D from CCC
---------------------------------------------------------------
Fitch downgrades Bear Stearns Mortgage Securities Inc., series
1993-4 class B-5 from 'CCC' to 'D'. In addition, Fitch places
Bear Stearns Mortgage Securities Inc. series 1997-6 FRM class B-
5 on Rating Watch Negative.

These actions are the result of a review of the level of losses
expected and incurred to date and the current high delinquencies
relative to the applicable credit support levels. As of the
December 25, 2001 distribution:

Bear Stearns Mortgage Securities Inc. 1993-4 remittance
information indicates that approximately 1.86% of the pool is
over 90 days delinquent, and cumulative losses are $720,309 or
.24% of the initial pool. The average monthly loss since October
2001 is $22,347. Class B-5 currently has no credit support.

Bear Stearns Mortgage Securities Inc. 1997-6 FRM remittance
information indicates that approximately 2.79% of the pool is
over 90 days delinquent, and cumulative losses are $1,885,568 or
0.85% of the initial pool. The average monthly loss since
October 2001 is $33,986. Class B-5 currently has 0.54 credit
support.


BETHLEHEM STEEL: Wants Exclusive Period Extended through July 31
----------------------------------------------------------------
Bethlehem Steel Corporation and its debtor-affiliates ask Judge
Lifland for an order extending their exclusive periods during
which to file a chapter 11 plan and solicit acceptances of that
plan.  The Debtors ask for an extension of their Exclusive Plan
Proposal Period through July 31, 2002 and ask for a concomitant
extension of their Exclusive Solicitation Period through
September 30, 2002.

Harvey R. Miller, Esq., at Weil, Gotshal & Manges LLP, tells
Judge Lifland that the Debtors' chapter 11 cases are
sufficiently large and complex to warrant an extension of the
Exclusive Periods.  "With thousands of creditors, 13,000
employees, 75,000 retirees, and over $4,000,000,000 in assets
and liabilities, the Debtors are clearly among the largest and
most complex chapter 11 cases in the country," Mr. Miller
asserts.

According to Mr. Miller, the Debtors have also made a lot of
progress towards rehabilitation and development of a consensual
plan -- a DIP Financing Facility was obtained; vendors,
customers, and employees were assured of normalcy in business
operations, certain assets were sold, extensions to decide on
leases and to file schedules were obtained, among others.

Mr. Miller contends that the requested extension is reasonable
given the Debtors' progress to date and the current posture of
these chapter 11 cases. "During the first three and half months
of these chapter 11 cases, the Debtors have focused on many near
to medium term operational and financial matters, which require
resolution before any meaningful plan formulation and
negotiation can begin," Mr. Miller tells the Court.  Now, Mr.
Miller explains, the Debtors are diligently evaluating their key
operations and identifying, among other things, ways to
streamline their businesses, eliminate unprofitable operations,
and participate in potential consolidation scenarios with other
domestic steel companies.

Moreover, Mr. Miller continues, the Debtors are making the
required post-petition payments and effectively managing their
business.  Mr. Miller notes that the Debtors have sufficient
resources to meet all projected post-petition payment
obligations.  In addition, Mr. Miller says, the Debtors are in
the process of disposing of non-profitable and non-core assets
to raise cash and reduce expenses.

However, Mr. Miller informs Judge Lifland, the Debtors still
need more time before they can craft a confirmable plan.  "The
Debtors need adequate opportunity to assess the full nature,
validity, and extent of the claims that will be asserted against
them," Mr. Miller emphasizes.  Also, the Debtors want to
continue discussions with the Committee, United Steelworkers of
America, the pre-petition and post-petition lender, their joint
venture partners, as well as entities in potential industry
consolidation and relevant governmental entities.  "Such
discussions are necessary to establish the parameters of a
chapter 11 plan, and the terms and conditions for the
formulation of a confirmable plan," Mr. Miller points out.

Clearly, Mr. Miller insists, an extension is necessary.

If the Court will not grant the extension of the Exclusive
Periods, Mr. Miller warns that the threat of multiple plans
would likely lead to unnecessary adversarial situations that
will cause a deterioration in the Debtors' businesses and value
of their estates. (Bethlehem Bankruptcy News, Issue No. 9;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


CAPITOL COMMUNITIES: Must Restructure Debt to Improve Results
-------------------------------------------------------------
For the year ended September 30, 2001, Capital Communities
Corporation experienced a loss of $2,115,003 compared with a
loss of $2,376,488 for the year ended September 30, 2000.  The  
difference in performance resulted primarily from a decrease in
revenues from $853,569 in the year ended September 30, 2000, to
$202,351 in the year ended September 30, 2001, a decrease of
$650,218. The cost of sales for the year ended September 30,
2001, amounted to $10,278, resulting in a gross profit of
$192,073.  Despite the decrease in revenues, gross profits as a
percentage of revenues increased to 94.92% in the year ended
September 30, 2001 from 77.43% in the year ended September 30,
2000. The revenues for the year ended September 30, 2001, were
increased by the recognition of $118,726 in deferred land sales
profit.

Sales decreased by $683,520 for the year ended September 30,
2001, to $75,000 for the year ended September 30, 2001, from
$758,520 for the year ended September 30, 2000, as a result of
decrease land sales of the Maumelle Property.  Gross profit for
the year ended September 30, 2001 was $192,073 a decrease of
$468,832  from the gross profit of $660,905 for the year ended
September 30, 2000.

At September 30, 2001, the Company had total assets of
$7,981,931, a decrease of $649,621 or 7.53%, from the Company's
total assets as of the fiscal year ended September 30, 2000.  
The Company had cash of $134 at September 30, 2001, compared to
$51,932 on September 30, 2000, a decrease of $51,798, or 99.74%.
This decrease was a result of operating losses for the fiscal
year ended September 30, 2001.

The Company believes that its results of operations can improve
in the future if it is able to reorganize the Operating
Subsidiary under Chapter 11 of the United States Bankruptcy  
Code, satisfy its obligations under the 2001 Settlement
Agreement with Resure, raise sufficient additional capital  to
restructure or retire its short-term debt into long-term debt
and/or equity, and commence significant development operations
through TradeArk Properties or other joint venture partners. The
Company, through its interest in TradeArk Properties or other
joint venture partners, intends to take advantage of an apparent
increase in building activity in the City of Maumelle.  There
can be no assurance, however, that such trends will continue or
that the Company will be able to capitalize on these trends.

Capitol Communities Corporation, a Nevada corporation, was
formed on August 21, 1995. It is the  successor-by-merger to
AWEC Resources, Inc., a New York corporation. The Predecessor
Corporation was  incorporated in the State of New York as
Century Cinema Corporation in November 1968.  On December 20,
1993, the Predecessor Corporation changed its name to AWEC
Resources, Inc. On February 11, 1994, the Predecessor
Corporation formed a wholly-owned subsidiary, AWEC Development
Corporation, an Arkansas corporation, which later changed its
name on January 29, 1996, to Capitol Development of Arkansas
Inc.

In order to effectuate a change in domicile and name change
approved by a majority of the  Predecessor Corporation
shareholders, the Predecessor Corporation merged, effective
January 30,  1996, into Capitol Communities Corporation, a
Nevada corporation formed in August 1995 solely for the purpose
of the merger.  Under the terms of the merger, each share of
Predecessor Corporation common stock was converted to a single
share of Capitol Communities Corporation common stock, and
Capitol   Communities Corporation succeeded to all of the
assets, rights, obligations and liabilities of the Predecessor
Corporation.

On July 21, 2000, the Operating Subsidiary, a wholly-owned
subsidiary of the Company which holds  substantially all of the
Company's assets, filed a voluntary petition for relief under
Chapter 11 of the United States Bankruptcy Code in the United
States Bankruptcy Court, Eastern District  of  Arkansas.  Since
then, the Company has continued to operate its business as a
debtor-in-possession.  As such, the Operating Subsidiary is
authorized to operate its business in the ordinary course, but
may not engage in transactions outside the ordinary course of
business without Bankruptcy Court approval.


COMDISCO: Panel Taps Latham to Replace Wachtell as Co-Counsel
-------------------------------------------------------------
Because Wachtell, Lipton, Rosen & Katz and Gardner, Carton &
Douglas will no longer represent the Official Committee of
Unsecured Creditors in the Chapter 11 cases of Comdisco, Inc.,
and its debtro-affiliates, the Committee has decided to retain
the law firm of Latham & Watkins to act as their counsel.

Committee Chair Randolph I. Thornton Jr., from Citibank N.A.,
tells the Court that Ronald W. Hanson, Richard A. Levy, Timothy
A. Barnes and Ann E. Stockman from the Chicago office of Latham
& Watkins will be principally responsible for the Committee's
representation and are each admitted to practice in and are
members of good standing of the bars of the State of Illinois
and the United States District Court for the Northern District
of Illinois.

Mr. Thornton explains that the Latham & Watkins' attorneys is
familiar with the complex factual and legal issues that will be
addressed in these cases because of their representation of some
of the Debtors' unsecured creditors.  "The retention of Latham &
Watkins will contribute to the efficient oversight of the
estates and an efficient and rapid transition of counsel for the
Committee while minimizing the expense to the estates," Mr.
Thornton contends.

According to Mr. Thornton, the Committee requires Latham &
Watkins to render legal services relating to the day-to-day
oversight of these chapter 11 cases, related litigation and the
myriad of problems that may arise in these cases.  The Committee
also needs Latham & Watkins to:

    (a) advise the Committee with its duties and powers in these
        cases;

    (b) prepare on behalf of the Committee all legal papers,
        including but not limited to, all necessary
        applications, motions, objections, responses, orders and
        reports;

    (c) appear on behalf of the Committee before this Court and
        any other court exercising dominion or control over the
        Debtors' estates, including any appellate courts and
        before the United States Trustee;

    (d) consult with the United States Trustee, the Debtors and
        their counsel concerning the administration of these
        cases;

    (e) assist the Committee in its investigation of the acts,
        conduct, assets, liabilities and financial condition of
        the Debtors, the operation of the Debtors' businesses
        and the desirability of the continuance of such
        businesses, and any other matter relevant to the cases
        or the formulation of a plan;

    (f) assist the Committee in analyzing the claims of the
        Debtors' creditors and in negotiating with such
        creditors;

    (g) participate with the Committee in the formulation of a
        plan;

    (h) assist the Committee in requesting the appointment of a
        trustee or examiner, should such action be necessary;

    (i) assist and advise the Committee with respect to its
        communications to the general creditor body regarding
        significant matters in these cases;

    (j) attend meetings and negotiate with any third party with
        respect to any of the foregoing;

    (k) provide services to the Committee with respect to the
        non-Debtor subsidiaries of the Debtors, including, but
        not limited to, the foreign subsidiaries,; and

    (l) perform such other legal services as may be necessary
        and appropriate and in the interest of creditors.

According to Ronald W. Hanson, Esq., a member of the Latham &
Watkins, the firm will charge the Committee its customary hourly
rates:

           Partners                    $415 - 725
           Counsel                      375 - 595
           Associates                   215 - 460
           Paralegals                   140 - 245
           Paralegal Assistants          90 - 115

           Partners Expected to be Most Active
           -----------------------------------
           Ronald Hanson               $625
           Richard Levy                $535

           Associates Expected to be Most Active
           -------------------------------------
           Timothy A. Barnes           $350
           Sarah S. Londergan          $275
           Ann Stockman                $250

           Paralegal Expected to be Most Active
           ------------------------------------
           Janet Stephens              $160

Mr. Hanson informs Judge Barliant that Latham & Watkins intends
to apply for compensation for professional services rendered in
connection with these chapter 11 cases and for reimbursement of
expenses.

Furthermore, Mr. Hanson admits that the firm, its partners and
associates:

    (1) may have appeared in the past, and may appear in the
        future, in unrelated cases or proceedings under the
        Bankruptcy Code or otherwise where one or more of the
        said parties may have been, or may be involved; and

    (2) may represent or may have represented certain creditors
        of the Debtors and potential buyers of the Debtors'
        assets in matters unrelated to these cases.

Effective with its retention as Committee counsel, Mr. Hanson
tells the Court that Latham & Watkins will be withdrawing from
all representation of Citibank N.A. and The Royal Bank of
Scotland -- Agents under four pre-petition credit facilities
with the Debtors.

Mr. Hanson adds it is also possible that certain other Latham &
Watkins attorneys may own Comdisco stock, either directly or
indirectly.  To check for possible conflict of interest, Mr.
Hanson says, the firm conducted extensive research into its
relationships with the Debtors, their affiliates, their
creditors, their equity security holders, and other parties in
interest.

"Should Latham & Watkins learn of any new connections, the firm
will immediately disclose such information with the Court," Mr.
Hanson states.

                       *     *     *

Convinced that the firm does not hold any adverse interest
against the Debtors, Judge Barliant authorizes the Committee to
retain Latham & Watkins, effective as of January 9, 2002 --
provided that the firm shall be entitled to be compensated for
time and expenses incurred from December 7, 2001 in preparing,
filing and presenting the Application.

Effective January 14, 2002, the Court states that all prior
appearances filed in these cases by attorneys at Latham &
Watkins in connection with their previous representation of
Citibank N.A. and Royal Bank of Scotland are withdrawn.

The Court permits James R. Daly, Esq., and the law firm of
Jones, Day, Reavis & Pogue at 77 W. Wacker Drive in Chicago,
Illinois, and Corinne Ball, Esq., at Jones, Day, Reavis & Pogue,
in 599 Lexington Avenue, New York, New York to substitute their
appearance as counsel to the Agents in place of Latham &
Watkins. (Comdisco Bankruptcy News, Issue No. 19; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


CONSTELLATION BRANDS: S&P Rates New $200 Million Notes at B+
------------------------------------------------------------
Standard & Poor's assigned its single-'B'-plus rating to
Constellation Brands Inc.'s $200 million senior subordinated
notes due 2012, the proceeds of which are to be used for
retiring the company's subordinated notes due in 2003. In
addition, the double-'B' corporate credit and senior unsecured
ratings for the company were affirmed.

Total debt outstanding as of November 30, 2001 was approximately
$1.5 billion.

The outlook remains negative.

The ratings reflect Constellation Brands Inc.'s strong cash
generation from a diverse portfolio of beverage alcohol
products, offset, in part, by the competitive nature of the
company's markets and its leveraged financial profile resulting
from its acquisitive growth strategy. The Fairport, N.Y.-based
company is the second-largest U.S. supplier of wines, second-
largest U.S. importer of beer, fourth-largest U.S. supplier of
distilled spirits, second-largest U.K. producer of cider, and a
leading U.K. beverage alcohol wholesaler.

Constellation made more than $1.4 billion of mostly debt-
financed acquisitions between November 1998 and April 2001,
including Matthew Clark PLC, selected Canadian whiskey brands
from Diageo Inc., Franciscan Estates, Simi Winery, and, most
recently, Ravenswood Winery Inc. and the assets of Turner Road
Vintners and Corus Brands Inc. These acquisitions have broadened
Constellation's business lines and product portfolio as well as
significantly increased the company's international revenue
base.

However, the substantial increase in debt has pressured the
company's credit measures, which remain below average for the
rating. Adjusted for operating leases, Constellation's adjusted
debt to EBITDA ratio was about 4.1 times and adjusted EBITDA
coverage was about 3.0x for the fiscal year ended February 28,
2001. Although Constellation has primarily used debt to
facilitate its growth strategy, the company has issued equity in
the past to restore balance sheet flexibility for ongoing
acquisitions. Additional financial flexibility is provided by
the company's $300 million revolving credit facility. Standard &
Poor's does not factor any share repurchases into the rating,
and financial flexibility is very limited for additional sizable
acquisitions over the near term.

                       Outlook: Negative

Credit measures remain somewhat weak for the rating. Standard &
Poor's could lower its rating if the company's credit measures
weaken from current levels.


DELTA CASUALTY: S&P Assigns R Financial Strength Rating
-------------------------------------------------------
Standard & Poor's assigned its 'R' financial strength rating to
Delta Casualty Co.

On Dec. 4, 2001, the Cook County Circuit Court in Illinois
issued an order of liquidation upon finding that Delta Casualty
was insolvent by more than $1 million. The Illinois Insurance
Guaranty Fund will be accountable for the claims filed by Delta
Casualty (NAIC: 10871) policyholders in Illinois.

Delta Casualty has been in business since 1967. Its major lines
of business include private passenger auto liability, commercial
auto liability, auto physical damage, and workers' compensation
insurance. The company is licensed in Illinois, Iowa, and
Florida.

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


DIGITAL LAVA: Sets January 30 Record Date Re Plan of Liquidation
----------------------------------------------------------------
DGLV Inc. (formerly Digital Lava Inc.) (OTCBB:DGLV) said that
its Board of Directors has established January 30, 2002 as the
final record date in connection with the plan of liquidation and
dissolution approved by the company's stockholders on October
30, 2001.

As of the close of business on January 30, 2002, DGLV will close
its stock transfer books and cease recording transfers of shares
of its common stock. In addition, at the close of business on
January 30, 2002, DGLV will file a certificate of dissolution
with the Secretary of State of the State of Delaware. Pursuant
to Delaware law, DGLV will continue to exist for three years
after the dissolution becomes effective or for such longer
period as the Delaware Court of Chancery shall direct, solely
for the purposes of prosecuting and defending lawsuits, settling
and closing its business in an orderly manner, disposing of any
remaining property, discharging its liabilities and distributing
to its stockholders any remaining assets, but not for the
purpose of continuing any business.

In accordance with the plan of liquidation and dissolution, DGLV
will make liquidating distributions, if any, only to
stockholders of record as of January 30, 2002. The timing and
amounts of any such distributions will be determined by DGLV's
Board of Directors in accordance with the plan of liquidation.


ELCOTEL INC: Sells All Non-Cash Assets to Gores for $2.1 Million
----------------------------------------------------------------
Elcotel, Inc., (OTC Pink Sheets: EWTLQ) has sold substantially
all of its non-cash assets pursuant to the terms of an Asset
Purchase Agreement dated December 14, 2001 between the Company
and an affiliate of Gores Technology Group, which was approved
by the United States Bankruptcy Court, Middle District of
Florida, Tampa Division pursuant to its Order Confirming the
Second Amended Joint Plan of Elcotel, Inc. and its Affiliated
Debtors entered on January 15, 2002.  The purchase price
including assumed liabilities approximates $2.1 million.

The orderly liquidation of substantially all of the Debtors'
non-cash assets was implemented through the sale as contemplated
by the Debtors' Second Amended Joint Plan confirmed by the
Bankruptcy Court on January 15, 2002.  Further, the Company has
commenced the winding up of its business in a manner and on
terms acceptable to its senior secured lender. Pursuant to the
Plan, the Debtors' unsecured creditors will receive, after
payments of costs associated with the prosecution of avoidance
actions, any recoveries from the prosecution of such avoidance
actions and $110,000; holders of the Company's common stock will
receive no value for their shares and such shares will be
cancelled; and the Company's senior secured lender will receive
the Company's cash and the net proceeds from the sale and
disposition of the Company's assets after payment of liquidation
costs and expenses, allowed administrative claims and the
payment to the Debtors' unsecured creditors.


ENRON: Trading Creditors Seek Appointment of Trustee for ENA
------------------------------------------------------------
Various trading creditors -- The Wiser Oil Company, Nuevo Energy
Company, BreitBurn Energy Company LLC, Denbury Resources Inc.,
EnerVest Energy L.P., EnerVest Management Partners Ltd., Vernon
E. Faulconer and Vernon E. Faulconer Inc., and Yuma Production &
Exploration, Inc. -- do not trust Enron North America to
effectively manage its estates during the pendency of these
chapter 11 cases.

By an application, the Trading Creditors ask Judge Gonzalez for
an order:

  (i) directing the appointment of a chapter 11 trustee,
      examiner with expanded powers or other such fiduciary for
      the estate of Enron North America;

(ii) directing Enron North America to secure and preserve all
      of its books, records and files pending such appointment;

(iii) directing Enron North America to sequester and hold in
      escrow all of its cash and other monetary receipts pending
      such appointment;

(iv) directing Enron North America to turn over custody of all
      of its books, records, files and cash and other monetary
      receipts to the Responsible Fiduciary upon such
      appointment;

  (v) directing Enron North America and its officers, directors
      and other employees to cooperate with the Responsible
      Fiduciary; and

(vi) vesting the Responsible Fiduciary with the power necessary
      to carry out her functions.

The Trading Creditors are creditors of Enron North America
pursuant to their respective hedge, forward or similar
contracts.

