TCR_Public/020129.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

            Tuesday, January 29, 2002, Vol. 6, No. 120     

                          Headlines

AAMES FINANCIAL: Taps UBS Warburg to Explore Debt Restructuring
ACT MANUFACTURING: Secures Access to $20mm of DIP Financing
AGERE SYSTEMS: Q1 2002 Net Loss Tops $282MM on $537MM Revenues
AGERE SYSTEMS: Seeking Buyer for Fla. Wafer Fabrication Assets
AMERICA WEST: Calls Back Furloughed Pilots as Business Improves

AMPEX CORP: Seeks Qualification of Indenture for New 12% Notes
AZTECA HOLDINGS: S&P Rates US$150MM Senior Secured Notes at B-
BETHLEHEM STEEL: Schedules & Statements Should Be Filed Today
BEYOND.COM CORP: Files for Chapter 11 Relief to Sell Assets
BEYOND.COM: Digital River to Acquire Assets & Customer Contracts

CENTENNIAL COMMS: S&P Revises Outlook on Low-B's to Negative
CHARLES RIVER: S&P Ratchets Corp. Credit Rating Up a Notch to BB
COLUMBUS MCKINNON: S&P Concerned About Weakening Performance
COMDISCO INC: Court Approves Proposed LP Interests Sale Protocol
COVANTA ENERGY: Fitch Monitoring Related Solid Waste Bonds

ENRON CORP: Wants Lease Decision Period Extended to Year-End
EXODUS COMMS: GE Capital Wants Payment & Lease Decision Now
FEDERAL-MOGUL: Court Extends Lease Decision Period to April 1
FLEMING: Kmart Bankruptcy Spurs S&P to Put Low-B's on Watch Neg.
FLEMING: Pleased with Moody's Swift Review of Ratings Outlook

GIMBEL VISION: Fails to Meet Certain TSE Listing Requirements
GLOBAL CROSSING: Files for Chapter 11 Restructuring in New York
GLOBAL CROSSING: Case Summary & 50 Largest Unsecured Creditors
HALO INDUSTRIES: Completes Sale of Businesses in MI and Canada
HELLER EQUIPMENT: Fitch Concerned About Decline in Asset Quality

HOULIHAN'S RESTAURANTS: Case Summary & Unsecured Creditors
ICG COMMS: Committee Taps Chaim J. Fortgang as Lead Co-Counsel
IT GROUP: Seeks Okay to Continue Use of Existing Business Forms
IT GROUP: Inks Definitive Sale Agreement with Shaw Group
IMEXSA EXPORT: S&P Junks Export Certificate Rating

INTEGRATED HEALTH: Pushing for Amendment of DIP Financing Pact
INTERFACE: Completes 10.275% Note Offer to Refinance Revolver
KMART CORP: Brings-In Skadden Arps to Prosecute Chapter 11 Cases
LTV CORP: Taps Skadden Arps as Co-Counsel on Int'l Trade Matters
LERNOUT & HAUSPIE: Bolts Settlement Agreement with the Bakers

MILLENIUM SEACARRIERS: Hires Thacher Proffitt for Legal Services
MOTIENT CORP: Signs-Up Bankruptcy Services as Claims Agent
NATIONSRENT: Has Until April 16 to File Schedules & Statements
OPTI INC: Will Pay Cash Dividends to Shareholders on February 15
ORIUS CORP: S&P Junks Ratings Following Bank Loan Amendment

PACIFIC GAS: Hiring of Real Estate Appraisers & Brokers Approved
PACIFICARE HEALTH: Bank Group Waives Covenants Under Credit Pact
PILLOWTEX: Deadline to Challenge Obligations Extended to Feb. 15
PSINET INC: Closes Sale of Japanese Unit to C&W for $16.6 Mill.
SENSE TECH: Falls Short of Nasdaq Capitalization Requirement

SERVICE MERCHANDISE: Gets Third Extension of Exclusive Periods
STATIA TERMINALS: Special Shareholders' Meeting Set for Feb. 22
SUN HEALTHCARE: Court Okays Innisfree M&A as Balloting Agent
SYNBIOTICS CORP: Completes Debt Restructuring with Comerica Bank
TELESYSTEM INT'L: Extends Purchase Offer for Units Until Feb. 4

TELESYSTEM: Amaranth and TAL Global Agree to Tender Debentures
TERAGLOBAL COMMS: Continues Exploring Financing Alternatives
UNICAPITAL: Fitch Cuts Ratings to D over Asset Deterioration
UNITED AIR: S&P Drops Ratings on Ongoing Losses & Labor Issues
UNITEDGLOBALCOM: IDT Waives Conditions to Note Tender Offer

UNITED GLOBALCOM: S&P Drops 10.75% Senior Secured Notes to D
VERTEX INTERACTIVE: Fails to Meet Nasdaq Listing Requirement

                          *********

AAMES FINANCIAL: Taps UBS Warburg to Explore Debt Restructuring
---------------------------------------------------------------
Aames Financial Corporation (OTCBB:AMSF), a leader in subprime
home equity lending, announced the successful completion of a
$235.0 million asset backed securitization of mortgage loans
during the three months ended December 31, 2001, the planned
commencement of its previously announced rights offering and the
retention of UBS Warburg as a financial advisor.

                         Securitization

Aames closed a $235.0 million securitization transaction of
fixed rate mortgage loans during the three months ended Dec. 31,
2001. At Dec. 31, 2001, Aames had retained the residual interest
created in the securitization transaction. Aames sold for cash
the servicing rights and prepayment penalties related to the
mortgage loans in the securitization transaction to an
independent third party mortgage loan servicing company.