Deborah A. Reperowitz, Esq., at Reed Smith LLP, in Newark, New
Jersey, asserts that a Responsible Fiduciary must be appointed
to take control of, and to preserve and protect the assets of
Enron North America.  But the Trading Creditors admit that a
traditional examiner and examiner's report is unnecessary in his
case.  Instead, the Trading Creditors suggest that the Court
appoint an examiner rather than a trustee.  "The examiner should
be vested with special powers sufficient to enable her to take
control of, preserve and protect the assets of Enron North
America for the benefits of its creditors," Ms. Reperowitz says.

According to Ms. Reperowitz, there is sufficient "cause" to
warrant the appointment of a trustee.  The Trading Creditors are
troubled by:

  (a) the disturbing facts surrounding the Debtors' collapse,

  (b) the suggestion of serious civil and criminal violations by
      the various investigations into the Debtors and their
      executives, including allegations of fraud, insider
      trading and obstruction of justice,

  (c) the reported destruction of Enron documents by Enron
      employees,

  (d) the acknowledgement by the Debtors' accountants that they
      destroyed financial documents and records of the Debtors,

  (e) the complete lack of financial disclosure by the Debtors
      to date,

  (f) the complete lack of a Debtor-by-Debtor accounting and
      allocation of assets and sale proceeds to date in
      connection with the Asset Sale,

  (g) the Debtors' cash management system in which it appears
      assets of various Enron entities are pooled and then
      redistributed on an "as needed" basis,

  (h) the effect of the Interim DIP Facility to create liens on
      the previously unencumbered assets of Enron North America
      (including the future royalties generated by the Asset
      Sale),

  (i) the fact that Enron N.A. is the financial "jewel" of the
      Debtors, and

  (j) the lack of disclosure by the Debtors concerning the
      current or future allocation of the DIP Facility proceeds.

And because of the on-going civil and criminal investigations,
Ms. Reperowitz continues, a fiduciary should be appointed to:

  (i) take control of the books and records of Enron North
      America,

(ii) prepare immediate and monthly accountings of Enron North
      America's cash receipts and disbursements since the
      Petition Date (including any proceeds of the Asset Sale),
      and

(iii) implement a cash management system for Enron North America
      that will, among other things, account for any and all
      receipts and disbursements of Enron North America and
      retain all of Enron North America's assets for the
      exclusive benefit of the Enron North America estate and
      Enron North America's creditors, in order to avoid or
      minimize the Debtors' potential plundering of Enron North
      America's assets.

Ms. Reperowitz emphasizes that this is a particularly urgent
matter in light of the Court's approval of the sale of the
Wholesale Trading Business to UBS Warburg in exchange for
royalty payments -- because of "the complete lack of a Debtor-
by-Debtor accounting and allocation of assets licensed and
royalties realized from the Asset Sale, the Interim DIP
Facility's grant of liens to the DIP Lenders on the proceeds of
the Asset Sale and the Debtors' existing cash management system
providing for the pooling of the respective Debtors' cash
receipts and other assets".

Unless a Responsible Fiduciary is appointed by the Court, the
Trading Creditors fear that the security of Enron North
America's books, records, cash receipts and cash management will
be compromised to the irreparable detriment of Enron North
America's creditors.  "Additional books and records may be
destroyed, and cash and other assets of Enron North America may
be used to pay the creditors of Debtors other than Enron North
America, and those Debtors may be administratively insolvent or
otherwise incapable of repaying Enron North America," Ms.
Reperowitz speculates.

Furthermore, Ms. Reperowitz tells Judge Gonzalez that the
Responsible Fiduciary must also be authorized and empowered to
administer and manage the Trading Book of Business.  According
to Ms. Reperowitz, the Trading Book of Business was not included
in the Asset Sale.  Until recently, Ms. Reperowitz says, the
Trading Book of Business constituted Enron North America's most
valuable asset.  "The Trading Book of Business also likely will
give rise to the largest number of creditors and amount of
claims against Enron North America and perhaps against all of
the Debtors," Ms. Reperowitz anticipates.

The Court should prevent another disaster from happening by
appointing a Responsible Fiduciary, Ms. Reperowitz insists.  The
Trading Creditors propose that such fiduciary should have the
power to:

  (a) compel production of and to assemble all books and records
      of Enron North America,

  (b) subpoena officers, directors and employees of the Debtors,
      and others, and conduct examinations regarding the
      location, contents, custody, maintenance, control,
      compilation, generation or destruction of Enron North
      America's books and records,

  (c) take complete and exclusive control of Enron North
      America's books and records,

  (d) implement and exclusively control a new cash management
      system for Enron North America to ensure that revenue
      generated by Enron North America is not distributed to
      other Debtors or their creditors,

  (e) administer and manage the Trading Book of Business, and

  (f) retain employees and professionals (subject to approval by
      the Court) necessary to enable said fiduciary to perform
      her functions.

Moreover, the Trading Creditors suggest that the
responsibilities of such Responsible Fiduciary should include,
among other things:

  (1) the immediate preparation, filing with the Court and
      service upon all interested parties in the Debtors'
      bankruptcy cases of an accounting of all cash and other
      disbursements and receipts of Enron North America upon the
      Petition Date, and

  (2) the preparation, filing and service of monthly reports as
      to any and all such disbursements and receipts by Enron
      North America, as well as the assumption of all accounting
      functions of Enron North America and administration and
      management of the Trading Book of Business.

Ms. Reperowitz also asserts that the Court should direct the
Debtors in general, and Enron North America in particular, to:

  (i) assemble and turn over to the Responsible Fiduciary all of
      Enron North America's books and records,

(ii) yield exclusive control thereof to the Responsible
      Fiduciary,

(iii) immediately cease disbursing any assets of Enron North
      America, and

(iv) sequester and secure any and all cash and other assets of
      Enron North America, and subsequently yield exclusive
      control over same to the Responsible Fiduciary. (Enron
      Bankruptcy News, Issue No. 10; Bankruptcy Creditors'
      Service, Inc., 609/392-0900)


EXODUS COMMS: Cisco Systems Demands Payment of Postpetition Rent
----------------------------------------------------------------
Cisco Systems Capital Corporation seeks an order of the Court:

A. requiring Exodus Communications, Inc., and its debtor-
   affiliates to pay rent from and after November 26, 2001 under
   the Master Lease and Equipment Schedules, as defined below,
   and

B. allowing and directing payment by Debtors of an
   administrative expense claim pursuant to 11 U.S.C. Sec.
   503(b) in the amount of the contract rent between the
   Petition Date and November 25, 2001, minus any amounts
   already paid by the Debtors.

In the alternative, Cisco Systems seeks relief from the
automatic stay on the grounds that the Debtors are failing to
provide Cisco with adequate protection pursuant to Bankruptcy
Code Sec. 362(d)(1).

Wilmer C. Bettinger, Esq., at Pepper Hamilton LLP in Wilmington,
Delaware, tells the Court that Cisco and the Debtors are parties
to a Master Agreement to Lease Equipment, dated April 24, 1997,
and approximately 139 integrated equipment schedules, pursuant
to which Debtors leased in excess of $100,000,000 of networking
equipment from Cisco. Virtually all of the Equipment Schedules
permit Exodus to purchase the leased equipment at the end of the
lease term for fair market value. Mr. Bettinger explains that
the equipment that Exodus leases from Cisco under the Master
Lease and Equipment Schedules includes switches, routers and
gateways, which Debtors utilize in connection with the operation
of their broadband network. The Debtors' broadband network
cannot be operated without the use of equipment leased to Exodus
by Cisco.

Under the Master Lease and Equipment Schedules, Mr. Bettinger
informs the Court that Cisco is entitled to monthly rent
payments, which decreases each month upon the expiration of any
of the Equipment Schedules. For example, the rent due for
October 2001 was $4,182,583, plus taxes, while the rent due for
November 2001 was $4,181,760, plus taxes, and the rent due for
December 2001 was $4,140,936, plus taxes.

In September 2001, Mr. Bettinger relates that Cisco forwarded to
the Debtors a series of invoices covering rent due under the
Equipment Schedules for the month of October 2001. On October 5,
2001, Debtors forwarded to Cisco a check in the amount of
$3,592,742.05 to be applied against monthly lease payments due
to Cisco for the month of October. The Rent Check explicitly
notes that it is issued in response to the invoices for October
rent. On October 30, 2001, and again on November 27, 2001, Mr.
Bettinger states that Cisco wrote to Debtors to confirm its
understanding that the Rent Check was intended to be applied
against monthly lease payments due to Cisco for the month of
October, and to demand full payment of the $4,182,583 plus taxes
due for the month of October. However, Debtors never responded
to either letter to contradict Cisco's understanding of the
lease payment and made no further payment under the Equipment
Schedules for the month of October 2001, and no payments for the
month of November 2001.

On December 5, 2001, the Debtors sent to Cisco a letter stating
that the Debtor believes that the vast majority of Equipment
Schedules are financing arrangements, and, based upon that
belief, would refrain from making any monthly lease payments to
Cisco under those particular Equipment Schedules, Mr. Bettinger
says. On December 12, 2001, Cisco sent a letter to Debtors
disputing their unilateral decision to treat the Equipment
Schedules as financing arrangement, and demanding compliance
with Debtors' obligations but Debtors have not complied with
Cisco's request.

Mr. Bettinger submits that the rent that has accrued under the
Master Lease between September 26, 2001 and November 25, 2001 is
$8,364,343, of which the Debtors have paid $3,592,742.05,
leaving $4,771,600.95 due and owing to Cisco.

Mr. Bettinger contends that the Debtors are not providing Cisco
with adequate protection, and if not compelled by this Court to
do so, will not provide Cisco with adequate protection. If this
Court is not inclined to enter an order compelling the Debtors
to provide Cisco with monthly rent payments, Cisco requests that
this Court enter an order granting Cisco relief from the
automatic stay in order to permit Cisco to recover its
Equipment. (Exodus Bankruptcy News, Issue No. 12; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


FAR WEST INSURANCE: S&P Revises Financial Strength Rating to R
--------------------------------------------------------------
Standard & Poor's revised its financial strength rating on Far
West Insurance Co., to 'R' from triple-'Cpi'.

This rating action follows the Nov. 9, 2001, order by the
District Court of Lancaster County, Neb., authorizing the
liquidation of the company. As of Nov. 1, 2001, all Far West
agents were directed to cease writing any new business. The
company principally provided surety bonds, contract bonds,
license and permits bonds, and commercial surety bonds.

Far West is a wholly owned subsidiary of Amwest Surety Insurance
Co., which was placed under an order of liquidation on June 7,
2001, by Lancaster District Court Judge John A. Colborn.


FEDERAL-MOGUL: Court Extends Exclusive Period Until August 1
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extends
the Exclusive Periods during which the Federal-Mogul Corporation
and its debtor-affiliates will file a plan of reorganization
and solicit acceptances of that plan. The Debtors' Exclusive
Period within which to propose and file a plan of reorganization
is extended through August 1, 2002 and that their Exclusive
Period to solicit acceptances for such plan be extended through
October 1, 2002.


FITNESS INNOVATIONS: Case Summary & Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Fitness Innovations & Technologies, Inc.
        500 International Drive, Suite 300
        Mount Olive, NJ 07828

Bankruptcy Case No.: 02-10242

Type of Business: Sale of consumer goods.

Chapter 11 Petition Date: January 23, 2002

Court: District of Delaware

Debtor's Counsel: Richard W. Riley, Esq.
                  Duane Morris LLP
                  1100 N. Market Street
                  Suite 1200
                  Wilmington, DE 19801-1246
                  Tel: 302 657 4900
                  Fax: 302 657 4901

                           -and-

                  Steven M. Spector, Esq.
                  Jeffer, Mangels, Butler & Marmaro LLP
                  2121 Avenue of the Stars
                  10th Floor
                  Los Angeles, CA 90067-5010
                  Tel: 310 203 8080
                  Fax: 310 785 5357

Total Assets: $3,378,898

Total Debts: $4,305,729

Debtor's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Coast Business Credit       Judgment               $3,863,017
12121 Wilshire Blvd.
14th Floor
Los Angeles, CA 90025

Skadden, Arps, Slate        Legal Services           $140,000
  Meagher & Flom LLP        Rendered

Howrey & Simon              Legal Services           $103,805
                            Rendered

Whitwell & Emhoff           Legal Services           $102,683
                            Rendered

Ballenger, Strike &         Expert Accounting         $78,111
   Associates               Services Rendered

ICON Health & Fitness, Inc  Judgment in U.K.          $75,000

Robert Hanington            Unpaid Salary             $34,615

Donald Brown                Unpaid Salary             $34,615

David Augustine             Unpaid Salary             $34,615

Alan Morelli                Unpaid Salary             $34,615

Denise McFarland            Legal Services             $9,231
                            Rendered

Carella, Byrne, Bain,       Legal Services             $5,300
   Gilfillan, Cecchi,       Rendered
   Stewart & Olsten

Blake-Turner & Co           Legal Services             $4,289
                            Rendered

Computer Patent Annuities   Patent Services            $1,943

China Laws & Technologies   Patent Services            $1,695

Ridout & Maybee             Patent Services              $828

Daniel & CIA                Judgment                     $587

Hazeltine & Lake            Patent Legal Work            $502

Lee & Li                    Patent Services              $363

CLAS Information Services   Title Search Services         $67


FLEMING CO: Fitch Places Low-B Ratings on Watch Negative
--------------------------------------------------------
Fitch places Fleming Companies, Inc.'s 'BB+' rated secured bank
credit facilities, 'BB' rated senior unsecured notes and 'B+'
rated senior subordinated notes on Rating Watch Negative.

The action comes following a Chapter 11 bankruptcy filing by
Kmart Corp., which represents about 20% of Fleming's revenues.
In addition, Fleming has announced that it has ceased shipments
to Kmart after it missed a $78 million payment to Fleming on
Friday. While we expect shipments to resume following Kmart's
receipt of a $2 billion debtor-in-possession facility, the
impact of expected Kmart store closings on Fleming's business
remains uncertain at this time.

Fitch expects to meet with Fleming management in the next
several weeks to discuss the ramifications of the Kmart
bankruptcy filing as well as the long-term growth opportunities
for the company. Our analysis will include a review of the
company's business model and the impact a downsized Kmart's
business will have on Fleming's operating and financial profile.


GENEVA STEEL: Files "Chapter 22" Petition in District of Utah
-------------------------------------------------------------
On January 25, 2002, Geneva Steel LLC, a wholly owned subsidiary
of Geneva Steel Holdings Corp (Nasdaq: GNVH), filed a voluntary
petition under Chapter 11 of the United States Bankruptcy Code.  
The filing in the United States Bankruptcy Court for Utah,
Central Division, was required by the Company's secured lenders
as a condition to providing continued access to cash proceeds
from the sale of inventory and the collection of accounts
receivable. Without such access, the Company would not have
sufficient liquidity to continue its activities and protect its
facilities.

The Company reached agreement with its secured lenders Friday
for continued access to cash proceeds through May 1, 2002.  
Access to cash pursuant to the agreement, which remains subject
to Bankruptcy Court approval, is subject to compliance with
several conditions, including a budget for cash disbursements.
There can be no assurance that the Bankruptcy Court will approve
the agreement, the Company will be able to access cash proceeds
under the agreement, any available cash proceeds will be
sufficient to fund Geneva's activities through May 1 or that the
Company will be able to reach any further agreement for access
to cash proceeds or other capital, if any, after the agreement
ends.

Low-priced steel imports have had a significant negative impact
on the U.S. steel industry and Geneva's order entry volume and
pricing.  This has been exacerbated by a weakened domestic
economy that has reduced demand for all of the Company's steel
products, contributing to reduced price realization and
shipments of product. Moreover, increases in domestic steel
plate production capacity have intensified plate market
competition with respect to both price and volume.

In November 2001, the Company announced the temporary shutdown
of substantially all of its production operations due to
continuing adverse steel market conditions, which created
liquidity problems for the Company.  Since then, the Company's
primary source of liquidity has been proceeds from the sale of
inventory and collection of receivables received pursuant to
agreements with its secured lenders.

"The combination of several significant adverse market
developments, combined with the requirements of our secured
lenders, have caused Geneva's current liquidity crisis and
forced us to seek protection under the Bankruptcy Code," said
Ken Johnsen, president and CEO of Geneva.

At the time Geneva previously emerged from bankruptcy, many
steel industry observers expected increases in steel pricing and
shipments due primarily to anticipated improvements in the
industry's supply situation, including decreased inventory
levels and reduced imports.  Actual pricing and shipments for
Geneva's primary products have, however, been substantially
lower than anticipated because of an unexpected weakening in
demand and continued import pressure.  Adverse market conditions
were further exacerbated by the events of September 11th.

Despite current adversities, Geneva is hopeful that the steel
market may recover during 2002.  A number of domestic steel
producers have recently announced price increases for various
flat-rolled steel products.

"We are continuing to pursue alternatives for securing the
future of the Geneva mill," said Joseph Cannon, chairman of
Geneva.  "This filing gives us the ability to continue those
efforts with the cooperation of our secured lenders."

Geneva Steel's steel mill is located in Vineyard, Utah.  The
Company's facilities can produce steel plate, hot-rolled coil,
pipe and slabs for sale primarily in the western, central and
southeastern United States.


ICG COMMS: Asks Court to Extend Removal Period through May 8
------------------------------------------------------------
ICG Communications, Inc. and its subsidiaries and affiliates ask
Judge Walsh to further extend the time within which the Debtors
may remove proceedings pending as of the commencement of these
cases.

As of the Petition Date, Timothy R. Pohl, Esq., at Skadden,
Arps, Slate, Meagher & Flom reminds Judge Walsh, the Debtors
were parties to hundreds of civil actions pending in various
jurisdictions around the United States and involving a variety
of claims, including claims sounding in contract and tort, as
well as claims arising under federal, state, and/or local
regulatory laws.

Thus, the Debtors propose that the time by which they may file
notices of removal with respect to any pending actions be
further extended until the earlier of:

   (a) 90 days through and including May 8, 2002;

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

   (c) the effective date of a plan of reorganization for the
       Debtors.

The Debtors argue that a further extension of the Removal Period
is in the best interests of the Debtors, their estates, their
creditors and other parties-in-interest. Since the commencement
of these chapter 11 cases, the Debtors' focus has been, first,
on stabilizing their businesses and, second, on formulating a
business plan that ultimately formed the basis of a plan or
plans of reorganiza00tion for the Debtors. Indeed, on December
19, 2001, the Debtors filed their plan of reorganization and
disclosure statement with this Court. Consequently, the Debtors
have not yet been able to conclude the monumental task of
analyzing the merits of removing each of the hundreds of actions
to which they are a party. The proposed extension of the Removal
Period will afford the Debtors the chance to make an informed
decision with respect to the benefits, if any, to be derived
from removal of some or all of the Actions.

The Debtors submit that a further extension of the Removal
Period will not prejudice the non-debtor parties to the actions.
Each non-debtor party to an action that ultimately is removed
will continue to have the right to seek remand. Further, an
additional extension of the Removal Period will not unduly delay
the prosecution of the actions, as most, if not all, of the
actions remain subject to the automatic stay of section 362(a)
of the Bankruptcy Code.  In short, a further extension of the
Removal Period simply will permit maintenance of the status quo
while the Debtors review, analyze, and consider their options
with respect to the actions. (ICG Communications Bankruptcy
News, Issue No. 16; Bankruptcy Creditors' Service, Inc.,
609/392-0900)  


IPI INC: Will Hold Special Shareholders' Meeting on Thursday
------------------------------------------------------------
The Special Meeting of the Shareholders of IPI, Inc. will be
held on Thursday, January 31, 2002, at 9:00 a.m. at the IPI,
Inc. corporate offices located at 8091 Wallace Road, Eden
Prairie, Minnesota 55344, for the following purposes:

       1. To approve and adopt that certain Asset Purchase
          Agreement dated November 15, 2001, pursuant to which
          the Company will sell the assets relating to its
          franchising of printing centers under the Insty-Prints
          trade name to Allegra Holdings LLC.

       2. To approve and adopt a plan of liquidation and
          dissolution of the Company that will authorize (a) the
          sale of the assets of the Company and the distribution
          to shareholders pursuant to the plan, (b) the
          deregistration of the Company's Common Stock under the
          Securities Exchange Act of 1934 and (c) the
          dissolution of the Company pursuant to the Minnesota
          Business Corporation Act.

       3. To transact such other business as may properly come
          before the meeting or any adjournments or
          postponements thereof.

The Board of Directors has fixed the close of business on
December 19, 2001 as the record date for the determination of
shareholders entitled to notice of and to vote at the meeting.


IT GROUP: Secures Okay to Maintain Use of Cash Management System
----------------------------------------------------------------
The IT Group, Inc., and its debtor-affiliates request authority
to continue to use their Cash Management System as it may be
modified in connection with the Debtors' contemplated debtor-in-
possession financing or as required by the Debtors in the
ordinary course of business.

Harry J. Soose, the Debtors' Senior Vice President, Chief
Financial Officer and Principal Financial Officer, explains that
the Bank Accounts comprise an established cash management system
that the Debtors need to maintain in order to ensure smooth
collections and disbursements in the ordinary course. The Cash
Management System is effectively centralized, and is comprised
of a main operating account that is funded from several lockbox
accounts and that is used to fund various other deposit accounts
and investment accounts, as well as intercompany transactions.

Mr. Soose believes that the Cash Management System, which is
similar to those commonly employed by corporate entities of
comparable size and complexity to the Debtors, allows for:

A. overall corporate control of funds,

B. certain cash availability when and where needed among the
     Debtors and Non-Debtor Affiliates, and

C. the reduction of administrative costs through a centralized
     method of coordinating funds collection and movement.

The Debtors' smooth transition into, and operations in, chapter
11 depends on their ability to maintain these bank accounts and
operate this Cash Management System without interruption.

Mr. Soose informs the Court that the Cash Management System is
highly automated and computerized and includes the necessary
accounting controls to enable the Debtors to trace funds through
the system and ensure that all transactions are adequately
documented and readily ascertainable. The Debtors will continue
to maintain detailed records reflecting all transfers of funds,
including, but not limited to, Intercompany Transactions.

Mr. Soose believes that the operation of the Debtors' business
requires that the Cash Management System continue during the
pendency of these chapter 11 cases. Adopting new, segmented cash
management systems would be expensive, would create unnecessary
administrative burdens, and would be disruptive to the Debtors'
business operations.

Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP
in Wilmington, Delaware, explains that the Cash Management
System, which is similar to those commonly employed by corporate
entities of comparable size and complexity to the Debtors,
allows for:

A. overall corporate control of funds,

B. certain cash availability when and where needed among the
     Debtors and Non-Debtor Affiliates, and

C. the reduction of administrative costs through a centralized
     method of coordinating funds collection and movement.

Mr. Galardi submits that the Debtors' smooth transition into,
and operations in, chapter 11 depends on their ability to
maintain these bank accounts and operate this Cash Management
System without interruption. The Cash Management System is
highly automated and computerized and includes the necessary
accounting controls to enable the Debtors to trace funds through
the system and ensure that all transactions are adequately
documented and readily ascertainable. The Debtors will continue
to maintain detailed records reflecting all transfers of funds,
including, but not limited to, Intercompany Transactions.

Mr. Galardi contends that the operation of the Debtors' business
requires that the Cash Management System continue during the
pendency of these chapter 11 cases. Adopting new, segmented cash
management systems would be expensive, would create unnecessary
administrative burdens, and would be disruptive to the Debtors'
business operations. Consequently, maintenance of the existing
Cash Management System is in the best interests of all creditors
and other parties in interest.

Subject to a final review by the Office of the U.S. Trustee,
Judge Walrath rules that the Cash Management Motion is granted.
(IT Group Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 609/392-0900)  


INTEGRATED HEALTH: Seeks Sixth Extension of Exclusive Periods
-------------------------------------------------------------
The Rotech Debtors have filed a proposed form of disclosure
statement and joint plan of reorganization, which were
subsequently amended.  A hearing on confirmation of the Rotech
Plan is currently scheduled for February 13, 2002.  No plan or
plans of reorganization have been filed with respect to any of
the Debtors other than the Rotech Debtors.

By this Motion, the Debtors ask the Court, pursuant to section
1121(d) of the Bankruptcy Code, to:

(1) further extend the Rotech Debtors' Exclusive Solicitation
    Period through and including July 26, 2002.

(2) further extend Integrated Health Services, Inc. Debtors'
    Exclusive Period for filing a Plan through and including May
    27, 2002, and their Exclusive Solicitation Period through
    and including July 26, 2002.

The Rotech Debtors are in the process of soliciting acceptances
of the Rotech Plan. According to the Debtors, the development of
a confirmable plan for the IHS Debtors involves the negotiation
and resolution of a number of complex issues, and they are now
in the process of addressing those issues and developing a
feasible framework for plan negotiations with the Creditors'
Committee and other major constituents.

The Debtors tell Judge Walrath that they have continued to make
significant progress in their reorganization efforts since the
order for the Fifth Extension.  In addition to the formulation
and filing of the Rotech Plan, they have undertaken significant
steps in furtherance of the plan of reorganization for the IHS
Debtors, including the sale of non-core assets and the
disposition of unprofitable and strategically unfavorable
facilities. Based on the Debtors' progress to date, the Debtors
believe that they will require at least an additional 120 days
to develop a plan or plans of reorganization for the IHS
Debtors, followed by a solicitation period of at least 60 days.

Though the Rotech Debtors hope to garner the necessary support
for the Plan in advance of February 13, 2002 Hearing, they are
seeking an extension of their Exclusive Solicitation Period in
an abundance of caution, which would be coextensive with that
requested by the IHS Debtors.

The Debtors' attorneys at Young Conaway Stargatt & Taylor, LLP
and Kaye Scholer, LLP remind Judge Walrath the Exclusive Periods
are intended to afford the Debtors a full and fair opportunity
to rehabilitate their businesses, negotiate and propose one or
more reorganization plans, and solicit acceptances thereof
without the deterioration and disruption of their businesses
that might be caused by the filing of competing plans of
reorganization by non-debtor parties. Given such intention for
granting the Exclusive Periods, and application of the factors
that Courts consider when granting an extension to the facts in
the case, ample cause exists for the requested further
extension, the attorneys represent. (Integrated Health
Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   


KEY TRONIC: Defaults on Credit Facility's Financial Covenants
-------------------------------------------------------------
Key Tronic Corporation (Nasdaq: KTCC), an emerging leader in
electronic manufacturing services (EMS), announced its results
for the quarter ended December 29, 2001.

For the second quarter of fiscal 2002, Key Tronic reported total
revenue of $50.5 million, up 46% from $34.6 million for the
previous quarter, and compared to $52.6 million for the second
quarter of fiscal 2001. Despite the challenging economic
environment worldwide, the Company's increased sales for the
second quarter reflect growing production levels and an
expanding customer base.

EMS revenue (non-keyboard sales) for the second quarter of
fiscal 2002 was $45.7 million or 90% of total revenue, up from
$29.6 million or 86% of total revenue for the previous quarter.
During the second quarter, Key Tronic increased production
levels for projects with new EMS customers, including a
significant consumer product program and a number of specialty
printer products.

For the second quarter of fiscal 2002, Key Tronic's gross margin
was approximately 10%, up significantly from approximately 1% in
the previous quarter. Operating income was $1.0 million, up from
an operating loss of $892,000 in the prior quarter.

As announced on December 21, 2001, a jury in Seattle federal
court rendered a verdict finding that in 1993 Key Tronic
misappropriated trade secrets and breached a confidentiality
agreement with Plaintiffs Fernando Falcon, Federico Gilligan and
their company, F&G Scrolling Mouse LLC. The jury awarded damages
of $16.5 million. Key Tronic strongly disagrees with the verdict
and has filed post-trial motions seeking to overturn the verdict
and will vigorously pursue an appeal if necessary.

As a result of the verdict, the Company has been notified by a
lender that the Company is in default of certain financial
covenants in its credit facility and all subsequent loans or
advances under the credit facility will be at the lender's sole
discretion. Should any action be taken by the Plaintiffs which
results in either a levy or execution on any assets of the
Company, the lender has stated that it will immediately stop all
further financing. The Company is dependent upon loans and
advances from the lender to fund its working capital
requirements. A levy or execution would disrupt funding and
require the Company to file under Chapter 11 of the U.S.
Bankruptcy Code in order to continue operating.

The Company is currently in negotiations with the Plaintiffs
attempting to reach a settlement of this matter in an amount and
on terms that will permit the Company to continue with ongoing
operations. The Company has made an offer to Plaintiffs which
the Company believes is in excess of the estimated amount
Plaintiffs would recover from a levy or execution in a Chapter
11 proceeding. Any settlement must be approved by the lender and
the Company's Board of Directors.

In the second quarter, the Company has reported a $17.0 million
charge for the litigation judgment and associated fees. In light
of the legal judgment, Key Tronic also believes that it is
appropriate to take an additional reserve of approximately $5.0
million against the Company's previously recorded tax assets.
The Company has accumulated net operating losses of
approximately $65 million that can be used to reduce future U.S.
income taxes.

Including the charges for the litigation judgment and the tax
provision, the net loss for the second quarter of fiscal 2002
was $21.6 million. Excluding the charges for the litigation
judgment and the tax provision, net income for the second
quarter of fiscal 2002 was $408,000, compared to a net loss of
$983,000 for the previous quarter, and approximately breakeven
in the second quarter of fiscal 2001.

"While we are very disappointed with the unanticipated legal
verdict and its potential impact on the future of our Company,
we are pleased with the continued improvement in our financial
performance during the second quarter," said Jack Oehlke,
President and Chief Executive Officer. "In spite of difficult
worldwide economic conditions, we have built a new base of
customers and continued to expand our EMS pipeline. Our unique
combination of skills, including our circuit board assembly,
engineering, precision plastic molding, mechanical assembly and
high-value manufacturing capabilities, have attracted new
customers and created additional business opportunities."

"From an operational standpoint, we had particularly strong
increases in production volume for the initial rollout of a new
consumer products program in the second quarter. While we expect
our sequential sales levels to be lower in the third quarter, we
anticipate continued strong demand from this client in the third
quarter."

"While our existing customers have been supportive, we remain
uncertain about the impact of the litigation judgment on our
ongoing business operations. We plan to provide updates to the
public on the status of the litigation and our loan covenants as
soon as material developments occur."

Key Tronic is a leading contract manufacturer offering value-
added design and manufacturing services from its facilities in
the United States, Mexico, Ireland and China. The Company
provides its customers full engineering services, materials
management, worldwide manufacturing facilities, assembly
services, in-house testing, and worldwide distribution. Its
customers include some of the world's leading original equipment
manufacturers. For more information about Key Tronic visit  
http://www.keytronic.com


KMART CORP: Pays $76 Million Pre-Petition Claim to Fleming
----------------------------------------------------------
Fleming (NYSE: FLM) announced that it has been named a "critical
vendor" to Kmart by the U.S. Bankruptcy Court and that $76
million of Fleming's pre-petition merchandise receivables claim
was paid by Kmart Friday, January 25, 2002.

"The U.S. Bankruptcy Court's ruling that named Fleming a
critical vendor and approved Kmart's interim debtor-in-
possession financing, combined with the court-approved payment
of the $76 million, give us satisfactory assurance of Kmart's
performance," said Bill Marquard, executive vice president of
Fleming. "Consequently, we have resumed shipping food and other
consumable products to all Kmart stores, effective immediately,
under the trade terms of our existing agreement.  Inventory
bound for Kmart's more than 2,100 stores began leaving our
warehouses yesterday."  Fleming has worked closely with Kmart to
develop a restart plan to replenish food and consumable products
to the Kmart stores.

Fleming will extend trade credit to Kmart on its weekly payment
cycle. "We are comfortable extending weekly trade credit to
Kmart because their debtor-in-possession financing is now in
place.  Additionally, we believe the priority given in
bankruptcy to post-petition trade creditors adequately protects
Fleming's interests," noted Marquard.

In addition to the $76 million, Fleming has an additional net
claim of approximately $30 million, representing primarily
merchandise shipped after January 18, 2002, and non-merchandise
receivables including reimbursements due under the supply
contract such as unreimbursed transportation costs, unreturned
pallets and vendor rebates.  Fleming will submit a claim against
these receivables.

"Kmart and the U.S. Bankruptcy Court have made swift and
significant progress in this matter," said Mark Hansen, chairman
of the board and chief executive officer of Fleming.  "We are
especially pleased with Kmart's determination to complete its
reorganization as quickly and smoothly as possible. Importantly,
we are confident that we can assist and support Kmart through
this important restructuring process, especially with our low-
cost supply chain."

Fleming is the industry leader in distribution and has a growing
presence in value retailing.  Fleming's primary business is
buying and selling merchandise.  The company serves
approximately 3,000 supermarkets, 6,800 convenience stores, and
more than 2,000 supercenters, discount, limited assortment,
drug, specialty, and other stores across the United States.  To
learn more about Fleming, visit our Web site at
http://www.fleming.com


KMART: Recoton Identifies $6.9MM Accounts Receivable with Debtor
----------------------------------------------------------------
Recoton Corporation (Nasdaq National Market: RCOT), a leading
global consumer electronics company, responded to the
announcement made by Kmart Corp., (NYSE: KM) that it has filed
for reorganization under Chapter 11 of the United States
Bankruptcy Code.

After an internal review, Recoton has identified approximately
$6.9 million in accounts receivable with Kmart as of January 22,
2002, against which the Company's insurance policy should cover
approximately $2.0 million, thus creating a net exposure to
Recoton of approximately $4.9 million. The Company believes that
its exposure can be further mitigated through anticipated
recovery when Kmart finalizes its settlement with creditors.
Sales to Kmart represented approximately 3% of Recoton's total
sales for 2001.

Robert L. Borchardt, Chairman, President and CEO of Recoton,
commented, "Recoton's high-quality, popular lines of products
are sold by more than 1,000 retail customers, thus limiting our
financial exposure in situations such as this. We support Kmart
during these difficult times and are hopeful that it will
successfully address its financial and operational challenges.
We believe that this will not have a material impact on
Recoton's long term profitability."

Recoton Corporation is a global leader in the development and
marketing of consumer electronic accessories, audio products and
gaming products. Recoton's more than 4,000 products include
highly functional accessories for audio, video, car audio,
camcorder, multi-media/computer, home office and cellular and
standard telephone products, as well as 900MHz wireless
technology products including headphones and speakers;
loudspeakers and car and marine audio products including high
fidelity loudspeakers, home theater speakers and car audio
speakers and components; and accessories for video and computer
games. The Company's products are marketed under three business
segments: Accessory, Audio and Gaming. Accessory products are
offered under the AAMP(R), Ambico(R), Ampersand(R),
AR(R)/Acoustic Research(R), Discwasher(R), InterAct(R),
Jensen(R), Parsec(R), Peripheral(R), Recoton(R), Rembrandt(R),
Ross(R), SoleControl(R), SoundQuest and Stinger brand names.
Audio products are offered under the Advent(R), AR(R)/Acoustic
Research(R), HECO, Jensen(R), MacAudio(R), Magnat(R), NHT(R)
(Now Hear This), Phase Linear(R) and Recoton(R) brand names.
Gaming products are offered under the Game Shark(R), InterAct(R)
and Performance brand names.


LTV CORPORATION: Court Okays Dewey Ballantine as Trade Counsel
--------------------------------------------------------------
The LTV Corporation, and its debtor-affiliates sought and
obtained Judge Bodoh's permission to employ the law firm of
Dewey Ballantine LLP as special international trade counsel to
represent the estates in ongoing legal and public policy efforts
to mitigate the adverse effect upon the Debtors of "unfairly
traded imported flat-rolled carbon steel products".

The Debtors explain that Dewey Ballantine and Skadden Arps
Meagher & Flom jointly serve as international trade counsel to a
group of four United States producers of carbon steel flat-
rolled products in their ongoing efforts to secure and retain
relief from unfair trade practices with respect to these
products.  The representation is limited to four main line
carbon steel product categories: hot-rolled flat products,
plate, cold-rolled flat products, and corrosion-resistant flat
products.  In addition to the Debtors, the members of this
coalition are Bethlehem Steel Corporation, now in chapter 11,
National Steel Corporation,, and U.S. Steel Group, a unit of USX
Corporation.  A fifth producer, Ispat Inland, Inc., participated
through 2000.

The principal legal remedies available to US steel producers to
mitigate the effects of unfair trade are the antidumping law and
the countervailing duty law.  Under these laws, upon petition by
an aggrieved industry, the United States government conducts an
administrative proceeding to determine whether a domestic
industry has been "materially injured" by subsidized imports
(subject to countervailing duties) or by sales at less than fair
value (subject to antidumping duties).  Dewey Ballantine and
Skadden Arps perform all of the legal work necessary to
prosecute such proceedings on behalf of the Debtors and other
members of the coalition. Dewey Ballantine and Skadden Arps
divide the work between them, with each firm handling a separate
group of AD and CVD cases on behalf of the coalition.  The two
firms regularly coordinate to avoid duplication.

If the government's findings are affirmative it imposes duties
on the subject imports to offset the margin of dumping or
subsidization, as the case may be.  The antidumping and
countervailing duty laws also provide for certain forms of
interim relief during the pendency of the investigations.  The
imposition of duties under these laws in all cases has the
effect of raising the price of imported steel products which are
subject to affirmative findings, and in some cases also results
in a reduction of the volume of the subject imports.  The
imposition of duties in current pending and prospective AD and
CVD proceedings will help alleviate the depressed prices and
reduced steel volume that has been the principal factors forcing
the Debtors to seek bankruptcy relief.

Dewey Ballantine and Skadden Arps are currently prosecuting
eleven antidumping and five countervailing duty investigations
with respect to the import of hot-rolled flat products from
eleven countries on behalf of the coalition.  In addition, the
two firms continue to litigate appeals and remands to the
administering agencies of final AD and CVD decisions which have
already been made with respect to hot-rolled flat products,
cold-rolled flat products, plate and corrosion-resistant flat
products.  There are currently 21 active appeals pending before
the United States Court of International Trade, and three before
the United States Court of Appeals for the Federal Circuit.  The
two firms also represent coalition members in periodic
administrative reviews of existing AD and CVD orders, which can
result in the upward or downward adjustments in the level of
duties.  There are currently 9 such active reviews under way.  
In total, Dewey Ballantine and Skadden Arps jointly represent
the members of the coalition with respect to 49 separate
administrative and legal proceedings.

In addition, the two firms advise the members of the coalition
with respect to "suspension agreements" under which AD and CVD
proceedings can be suspended by government-to-government
agreements which establish restrictions on the quantities and/or
prices of subject products allowed to enter the United States
market in lieu of the imposition of antidumping and
countervailing duties.  The two firms also provide advice and
support to the United States government with respect to
challenges to United States AD and CVD decisions by foreign
governments under the dispute resolution procedures of the World
Trade Organization.

Other legal remedies exist which can be applied, under some
circumstances, to offset unfair trade practices and injurious
imports, such as Section 301 of the Trade Act of 1974 and
Section 201 of the Trade Act of 1974, and the civil and criminal
antitrust laws of the United States.  From time to time
coalition members have asked Dewey Ballantine and Skadden Arps
to examine the applicability of these laws to the problem of
unfair trade in steel.  While to date the firms have not
commenced legal proceedings under any of these laws on behalf of
coalition members, the coalition members may direct them to do
so during the course of current representation.

In particular, Dewey Ballantine will perform services as
necessary to:

       (a) Prosecute ongoing investigations under the
Antidumping and Countervailing Duty laws with respect to
unfairly traded hot-rolled carbon steel flat products;

       (b) Prepare and prosecute, as appropriate, and with the
Debtors' approval, additional complaints under the Antidumping
and Countervailing Duty laws, and other relevant statutes with
respect to unfairly traded carbon steel hot-rolled flat
products, cold-rolled flat products, plate and corrosion-
resistant flat products;

       (c) Provide advice to the Debtors with respect to all
aspects of unfair trade in carbon steel flat products as it
affects their interests;

       (d) Provide legal services with respect to Administrative
Review of outstanding Antidumping and Countervailing Duty orders
and appeals and remands of such reviews;

       (e) Provide legal services with respect to appeals and
remand of Antidumping and Countervailing Duty orders;

       (f) Provide legal services with respect to United States
decisions under the Antidumping and Countervailing Duty laws
under the Dispute Resolution procedures of the World Trade
Organization;

       (g) Provide legal services with respect to the
negotiation, administration and enforcement of suspension
agreements with respect to the Antidumping and Countervailing
Duty proceedings;

       (h) Provide legal and public policy support as requested
by the Debtors, with respect to Congressional legislation,
hearings and other activities and initiatives related to the
problem of unfair trade in steel and the legal and public policy
responses in those respects;

       (i) Monitor unfair trade policies and practices in the
steel industries of foreign countries to the extent that such
practices and policies are relevant to ongoing or potential
proceedings under the Antidumping or Countervailing Duty laws,
or other relevant statutes, or to other public policy
initiatives by the United States government to address the
problem of unfair trade in steel;

       (j) Provide information, as appropriate, to the United
States government concerning all aspects of unfair trade in
steel, in coordination with Skadden Arps to avoid duplication of
efforts.