"The December 2001 securitization transaction was our sixth
consecutive quarterly securitization and demonstrates our
commitment to pursuing a diversified loan disposition strategy
by accessing both the whole loan sale and securitization
markets," said A. Jay Meyerson, Aames' Chief Executive Officer.

                         Rights Offering

Aames plans to commence on January 29, 2002 its previously
announced rights offering to record holders of its common stock.
Aames has set a record date for this offering as of January 22,
2002. The rights offering grants holders of common stock on the
record date the right to purchase 2.56 shares of Aames Series D
convertible preferred stock at $0.85 per share for each share of
Aames common stock owned. Aames anticipates the rights offering
will expire February 12, 2002. Please refer to Aames'
registration statement on Form S-3 filed with the Securities and
Exchange Commission for more information.

                         Financial Advisor

Aames has retained UBS Warburg as a financial advisor to explore
options for a possible restructuring of Aames' outstanding
9.125% senior notes due November 2003 and its 5.5% convertible
subordinated debentures due March 2006. There can be no
assurance that any such restructuring can be successfully
completed.

Aames is a leading home equity lender and at December 31, 2001
operated 100 retail Aames Home Loan branches, five wholesale
loan centers and two National Loan Centers throughout the United
States.


ACT MANUFACTURING: Secures Access to $20mm of DIP Financing
-----------------------------------------------------------
After a preliminary hearing Friday in Federal Bankruptcy Court
in Worcester, Massachusetts, ACT Manufacturing, Inc., said it
received $20 million of Debtor in Possession (DIP) financing
under Chapter 11.  The Judge handling the case is the Honorable
Joel Rosenthal.

The company filed for reorganization on December 21, 2001.  The
funds approved Friday, subject to a final hearing, are through
June 2002 and would allow ACT to continue to service customers
and maintain day-to-day operations. The firm believes that the
multi-month DIP, along with the ongoing cash collateral, would
be sufficient to meet ACT's operational needs.

ACT has operations in California, Georgia, Massachusetts,
Mississippi, France, England, Ireland, Mexico, Singapore, Taiwan
and Thailand.  ACT's overseas operations are unaffected by the
Chapter 11 filing.

The company, headquartered in Hudson, Massachusetts, provides
value-added electronics manufacturing services to original
equipment manufacturers in the networking and
telecommunications, computer and industrial and medical
equipment markets.  The Company provides OEMs with complex
printed circuit board assembly primarily utilizing advanced
surface mount technology, electro-mechanical subassembly, total
system assembly and integration, mechanical and molded cable and
harness assembly and other value-added services.


AGERE SYSTEMS: Q1 2002 Net Loss Tops $282MM on $537MM Revenues
--------------------------------------------------------------
Agere Systems (NYSE: AGR.A), the world leader in communications
components, reported that revenues for the first quarter of
fiscal 2002, ended December 31, 2001, were $537 million, down
approximately 10 percent from the September quarter and in line
with the guidance provided by the company in October. Pro forma
net loss was $282 million.

Pro forma EPS assumes that 1.635 billion shares of common stock
were outstanding for all periods. Pro forma net loss excludes
amortization of goodwill and other acquired intangibles,
restructuring and separation charges, and impairment of goodwill
and other acquired intangibles.  Including these items, reported
net loss for the December quarter was $375 million.  Reported
net loss for the September quarter was $3.4 billion, which
included $2.7 billion in impairment of goodwill and other
acquired intangibles.

In the past year, Agere has implemented a number of actions to
improve operating efficiency and accelerate time-to-market,
while reducing fixed costs and lowering its revenue breakeven
level.  Continuing those initiatives, Agere announced plans to
streamline its operations.  The company plans to seek a buyer
for its wafer fabrication operation in Orlando, Fla., and has
had preliminary discussions with potential buyers. Additionally,
Agere will combine a majority of its integrated circuits (IC)
and optoelectronics operations from the company's sites in
Reading and Breinigsville, Pa., into the Allentown, Pa., campus.  
The company will also move about half of its New Jersey
workforce, which includes product development positions, to
Allentown.

"We are streamlining our business to create an operating model
that will best support Agere's future profitable growth," said
John Dickson, president and CEO, Agere Systems.  "In
Pennsylvania, we are bringing together a large part of our IC
and optoelectronics manufacturing and product development into
our Allentown facility.  This will allow us to optimize design
and manufacturing synergies and more rapidly introduce
integrated solutions to the market.

"With the intended sale of our Orlando operations, we will
create a more variable cost structure, freeing us to focus our
investment on products and technologies that differentiate us in
the market," Dickson added.  "Moving forward, we will leverage
our strong foundry relationships to provide our customers the
benefits of advanced manufacturing processes and flexible, cost-
effective production."

          Combining New Jersey and Pennsylvania Operations

Agere will move its operations from Reading and Breinigsville to
its Allentown campus over the next 12-18 months.  Subsequently,
the company will discontinue operations at the two facilities
and will seek buyers for these properties.  The company will
also transfer approximately 350 corporate support and product
development positions from multiple locations in New Jersey to
Allentown over the next several months. The remaining research
and development positions in New Jersey will move to a new site
in central New Jersey.

Through the consolidation of operations from nine sites to
Allentown and one New Jersey location, the company will reduce
its square footage in the two states by about two million square
feet, or approximately 50 percent, significantly lowering costs.

The Reading facility has 1,600 employees and manufactures a
broad range of optoelectronics components as well as chips for
communications systems.  The Breinigsville plant has 1,100
employees and focuses on design, development and automated
manufacturing of optoelectronic components.  The company expects
that its plans to combine operations from these facilities into
Allentown will result in a net reduction of approximately 300
positions.