For compensation, the Debtors propose that for the year 2001 the
Debtors pay a flat fee to the two firms of $1 million, to be
divided equally between the two firms, and payable in monthly
installments without separate court order.  Given the historic
level of the two firms' bills to the Debtors, and in light of
the level of activity that the two firms will be required to
undertake on behalf of the coalition, the amounts proposed
constitute only a small fraction of the amount the Debtors would
otherwise be required to pay under the pre-chapter 11 fee
arrangements.  Accordingly, the Debtors propose that no portion
of these fees be withheld, and that the firms not be required to
make application on a quarterly basis.

Thomas R. Howell, Esq., a member of Dewey Ballantine, discloses
that Dewey Ballantine is a disinterested person and neither
holds nor represents any interests adverse to the Debtors or
these estates in the matters for which Judge Bodoh's approval is
sought.  However, he discloses that:

       (1) USX and National are unsecured creditors of the
Debtors.  USX Corporation has also purchased certain assets of
the Debtors by order of the Court.  Dewey Ballantine does not
represent USX or National with respect to any other matters
relating to the Debtors or these chapter 11 cases, and will not
represent the Debtors in any matters adverse to USX or National,
or USX or National in any matters adverse to the Debtors.

       (2) Dewey Ballantine has in the past represented AK Steel
Corporation, an unsecured creditor of the Debtors, in connection
with the joint effort, but no longer represents AK Steel in that
or any other connection.  Dewey Ballantine will not represent AK
in any matters adverse to the Debtors and will not represent the
Debtors in any matters adverse to AK.

       (3) Dewey Ballantine has in the past represented Inland
Steel Company which may be a significant party to joint
ventures, partnerships, and/or limited partnerships involving
the Debtors and their non-debtor affiliates, and a party to
litigation with the Debtors.  Dewey Ballantine's representation
of Inland has been limited to the joint effort.  Inland has
withdrawn from this effort as of September 2000 and its future
participation, if any, is uncertain. Dewey Ballantine will not
represent Inland in any matters adverse to the Debtors and will
not represent the Debtors in any matters adverse to Inland.

       (4) Bethlehem is a party to joint ventures, partnerships,
and/or limited partnerships involving the Debtors and their non-
debtor affiliates.  Dewey Ballantine does not represent
Bethlehem with respect to any other matters relating to the
Debtors or these chapter 11 cases. Dewey Ballantine will not
represent Bethlehem in any matters adverse to the Debtors and
will not represent the Debtors in any matters adverse to
Bethlehem.

       (5) Dewey Ballantine serves as counsel to a number of
coalitions which include as a member the United Steelworkers of
America, including the Labor-Industry Coalition for Trade and
the Coalition for Open Trade.  The activities of these groups
are not directly or indirectly connected with these chapter 11
cases.  The Steelworkers hold or assert status as secured
creditors of the Debtors, and are parties to significant
contracts with the Debtors.  Dewey Ballantine will not represent
the Steelworkers in any matters adverse to the Debtors and will
not represent the Debtors in any matters adverse to the
Steelworkers.

       (6) Dewey Ballantine has relationships with a number of
other entities which have been identified as interested parties
in these chapter 11 cases, including unsecured creditors.  
However, none of these relationships involve these chapter 11
cases.  Dewey Ballantine will not represent any of these
interested parties in any matters adverse to the Debtors and
will not represent the Debtors in any matters adverse to the
interested parties.

       (7) The Debtors are indebted to Dewey Ballantine arising
from prepetition legal and public policy issues in the amount of
$745,043.51 for the months of September through November 2000.  
In addition, the Debtors' share of the December 2000 bill is
$159,301.61, for a total prepetition debt of $904,345.12.  Dewey
Ballantine's representation is limited to the matters involving
the coalition activities and the firm will not generally
represent the Debtors in these cases. (LTV Bankruptcy News,
Issue No. 23; Bankruptcy Creditors' Service, Inc., 609/392-
00900)


LAIDLAW: Wins Nod to Hire Spencer Stuart as Search Consultants
--------------------------------------------------------------
Laidlaw Inc., obtained the Court's authority to retain and
employ Spencer Stuart as consultants in the search for:

     (a) new members of Laidlaw Inc.'s board of directors, and

     (b) a new chief executive officer for Laidlaw Inc. (Laidlaw
     Bankruptcy News, Issue No. 13; Bankruptcy Creditors'
     Service, Inc., 609/392-0900)  


LODGIAN: Obtains Okay to Continue Use of Cash Management System
---------------------------------------------------------------
Lodgian, Inc., and its debtor-affiliates sought and obtained an
order authorizing them to continue using their centralized Cash
Management System and to maintain their existing Bank Accounts,
checks and business forms, except as may otherwise be required
by any applicable cash collateral or post-petition financing
orders.

Adam C. Rogoff, Esq., at Cadwalader Wickersham & Taft in New
York, relates that in the ordinary course of business and prior
to the Commencement Date, the Debtors used a centralized cash
management system similar to those utilized by other major
corporate enterprises. The Cash Management System is designed to
efficiently collect, transfer and disburse funds generated
through the Debtors' operations and to accurately record such
collections, transfers and disbursements as they are made. The
principal components of the Cash Management System are:

A. Cash Collection and Concentration: The Debtors maintain
     several bank accounts at Bank of America in Georgia. The
     following basic procedures are used for cash collection and
     concentration into the Bank Accounts:

     a. In general, hotel funds are deposited into local
          depository accounts, generally housed at Bank of
          America. Funds generated from the properties serving
          as collateral for the Morgan Stanley loan obligation
          are swept into the Lodgian Financing Corp.
          concentration account. All other deposits are swept
          into the Lodgian, Inc. concentration account. Funds
          are transferred from the Lodgian Financing Corp
          concentration account to the Lodgian, Inc.
          concentration account as needed.

     b. The Debtors maintain blocked local depository accounts
          for receipt of funds generated from the eighteen
          properties covered by the IMPAC II and IMPAC III
          credit agreements with the Capital Corporation of
          America. Such funds are then swept directly into a
          waterfall account at LaSalle Bank, where monthly debt
          obligations owed to CCA are immediately repaid. Any
          residual funds are transferred to the Debtors'
          designated IMPAC accounts at the Bank of America. Upon
          such transfer, these excess funds are no longer
          restricted in use and are available for use in the
          Cash Management System.

     c. Funds generated from the four properties which the
          Debtors own pursuant to partnership agreements with
          various limited partners are swept into a partnership
          account at Bank of America, either directly, or by way
          of deposit into local accounts. The Debtors are
          reimbursed from the partnership account on a weekly
          basis to cover the accounts payable and payroll
          expenses incurred on behalf of the partnership for
          management fees. Any remaining balance is available
          for distribution in accordance with certain provisions
          in the partnership agreement, either as capital
          expenditures, or in the alternative, as reimbursements
          to the parties.

B. Disbursements: The funds swept into the concentration
     accounts are ultimately disbursed into a manually funded
     managers' account, a zero-balance accounts payable account,
     and a zero-balance payroll account. With the exception of
     the electronically transferred Morgan Stanley debt payment
     drawn against the Lodgian Finance Corp. account, all of the
     Debtors' checks issued from the Disbursement Accounts are
     funded by the Lodgian Inc. concentration account.

The Debtors' submit that a waiver of the U.S. Trustee's mandate
of closure of existing bank accounts and opening of new accounts
is appropriate in these chapter 11 cases. Mr. Rogoff explains
that the Debtors' Cash Management System provides an efficient
and secure means of managing and disbursing cash for the
Debtors' operations on a daily basis. The closing of each of the
Bank Accounts and the opening of new accounts would
unnecessarily impair the Debtors' business operations and
disrupt the Debtors' Cash Management System, and therefore,
hinder the operation of the Debtors' businesses during the
critical initial stages of their chapter 11 cases. Mr. Rogoff
adds that the Debtors' centralized Cash Management System is
beneficial to the Debtors, their estates and creditors because
it enables the Debtors to reduce the administrative expenses
involved in moving funds, to maintain more accurate information
regarding receipts, account balances and disbursements, to
maintain a more efficient process for the investment of cash,
and to ensure compliance with the Debtors' accounting and
disbursement control procedures.

Mr. Rogoff informs the Court that the Debtors issue a large
number of checks in the ordinary course of business and it may
be impractical to obtain sufficient "Debtor in Possession" check
stock during the initial days of these chapter 11 cases, all of
which are computer-generated. Therefore, the Debtors believe
that they will be able to generate "Debtor in Possession" checks
within a few business days after the commencement of these
cases. However, the Debtors may also use and have on hand a
limited supply of pre-printed checks which may be used when it
is impractical to use computer-generated checks. To the extent
that any such existing check stock is depleted, Mr. Rogoff
assures the Court that the Debtors will obtain new check stock
reflecting their status as debtors in possession.

Similarly, the Debtors utilize numerous standard business forms,
including invoices, purchase orders, stationery and envelopes.
Mr. Rogoff states that these standard business forms are
computer-generated forms and the Debtors believe they will be
able to generate "Debtor in Possession" forms within a few
business days after the commencement of these cases. However,
the Debtors may also use and have on hand several months supply
of pre-printed stationery, envelopes and invoices. To the extent
that the existing stock of pre-printed business forms is
depleted, the Debtors will obtain new business forms reflecting
their status as debtors in possession.

The Debtors submit that the relief obtained will help to ensure
the Debtors' orderly entry into chapter 11 and avoid many of the
possible disruptions and distractions that could divert the
Debtors' attention from more pressing matters during the initial
days of these chapter 11 cases. (Lodgian Bankruptcy News, Issue
No. 2; Bankruptcy Creditors' Service, Inc., 609/392-0900)  


MBC HOLDING: Commences Trading on OTC Bulletin Board Today
----------------------------------------------------------
MBC Holding Company (Nasdaq: MBRW) said that beginning Today
January 28, 2002, its common stock would begin trading on the
Nasdaq OTC Bulletin Board for failure to meet the Nasdaq
requirements for continued listing on the Nasdaq Small Cap
Market.


MARINER POST-ACUTE: Signs-Up CDL, P.C. as Bankruptcy Co-Counsel
---------------------------------------------------------------
Pursuant to Section 327(a) and (e) of the Bankruptcy Code,
Mariner Post-Acute Network, Inc., and its debtor-affiliates
request that the Court approve the employment of seek the
Court's authority to employ the law firm of Christopher D.
Loizides, P.C. in Wilmington, Delaware as bankruptcy co-counsel
in connection with the commencement and prosecution of a limited
number of adversary proceedings the Debtors intend to file
seeking to recover preferences, fraudulent conveyances and other
turnover actions.

The Debtors find it necessary to seek additional Delaware
counsel for this purpose as its current Delaware bankruptcy
counsel, Richards, Layton & Finger, and its other special co-
counsel, Montgomery McCracken, Walker & Rhoads, LLP, are
conflicted in pursuing claims against EMC Corporation,
AmeriSource Corporation and US West Communications, Inc.

CDL, P.C. 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, subject to the
provisions of the Bankruptcy Code, the Bankruptcy Rules and the
Local Rules, propose to compensate CDL, P.C. at its customary
hourly rates in effect from time to time. The current standard
hourly rates of the principal professionals and
paraprofessionals designated to represent the Debtors are as
follows:

         Christopher D. Loizides     $185.00 per hour
         Magdalen Braden             $145.00 per hour

The Debtors have selected CDL, P.C. as co-counsel because of Mr.
Loizides' extensive experience and knowledge in the practice of
bankruptcy law, because of his expertise, experience and
knowledge practicing before the Court, because of CDL, P.C.'s
proximity to the Court and because of CDL, P.C.'s ability to
respond quickly to emergency hearings and other emergency
matters before the Court. The Debtors believe that CDL, P.C. is
well qualified to represent them with respect to preference and
other avoidance action matters in a most efficient and timely
manner.

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

Mr. Christopher D. Loizides, principal of the law firm of
Christopher D. Loizides, discloses that he did work on a few
discrete matters for the Debtors when he was employed by the
Debtors' Delaware general bankruptcy counsel, Richards, Layton &
Finger, P.A., and before CDL, P.C. existed. Mr. Loizides
declares that neither he nor any partner or associate of CDL,
P.C. has in the past represented the Debtors' creditors, equity
security holders, or any other party in interest in the MPAN
cases, except the following in matters unrelated to the MPAN
Bankruptcy: Mellon Bank, N.A., Bank of New York, Chase Manhattan
Bank, Aetna/U.S. Healthcare/Prudential, Sundance Rehabilitation,
PNC Capital Markets, First Union Capital Markets, Physician's
Health Services, Inc., Blue Cross/Blue Shield, Ernst & Young.
Mr. Loizides believes that CDL, P.C. 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.
(Mariner Bankruptcy News, Issue No. 24; Bankruptcy Creditors'
Service, Inc., 609/392-0900)  


MCCRORY: Wants Plan Filing Exclusive Period Stretched to April 7
----------------------------------------------------------------
McCrory Corporation and its debtor-affiliates asks the U.S.
Bankruptcy Court for the District of Delaware to extend the
period during which they have the exclusive right to propose and
file a plan of reorganization through and including April 7,
2002.  The Debtors seek a further extension of their exclusive
period during which to solicit acceptances of that plan through
and including June 6, 2002.

The Debtors have commenced going-out-of-business sales and
scheduled an auction of certain leases of non-residential real
estate. The Debtors tell the Court that it would be
inappropriate to file a Plan until these activities are
concluded.

McCrory Corporation operates about 175 discount variety stores
under the names Dollar Zone, McCrory, G. C. Murphy, J. J.
Newberry, and T.G.& Y. The Company filed for chapter 11
protection on September 10, 2001. Laura Davis Jones, Esq. at
Pachulski, Stang, Ziehl, Young & Jones P.C. represents the
Debtors in their restructuring efforts.


MEDICALOGIC: Files for Chapter 11 Protection in Wilmington
----------------------------------------------------------
The GE Medical Systems Information Technologies business of the
General Electric Company (NYSE: GE), says that it has signed a
definitive agreement to acquire the digital health record assets
of MedicaLogic (Nasdaq: MDLI), a leading provider of electronic
medical records (EMR) for patients treated in care areas outside
the hospital, or outpatient settings, for $20 million in cash.

The offering from MedicaLogic will enable GE to expand its
advanced medical record technology beyond the hospital, so
healthcare providers can capture a patients' medical experience
into a single electronic record that spans care given throughout
the healthcare network. This is especially important for
"integrated delivery networks", or IDNs, a growing movement of
healthcare delivery that consists of a single organization of
hospitals, clinics, and physician offices that together provide
patients with end-to-end care options.

"The acquisition of MedicaLogic's advanced EMR products for the
outpatient care area allows us to expand into the fast-growing
segment," said Greg Lucier, president and CEO of GE Medical
Systems Information Technologies. "By coupling this technology
with our Centricity Clinical Information System, we'll be able
to offer healthcare providers a comprehensive, end-to-end
medical information product that spans a patient's entire health
history--whether the care process occurred during an inpatient
or outpatient encounter."

Over the last several years, GE Medical has invested more than
$1.5 billion in technologies to help hospitals better manage
clinical workflow. The addition of MedicaLogic's ambulatory
electronic medical record will play an integral role in
expanding GE's reach from inpatient to outpatient care.

"We are very excited to make this announcement, and we feel that
the acquisition by GE Medical Systems Information Technologies
reflects the value we have created over a decade of development
and deployment of digital health record solutions for ambulatory
care," said Mark Leavitt, MD, PhD, Chairman, MedicaLogic. "We
look forward to joining the GE team and making our products part
of their broad suite of clinical information technology
solutions."

MedicaLogic's advanced outpatient systems are installed in
hundreds of hospitals and affiliated doctors' offices in the
U.S. and used by more than 16,000 physicians to manage millions
of patients' records. MedicaLogic's premier solution,
Logician(R), is the most widely used ambulatory care electronic
medical record.

Vik Kheterpal, M.D., vice president of Clinical Information
Systems at GE said, "The combination of MedicaLogic's outpatient
EMR system with GE's Centricity Clinical Information System will
enable GE to offer care providers the industry's most
comprehensive proven solution for an enterprise-wide, electronic
medical record spanning the entire care continuum. MedicaLogic's
outpatient solutions will be integrated with the Centricity
architecture to provide customers an integrated clinical
information system for labor & delivery, critical care,
perioperative care, emergency department, med-surg, cardiology,
radiology and ambulatory care."

Contemporaneous with execution of the agreement,
MedicaLogic/Medscape, the parent company of MedicaLogic has
filed under Chapter 11 of the U.S. Bankruptcy Code. This process
will permit MedicaLogic to resolve any liabilities that remain
after the acquisition through the bankruptcy process.
MedicaLogic will maintain normal operations throughout the sale
process.

Assuming a successful resolution of MedicaLogic's residual and
contingent liabilities, MedicaLogic believes the proceeds from
the sale of the DHR business to GE, combined with the remaining
proceeds from the sales of its other business units, should be
sufficient to pay creditors in full. MedicaLogic also believes
these proceeds will be sufficient to pay accumulated dividends
to, and satisfy redemption claims of the preferred shareholders,
as well as possibly provide a distribution to common
shareholders.

The transaction is subject to various approvals, including that
of the Bankruptcy Court, and to customary conditions. The
parties expect to close by end of first quarter 2002.

GE Medical Systems Information Technologies provides hospitals
and healthcare systems with advanced software and technologies
to improve their clinical performance. The Company's expertise
spans the areas of cardiology, patient monitoring, image
management, clinical communications, clinical information
systems and Six Sigma-based management tools to enable a real-
time, integrated electronic medical record. GE Medical Systems
Information Technologies is a business of GE Medical Systems, an
$8 billion global leader in medical imaging and technology.
Additional information about GE Medical Systems can be found at
http://www.gemedical.com  

MedicaLogic/Medscape, Inc. (MedicaLogic) (NASDAQ: MDLI) is a
leading provider of digital health records. The core of
MedicaLogic's product portfolio is the industry-leading Digital
Health Record (DHR). DHR applications and services are an
integral part of the practice of medicine and are used every day
by physicians across the country.

MedicaLogic's DHR enables physicians to access patient
information, share data with existing systems, communicate among
physician practice group members and capture and store
quantifiable data for patient-by-patient or population-based
studies. The DHR also enables practice sites to interact with
their patients electronically to answer questions, schedule
appointments and address personal health concerns. More than 16
million patients now have digital records hosted on MedicaLogic
systems. More information about MedicaLogic's products and
services is available on the Web at http://www.medicalogic.com


MEDICALOGIC: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Lead Debtor: MedicaLogic/Medscape, Inc.
             20500 NW Evergreen Parkway
             Hillsboro, OR 97124

Bankruptcy Case No.: 02-10254-PJW

Debtor affiliates filing separate chapter 11 petitions:

             Entity                        Case No.
             ------                        --------
             MSCP Holdings, Inc.           02-10253-PJW
             MedicaLogic Enterprises, Inc. 02-10255-PJW
             MedicLogic Pennsylvania, LLC  02-10256-PJW
             MedicaLogic of Texas, Inc.    02-10257-PJW
             MedicaLogic Texas, L.P.       02-10258-PJW

Chapter 11 Petition Date: January 24, 2002

Court: District of Delaware

Judge: Peter J. Walsh

Debtors' Counsel: Neil B. Glassman, Esq.
                  Steven M. Yoder, Esq.
                  The Bayard Firm
                  222 Delaware Avenue
                  Suite 900
                  Wilmington, DE 19899
                  Tel: 302 655-5000
                  Fax: 302-658-6395

                        -and-

                  Conor D. Reilly, Esq.
                  Janet M. Weiss, Esq.
                  Gibson, Dunn & Crutcher LLP
                  Metlife Building
                  200 Park Avenue
                  New York, New York 10166
                  Tel: 212 351 4000
                  Fax: 212 351 4035

Debtor's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Evergreen Corporate         Real Property Lease    $1,775,000
   Center, LLC
Mike Kendig
c/o Melvin Mark
Brokerage CO, ECCOP
111 Southwest Columbia
Suite 1380
Portland, OR 97201
Tel: 503 546 4515
Fax: 503 223 4606

L&H Applications            License Agreement       $1,025,000
   USA, Inc.
Patrick Deshriver
Carl Dammekens
52 Third Avenue
Burlington, MA 01803
Tel: 781 203 5000
Fax: 781 238 0986

MCI Worldcom                Service Agreement        $900,000
   Communications Inc.
Frank Grillo
Sean Sasiak
500 Clinton Center Dr.
Building 4
4th Floor
Clinton, MS 39056
Tel: 973 889 2799
Fax: 601 460 8377

Kathryn L. Parks            Litigation               $811,000
c/o Willner Wren Hill &
   U'ren LLP
111 S.W. Naito Pkwy
Suite 303
Portland, OR 97204-3500
Tel: 503 228 4000
     503 977 3215
Fax: 503 228 4261

Oracle Corporation          License Agreement        $712,000
Phillip Woody
500 Oracle Parkway
Redwood Shores, CA 94065
Tel: 770 394 0110
     650 607 3465
Fax: 650 633 1668

MB Hampton LLC,             Real Property Lease      $586,000
   @ May Bao Ltd.
East 80 Route 4
Suite 128
Paramus, NJ 07652
Tel: 201 587 9886
Fax: 201 587 7496

Veritas Software            Service Agreement        $154,000

Tarascon, Inc.              License Agreement        $140,000

AFCO                        Insurance Financing      $105,000
                            Agreement

First Data Bank             License Agreement         $99,000

VHA, Inc.                   Marketing Agreement       $94,000

Dot Glu                     Service Agreement         $85,000

CP/SMRS - THP. L.P.         Service Agreement         $83,000

Highwoods/Tennessee         Real Property             $81,000
   Holdings, L.P.