                    Plans for Orlando Operations

Agere's Orlando facility manufactures advanced CMOS-based chips
for use in a variety of applications, ranging from computer disk
drives to network communications systems.  The site has a
workforce of approximately 1,100 employees.

Agere intends to sell the Orlando plant as an ongoing operation,
allowing it to continue sourcing products from this facility.  
The company has had preliminary discussions with potential
buyers who can benefit from the facility's technology and
process development capabilities, as well as the talents of its
workforce.  The company's intention is that employees who
support the site's operations will move with the sale.

These actions are the latest in a series of steps the company
has taken to position Agere for long-term growth.  In October,
the company realigned its business under two new market-focused
groups: Infrastructure Systems and Client Systems, allowing it
to better address customer needs.  The company exited businesses
not central to its strategy, such as Test and Measurement,
Infiniband and Field- Programmable Gate Arrays (FPGA).  In
December, the company completed the sale of its plant in Madrid,
Spain to UK-based energy supplier BP.  In the last calendar
year, the company announced workforce reductions of
approximately 7,000 employees, a majority of whom were
associated with the company's manufacturing operations.

"Clearly, our actions have had an adverse impact on many of our
people, and for that, we are deeply sorry," said Dickson.  
"However, we must continue to focus on taking the necessary
steps to strengthen our business and better serve our
customers."

Agere expects that these initiatives, combined with previous
actions, will allow the company to reach by the end of the
calendar year its target cost and expense structure.  This will
enable the company to breakeven at $700 million of quarterly
revenue.

Results By Segment:

               Infrastructure Systems Group

The Infrastructure Systems Group reported revenues of $263
million during the December quarter, down from $298 million in
the September quarter.  The decline was due primarily to the
continuing weakness in the optical networking market.

In the December quarter, the Infrastructure Systems Group:

     * Introduced the industry's first single-chip 10 Gigabit
Ethernet physical layer IC for devices compliant with the XENPAK
industry standard.

     * Announced a XENPAK-compliant 10 Gigabit Ethernet serial
transceiver for metro access networks.

     * Announced that LG Electronics is using Agere's switching
and network processor chips to deliver a high-performance multi-
service router for networking service providers in the Asia
Pacific region.

     * Introduced 10 Gigabit software development environment
for OC-192C PayloadPlus network processors.

     * Announced the sale of its FPGA business to Lattice
Semiconductor Corporation and closed that transaction for $250
million in January.

     * Provided Astral Point with programmable 6.8 gigabit-per-
second backplane transceiver chips and SONET overhead path
processors for Astral Point's optical transport nodes.

                    Client Systems Group

The Client Systems Group reported revenues of $274 million
during the December quarter, down from $302 million in the
September quarter.  The decline was across the business, except
for the Storage product offerings, which posted sequential
growth in revenues.

In the December quarter, the Client Systems Group:

     * Expanded its motor controller product offerings with two
new chips for PCs and consumer electronics hard-disk drives, and
high-end data storage applications.

     * Announced that China's 9th National Games selected the
ORiNOCO products to provide wireless networking and Internet
access.

     * Provided its Sceptre(R) wireless platform to PTIC-Capitel
in China, enabling the world's smallest and lightest
commercially available GSM handsets.

     * Signed agreements with Compaq Computer, Actiontec
Electronics, Multi-Tech Systems and Zoom Telephonics for
enhanced modem chips.

                              Outlook

For the March quarter, Agere expects that both revenues and pro
forma net loss per share will be at about the same levels as in
the December quarter. The company notes that its guidance does
not reflect the gain from the sale of the company's FPGA
business or any costs associated with the consolidation actions
announced Wednesday.

Agere Systems is the world's No.1 provider of components for
communications applications with leadership in optical
components and integrated circuits.  This dual capability
uniquely positions Agere to deliver integrated solutions that
form the building blocks for advanced wired, wireless, and
optical communications networks.  Agere also designs and
manufactures a wide range of semiconductor solutions for
communications-related devices used by consumers such as
cellular phones, modems, and hard disk drives for personal
computers and workstations.  In addition, the company supplies
complete wireless computer networking solutions through the
ORiNOCO product line. The company is restructuring both its debt
and its operations, and reducing its workforce by a third.  More
information about Agere Systems is available from its Web site
at http://www.agere.com  


AGERE SYSTEMS: Seeking Buyer for Fla. Wafer Fabrication Assets
--------------------------------------------------------------
Agere Systems (NYSE: AGR.A) said that it is seeking a buyer for
its wafer fabrication operation in Orlando, Florida.

The company's plant in Orlando primarily manufactures advanced
CMOS (complementary metal oxide semiconductor) integrated
circuits for use in a broad range of communications and computer
devices, ranging from computer disk drives to network
communications systems.  The facility has a workforce of more
than 1,100 employees in manufacturing, research and development
and corporate support functions.  Preliminary discussions have
taken place with potential buyers who can benefit from the
technology and process development capabilities of the Orlando
operations, as well as the talents of its workforce.  The
company's intention is that the employees who support the site's
operations will move with the sale.

"Our intent is to sell the facility as an ongoing operation that
would continue to be a source for our products," said Mike
Watson, wafer fabrication vice president.  "For a potential
buyer, this is an opportunity to acquire a world-class facility
with the equipment set and technical talent to deliver superior
semiconductor technology.  In addition, the buyer would be
joining a community that is committed to attracting and
supporting high-tech businesses in the area.

"We understand the uncertainty surrounding this sale will be
difficult for our employees and this community," Watson
continued.  "We will seek an agreement that will be positive for
our people, the community and our business."