Duke Realty Corporation     Real Property             $76,000

Alexander Oglivy Public     Trade Debt                $70,000
   Relations Worldwide

Blackford Middleton         Service Agreement         $68,000

HBO & Co.                   Service Agreement         $40,000

CIT Financial USA, Inc.     Financing Agreement       $37,000

Buffalo 2201 Holcombe, Ltd  Real Property Lease       $35,000


METALS USA: Court Okays Akin Gump as Committee's Counsel
--------------------------------------------------------
The Official Committee of Unsecured Creditors and Bondholders of
Metals USA, Inc., and its debtor-affiliates obtained Court
approval to retain the law firm of Akin, Gump, Strauss, Hauer &
Feld, L.L.P., in Houston.  Henry J. Kaim, Esq., will represent
the Committee in the Debtors' Chapter 11 cases.


MOTIENT CORP: Begins Trading on OTCBB Under New MTNTQ Symbol
------------------------------------------------------------
Motient Corporation (OTC Bulletin Board: MTNTQ), owner and
operator of the nation's largest two-way wireless data network,
today announced it has begun trading on NASD's Over-the-Counter
Bulletin Board (OTCBB).  Motient (previously Nasdaq: MTNT) is
now traded under the symbol "MTNTQ."

Motient voluntarily delisted its stock from the Nasdaq National
Market on January 14, 2002, following its announcement of an
agreement in principle to restructure its senior notes by
converting those senior notes to equity.  The restructuring
plan, which is subject to court approval and other customary
conditions, will enable Motient to eliminate $335 million in
senior notes and $40 million in associated interest payments.

The OTCBB is a regulated quotation service that displays real-
time quotes, last-sale prices and volume information in the
over-the-counter (OTC) equity securities market.  OTCBB
securities are traded by a community of market makers that enter
quotes and trade reports.

Motient ( http://www.motient.com) owns and operates the  
nation's largest two-way wireless data network -- the Motient
network -- and provides a wide-range of mobile and Internet
communications services principally to business-to-business
customers and enterprises.  The company provides eLink(SM) and
BlackBerry by Motient two-way wireless email services. Motient's
wireless email services operate on the RIM 850 and RIM 857
Wireless Handhelds and Motient's MobileModem for the Palm V
series handhelds. Motient serves a variety of markets including
mobile professionals, telemetry, transportation and field
service, offering coverage to all 50 states, Puerto Rico and the
U.S. Virgin Islands.

eLink is a service mark and Motient is a trademark of Motient
Corporation. The BlackBerry and RIM families of related marks,
images and symbols are the exclusive properties of, and
trademarks of Research In Motion Limited and are used by
permission.  "BlackBerry by Motient" -- used by permission.  
Palm V is a trademark of Palm, Inc.


NATIONAL STEEL: S&P Ratchets Ratings Down a Notch to Junk Level
---------------------------------------------------------------
Standard & Poor's lowered its ratings on National Steel Corp.
and placed them 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.

The rating actions on National Steel reflect Standard & Poor's
heightened concerns regarding National's declining financial
flexibility as a result of very difficult conditions in the U.S.
steel industry. Moreover, in evaluating the terms of the
proposed deal, it appears that NKK may be less willing to
provide additional financial support to National, as it has done
in the past. Although imports have subsided as a result of the
U.S. government's pending section 201 trade investigation (about
8% of capacity has been shuttered) the U.S steel industry
continues to suffer from overcapacity from weak demand and price
levels caused by the recession. Should demand levels remain at
these weak levels and should National be unsuccessful in
preserving its liquidity in the near term, the ratings could
be lowered again. Ratings on National will also be lowered if a
restructuring of National Steel's debt is consummated and deemed
to be coercive.

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 Lowered and Placed on CreditWatch
                  with Negative Implications

                                          Ratings
     National Steel Corp.            To               From
        Corporate credit rating      CCC+              B-
        Senior secured debt          CCC+              B-

DebtTRaders reports that National Steel Corp.'s 8.375% bonds due
2006 (NATSTL1) are trading between 40 and 45. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NATSTL1for  
real-time bond pricing.


NATIONSRENT: US Trustee Appoints Unsecured Creditors' Committee
---------------------------------------------------------------
Pursuant to Section 1102(a)(1) of the Bankruptcy Code, the
United States Trustee appoints these creditors to serve on the
Official Committee of Unsecured Creditors in NationsRent's
chapter 11 cases:

      A. Bank of New York, as Trustee
         Attn: Corey Babarovich
         5 Penn Plaza, 13th Floor, New York, NY 10001
         Phone: (212) 896-7154, Fax: (212) 328-7302;

      B. Commonwealth Advisors, Inc.
         Attn: Walter Morales
         247 Florida Street, Baton Rouge, LA 70801
         Phone: (225) 343-9342, Fax: (225) 343-1645

      C. PPM America, Inc.
         Attn: James K. Schaeffer
         225 W. Wacker Drive, Suite 1200, Chicago, IL 60606
         Phone: (312) 634-2576, Fax: (312) 634-0728

      D. TJWSR/SKW Investments Ltd.
         Attn: Thomas J. Watts, Sr.
         P.O. Box 4049, Pasadena, TX 77502
         Phone: (713) 472-7733, Fax: (713) 472-7781

      E. Lloyd H. Wells, Trustee of the Lloyd Wells Gift Trust
         17075 Old Coach Road, Poway, CA 92064
         Phone: (858) 391-2973, Fax: (858) 391-2979

      F. Key Corporate Capital, Inc.
         Attn: Randall K. Garland
         66 South Pearl Street, Albany, NY 12201
         Phone: (518) 257-8212, Fax: (518) 257-8833

      G. OmniQuip Textron as Lull SkyTrak Snockel & ScatTrak
         Attn: Patrick Kuhn
         901 Sunset Road, Pt. Washington, WI 53074
         Phone: (262) 268-8995, Fax: (262) 268-3264 (NationsRent
         Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
         Service, Inc., 609/392-0900)


NET2000 COMMS: Wants Lease Decision Period Extended to March 15
---------------------------------------------------------------
Net2000 Communications, Inc., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the District of Delaware to further
extend their time period to assume, assume and assign, or reject
unexpired leases of nonresidential real property. The Debtors
want their Lease Decision Period to run through March 15, 2002.

The Debtors relate to the Bankruptcy Court that presently, they
have not had an adequate chance to determine whether to assume
or reject the Leases because they do not have sufficient
information available to base their judgment on regarding the
Leases.  The Debtors further cites that the information-
gathering process has been complicated by the attrition of
certain key employees.  The remaining key employees on the other
hand, have been preoccupied to consummate a sale transaction
with Cavalier involving all, or substantially all, of the
Debtors' assets.

Moreover, pending the completion of the sale process, the
Debtors have incurred a significant amount of resources
complying with the other administrative burdens of operating the
Debtors' business in Chapter 11.

Net2000 Communications, Inc., providers of state-of-the-art
broadband telecommunications services to high-end customers,
filed for chapter 11 protection on November 16, 2001.  Michael
G. Wilson, Esq. at Morris, Nichols, Arsht & Tunnell represents
the Debtors in their restructuring effort. When the Company
filed for protection from its creditors, it listed $256,786,000
in assets and $170,588,000 in debts.


NETWORK COMMERCE: Sells FreeMerchant.com Assets to Digital River
----------------------------------------------------------------
On December 28, 2001, Network Commerce Inc. and
Freemerchant.com, Inc., sold certain customer assets used in the
operation of the Web site located at http://www.FreeMerchant.com
to Digital River, Inc., a Delaware corporation, pursuant to an
Asset Purchase Agreement dated December 28, 2001, entered into
between Network Commerce, Freemerchant and Digital River.

The assets sold include the technology presently used to operate
the Web site presently located at http://www.FreeMerchant.com,
all software licenses presently required to operate and maintain
the FreeMerchant Technology, all contracts by which Network
Commerce provided services for FreeMerchant subscribers by use
of the FreeMerchant Technology and the servers, computer
equipment and other hardware presently required to operate and
maintain the FreeMerchant Technology and the FreeMerchant.com
Web site.

Under the terms of the asset purchase agreement, Digital River
acquired approximately 3,000 subscription-based customers from
Network Commerce's FreeMerchant.com business in exchange for
$875,000 in cash. The agreement does not include the acquisition
of any Network Commerce personnel. In addition to the cash
payment, $475,000 of which was paid at closing, the agreement
provides Network Commerce an opportunity for an additional earn
out based upon revenue generated from the acquired customer
assets over the next ten months.

Network Commerce hopes to sell, sell, sell its way to financial
health. The company (formerly ShopNow.com) has sold or otherwise
disposed of half a dozen business operations -- including direct
marketing firm The Haggin Group, payment processing software
maker Go Software, online shopping site ShopNow.com, and online
business barter portal Ubarter.com -- in an effort to revive its
fortunes. Network Commerce, which is being sued by shareholders,
has also significantly reduced its staff. The company currently
offers technology services such as domain name registration, Web
site hosting, e-mail marketing, and e-commerce development.


NORTHWEST AIRLINES: S&P Keeps Low-B Ratings on CreditWatch Neg.
---------------------------------------------------------------
Northwest Airlines Corp. (BB/Watch Neg/--), parent of Northwest
Airlines Inc. (BB/Watch Neg/--), reported a net loss of $256
million before federal cash grants and other special items ($216
million as reported). Ratings for both entities remain on
CreditWatch with negative implications, where they were placed
September 13, 2001 (along with those of other rated U.S.
airlines), but Standard & Poor's expects to be able to resolve
the CreditWatch review fairly soon.

The fourth-quarter earnings performance, and the full-year 2001
net loss of $536 million before special items ($423 million as
reported), are expected to be better than average among large
U.S. airlines, in a very difficult industry environment. As at
other airlines, revenue is improving gradually from post-
September 11, 2001, lows, and Northwest has been aggressive in
cutting operating costs (management estimates $600 million
annually of permanent cost cuts).

Liquidity remains good, with $2.6 billion of cash at December
31, 2001, and covenant amendments in place on the company's bank
revolving credit agreement. Northwest, in contrast to other
large airlines, has not deferred any aircraft delivery
commitments, as most are intended to replace older, inefficient
planes. Accordingly, capital expenditures in 2002 are forecast
at a substantial $2.1 billion, though all aircraft are either
prefinanced or have financing commitments in place.

DebtTraders reports that Northwest Airlines Inc.'s 8.875% bonds
due 2006 (NORTHWT1) currently trade in the high 80s. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NORTHWT1for  
real-time bond pricing.


OLYMPUS HEALTHCARE: Seeks Approval to Extend Exclusive Periods
--------------------------------------------------------------
Olympus Healthcare Group, Inc., and its debtor-affiliates ask
the U.S. Bankruptcy Court for the District of Delaware to extend
their exclusive periods, for the second time.  The Debtors want
their exclusive period within which to propose and file a plan
of reorganization stretched to February 28, 2002 and their
exclusive period during which to solicit acceptances of that
plan moved through May 10, 2002.

The Debtors assert that their cases are complex and their
business structure is complicated.  The Debtors further point
out that they have made good faith progress towards a consensual
plan of reorganization and that there is no contention that they
are attempting to pressure creditors to accept an unfit plan.

Olympus Healthcare Group, Inc. filed for chapter 11 protection
on May 25, 2001. Michael Lastorwki, Esq. at Duane, Morris &
Hecksher represents the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed an estimated assets of not more than $50,000 and
estimated debts of $10 million to $50 million.


OWENS CORNING: Posts Improved Operating Results in Q4 2001
----------------------------------------------------------
Owens Corning (NYSE: OWC) reported that for the fourth quarter
2001, the company had net sales of $1.17 billion, compared to
$1.11 billion in the same period in 2000. Owens Corning reported
$12 million in income from operations for the quarter, and a net
loss of $7 million. For the fourth quarter of the prior year,
the company reported a loss from operations of $178 million
resulting in a net loss of $114 million for the period.

Income from ongoing operations for the fourth quarter of 2001
was $83 million, which excludes $46 million for restructuring
and other charges, $27 million of Chapter 11-related charges and
$2 million of income from asbestos-related insurance recoveries.
Income from ongoing operations for the fourth quarter of the
prior year was $48 million, which excludes $202 million for
restructuring and other charges and $24 million of Chapter 11-
related charges.

For the full year 2001, the company had net sales of $4.76
billion, compared to $4.94 billion for the full year 2000.  
Owens Corning reported $116 million of income from operations
and net income of $39 million for 2001. For the prior year, the
company reported a loss from operations of $631 million and a
net loss of $478 million.

Income from ongoing operations for 2001 was $336 million, which
excludes $140 million for restructuring and other charges, $87
million of Chapter 11-related charges and $7 million of income
from asbestos-related insurance recoveries. Income from ongoing
operations for the prior year was $412 million, which excludes
$229 million for restructuring and other charges, $24 million of
Chapter 11-related charges and $790 million of charges related
to asbestos.

Owens Corning ended 2001 with a cash balance of $764 million
compared to $550 million in 2000.

Owens Corning is a world leader in building materials systems
and composites systems. Additional information is available on
Owens Corning's Web site at http://www.owenscorning.comor by  
calling the company's toll-free General Information line: 1-800-
GET PINK.

On October 5, 2000, Owens Corning and 17 United States
subsidiaries filed voluntary petitions for relief under Chapter
11 of the U. S. Bankruptcy Code in the U. S. Bankruptcy Court
for the District of Delaware.  The Debtors are currently
operating their businesses as debtors-in-possession in
accordance with provisions of the Bankruptcy Code.  The Chapter
11 cases of the Debtors are being jointly administered under
Case No. 00-3837 (JKF).  The Chapter 11 cases do not include
other U. S. subsidiaries of Owens Corning or any of its foreign
subsidiaries.  The Debtors filed for relief under Chapter 11 to
address the growing demands on Owens Corning's cash flow
resulting from its multi-billion dollar asbestos liability.  
Owens Corning is unable to predict at this time what the
treatment of creditors and equity holders of the respective
Debtors will be under any proposed plan or plans of
reorganization. Pre-petition creditors may receive under a plan
or plans less than 100% of the face value of their claims, and
the interests of Owens Corning's equity security holders may be
substantially diluted or cancelled in whole or in part. It is
not possible at this time to predict the outcome of the Chapter
11 cases, the terms and provisions of any plan or plans of
reorganization, or the effect of the Chapter 11 reorganization
process on the claims of the creditors of the Debtors, or the
interests of Owens Corning's equity security holders.

DebtTraders reports that Owens Corning's 7.700% bonds due 2008
(OWENC4) are trading in the high 30s. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=OWENC4for  
real-time bond pricing.


PACIFIC GAS: Intends to Assume Main Line Extension Contracts
------------------------------------------------------------
When existing gas or electricity lines must be extended in
Pacific Gas and Electric Company's service area, for example,
upon the construction of a new residential subdivision, a Main
Line Extension must be constructed and energized. Service Lines
or Services must also be constructed to connect the Load, such
as a new dwelling, to the main line. Any customer seeking the
construction of such a Main Line Extension and Service must
enter a contract with PG&E, known as a Line Extension Contract
or MLX Contract. Over time, a set of rules has been developed
governing line extensions. Currently, PG&E is party to
approximately 50,000 line extension contracts.

By motion, PG&E seeks the Court's authority to (1) assume all
executory line extension contracts to which PG&E is a party and
(2) pay all amounts validly owed to customers pursuant to any
line extension contracts, whether or not executory; and (3)
establish the dispute resolution procedure to resolve any
disputes relating to amounts payable to customers pursuant to
such line extension contracts.

PG&E seeks to assume those line extension contracts that are
clearly executory, and to make payments validly owed to
customers under those line extension contracts which may not be
executory, without first determining whether each contract is
executory because PG&E believes that, to require this
determination would impose a severe administrative burden on
PG&E. PG&E has had no previous business-related justification to
separate line extension contracts into executory and non-
executory classifications, any such review must necessarily be
manual, rather than automated. The Majority Of The Line
Extension Contracts Are Executory as the term is defined in
Section 365 of the Bankruptcy Code, i.e. contracts regarding
which "performance remains due to some extent on both sides."

On the petition date, PG&E filed an emergency motion seeking
authorization to refund amounts due to both residential and non-
residential customers under line extension contracts for gas and
electric main line extensions. The Court granted the emergency
motion with respect to individual residential customers but did
not grant the motion with respect to residential subdivisions
(such as developers) and nonresidential customers, primarily on
the basis that there was no necessity for payment of such
refunds on an emergency basis.

In its motion, PG&E seeks authorization pursuant to Sections 365
and 105(a) of the Bankruptcy Code (11 U.S.C. Sec. 365, 105(a)),
on the grounds that the relief sought is in the best interests
of the estate and the reorganization process of PG&E. The line
extension contract customers consist of a large group of
creditors who represent the core part of PG&E's business as a
utility - the provision of gas and electric service to unserved
areas. PG&E anticipates that the reorganized utility will
continue to provide such services. Preserving the good will of a
large group of core customers is of significant value to the
business and reorganization prospects of PG&E.

Moreover, PG&E believes it is beneficial to assume the line
extension contracts and to pay amounts owed under such contracts
prior to confirmation, for a number of reasons. The total amount
currently owed under the line extension contracts is
approximately $89 million involving over 30,000 customers and
approximately 50,000 contracts. If the Motion is granted, all
line extension contract customers' claims could be addressed at
the same time, minimizing duplication of effort and waste of
resources. It will benefit the estate and the reorganization
process in general if this large group of creditors can be
effectively dealt with in advance of the confirmation process.

PG&E submits that it has the ability to cure arrearages under
the Line Extension Contracts and provide adequate assurance of
future performance in compliance with section 365(b) of the
Bankruptcy Code, given the substantial cash reserves and ongoing
revenues that it has.

The Debtor recognizes that payment of pre-petition claims prior
to confirmation of a plan in a Chapter 11 case is generally not
allowed. However, Section 105(a) confers on the Court the power  
to authorize payments irrespective of priorities where
circumstances so warrant, and PG&E believes that the Court
should authorize payment of all outstanding pre-petition and
post-petition MLX Refunds and other amounts outstanding under
the Line Extension Contracts pursuant to Section 105(a).

In a similar context, PG&E cites, a utility has been permitted
to refund deposits in advance of confirmation. See In re Public
Serv. Co., 107 B.R. 441, 447 (Bankr. D.N.H. 1989)

    [I]t is obvious that these commercial deposit refund rights
    will ultimately be honored and no good purpose is served in
    withholding such payments to protect against any alternative
    result that may occur by virtue of the reorganization. It is
    inconceivable that this court could or would approve a plan
    of reorganization for a continuing electric utility in this
    State that did not honor existing vested rights to return
    regulatory-compelled deposits to the utility's customers.

The logic of these cases applies with special force in the
current context, PG&E represents, because

-- Failure to return the outstanding amounts may impose
   hardships on the Debtor's customers;

-- Denying refunds to those customers who happen to be parties
   to completed contracts as opposed to those who are parties to
   executory line extension contracts is both inefficient in
   execution and inequitable;

-- In addition, customers have little choice but to submit
   payments pursuant to the line extension contracts and do so
   with the understanding that their money will be repaid if
   they become eligible for payment.