The Orlando facility has state-of-the-art cleanroom facilities
built and equipped for flexible, high-volume manufacturing in a
variety of leading-edge technologies, including recently
introduced silicon germanium, a technology that enables high
performance communications chips.

"We have one of the most skilled manufacturing organizations in
the industry -- one which offers significant expertise, advanced
technology and an impressive track record," Watson said.  "This
site serves Agere's primary customers, who are industry leaders
in communications and computing.  We also work with
semiconductor customers such as RF Micro Devices, Cirrus Logic
and Lattice Semiconductor, who purchase the specialty
technologies we manufacture here."

Agere has implemented a number of actions to improve operating
efficiency and accelerate time to market, while reducing fixed
costs and lowering its revenue breakeven level.  For example, in
December, the company closed the sale of its plant in Madrid,
Spain to UK-based energy supplier BP.  Continuing those
initiatives, Agere also announced plans to combine a majority of
its integrated circuits (IC) and optoelectronics operations from
its sites in Reading and Breinigsville, Pa., into the company's
Allentown, Pa. campus.

The company has maintained an Orlando presence since 1984 when
AT&T built its semiconductor manufacturing and research facility
in south Orange County. The operation became known as Cirent
Semiconductor in 1996 as part of a joint venture arrangement
between Lucent Technologies and Cirrus Logic following Lucent's
spin-off from AT&T.  Agere operated the facility as Cirent
Semiconductor until September 2001.

Agere expects that these initiatives, combined with the previous
actions, will allow the company to reach, by the end of the
calendar year, its target cost and expense structure.  This will
enable the company to break even at $700 million of quarterly
revenue.

Agere Systems is the world's No. 1 provider of components for
communications applications with leadership in optical
components and integrated circuits.  This dual capability
uniquely positions Agere to deliver integrated solutions that
form the building blocks for advanced wired, wireless, and
optical communications networks.  Agere also designs and
manufactures a wide range of semiconductor solutions for
communications-related devices used by consumers such as
cellular phones, modems, and hard disk drives for personal
computers and workstations.  In addition, the company supplies
complete wireless computer networking solutions through the
ORiNOCO product line.  More information about Agere Systems is
available from its Web site at http://www.agere.com


AMERICA WEST: Calls Back Furloughed Pilots as Business Improves
---------------------------------------------------------------
America West Airlines (NYSE: AWA) said it is recalling
furloughed pilots to support a projected increase in travel
demand for the spring and summer.  The airline will bring back
75 pilots starting mid-February through early March.

"As demand for air travel continues to increase, we are
responding by adding flights back to our schedule," said Jeff
McClelland, executive vice president, operations.  "To support
this additional service to our customers, we're very happy to be
returning these pilots to the America West team."

America West furloughed 179 pilots due to the downturn in travel
demand that resulted from the September 11 terrorist attacks,
while reducing its flight schedule by approximately 20 percent.  
In December the airline reinstated about a third of the flights
that had been affected and plans to reinstate additional flights
in February and April 2002.

America West has brought back more than 650 employees since the
reductions in force last October, primarily in the customer
service and reservations areas.

America West Airlines, the nation's eighth-largest carrier,
serves 88 destinations in the U.S., Canada and Mexico.  Along
with its codeshare partners, America West serves more than 170
destinations worldwide.  America West Airlines is a wholly owned
subsidiary of America West Holdings Corporation, an aviation and
travel services company with 2000 sales of $2.3 billion.


AMPEX CORP: Seeks Qualification of Indenture for New 12% Notes
--------------------------------------------------------------
Ampex Corporation (Amex:AXC) filed a Form T-3 application with
the Securities and Exchange Commission for the qualification of
an indenture for certain new 12% Senior Secured Notes due 2008,
which are expected to be issued in exchange for $44,000,000 of
its 12% Senior Notes due 2003 currently outstanding.

As previously disclosed in Form 10Q for the quarter ended
September 30, 2001, the holders of the outstanding Senior Notes
agreed to defer a scheduled interest payment on the Senior Notes
which was due September 15, 2001. The deferral expires February
28, 2002. The holders of a majority of the outstanding Notes
have agreed, subject to certain conditions, to exchange their
existing Notes for the new Senior Secured Notes. The new Notes,
if issued, would provide for payment of principal and interest
out of substantially all future patent royalties received by the
Company, net of specified operating expenses, as well as net
proceeds of certain asset sales. Payment of the new Notes would
be subject to prior payment in full of the Company's outstanding
Senior Discount Notes due March 31, 2002. The Company intends to
seek to extend the maturity date and to make other changes to
the Senior Discount Notes in order to complete restructuring of
its senior debt.

The consummation of the exchange is subject to qualification of
the new indenture with the SEC, tenders of at least 95% of the
outstanding Senior Notes and satisfaction of other conditions.
The Company currently hopes to complete the exchange by February
28, 2002, but there can be no assurance that the exchange will
be completed or as to the timing thereof.

Ampex Corporation -- http://www.Ampex.com-- one of the world's  
leading innovators and licensors of visual information
technology, is headquartered in Redwood City, California.


AZTECA HOLDINGS: S&P Rates US$150MM Senior Secured Notes at B-
--------------------------------------------------------------
Standard & Poor's assigned its single-'B'-minus rating to Azteca  
Holdings S.A. de C.V.'s US$150 million senior secured notes due
2003. The single-'B'-minus local and foreign currency corporate
credit ratings of Azteca Holdings were affirmed. The ratings on
Azteca Holdings reflect its reliance on a structural
subordination to TV Azteca S.A. de C.V.

The single-'B'-plus local and foreign currency corporate credit
ratings and foreign currency senior unsecured debt rating of TV
Azteca S.A. de C.V. were also affirmed.