Further, permitting PG&E to pay all outstanding line extension
contract amounts would obviate the possibility of action against
PG&E at the California Public Utilities Commission (CPUC) by
concerned line extension contract parties) and resolve
outstanding issues with respect to payment of amounts validly
owed pursuant to the line extension contracts.

In sum, both equitable considerations and the promotion of
PG&E's successful reorganization strongly mitigate in favor of
authorizing PG&E to pay line extension contract refunds and  
other outstanding amounts consistent with the line extension
contracts. PG&E submits that its proposed assumption of the
executory Line Extension Contracts is supported by a sound
business rationale.

                   Procedure to Resolve Disputes

To ascertain a total cure amount, the amount outstanding to or
from the customer must be calculated with respect to all of the
different relevant payments. Some of these items are
computerized and some are manually calculated within PG&E. Each
of the approximately 50,000 line extension contracts requires a
set of complex calculations. PG&E anticipates that fully curing
all of the approximately 50,000 line extension contracts to
which PG&E is currently a party could take as much as nine
months to complete.

PG&E proposes to cure defaults on a rolling basis, starting
immediately upon entry of the Court's Order granting this
Motion.

PG&E proposes that any customer who will be subject to hardship
as a result of the extended cure period be permitted to write to
PG&E requesting earlier consideration, and PG&E will endeavor to
give priority to any customer that has or would suffer hardship
as a result of waiting for the cure payment.

It is conceivable that customers may disagree with PG&E's
calculation of the cure amount. PG&E proposes that the Court
authorize a procedure to resolve any such dispute. PG&E proposes
to allow each line extension contract party 30 days from receipt
of its respective cure amount to dispute the amount of the cure
by serving an initial written notice by mail on a designated
contact person at PG&E. If the parties are not able to resolve
the dispute informally, then the customer may, within 30 days of
the initial dispute notification, file a motion in the Court
seeking to have the disputed cure amount determined by the
Court.

PG&E would mail notice of this dispute resolution procedure,
including the designated contact person, with the check for the
cure amount.

          Relevant Features Of Line Extension Contracts

Customers pay PG&E a small "project deposit" in advance
(conceptually similar to "earnest money") for PG&E's part in
designing the construction of the line extension. Subsequently,
customers may either choose to pay to have PG&E construct the
line extension project (Option 1), or may themselves organize
and pay for the work to be completed (Option 2). Customers also
pre-pay a fee for a PG&E inspection, which is conducted before
the line extension can be energized. PG&E reconciles the amount
paid in advance for the inspection with the actual inspection
cost. In certain cases, PG&E may request that the customer
perform certain work that ordinarily would be the responsibility
of and performed by PG&E itself. In such circumstances, PG&E
reimburses the customer the amount that PG&E would otherwise
have expended to perform the work requested.

Under the line extension contracts and incorporated tariff
rules, credits which are based on forecasted revenues (also
referred to as "allowances" or "MLX refunds") are applied
against the cost of engineering and construction work on the
line extension if the customer's new equipment will be used
within a reasonable period of time or if additional meters are
connected to the extension. These MLX refunds or allowances are
based upon anticipated natural gas or electricity-billing
revenues that PG&E expects to receive once the new equipment is
connected. PG&E will track the value of the work done by PG&E or
the customer on the line extension in specific line extension
accounts for a possible future payment of MLX refunds or
allowances to the customer. The total value of the work done on
the line extension, less the nonrefundable portion, is referred
to in the line extension contract as the "refundable amount."
The customer typically receives an initial allowance based upon
the estimated number of meters to be connected in the first six
months after the "Date Ready for Service," i.e. the date upon
which the main line extensions are completed and ready to be
energized ("DRS"). Subsequently, as additional meters are
connected to the main line extension, the customer is eligible
for further "refunds," up to the refundable amount. Thus, four
main types of payments may be made to customers pursuant to line
extension contracts: (1) return of the project deposit; (2)
payment for work requested by PG&E that, generally speaking,
would otherwise be the responsibility of PG&E; (3) payment for
inspection fees; and (4) the MLX refund, which is based on the
line extension's forecasted revenue.

Under line extension contracts, both residential and
nonresidential customers have ten years to qualify for MLX
refunds. MLX refunds may never exceed the total refundable cost
of PG&E's estimated engineering and construction work and, in
some cases, customers never recover the total refundable amount.
In addition to the payment provisions of the contracts, the
contracts are designed to extend certain protections from the
developers to PG&E during the ten-year contract term. For
example, the customer indemnifies PG&E against liability for
personal injury, death, violations of laws or for environmental
claims "connected with Applicant's performance" of the contract.
Since PG&E takes ownership and responsibility for the ongoing
maintenance of the facilities, the indemnity is a critical
element of the contract.

In the case of the line extension contracts, the developer
customers undertake (if they so choose) certain construction
obligations, and commit to setting a certain number of meters
within the first 6 months after the DRS. The developer customers
have a ten-year period within which to connect meters under each
line extension contract, and they undertake certain ongoing
warranty and indemnification obligations with respect to work
performed and equipment installed by the developer. Moreover, to
protect PG&E, the developers are subject to on-going obligations
in the contract for the term of the contract, such as making
additional payments to PG&E for facilities rendered "excess" if
the developer decreases its estimated load or leaves PG&E's
system. On the other hand, PG&E is obligated to carry out
certain construction and connection work with respect to the
main line extensions and the connection of services to the
system, and to make certain payments to the customer. (Pacific
Gas Bankruptcy News, Issue No. 20; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   


PACIFIC GAS: Says TURN's Allegations Not Supported by Facts
-----------------------------------------------------------
Pacific Gas and Electric Company issued a statement after The
Utility Reform Network (TURN) held a press conference and
released a document mischaracterizing PG&E's bankruptcy plan of
reorganization:

     "Not since J.K. Rowling penned the first Harry Potter
adventure has there been such an intricate collection of
fantasies.  The difference is that the Potter books were written
to entertain children, while TURN's novella simply treats the
public like children, by misstating the truth, manipulating the
facts, and ultimately, concocting a fairy tale around the
utility's bankruptcy case."

     "PG&E's plan of reorganization does not require a retail
rate increase. No amount of creative writing by TURN can change
that simple, honest, fact."

                         TURN's "Big Lie"

     "TURN has started up its fog machine to deliberately cloud
the truth and obscure the facts of PG&E's plan of
reorganization.  Their tables, pie-charts, and full-color graphs
-- which purport to show $20 billion in excess costs to
ratepayers -- are premised on misrepresentation and factual
inaccuracy, as shown below.  Specifically:

          -- Nuclear Decommissioning -- Grossly misstating the
facts, TURN claims that there will be a surplus in the nuclear
decommission account, then goes on to allege that this mythical
surplus would be kept by the new Generation company.  However,
it is wrong on both scores.  In PG&E's most recent General Rate
Case proceeding, the CPUC reviewed the level of the
decommissioning account and determined that rather than a
surplus, in fact, additional money could be necessary to pay for
decommissioning efforts.  Just as importantly, PG&E has pledged
in its legal filings submitted under oath -- FERC filings and
Bankruptcy Disclosure Statement -- that should any surplus
remain in the decommissioning account, the Generation company
would return that amount to the utility, for its ratepayers.  
TURN's claim that it bases this accusation on PG&E's filings is
either a fabrication, or they somehow missed this important
point.  Poof! $1.4 billion of TURN's $20 billion in alleged
ratepayer costs just vanished.

          -- Filed rate case -- In an absurd effort to double
its numbers, TURN accuses PG&E of attempting to collect twice
from customers through its Filed Rate Doctrine litigation.  
However, in both its FERC filing and in a public letter to the
California State Assembly, the utility very clearly pledged that
should it prevail in that suit, it will not double collect any
costs associated with the filed rate doctrine case. Result:  
Another $9.2 billion of TURN's $20 billion total evaporates.

          -- Generation overcharges -- TURN's cost of service
numbers are pure fiction.  They provide no evidence to support
their estimates, and in fact their numbers are not based on any
decision of the California Public Utilities Commission (CPUC).  
Even more misleading, TURN intentionally ignores the fact that
cost of service ratemaking requires reimbursement for not just
operating costs but also for capital costs. State law requires
that should the CPUC eventually develop a cost of service
ratemaking structure, it must include reimbursement for capital
costs, and that structure would come close to the 5.1 cents/kwh
average cost of the power contract included in PG&E's plan.  
TURN knows that the CPUC-approved generation-related part of
PG&E's rates is 9.47 cents/kwh, and they also know that the
utility's plan does not require any change in PG&E's overall
rates.  Thus, $8.4 billion of TURN's alleged total disappears.

          -- Increase in natural gas prices -- TURN falsely
accuses PG&E's plan of requiring a rate increase for natural gas
transmission costs.  This is just one more fabrication: The plan
does not require any rate increase in natural gas costs.  If,
under FERC jurisdiction, rates for different classes of
customers are ever reallocated among these classes in the
future, in either direction, that by no means equates to
additional profit for the utility, GTrans, or PG&E Corporation.  
Furthermore, any future change in gas transmission rates could
only occur through a full and open process at FERC where TURN,
CPUC and every other interested party could participate.  Zap.  
The last $900 million in TURN's pie-chart is as fictional as the
rest.

            Additional Misrepresentations and Untruths

     "Beyond crafting a fictional pie chart stuffed with phony
numbers, TURN made several additional claims designed to mislead
the press and the public, including:

          -- TURN said AB 6X required cost-based ratemaking in
California.  This is not true, read the law.

          -- TURN tried to imply that any future drought
conditions would result in higher costs for ratepayers under the
utility's plan of reorganization than under a cost-based rate
structure.  Also not true.  Drought conditions would be treated
similarly under either structure.

          -- TURN also implied that the cost of any new state-
mandated clean-up requirements for Diablo Canyon Power Plant
would result in higher costs for ratepayers under the utility's
plan than under cost-based ratemaking.  Again, not true.  These
costs would be treated similarly under the plan and cost-based
ratemaking.

          -- In discussing the hydro settlement, TURN
conveniently failed to mention they were a willing party to the
agreement in 2000 to transfer the utility's hydro assets to a
federally-regulated affiliate.  TURN today wishes to pretend any
change in ownership is somehow morally wrong.

     "TURN knows that its fairy tale is nothing more than smoke
and mirrors. As it has done several times before, unfortunately
TURN once again cooks the books in order to support a false
conclusion worthy only of the evil wizard Voldemort's support."


PEN HOLDINGS: Files for Chapter 11 Reorganization in Tennessee
--------------------------------------------------------------
Pen Holdings, Inc., said that on January 24, 2002, it and
certain of its subsidiaries filed voluntary petitions for
Chapter 11 reorganization with the U.S. Bankruptcy Court for the
Middle District of Tennessee.

In conjunction with the company's Chapter 11 filings, Pen
Holdings has obtained the Court's interim approval to utilize
cash collateral which will enable the company to continue normal
business operations.

Petitions for Chapter 11 reorganization have also been filed for
five of Pen Holdings' subsidiaries, including Pen Coal
Corporation, The Elk Horn Coal Corporation, River Marine
Terminals, Inc., Marine Terminals Incorporated and Pen Land
Company.

In connection with the filings, Pen Holdings has gained
Bankruptcy Court approval of a variety of motions to support its
employees, vendors, customers and other constituents.  The
company expects to continue employee pay and benefits without
disruption.  During the restructuring process, vendors and
suppliers will be paid under normal terms for goods or services
provided to Pen Holdings or its subsidiaries during the
reorganization.

"The last year has been an extremely challenging one for our
company.  Our liquidity position was severely impaired by the
ultimate outcome of the Cheyenne Resources, Inc. litigation, and
compounded by adverse mining conditions at our Fork Creek
operations.  We, along with our advisors, have worked vigorously
to explore various measures to remedy these circumstances, but
have found no viable alternative to date.  A great deal of
analysis and deliberation has gone into the decision to seek
relief under Chapter 11 and this was an extremely difficult
decision for us to make, as we have a talented, loyal and
dedicated group of employees.  However, we intend to continue to
explore scenarios that we believe will be beneficial to our
employees, vendors, customers and other interested parties.  
This voluntary, but difficult, decision enables us to continue
our operations with a high level of commitment," said William E.
Beckner, President and Chief Executive Officer and majority
shareholder of Pen Holdings.

Pen Holdings and its consolidated subsidiaries are primarily
engaged in the mining and sale of coal, selling predominantly to
utility companies.  The Company also receives royalty income
from coal reserves leased to other companies.  The Company's
coal reserves and mining operations are located in Kentucky and
West Virginia.


PEN HOLDINGS: Chapter 11 Case Summary
-------------------------------------
Lead Debtor: Pen Holdings, Inc.
             5110 Maryland Way
             Ste. 300
             Brentwood, TN 37027
             Tel: 6153717300

Bankruptcy Case No.: 02-00979

Debtor affiliates filing separate chapter 11 petitions:

             Entity                        Case No.
             ------                        --------
             Pen Coal Corporation          02-00980
             The Elk Horn Coal Corp.       02-00981
             River Marine Terminals, Inc.  02-00982
             Pen Land Company              02-00983
             Marine Terminals Incorporated 02-00984

Type of Business: Pen Holdings, Inc. and its consolidated
                  subsidiaries are primarily engaged in the   
                  mining and sale of coal, selling
                  predominantly to utility companies. The
                  Company also receives royalty income from
                  coal reserves leased to other companies. The
                  Company's coal reserves and mining operations
                  are in Kentucky and West Virginia.

Chapter 11 Petition Date: January 24, 2002

Court: Middle District of Tennessee

Judge: Keith M. Lundin

Debtor's Counsel: Craig V. Gabbert, Jr., Esq.
                  HARWELL HOWARD HYNE GABBERT & MANNER, P.C.
                  1800 First American Center
                  315 Deaderick Street
                  Nashville, Tennessee 37238
                  (615) 256-0500 - Telephone
                  (615) 251-1059 - Facsimile



PSINET INC: Taps Staubach Company to Dispose of 4 Properties
------------------------------------------------------------
As previously reported, PSINet, Inc., and its debtor-affiliates
sought and obtained the Court's authority to employ and retain
The Staubach Company - Northeast, Inc., a Texas Corporation, as
their real estate brokers and consultants to perform real estate
services with respect to Disposition of the Debtors' Austin
Property (at 7551 Metro Center Drive, Austin, Texas), Ashburn
Property (at 44983 Knoll Square, Ashburn, VA, which serves as
PSINet's headquarters) and Ashburn Parcels (four parcels of land
adjacent to the Ashburn Property, totaling 29.6 acres).

In this motion, the Debtors seek authorization under Sections
327(a) and 328(a) of the Bankruptcy Code and Bankruptcy Rules
2014(a) and 2016(a) to retain Staubach to provide additional
professional services, specifically, disposition of the Debtors'

    *  Dallas Property located at 1333 Crestside Drive, Coppell,
       Texas;

    *  Boston Property located at 55 Middlesex Tumpike, Bedford,
       Massachusetts;

    *  Atlanta Property located at 40 Perimeter Center East,
       Atlanta, Georgia; and

    *  Miami Property located at 2100 Northwest 84th Avenue,
       Miami, Florida.

At the request of the Debtors, and upon the separate approval of
the Court, Staubach may provide further services for the benefit
of the Debtors and their estates.

The Debtors submit that, to the best of their knowledge,
information and belief, the partners and professionals of
Staubach do not have any connection with the Debtors, and do not
hold or represent an interest adverse to the Debtors' estates.
Gregory O'Brien, the President of Staubach submits, and the
Debtors agree, that Staubach is a "disinterested person" under
Section 101(14) of the Bankruptcy Code, as such term is modified
by Section 1107(b) of the Bankruptcy Code.

Staubach has indicated its willingness to be compensated for the
Real Estate Services at the following commission and rebate
rates:

Net Commission Per Transaction    Staubach Share   PSINet Share
------------------------------    --------------   ------------
     $0 - $49,999                       100%            0%
     $50,000 - $499,999                 75%             25%
     $500,000 - $999,999                70%             30%
     $1,000,000+                        65%             35%

Staubach successfully brokered the sale of the Austin Property
to Met Center 3, Inc., for a purchase priceof $7 million and
received 3% of the purchase price, or $210,000. Pursuant to the
Commission Rebate Schedule, PSINet received a $40,000 rebate,
leaving Staubach with $170,000 as its final payment for
brokering and consulting services rendered in connection with
the sale of the Austin Property.

If Staubach successfully brokers the sale of the Ashburn
Property, it will receive a commission equal to 2% of the
purchase price, less a rebate to be determined according to the
Commission Rebate Schedule.

The Ashburn Parcels most likely will be sold to the purchaser of
the Ashburn Property as part of a single transaction. In that
event, Staubach would receive a single commission from the
Debtors, based on the aggregate purchase price received for the
Ashburn Property and the Ashburn Parcels, the aforementioned 2%
commission rate and the Commission Rebate Schedule. If one or
more of the Ashburn Parcels were sold in one or more separate
transactions, Staubach would receive a separate commission upon
the completion of each such transaction, based on the purchase
price received for the Parcel(s) sold in that transaction, the
aforementioned 2% commission rate and the Commission Rebate
Schedule.

If Staubach successfully brokers the sale of the Dallas
Property, Boston Property and/or the Miami Property, it will
receive a commission equal to 2% of the purchase price of each
property, less a rebate to be determined according to the
Commission Rebate Schedule. If Staubach successfully brokers the
sale of the Atlanta Property, the parties currently contemplate
that Staubach would receive a 4% commission (50% of which would
be paid to the buyer's broker) and the remainder of which would
be subject to a partial rebate to the Debtors in accordance with
the Commission Rebate Schedule.

Staubach and the Debtors agree and acknowledge that any prior
understanding or agreement between the parties regarding
commissions (whether orally or in writing) is null and void, and
the Debtors will be authorized to pay commissions to Staubach
only in connection with the sales of the four properties (the
Dallas Property, Boston Property, Atlanta Property and Miami
Property), unless as provided by a separate application by the
Debtors and order of the Court.

Staubach also acknowledges that any compensation received from
the Debtors or the Debtors' estates is subject to approval by
the Court in accordance with Sections 330 and 331 of the
Bankruptcy Code, the applicable Bankruptcy Rules, the Local
Rules of the United States Bankruptcy Court for the Southern
District of New York, and all other rules and orders of the
Court. (PSINet Bankruptcy News, Issue No. 13; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


REPUBLIC TECHNOLOGIES: Steelworkers Ratify New Labor Agreement
--------------------------------------------------------------
Republic Technologies International LLC, the nation's leading
supplier of special bar quality steel, announced ratification of
a new labor contract that will reduce costs and support the
company's effort to emerge from Chapter 11 bankruptcy
protection.

The contract with the United Steelworkers union will last
through April 2006 and reduce union employees' wages and
benefits by 15 percent for a five-month period.  It also
provides for operating cost savings over the long term.

"This contract represents a monumental step toward Republic's
emergence from Chapter 11," said Joseph F. Lapinsky, Republic's
president and chief executive officer.  "Now we are able to move
forward along the path of restructuring the company."

The previous contract was scheduled to expire in October 2003.  
The new agreement covers more than 3,500 union employees at 12
Republic plants in Canton, Massillon, and Lorain, Ohio; Beaver
Falls, Pa.; Chicago and Harvey, Ill.; Gary, Ind.; Lackawanna,
N.Y.; and Hamilton, Ont.

In conjunction with the contract, Republic has imposed
comparable five-month compensation reductions on its salaried
employees, and has asked suppliers to reduce prices by 15
percent for five months.

Republic's lenders have extended the company's debtor-in-
possession financing through May 31, 2002, contingent on the
ratification.  Meanwhile, Republic will be seeking a federal
loan and asking the federal pension agency, the Pension Benefit
Guaranty Corp., to restructure its pension obligations.

"We still need the extraordinary support of our customers, our
banks, our suppliers, our government leaders, our union leaders
and our salaried employees to develop and implement a successful
plan of reorganization," Lapinsky said.  "We remain confident
that with this support, we will emerge from Chapter 11 stronger
than ever."

The new labor agreement also includes the following provisions:

     * A continued delay in previously scheduled wage increases
       until January 1, 2003.

     * Reduction of the equivalent of at least 200 full-time
       employees.

     * Consolidation of several health plans into a single
       preferred-provider structure.

     * Preservation of holiday, vacation and retirement
       benefits.