The outlook is revised to positive from stable.

The proceeds will be used to refinance Azteca Holdings'
US$126.03 million 11% notes maturing in June 2002.

The outlook revision reflects TV Azteca's improving operating
results based on the company's price increases during 2001 and
its cost-reduction strategy, that have allowed for an
improvement in the company's overall profitability and cash flow
generation.

The ratings reflect TV Azteca's position as one of the largest
producers of Spanish-language programming in the world, and TV
Azteca's cost-reduction strategy and improving operating
performance during 2001. These factors are partly offset by the
company's high financial leverage, the risk of potential capital
contributions, loans or guarantees to its subsidiaries, the
strong market competition, and the correlation between
advertising revenues and GDP growth.

TV Azteca is the second-largest television broadcasting company
in Mexico, commanding around 31% of Mexican TV advertising
spending as of September 2001. Despite the strong competition
with Grupo Televisa and lower economic growth during 2001, TV
Azteca was able to improve its ratings and gain audience share.
These factors contributed to TV Azteca's positive negotiation of
the advertising advances for 2002, which are expected to
increase by 14% to US$479 million as of December 2001 from
US$419 million in December 2000. Additionally, TV Azteca has
implemented a very efficient cost-reduction strategy based in
part on a variable compensation plan that has allowed TV Azteca
to improve its profitability and EBITDA generation.

TV Azteca's EBITDA margins as of December 2001 are expected to
increase to 44% from 39.5% in December 2000.

TV Azteca affiliate, Unefon, has revised its business strategy
to focus on increasing its average revenue per users (ARPUs),
while its former focus was to increase the geographic coverage
of its networks. This should result in smaller investment
requirements, lessening potential cash requirements or other
financial support from TV Azteca.

All of TV Azteca's debt is dollar denominated exposing the
company to devaluation risk. However, lower interest rates and
higher EBITDA have contributed to an improvement of the TV
Azteca's credit protection measures. EBITDA interest coverage
and total debt to EBITDA (all calculations include Azteca
Holdings' debt) improved to approximately 2.6x and 3.2x as of
December 2001 from 2.17x and 3.9x respectively as of December
2000. These measures should continue to improve if TV Azteca
continues to increase its cash flow generation. TV Azteca's
challenge will be to continue to produce successful programming
while maintaining its current market share and its efficient
cost structure.

                        Outlook: Positive

The outlook reflects Standard & Poor's expectation that if TV
Azteca is able to continue improving its credit protection
measures by increasing its revenue growth and profitability and
by not increasing debt during 2002 an upgrade could be
considered. However, future capital infusions, cash flow
transfers or guarantees to Unefon in excess of the existing
US$80 million, or to any other subsidiary could have an adverse
effect on the outlook and rating. The outlook also incorporates
the successful refinancing of Azteca Holdings' existing US$126
million senior secured notes and assumes that the funding in
Azteca America will not deteriorate the current credit profile.


BETHLEHEM STEEL: Schedules & Statements Should Be Filed Today
-------------------------------------------------------------
Bethlehem Steel Corporation, and its debtor-affiliates sought
and obtained a third order extending the time to file their
schedules of assets and liabilities for an additional 15 days --
until January 29, 2002.

Jeffrey L. Tanenbaum, Esq., at Weil, Gotshal & Manges LLP, tells
Judge Lifland that the Debtors need more time to gather the
required information and complete the:

  (i) schedules of assets and liabilities,

(ii) schedules of executory contracts and unexpired leases, and

(iii) statements of financial affairs.

Mr. Tanenbaum relates that the Debtors have discussed the
requested extension with the Office of United States Trustee for
the Southern District of New York and attorneys for the Official
Committee of Unsecured Creditors and the Debtors' pre-petition
and post-petition lenders. (Bethlehem Bankruptcy News, Issue No.
9; Bankruptcy Creditors' Service, Inc., 609/392-0900)


BEYOND.COM CORP: Files for Chapter 11 Relief to Sell Assets
-----------------------------------------------------------
Beyond.com Corporation (Nasdaq:BYND) said it has agreed to sell
substantially all of its assets to Digital River, Inc.,
(Nasdaq:DRIV) and has filed a voluntary petition for relief
under Chapter 11 of the U.S. Bankruptcy Code. The asset sale is
subject to certain closing conditions, including bankruptcy
court approval.

Beyond.com had been seeking additional capital to both
strengthen its balance sheet and satisfy debt obligations, but
was unable to secure the necessary financing. The Chapter 11
filing will enable Beyond.com to maintain operation of its
business during the sale approval process.

"This filing protects the value of Beyond.com's business,
including its eStores and Government Systems businesses for the
benefit of Beyond.com's creditors, and will help to ensure that
our customers continue to receive uninterrupted service through
the sale process," said Ron Smith, president and CEO of
Beyond.com.

Under the terms of the agreement, Digital River has agreed to
acquire substantially all of the assets and customer contracts
related to the eStores and Governments Systems Group businesses
in exchange for $3.5 million in cash and $7.5 million in Digital
River common stock, subject to certain escrow and sale
restrictions and certain resale registration rights.

The agreement also provides Beyond.com an earn-out for an
additional $1.5 million in Digital River common stock, and
provides for certain purchase price reductions in certain
events. Digital River is not assuming liabilities of Beyond.com
other than obligations under the Beyond.com client contracts.
Beyond.com expects that the purchase price payable by Digital
River for the assets will be insufficient to cover all of
Beyond.com's liabilities and that, therefore, Beyond.com's
stockholders will not receive any distribution upon completion
of the bankruptcy proceedings.

Beyond.com Corporation is a leading provider of e-commerce
technology and services. The company builds, manages and markets
online stores (eStores) for businesses. Beyond provides a full
suite of marketing programs and services to help maximize
clients' eStore sales activities and revenues. The company also
sells software and computer-related products to the government
and consumer markets. Beyond.com Corporation trades on the
Nasdaq National Market under the symbol "BYND." More information
on the company can be found in its filings with the Securities
and Exchange Commission (SEC), or by visiting
http://www.beyond.com

Founded in 1994, Digital River is a leading global e-commerce
outsource provider, offering more than 13,000 companies complete
e-commerce systems and services. The company's world-class
infrastructure and professional services are proven to grow
businesses quickly and profitably while reducing risk. Digital
River's commerce services include e-commerce strategy, site
development and hosting, order and transaction management,
system integration, product fulfillment and returns, e-marketing
and customer service. Digital River's clients include Symantec,
Fujitsu, 3M, Siemens, Polaris, Major League Baseball, Novell,
Autodesk, SONICblue, Adaptec and Staples.com. For more details
about Digital River, visit the corporate Web site at
http://www.digitalriver.comor call 952/253-1234.


BEYOND.COM: Digital River to Acquire Assets & Customer Contracts
----------------------------------------------------------------
Digital River, Inc. (Nasdaq:DRIV), a leading global e-commerce
outsource provider, announced it has agreed to acquire
substantially all of the assets and customer contracts related
to the eStores and Government Systems Group businesses of
Beyond.com Corporation (Nasdaq:BYND), a leading provider of e-
commerce technology and services. The acquisition would further
solidify Digital River's e-commerce leadership position among
software and digital commerce publishers and expand the
company's presence in the government sector.

"Digital River continues to demonstrate its e-commerce
leadership, expanding market opportunities, attracting industry-
leading clients and delivering a world-class e-commerce system,"
said Joel Ronning, Digital River's CEO. "We are looking forward
to extending our e-commerce expertise to the clients of
Beyond.com and are committed to providing them an exceptional
level of service."

As part of the acquisition, Beyond.com has filed for chapter 11
bankruptcy protection. The acquisition is subject to bankruptcy
court approval and certain other conditions. Under the terms of
the agreement, Digital River is not assuming liabilities of
Beyond.com other than obligations under the Beyond.com client
contracts. Digital River has agreed to acquire substantially all
of the assets and customer contracts related to the eStores and
Government Systems Group businesses in exchange for $3.5 million
in cash and $7.5 million in Digital River common stock, subject
to certain escrow and sale restrictions and certain resale
registration rights. The agreement also provides Beyond.com an
earn-out for an additional $1.5 million in Digital River common
stock, and provides for purchase price reductions in certain
events. Further terms of the acquisition were not disclosed.

"Beyond.com selected Digital River based on, among other things,
its e-commerce experience, customer service record and financial
strength," said Ron Smith, president and CEO of Beyond.com
Corporation. "This agreement should ensure that our eStore and
government clients will continue to receive high-quality
technology and services from a truly industry-leading company."

Beyond.com Corporation is a leading provider of e-commerce
technology and services. The company builds, manages and markets
online stores (eStores) for businesses. Beyond provides a full
suite of marketing programs and services to help maximize
clients' eStore sales activities and revenues. The company also
sells software and computer-related products to the government
and consumer markets. Beyond.com Corporation trades on the
Nasdaq National Market under the symbol "BYND." More information
on the company can be found in its filings with the Securities
and Exchange Commission, or by visiting http://www.beyond.com  

Founded in 1994, Digital River is a leading global e-commerce
outsource provider, offering more than 13,000 companies complete
e-commerce systems and services. The company's world-class
infrastructure and professional services are proven to grow
businesses quickly and profitably while reducing risk. Digital
River's commerce services include e-commerce strategy, site
development and hosting, order and transaction management,
system integration, product fulfillment and returns, e-marketing
and customer service. Digital River's clients include Symantec,
Fujitsu, 3M, Siemens, Polaris, Major League Baseball, Novell,
Autodesk, SONICblue, Adaptec and Staples.com. For more details
about Digital River, visit the corporate Web site at
http://www.digitalriver.comor call 952-253-1234.


CENTENNIAL COMMS: S&P Revises Outlook on Low-B's to Negative
------------------------------------------------------------
Standard & Poor's revised its outlook on Centennial
Communications Corp. and its subsidiaries to negative from
stable.

At the same time, Standard & Poor's affirmed its single-'B'-plus
corporate credit and its single-'B'-minus subordinated debt
ratings on Centennial and its subsidiaries, and its single-'B'-
plus senior secured bank loan rating on Centennial Cellular
Operating Co. LLC, Centennial's subsidiary.

The outlook revision is based on the continuing deterioration of
the company's domestic operating cash flow and slower-than-
expected growth in its Caribbean operations. These factors,
along with increase in debt levels, have deteriorated credit
measures.

The ratings on Centennial and its wholly owned subsidiaries
reflect the high financial risk derived from its high debt
burden, increasing competitive pressures in its U.S. cellular
properties, and the integration and execution risks of its
acquisitions in the Caribbean in the past two years. These risks
are tempered, somewhat, by the strong cash flow from its
domestic operations and good business positions of its Caribbean
operations in Puerto Rico, Dominican Republic, Jamaica, and U.S.
Virgin Islands, which include personal communications services
(PCS), competitive local exchange carrier (CLEC), and cable TV
businesses.

Centennial is highly leveraged, with total debt of about $1.8
billion at November 30, 2001. In the last two years, Centennial
spent more than $600 million between the acquisitions of
undersea capacity, cable television operations in Puerto Rico,
an ISP in Jamaica, and the buildouts of its PCS operations in
Jamaica, U.S. Virgin Islands, and Dominican Republic. While
assets disposals partially financed these acquisitions, about
$300 million in debt was used to fund Centennial's expansion
into the Caribbean.