     * Increase to two, from one, the number of union-designated
       directors on the company's board.

     * Modification of the employment security provisions to
       provide more operating flexibility and to more closely
       conform to industry standards.

     * A new profit-sharing plan tied to company performance.

     * An employee stock ownership plan.

Republic Technologies International, based in Fairlawn, Ohio, is
the nation's largest producer of high-quality steel bars. With
4,300 employees and 2000 sales of nearly $1.3 billion, Republic
was included in Forbes magazine's 2001 and 2000 lists of the
largest U.S. private companies. Republic operates plants in
Canton, Massillon, and Lorain, Ohio; Beaver Falls, Pa.; Chicago
and Harvey, Ill.; Gary, Ind.; Lackawanna, N.Y.; Cartersville,
Ga.; and Hamilton, Ont. The company's products are used in
demanding applications in the automotive, agricultural,
aerospace, off-highway, industrial machinery and energy
industries.

                         *   *   *

The United Steelworkers of America (USWA) announced that a
majority of workers from Republic Technologies International LLC
(RTI) steel plants voted to accept a Modified Labor Agreement
(MLA).  The MLA will stabilize jobs and allow the company to
reorganize its business and emerge from bankruptcy.

Ballots on the new labor agreement were counted at the USWA
headquarters in Pittsburgh today.  The final vote count was
1,864 for the agreement, 1,143 against.

The new agreement will cover more than 3,500 hourly employees at
Republic plants in Canton, Massillon, and Lorain, Ohio; Beaver
Falls, PA; Chicago and Harvey, IL; Gary, IN; Lackawanna, N.Y.;
and Hamilton, Ontario, Canada.

"By accepting this agreement, the Steelworkers Union members
showed that they are willing to do their part to help the
company emerge from bankruptcy as a viable supplier to the
market," said David McCall, the union's chief negotiator with
RTI and director of the USWA's Ohio District 1.  "Now it is
crucial that the Bush Administration and the federal government
act quickly to stop illegal steel dumping by foreign companies,
and help steel retirees from losing their pension benefits."

The Bush Administration is scheduled to decide remedies in March
against foreign steel companies found by the U.S. International
Trade Commission to have unfairly harmed the domestic steel
industry due to their trading practices.  American steel
companies, the USWA and citizens from communities across the
country are urging President Bush to impose the strongest
possible relief to prevent further collapse of the industry.

Supporters of the American steel industry say problems in the
domestic industry are the result of failed trade policies by the
government.  In addition to trade relief, they are also calling
on the federal government to safeguard the health insurance
benefits for steel industry retirees and spouses.  Those
benefits are at risk as more and more American steel companies
file for bankruptcy.

To date, twenty-nine steel companies have filed for bankruptcy,
and more than 30,000 Steelworkers have lost their jobs since the
crisis began.  Fifteen steel mills have completely shut down,
with 22 million tons of America's steel capacity eliminated
since 2000.

RTI management has stated that the new labor agreement would
reduce operating costs and improve financial performance for the
troubled company. Union workers say the agreement stipulated
that workers' contributions will be returned when the company
regains its footing in the industry.  The MLA provides for
future wage and pension increases, and contains significant
profit sharing and ownership benefits.


RESEARCH INC: Commences Reorganization Under Chapter 11 in Minn.
----------------------------------------------------------------
Research, Inc., (Nasdaq: RESRE) said that in order to implement
the next phase of its restructuring process, it has filed a
voluntary petition under Chapter 11 of the Bankruptcy code.

The Company has recorded significant losses this past year as a
result of the downturn seen in the semiconductor and printed
circuit board industry. Since its announcement in June 2001,
regarding the discontinuance of its reflow oven product line,
the Company has significantly reduced its operating costs and
has been working with its unsecured creditors in developing a
debt repayment plan.

In addition, the Company has been negotiating with a bank to
provide a new credit facility and with its landlord to negotiate
a new lease for less space.  However, the Company has been
unable to bring all these pieces together to complete its
restructuring.  

"After exploring its alternatives, we now believe that a
voluntary chapter 11 proceeding presents the most effective
means to complete its restructuring," said President Brad Yopp.  
"Chapter 11 allows us to achieve our restructuring objectives
while at the same time remain committed to providing the same
high quality products and services to our customers."

The Company also announces a restructuring of its board of
directors to better balance the size of the board and the needs
of the company as well as controlling costs.  Concurrent with
its chapter 11 filing, Brad Yopp, President and Chief Financial
Officer, has been appointed to the board and three outside
directors, Edward L. Lundstrom, Charles G. Schiefelbein and Mike
Pudil have resigned their positions.

In addition, the Company has received notification from Nasdaq
that its stock will be delisted at the opening of business on
January 30, 2002 resulting from its failure to file a Form 10-k
for the year ended

September 30, 2001 as required by Marketplace Rule 4310c(14).  
The Company has seven calendar days from the receipt of such
notice to appeal this determination.  The Company does not
intend to appeal the decision.

Research, Inc. designs and manufactures complete product
solutions based on its core competency: the precise control of
heat.  The Company targets markets worldwide including graphics
art printing (ink drying) and plastics, rubber and metal
processing applications. Research, Inc. is headquartered in Eden
Prairie, Minn. The company's common stock trades on the Nasdaq
SmallCap Market under the symbol: RESRE. Additional news and
information can be found on the company's Web site at
http://www.researchinc.com


RESEARCH INCORPORATED: Chapter 11 Case Summary
----------------------------------------------
Lead Debtor: Research Incorporated
             6425 Flying Cloud Drive
             Eden Prairie MN 55344

Bankruptcy Case No.: 02-40309

Chapter 11 Petition Date: January 24, 2002

Court: District of Minnesota (Minneapolis)

Judge: Robert J. Kressel

Debtor's Counsel: Michael L. Meyer, Esq.
                  Ravich Meyer Kirkman & Mcgrath
                  80 S 8th St. Rm. 4545
                  Minneapolis, MN 55402
                  612-332-8511

Estimated Assets: $1 million to $10 million

Estimated Debts: $1 million to $10 million


ROADHOUSE GRILL: Landlords File Involuntary Chapter 11 in FL
------------------------------------------------------------
Roadhouse Grill, Inc. (Nasdaq:GRLL), a full service, casual
dining restaurant operator, said that on January 18, 2002, an
involuntary Chapter 11 petition was filed against Roadhouse
Grill, Inc., in the United States Bankruptcy Court for the
Southern District of Florida by three entities related to CNL
Restaurant Properties, Inc.   Chapter 11 is the reorganization
provision of the U.S. Bankruptcy Code under which a company may
continue its operations, restructure its indebtedness and emerge
from Chapter 11 as a reorganized enterprise.

Roadhouse Grill, Inc., had been in negotiations with the
petitioning creditors in an effort to effect an out-of-court
restructuring -- a process favored by all of the Company's other
major creditors and one which the Company believed was in the
best interest of its constituencies. The Company has just
recently completed an internal restructuring and believes that
it has positioned itself to execute its business plan.

Roadhouse Grill, Inc. has twenty days to respond to this
involuntary petition and has not yet determined whether it is in
the best interests of its constituencies to contest the
petition, if the petition is not withdrawn voluntarily. In any
event, the Company will continue to conduct its operations in
the ordinary course of its business, whether under Chapter 11
protection or not.


SUN HEALTHCARE: Seeks OK to Hire Marla Eskin as Special Counsel
---------------------------------------------------------------
Sun Healthcare Group, Inc., and its debtor-affiliates seek the
Court's authority to employ and retain the Law Office of Marla
R. Eskin as special counsel to assist in the commencement and
prosecution of certain avoidance actions.

Etta R. Wolfe, Esq., at Richards, Layton & Finger, in
Wilmington, Delaware, explains that the Debtors previously
sought authorization to hire Bloom Borenstein & Savage as
special counsel as a cost-effective way to prosecute avoidance
actions on a contingency fee basis.  According to Ms. Wolfe,
while Richards, Layton & Finger has agreed to prosecute the
larger avoidance actions at its ordinary hourly rate, neither of
the Debtors' retained professionals -- Richards, Layton & Finger
and Weil, Gotshal & Manges -- have agreed to prosecute the
remaining avoidance actions on a contingency basis.  Thus, the
Debtors sought and obtained Court authority to retain Bloom
Borenstein & Savage to assist them with those remaining
avoidance actions.

Ms. Wolfe informs the Court that each of the Debtors desires to
employ Eskin because they believe that Eskin is well qualified
to act in this capacity as local counsel to commence and
prosecute avoidance actions.  Ms. Wolfe states that if given
Court authority, Eskin will be required to represent the Debtors
as special counsel to commence and prosecute certain avoidance
actions that are not commenced by Richards, Layton & Finger.  
The Debtors will take appropriate steps to avoid unnecessary and
wasteful duplication of legal services among Bloom Borenstein &
Savage, Eskin and Richards, Layton & Finger.  "As Eskin will be
compensated by Bloom Borenstein & Savage, who will perform its
services on a contingency basis, duplication of effort is of
less concern," Ms. Wolfe adds.

Ms. Wolfe states that Eskin will seek compensation for legal
services from Bloom Borenstein & Savage payable on an hourly
basis, including reimbursement of actual, necessary expenses and
other charges incurred by Eskin.  The rates are set to
compensate Eskin for the work of its attorneys and paralegals
and to cover fixed and routine overhead expenses.  Ms. Wolfe
informs the Court that it is Eskin's policy to charge its
clients for all other expenses incurred in connection with the
case including phone and telecopier bills, toll and other
charges, mail and express mail charges, special or hand delivery
charges, photocopying charges, travel expenses, expenses for
"working meals," computerized research, transcription costs, as
well as secretarial and overtime fees.  Ms. Wolfe lists down the
attorney and paralegal designated to represent the Debtors and
their current standard hourly rates as:

     Professional               Position             Rate
     ------------               --------             ----
     Marla Rosoff Eskin         Owner                $250
     Denise Collett             Paralegal             $95

Furthermore, Ms. Wolfe says that the hourly rates are subject to
periodic adjustments to reflect economic and other conditions.
Other attorneys and paralegals may from time to time serve the
Debtors in connection with this case.

According to Marla R. Eskin, owner of the Eskin Law Office, no
attorney at Eskin:

  (a) holds or represents an interest adverse to the Debtors'
      estates;

  (b) is or was a creditor, an equity security holder or an
      insider of the Debtors;

  (c) is or was an investment banker for any outstanding
      security of the Debtors;

  (d) is or was, within three years before the Petition Date, an
      investment banker for a security of the Debtors, or an
      attorney for an investment banker in connection with the
      offer, sale or issuance of any security of the Debtors;

  (e) is or was, within two years before the Petition Date, a
      director, officer or employee of the Debtors or of an
      investment banker of the Debtors;

  (f) has an interest materially adverse to the interest of the
      estates or of any class of creditors or equity security
      holders, by reason of any direct or indirect relationship
      to, connection with, or interest in the Debtors or an
      investment banker specified;

  (g) is related to any United States District Judge or
      Bankruptcy Judge for the District of Delaware or to the
      United States Trustee for such district or to any known
      employee in the office thereof;

  (h) has received or been promised any compensation for legal
      services rendered or to be rendered in any capacity in
      connection with the Debtors' Chapter 11 cases, other than
      as permitted by the Bankruptcy Code;

  (i) has an agreement with any other entity to share any
      compensation received, nor will any be made, except as
      permitted by the Bankruptcy Code and Rule 2016;

  (j) has other proposed agreement with the Debtors for
      compensation to be paid in these cases.

Consequently, Ms. Eskin asserts that the members and associates
of Eskin are "disinterested persons" as the term is defined
under the Bankruptcy Code. (Sun Healthcare Bankruptcy News,
Issue No. 30; Bankruptcy Creditors' Service, Inc., 609/392-0900)   


SUNBEAM AMERICAS: Lease Decision Hearing Scheduled for Tomorrow
---------------------------------------------------------------
Sunbeam Americas Holdings, Ltd., and its debtor-affiliates, ask
the U.S. Bankruptcy Court for the Southern District of New York,
for the third time, to extend the period within which they must
decide to assume, assume and assign, or reject unexpired leases
of nonresidential real property through June 3, 2002.

Currently, the Debtors are reviewing and analyzing each
remaining unexpired leases.  The Debtors remind the Court that
they were able to reject one unexpired lease in Delray Beach
Florida, one in Fort Lauderdale, and four in Schaumburg,
Illinois, and assume two Boca Raton leases.  This leaves the
Debtors with 63 more unexpired leases.

Their decision whether to assume or reject these leases depends
much on their business assessment and analysis of each contract
and lease location. Due to the large number of the remaining
unexpired leases, the Debtors expect that it will take longer
than the current deadline to make the decision.

A hearing on the motion is scheduled for tomorrow, January 29,
2002 before the Honorable Arthur J. Gonzales, Room 523 of the
U.S. Bankruptcy Court for the Southern District of New York, One
Bowling Green, New York, at 10:00 a.m.

Sunbeam Corporation, the largest manufacturer and distributor of
small appliances, sells mixers, coffeemakers, grills, smoke
detectors, toasters and outdoor & camping equipment in the
United States, filed for chapter 11 protection on February 6,
2001. George A. Davis, Esq., of Weil Gotshal & Manges LLP,
represents the Debtors in their restructuring effort. As of
filing date, the company listed $2,959,863,000 in assets and
$3,201,512,000 in debt.


SUPERVALU: Q3 Net Sales Drop 15% Due to Impact of Restructuring
---------------------------------------------------------------
For the third quarter of fiscal 2002, SUPERVALU Inc., achieved
sales of $4.6 billion, net earnings of $59.0 million. Last year,
sales were $5.4 billion, net earnings were $47.5 million.

Net sales decreased 14.9 percent compared to last year. Retail
food sales increased 1.7 percent and food distribution sales
decreased 26.0 percent. Retail food sales increased over last
year primarily due to new store openings. In addition, same-
store sales were positive 0.7 percent for the quarter. Food
distribution sales decreased from last year reflecting customer
losses, primarily the exit of the Kmart business. The Kmart
supply agreement was terminated June 30, 2001. In addition,
sales decreased as a result of the impact of restructuring
activities.

Gross profit, as a percentage of net sales, was 12.9 percent
compared to 10.8 percent last year. The increase was primarily
due to the growing proportion of the Company's retail business,
which operates at a higher gross profit margin as a percentage
of net sales than does the food distribution business. In
addition, improved merchandising execution in retail and
benefits of restructuring and reconfiguration activities in
distribution added to the gross profit percent increase.

The Company's pretax operating earnings (earnings before
interest and taxes) were $138.1 million compared to $123.3
million last year, a 12.0 percent increase. Operating earnings
before depreciation and amortization were $215.6 million
compared with $201.4 million last year, a 7.1 percent increase.
Retail food operating earnings increased 36.5 percent to $93.5
million, or 4.3 percent of sales, from last year's $68.5
million, or 3.2 percent of sales. The increase was primarily a
result of higher gross profit margins, partially offset by
increases in labor and employee benefit costs. Retail food
operating earnings before depreciation and amortization
increased 24.7 percent to $134.4 million, or 6.1 percent of
sales, from last year's $107.8 million, or 5.0 percent of sales.
Food distribution operating earnings decreased 13.8 percent to
$54.9 million from last year's $63.7 million. The decrease
reflects customer losses, primarily the exit of the Kmart
business.

Operating earnings for distribution, as a percentage of net
sales, increased to 2.3 percent this quarter from 2.0
percent in the prior year reflecting the benefits of
restructuring and reconfiguration activities. Food distribution
operating earnings before depreciation and amortization
decreased 10.7 percent to $90.9 million, or 3.8 percent of
sales, from last year's $101.8 million, or 3.1 percent of sales.

Net earnings increased 24.3 percent to $59.0 million or $0.44
per share - diluted compared with last year's net earnings of
$47.5 million or $0.36 per share - diluted. Weighted average
shares - diluted increased to 135.1 million compared with last
year's 132.7 million.

                      Results For The Year

Year-to-date for fiscal 2002, the Company achieved sales of
$16.3 billion, net earnings of $170.6 million. Last year, net
sales were $17.7 billion, net earnings were $174.8 million and.

Net sales decreased 8.2 percent compared to last year. Retail
food sales increased 2.5 percent, and food distribution sales
decreased 15.2 percent. Retail food sales increased over last
year primarily due to new store openings. Food distribution
sales decreased from last year reflecting customer losses,
primarily the exit of the Kmart business in the second quarter.
In addition, distribution sales decreased as a result of the
impact of restructuring activities.

Gross profit as a percentage of net sales was 12.0 percent
compared to 10.9 percent last year. This increase was primarily
due to the growing proportion of the Company's retail business,
which operates at a higher gross profit margin, as a percentage
of net sales, than does the food distribution business. In
addition, improved merchandising execution in retail and
benefits of restructuring and reconfiguration activities in
distribution contributed to the increase in the gross profit
percent.

The Company's pretax operating earnings (earnings before
interest and taxes) decreased 3.9 percent to $421.0 million,
compared with $438.1 million last year. Operating earnings
before depreciation and amortization decreased to $678.8 million
compared with $691.5 million last year, a 1.8 percent decrease.
Retail food operating earnings increased 5.5 percent to $278.8
million, or 3.9 percent of sales, from last year's $264.2
million, or 3.8 percent of sales. This increase in retail
earnings was attributable to improved merchandising execution
resulting in an improvement in gross margins. Retail food
operating earnings before depreciation and amortization
increased 5.0 percent to $410.7 million, or 5.7 percent of
sales, from last year's $391.2 million, or 5.6 percent of sales.

Food distribution operating earnings decreased 13.9 percent to
$173.3 million, or 1.9 percent of sales, from last year's $201.2
million, or 1.9 percent of sales. The decrease in operating
earnings reflects customer losses, primarily the exit of the
Kmart business. Food distribution operating earnings before
depreciation and amortization decreased 8.7 percent to $297.0
million, or 3.3 percent of sales, from last year's $325.3
million, or 3.0 percent of sales.

Net earnings decreased 2.4 percent to $170.6 million or $1.28
per share - diluted compared with last year's net earnings of
$174.8 million or $1.31 per share - diluted. Weighted average
shares - diluted increased to 133.8 million compared with last
year's 133.0 million.

                  Liquidity and Capital Resources

Internally generated funds from operations continued to be the
major source of liquidity and capital growth. Cash provided from
operations was $437.1 million year-to-date, compared with $338.7
million last year. The increase is reflective of positive
impacts on working capital attributable to the exit of the Kmart
business as well as restructuring activities. Net cash used in
investing activities was $162.7 million, compared with $313.3
million last year. The decrease was primarily due to lower
purchases of fixed assets and higher proceeds from sales of
assets related to restructuring activities. Net cash used in
financing activities was $273.5 million, compared with $26.7
million last year. The increase in cash used in financing
activities reflects higher net debt reduction in fiscal 2002.

Management expects that the Company will continue to replenish
operating assets and reduce aggregate debt with internally
generated funds.  The Company indicates that it has adequate
short-term and long-term financing capabilities to fund its
capital expenditures plan and acquisitions as the opportunities
arise.  SUPERVALU will continue to use short-term and long-term
debt as a supplement to internally generated funds to finance
its activities. Maturities of debt issued will depend on
management's views with respect to the relative attractiveness
of interest rates at the time of issuance.

The Company has entered into revolving credit agreements with
various financial institutions, which are available for general
corporate purposes and for the issuance of letters of credit. A
$400 million revolving credit agreement expires in October 2002
and a $300 million 364-day agreement expires in August 2002.
Both credit facilities have rates tied to LIBOR plus 0.650 to
1.400 percent, based on the Company's credit ratings. As of
December 1, 2001, letters of credit outstanding under the credit
facilities were $111 million and the unused available credit
under these facilities was $548 million. The Company also has
$137.3 million outstanding under an accounts receivable
securitization program.

In the fourth quarter of fiscal 2001, the Company completed a
company-wide asset review to identify assets that did not meet
return objectives, provide long-term strategic opportunities, or
justify additional capital investment. As a result, the Company
recorded restructure and other charges of $171.3 million
including $89.7 million for asset impairment charges, $52.1
million for lease subsidies, lease cancellation fees, future
payments on exited leased facilities and guarantee obligations
and $39.8 million for severance and employee related costs,
offset by a reduction in the fiscal 2000 reserve of $10.3
million for lease subsidies and future payments on exited leased
facilities. These actions include a net reduction of
approximately 4,500 employees throughout the organization.
Management expects that these actions will be substantially
completed by the end of fiscal 2002.