In addition, lower cash flow levels in the company's domestic
operation and slower-than-expected growth in the Caribbean has
put some pressure in credit metrics, bringing total debt to
EBITDA (last 12 months ended November 2001) to about 7.6 times
up from 6.6x in fiscal year 2000 and fiscal year 2001 (ended May
31). However, expected improvement in cash flow metrics and
lower capital requirements in fiscal year 2003, resulting from
the completion of the wireless buildouts in the Caribbean and
the deferral of investments in new undersea cable capacity,
provide Centennial with an opportunity to delever in the next 18
months, absent additional acquisitions.

The U.S. cellular business represents about of 50% of total
revenues and between 50% and 60% of total EBITDA. Margins in the
domestic operations are strong, but have been under pressure due
to declining roaming rates and increased competition from
national carriers and affiliates that have produced lower
subscriber addition, and higher acquisition and retention
costs. In the last 12 months ended on November 30, 2001, EBITDA
margin of the domestic operations was 38%, down from an average
ranging from 40% to 50% in the past two years. While still
posting subscriber growth and increase in penetration, net adds
have been declining and the company has been losing market share
to new entrants PCS operators.

The Caribbean PCS operations have posted strong subscriber
growth since inception, thanks to a successful strategy in
Puerto Rico, which is focused on high-end post-paid customers
with strong ARPU contributions. The expansion into Dominican
Republic, however, has put downward pressure on ARPU due to a
predominant pre-paid customer base. As a result, in the quarter
ended November 30 2001, ARPU for the Caribbean Wireless
operations was down on a year-over-year basis and sequentially.

The company is, however, shifting its focus from pre-paid to
post-paid in Dominican Republic and expects to bring ARPU back
up again. In addition, although Centennial's broadband
operations have been showing steady growth with margins around
20%, cash flow improvement has been slower than expected due to
deterioration of the long distance business in Dominican
Republic and capacity constraints in Puerto Rico. Centennial
expects to address these issues with the strategic shift from
long distance to high-margin CLEC business in the Dominican
Republic, and with the installation of a new switch in Puerto
Rico in November 2001, which is expected to address the recent
switching capacity constraints.

                       Outlook: Negative

Cash flow generation has been affected by declining roaming
revenues in the U.S. cellular business and slower-than-expected
growth in its Caribbean operations. Financial flexibility has
also decreased with less availability under the credit facility
and now derives mostly from a diversified portfolio of assets
that could be monetized in case of financial distress, if market
conditions permit. In addition, higher-than-projected debt
levels could start putting pressure on financial covenants of
its credit facility if cash flow does not improve. Management is
currently focused on increasing cash flow of its Caribbean
acquisitions by growing revenues and optimizing its operating
leverage derived from synergies and shared infrastructure of its
combined wireless and broadband businesses in the region. While
the company has been addressing operating missteps in the
Caribbean, significant execution and integration risks lay
ahead. Failure to produce operating results leading to cash flow
improvement will likely result in lower ratings in the next 12
months.


CHARLES RIVER: S&P Ratchets Corp. Credit Rating Up a Notch to BB
----------------------------------------------------------------
Standard & Poor's raised its corporate credit rating on Charles
River Laboratories International Inc., to double-'B' from
double-'B'-minus. Standard & Poor's also assigned its single-
'B'-plus debt rating to Charles River Laboratories International
Inc.'s proposed $150 million senior convertible debt offering.
The operating company, Charles River Laboratories Inc., does not
guarantee the debt. Charles River Laboratories International
is the corporate parent of Charles River Laboratories Inc.

At the same time, Standard & Poor's raised its corporate credit
and bank loan ratings on Charles River Laboratories Inc.
(Charles River) to double-'B' from double-'B'-minus, and raised
its subordinated debt rating to single-'B'-plus from single-'B'.
The outlook for both companies is stable.

The rating actions reflect Charles River's demonstrated
discipline in building on its leading positions in the animal
models business and the maintenance of sound financial policies,
offset by its narrow business profile.

Wilmington, Massachusetts-based Charles River provides products
and services for use in the discovery, development, and testing
of pharmaceuticals. It is the leading provider of pharmaceutical
research animals, holding more than a 70% share of the fast-
growing market for genetically altered rats and mice. The
company should continue to benefit from the increased R&D
activity at the pharmaceutical and biotech companies that are
its main customers.

Charles River has focused on expanding its biomedical products
and services business, which, through a mix of internal growth
and acquisitions, provide various contract research services;
analytical, biosafety and endotoxin testing; and production
services. The services business now accounts for 57% of the
company's annual revenues, an increase from 41% in 2000.
Although the services side of the business generates lower
operating margins compared to the animal models business (18%
compared to 27%), it does diversify Charles River's offerings
and enable the company to better leverage its existing
relationships with customers. The issuance of $124 million in
equity within the past year helped to finance the company's
expansion.

Nevertheless, Charles River's still-limited diversity and its
relatively small size leave it vulnerable to operating
uncertainties.

                        Outlook: Stable

Debt reduction and refinancing are expected to contribute to
sustained improvement in credit protection measures, consistent
with the rating.


COLUMBUS MCKINNON: S&P Concerned About Weakening Performance
------------------------------------------------------------
Standard & Poor's placed its ratings on Columbus McKinnon Corp.
on CreditWatch with negative implications.

The rating actions affect $199 million in subordinated notes and
the firm's $225 million bank credit facility.