SUPERVALU is a leading supermarket retailer holding the nation's
largest position in the extreme value grocery retailing segment
and is the nation's most successful food distributor to grocery
retailers.

At September 8, 2001, SUPERVALU's balance sheet shows a working
capital deficit -- $1.8 billion in current assets (cash or
assets expected to convert to cash within the next year)
available to pay $1.9 billion of debt coming due in the next
year.  


TELIGENT INC: Venture Asset to Manage Sale of 20 Central Offices
----------------------------------------------------------------
Venture Asset Group, LLC, a leading financial services firm
specializing in strategic asset spin-offs and divestitures for
technology infrastructure and telecommunications companies, said
that it has been retained by Teligent, Inc. (OTC Bulletin Board:
TGNTQ) to manage the sale of over 20 Teligent Central Offices
(TCOs) throughout the United States.

The TCOs were part of Teligent's extensive national 43 city
fixed-wireless network providing voice and data services to
business customers. Teligent's central offices are carrier-class
voice and data switching centers with sophisticated
environmental controls, security and leading broadband network
equipment.

"This is an excellent opportunity for either an emerging service
provider or major carrier to immediately strengthen their
network with world class voice and data facilities and
telecommunications equipment," said

Jim Continenza, Teligent's COO. "Teligent is confident that
through Venture Asset Group's relationships in the broadband and
telecom industry, it will quickly find the right buyers for the
TCOs."

On May 21 Teligent filed for Chapter 11-bankruptcy protection
and is in the process of divesting certain non-operating assets,
while continuing to provide facilities-based fixed wireless
services, including private line, transport, and wholesale
services, in addition to resold services. Venture Asset Group
will manage the sale of all 21 TCOs located in 17 states,
including California, Texas and New York.

"Over the past five years, Teligent has invested a significant
amount of capital to build some of the industry's best-equipped
telecom centers," said Dan Schryer, managing partner, Venture
Asset Group. "Many telecom service providers are now involved in
a broad reallocation of assets like these. We look forward to
making the TCOs available to our network of service provider
contacts."

Venture Asset Group's assignment includes marketing Teligent
telecom centers in the following metro areas:  Atlanta,
Charlestown, Mass., Charlotte, Chicago, Dallas, Eagan, Minn.,
Englewood, Colo., Garfield Heights, Ohio, Houston, Indianapolis,
Kansas City, Los Angeles, New York, Oakland, Orlando,
Philadelphia, San Antonio, Seattle, Southfield, Mich., Tempe,
Ariz., and Washington, D.C.

Based in Palo Alto, Calif., Venture Asset Group provides trusted
advisory and transaction services to the technology and network
infrastructure industries. Venture Asset Group works
strategically with its clients to provide maximum value from the
divestiture of technology assets, intellectual property,
strategic business units and telecom infrastructure. Venture
Asset Group's management team includes seasoned executives who
have joined the firm from senior positions at some of the most
successful emerging telecom and technology companies in the
world.

More information about Venture Asset Group can be found at
http://www.VentureAG.comor by calling 650-330-8910.  

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


TRANSFINANCIAL: Shareholders Accept Plan of Complete Dissolution
----------------------------------------------------------------
TransFinancial Holdings, Inc. (AMEX:TFH), a holding company
located in Lenexa, Kansas, reported that its shareholders
approved all of the proposals presented at the shareholder
meeting held on January 22, 2002. The most significant of those
were the sale of its premium finance operations and the approval
of the Plan of Complete Liquidation of the Company.

Bill Cox, Chairman of the Board and President of the Company,
stated: "The Company expects to close on the sale of its premium
finance operations, which is still subject to the approval of
the Company's bank, within the first quarter, and intends to
file a Certificate of Dissolution thereafter. Initial
distribution of assets, in the previously stated aggregate range
of $2.50 to $3.00 per share are expected to occur within 90 days
of such filing."

The Company's common stock will cease trading on the American
Stock Exchange once the Certificate of Dissolution is filed.


TREND-LINES INC: Working Capital Deficit Swells to $38.7 Million
----------------------------------------------------------------
Net sales for the first quarter of fiscal 2001 for Trend-Lines,
Inc., decreased by $17.0 million, or 38.6%, from $44.1 million
for the first quarter of fiscal 2000, to $27.1 million.

Net retail sales for the first quarter of fiscal 2001 decreased
$13.9 million, or 35.2%, from $39.4 million for the first
quarter of fiscal 2000 to $25.5 million. The retail sales
decrease was attributable to implications from the Company's
bankruptcy filing in August 2000. Catalog sales for the first
quarter of fiscal 2001 decreased $3.2 million, or 67.3%, from
$4.7 million for the first quarter of fiscal 2000, to $1.5
million. Catalog sales were impacted due to fewer catalogs being
mailed during the period.

Gross profit for the first quarter of fiscal 2001 decreased $3.9
million, or 32.7%, from $12.0 million for the first quarter of
fiscal 2000, to $8.1 million. As a percentage of net sales,
gross profit increased 2.6% from 27.2% of net sales for the
first quarter of fiscal 2000 to 29.8% of net sales in the first
quarter of fiscal 2001. Aggressive promotional advertising and
the change in sales mix is the primary cause for the change in
gross margin.

Net loss for the first quarter of fiscal 2001 was $6,371 as
compared with the net loss of the first quarter of 2000 of
$3,814.

The Company's working capital deficiency increased by $4.6
million, from $34.1 million as of February 24, 2001 to $38.7
million as of May 26, 2001. The increase resulted primarily from
a decrease in inventories of $4.5 million, which was offset by
an increase in pre-petition and post-petition accounts payable
of $17.1 million, collectively.

Net sales for the second quarter of fiscal 2001 decreased by
$11.3 million, or 32.9%, from $34.5 million for the second
quarter of fiscal 2000, to $23.1 million. Net retail sales for
the second quarter of fiscal 2001 decreased $9.4 million, or
30.3%, from $31.2 million for the second quarter of fiscal 2000,
to $21.8 million. The retail sales decrease was attributable to
implications from the Company's bankruptcy filing in August
2000. Catalog sales for the second quarter of fiscal 2001
decreased $1.9 million, or 58.6%, from $3.2 million for the
second quarter of fiscal 2000, to $1.3 million.

Net sales for the six months of fiscal 2001 decreased by $28.4
million, or 36.1%, from $78.6 million for the first six months
of fiscal 2000, to $50.2 million. Net retail sales for the first
six months of fiscal 2001 decreased $23.4 million, or 33.1%%,
from $70.7 million for the first six months of fiscal 2000, to
$47.3 million. The retail sales decrease was attributable to
implications from the Company's bankruptcy filing in August
2000. Catalog sales for the first six months of fiscal 2001
decreased $5.0 million, or 63.8%, from $7.9 million for the
first six months of fiscal 2000, to $2.9 million.

Gross profit for the second quarter of fiscal 2001 decreased
$1.8 million, or 20.0%, from $8.7 million for the second quarter
of fiscal 2000, to $6.9 million. As a percentage of net sales,
gross profit increased 4.9% from 25.1% of net sales for the
second quarter of fiscal 2000 to 30.0% of net sales in the
second quarter of fiscal 2001. Aggressive promotional
advertising and the change in sales mix is the primary cause for
the change in gross margin.

Gross profit for the first six months of fiscal 2001 decreased
$5.7 million, or 27.3%, from $20.7 million for the first six
months of fiscal 2000, to $15.0 million for the first six months
of fiscal 2001. As a percentage of net sales, gross profit
increased 3.7% from 26.3% of net sales for the first six months
of fiscal 2000 to 30.0% of net sales in the first six months of
fiscal 2001.

Net income for the second quarter of fiscal 2001 was $ 382 as
compared to the net loss of the same quarter of 2000, of
$37,676.  Net loss for the six months of fiscal 2001 was $5,989,
while net loss for the first six months of 2000 was $41,490.

The Company's working capital deficiency increased by $3.9
million, from $34.1 million as of February 24, 2001 to $38.0
million as of August 25, 2001. The increase resulted primarily
from a decrease in inventories of $10.4 million which was offset
by an increase in accounts receivable of $2.8 million and a
decrease in the bank credit facility of $4.9 million.


TRITON NETWORK: Will File Certificate of Dissolution by Jan. 31
---------------------------------------------------------------
Triton Network Systems, Inc., (Nasdaq:TNSI) said that its Board
of Directors has authorized management to promptly file a
Certificate of Dissolution with the Secretary of State of
Delaware. The Board's action was authorized in late October
2001, when Triton's stockholders approved a Plan of Complete
Liquidation and Dissolution of the company. The Board of
Directors also approved an employment agreement with Ken Vines
to continue as the Chief Executive Officer of the company and
also appointed Mr. Vines to the Board of Directors. All current
directors, other than Howard "Skip" Speaks and Stanley Arthur,
agreed to resign effective the date of the Board meeting.

Management currently anticipates filing the Certificate of
Dissolution on or about January 31, 2001. Upon filing, the
company will request that the Nasdaq Stock Market delist the
company's common stock, and will petition the Securities and
Exchange Commission for relief from the obligation to file
periodic and other reports under the Securities and Exchange Act
of 1934. The company will also close its stock transfer books
and discontinue recording transfers of common stock at the close
of business on the day the Certificate of Dissolution is filed.
Thereafter, certificates representing the common stock will not
be assignable or transferable on the books of the company except
by will, intestate succession or operation of law.

Subsequent to the adoption of the Plan by the company's
stockholders, the company's activities have been limited
primarily to selling remaining assets, paying creditors,
terminating commercial agreements and continuing to honor
customer obligations. The company's contracts with customers
require the company to provide product repair and return and
other support activities for specified periods of time in the
future. As specified in the Plan, the company is committed to
complying with its contractual obligations with customers and,
as a result, the company will retain the necessary personnel,
equipment and materials to perform the future support activities
outlined in the customer contracts.

Following the filing of the Certificate of Dissolution, the
company will continue with its liquidation activities, including
attempting to resolve four pending lawsuits. Two lawsuits have
been filed by customers, CAVU/EXPEDIENT, Inc., and XO
Communications, Inc., each of whom contends the company will
breach its contracts with them when the company is liquidated,
including one filed by a customer in late November 2001 in the
Circuit Court of Fairfax County, Virginia which asks that, among
other things, money damages, interest, attorneys' fees and costs
be awarded to the plaintiff. The company has filed motions to
dismiss these lawsuits on the basis that the Plan adequately
provides for the continuing customer support necessary for the
company to honor its obligations under the customers' contracts.
A third lawsuit has been filed by Frank Musolino, a stockholder,
who held shares of the company prior to the initial public
offering, claiming that the company interfered with his proposed
sale of shares of company common stock. This lawsuit is
scheduled for trial in the second quarter of 2002. The last
lawsuit is one of more than 300 class actions challenging the
disclosure of underwriting and distribution arrangements in
recent initial public offerings and seeking monetary and
recissory damages and interest. The class action names Credit
Suisse First Boston, the lead underwriter of the company's
initial public offering, as a defendant. Although the company
believes it has meritorious defenses in each of these lawsuits
and intends to contest the claims vigorously, management cannot
determine the outcome at the current time. Once management is
able to either resolve the lawsuits or quantify and establish a
contingency reserve for the estimated costs of these and any
future claims, and related expenses, the company intends to
distribute the balance of the proceeds from its liquidation
activities to its stockholders.

Although there can be no assurance as to the amount or the
timing of the total distribution to stockholders, the company
continues to believe that the total distribution is likely to be
between $0.75 and $0.95 per share, unless the company is
unsuccessful in its defenses in current and any future
litigation. The company plans to make an initial distribution to
stockholders promptly after establishing the contingency
reserve. Although there can be no assurance, management is
hopeful that the initial distribution, net of the estimated
contingency reserve, will be made by mid-2002. The timing of any
distribution may depend on court actions, and as a result may
not be within the company's control. The timing and amount of
distributions will also depend on the final resolution of the
various contingencies outlined above.


VYTALTEK SECURITY: Court Extends Plan Filing Deadline to March 4
----------------------------------------------------------------
VentureQuest Group, Inc., a Nevada corporation, (VQGI on "Pink
Sheets"), said that VytalTek Security Services Inc., of
Vancouver, British Columbia has obtained Court approval to
extend the deadline for filing its Formal Proposal to creditors
under the Bankruptcy and Insolvency Act of Canada from January
14, 2002 until March 4, 2002.

VytalTek is a full service security company that sells,
installs, services and monitors commercial and residential
security systems.

On October 12, 2001 the Company announced it had entered into an
agreement to purchase all of the outstanding shares of VytalTek
subject to VytalTek successfully completing its Proposal. In
order for a Proposal to be successful, the Act requires it to be
approved by a majority of the unsecured creditors who represent
a minimum of 66%of the unsecured liabilities.

According to the financial records provided in Court, the
unsecured indebtedness controlled by VentureQuest affiliates
represents approximately 70% of VytalTek's total unsecured
liabilities of CDN$425,000.

"The extension provides VytalTek with the additional time it
needs to restructure its affairs and solidify its customer base"
said Eric Hutchingame, Chairman of VentureQuest. "We view the
Court's approval as another positive step in ensuring a
successful restructuring that will ultimately result in
VentureQuest acquiring a financially healthy company", he added.

VentureQuest is in the business of acquiring and consolidating
emerging or underachieving companies or opportunities that
provide recurring revenue.


WASHINGTON GROUP: Plan Declared Effective on January 25
-------------------------------------------------------
Washington Group International, Inc., et al., advise the U.S.
Bankruptcy Court for the District of Nevada that their Second
Amended Joint Plan of Reorganization, as modified, became
effective on January 25, 2002.  

Washington Group, an international engineering and construction
firm, offers a full life-cycle of services as a preferred
provider of premier science, engineering, construction, program
management, and development. The company filed for
reorganization under Chapter 11 of the U.S. Bankruptcy Code on
May 14, 2001.  David S. Kurtz, Esq., Timothy R. Pohl, Esq.,
Gregg M. Galardi, Esq., and Eric M. Davis, Esq., at SKADDEN,
ARPS, SLATE, MEAGHER & FLOM LLP, represent WGI, assisted by
Jennifer A. Smith, Esq., and Etta L. Walker, Esq., at LIONEL
SAWYER & COLLINS as local counsel.


WEIRTON STEEL: S&P Hatchets Junk Ratings Down to Default Level
--------------------------------------------------------------
Standard & Poor's lowered its corporate credit rating on Weirton
Steel Corp. to 'SD' (selective default) and lowered its ratings
on two of the company's senior unsecured debt issues to 'D'.

At the same time, Standard & Poor's affirmed its triple-'C'
rating on the company's existing 8-5/8% pollution control
revenue refunding bond series 1989 due 2014. All ratings are
removed from CreditWatch where they were placed with negative
implications on November 1, 2001.

These actions follow the company's failure to make scheduled
interest payments on its 11-3/8% senior unsecured notes and 10-
3/4% senior unsecured notes. Weirton is in the midst of an
exchange offer for all of its outstanding 11-3/8% and 10-3/4%
for new $79.3 million 10% senior discount notes due 2008, which
represents a par value significantly less than the existing
debt. The senior discount notes will be secured by a mortgage
and first priority security interest in the company's hot-strip
mill.

In addition, Weirton has requested that the City of Weirton
offer in exchange all of its outstanding 8 5/8% pollution
control revenue refunding bond series bonds for new 9% pollution
control revenue refunding bonds series 2001 due 2014. The
secured series 2001 will also be secured by a mortgage and first
security interest in the hot-strip mill. As part of the
restructuring Weirton finalized a $200 million senior secured
credit facility maturing March 31, 2004, to refinance its
existing inventory and receivable facilities and provide an
additional $35 million of liquidity. This facility is secured by
receivables, inventory and its number-nine tandem mill.

Following the successful completion of the exchange offer, the
defaulted ratings will be re-evaluated and the new notes will be
rated and will rise to a level accurately depicting future
prospects for credit quality.

            Ratings Lowered and Removed from CreditWatch

                                             Ratings
     Weirton Steel Corp.                To            From
        Corporate credit rating         SD            CC
        $125 mil. 10 3/4% senior notes  D             C
        $125 mil. 11 3/8% senior notes  D             C

            Rating Affirmed and Removed from CreditWatch

     Weirton Steel Corp.                       Rating
        $56.3 mil. pollution cntl. rev. bonds   CCC

DebtTraders reports that Weirton Steel Corporation's 11.375%
bonds due 2004 (WEIRT2) are trading between 9 and 12. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WEIRT2for  
real-time bond pricing.


WILLIAMS CONTROLS: Net Operating Losses Continue in FY 2001
-----------------------------------------------------------
Williams Controls, Inc., reported that its loss from continuing
operations was $5.17 million in fiscal 2001 compared to a loss
of $1.55 million in fiscal 2000. According to the Company the
most significant factor in the reduced earnings were lower sales
volumes and resulting lower gross profit margins from the
Company's electronic throttle controls (ETC's) for the heavy
truck market. The lower gross profit margins were partially
offset by reduced spending in research and development of $2.7
million and lower spending on sales and administrative of $1.24
million. Additionally, during fiscal 2001, the Company
recognized an asset impairment loss of $1.8 million related to
the Company's plastic injection molding business (PPT) which was
shut down during the year, impairment loss of $4.37 million on
the goodwill and intangible assets of the Company's adjustable
pedal business, and gains on sales of assets of $4.3 million.

Net sales from continuing operations decreased $12.6 million or
18.7%, to $55.1 million in the year ended September 30, 2001
compared to $67.7 million during the prior period, primarily due
to the closure of the PPT operations and lower unit sales
volumes in the remaining portion of the Company's vehicle
components segment.

Sales in the Vehicle component business segment decreased $13
million, or 20.0%, to $52.2 million from sales of $65.26 million
in fiscal 2000. A significant factor in the decline was lower
unit sales of electronic throttle controls primarily caused by
the general slowdown in all of the major markets the Company's
serves. Additionally, in February the management of the Company
began closing the operations of PPT. Except for some completion
of existing orders, PPT ceased operations on March 31, 2001. PPT
sales were $4.029 million in fiscal 2001, $6,117 lower than the
$10.15 million in fiscal 2000.

The Electrical Components and GPS component business segment
sales for fiscal 2001 were $2.9 million, an increase of $432
million over the 2000 sales levels. Although the Company is
committed to the development and production of sensors and
sensor related products, sales from this segment may be
significantly lower during fiscal 2002 as the Company phased out
a number of its traditional electrical component products in
fiscal 2001 and sold the global positioning system product line
(GPS) in June 2001.

Gross Margins were $10.245 million, or 18.6% of sales in fiscal
2001 a reduction of $5.7 million compared to the gross margin of
$15.979 million, or 23.6%, of sales in fiscal 2000. The reduced
gross profit margins were primarily due to the lower overall
sales levels. Additionally, the Company's liquidity constraints
during the first two quarters of the year caused disruptions in
the Company's materials flow, resulting in production
inefficiencies and higher shipping costs, reducing gross profit
margins. The Company has not experienced any significant
materials flow disruptions during the last half of fiscal 2001.
The PPT operations, which were shut down earlier in the year,
negatively affected gross profit margins in both fiscal 2001 and
2000. Negative operating margins on sales and costs of shutting
down PPT resulted in a negative gross profit margin of $2,194
during the 6 months of operations in fiscal 2001. The negative
gross profit margin in fiscal 2000 was $1,950.

Net loss allocable to common shareholders was $10.698 million in
the year ended September 30, 2001 compared to $17.332 million in
the year ended September 30, 2000 due to the factors described
above and higher preferred dividends due primarily to a charge
of $455 for change in conversion price.

Williams Controls, Inc., includes its wholly-owned subsidiaries,
Williams Controls Industries, Inc.; Aptek Williams, Inc.;
Premier Plastic Technologies, Inc.; ProActive Acquisition
Corporation; GeoFocus, Inc.; NESC Williams, Inc.; Williams
Technologies, Inc.; Williams World Trade, Inc.; Kenco/Williams,
Inc.; Techwood Williams, Inc.; Agrotec Williams, Inc. and its
80% owned subsidiaries Hardee Williams, Inc. and Waccamaw Wheel
Williams, Inc.  

The Company is a Delaware corporation formed in 1988. The
principal company in its Vehicle Components segment, its primary
business segment, was founded by Norman C. Williams in 1939 and
acquired by the Company in 1988. The operating subsidiaries are
divided into two operating segments and one discontinued
segment, which was sold in May 2000.


* BOND PRICING: For the week of January 28 - February 1, 2002
-------------------------------------------------------------
Following are indicated prices for selected issues:

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

                          *********

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

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