The CreditWatch listing reflects weaker-than-anticipated
performance and the expectation that continued softness in both
industrial and automotive markets will further delay
improvements in credit protection measures. In addition,
financial flexibility is limited because the company is in
violation of its bank covenants (as of December 31, 2001) and is
currently negotiating a new credit facility with its lenders to
include a waiver for non-compliance.

For the nine months ended December 31, 2001, Columbus McKinnon
reported a 31% drop in operating income to around $51 million
compared with around $76 million for the same period in 2000.
Columbus McKinnon continues to be negatively affected by the
soft U.S. industrial economy and by the reduction in capital
spending by some automotive customers. Although management
continues to focus on cost-cutting initiatives such as headcount
reductions and lean manufacturing, it has been unable to offset
the decline in operating income resulting from the decrease in
sales volume. As a result, credit protection measures are very
weak with total debt to EBITDA estimated to be 4.6 times and
interest coverage of around 2.2x as of December 31, 2001.
Current ratings had incorporated an expectation that credit
measures (including previously announced asset sales) would
strengthen over the near term with total debt to EBITDA of 3.5x
and interest coverage of between 3.0x to 3.5x.

Standard & Poor's will meet with management to review the
company's financial results and to discuss the company's
operating and financial strategies in the future. If it appears
that financial and operating performance will remain below
previously expected levels for an extended period, or if the
company fails to obtain a wavier to its senior credit facility,
the ratings could be lowered.

Amherst, New York-based Columbus McKinnon manufactures materials
handling, lifting, and positioning products, including
electronic and hand-powered hoists, alloy and carbon steel
chains, and closed-die forging. The company holds leading
positions in most of its markets, with more than 75% of its
domestic sales in markets where it is the number-one supplier.

           Ratings Placed on CreditWatch Negative

     Columbus McKinnon Corp.
       Corporate credit rating             BB-
       Senior secured bank loan            BB-
       Subordinated debt                   B


COMDISCO INC: Court Approves Proposed LP Interests Sale Protocol
----------------------------------------------------------------
Judge Barliant approves the Limited Partnership Interests Sale
Procedures proposed by Comdisco, Inc., and its debtor-
affiliates.

However, in light of Redwood Ventures' objection, Judge Barliant
further directs the Debtors to comply with Section 7.07 of the
Redwood Ventures IV LP, Amended and Restated Limited Partnership
Agreement dated December 20, 2000.  But Judge Barliant
emphasizes that this directive is only to the extent that the
Debtors sell their interests in the Limited Partnership created
by the Agreement.  However, Judge Barliant adds, there are
exceptions:

  (a) The Debtors need only provide the other partners notice 15
      calendar days before completing any sale of such
      interests; and

  (b) The opinion requirement under subsection 7.07(c) of the
      Limited Partnership Agreement shall be waived.

Instead, Judge Barliant states, the Debtors and any prospective
purchaser of interests in the limited partnership shall, with
the notice of the proposed sale, jointly represent to Redwood
Ventures that all of the conditions in subsection 7.07(c) are
satisfied under the proposed sale.  "The Debtors and the
prospective purchaser shall also jointly represent that the
interests are being sold to only one beneficial owner," Judge
Barliant continues. (Comdisco Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   


COVANTA ENERGY: Fitch Monitoring Related Solid Waste Bonds
----------------------------------------------------------
The international rating agency Fitch is monitoring certain
rated municipal solid waste facilities in the U.S. connected
with Covanta Energy Corp., formerly Ogden Corp., due to
Covanta's recently rapid credit deterioration. This creates
uncertainty as it relates to the municipal credits involved and
operations of related solid waste facilities. Fitch does not
rate Covanta's corporate debt.

The effects of further credit weakness or bankruptcy by Covanta,
were that to occur, could vary from one municipal project to
another. In the best cases, impacts on the municipal credits
could be minimal, as many of these business relationships appear
profitable for Covanta and the bonds typically involve some
protections intended to shield investors and municipalities from
corporate credit risks. However, in other cases, impacts on the
municipal credits could be substantial, including, but not
limited to: disrupted operational services from the corporate
parent (which also often guaranties operating performance of
subsidiaries), disruptions in vendor relationships, or
consolidation of Covanta subsidiaries associated with municipal
plants into a corporate bankruptcy. The latter scenario, were it
ever to occur, could disrupt cash flows to bondholders in some
instances.

For some systems, Covanta rating downgrades may trigger certain
requirements, including the posting of additional credit
enhancement by the corporate entity, and if this occurred, the
ability and willingness of the company to meet these
requirements is uncertain. Additionally, the governmental
entities involved may have the opportunity to take certain
remedial actions pursuant to legal agreements.

Fitch intends to monitor developments at each of its rated
municipal facilities and take rating action, if and when
appropriate. Discussions with officials from numerous affected
entities and their advisors have been initiated.

Fitch maintains unenhanced ratings on the following municipal
solid waste revenue bonds connected with Covanta:

     -- Bristol Resource Recovery Facility Operating Committee,
CT solid waste revenue bonds (Ogden Martin Systems of Bristol,
Inc. Project), series 1995, unenhanced rating of 'A';

     -- Lee County, FL solid waste system refunding revenue
bonds, series 2001 (insured: MBIA), unenhanced rating of 'A-';

     -- Lee County, FL solid waste system revenue bonds, series
1995, unenhanced rating of 'A-';

     -- Union County Utilities Authority, NJ solid waste
landfill revenue bonds, series 1998 (insured: Ambac), unenhanced
rating of 'BBB+';

     -- Union County Utilities Authority, NJ solid waste
facility senior lease revenue bonds, series 1998 A & B (Ogden
Martin Systems of Union, Inc. Project), unenhanced rating of
'BBB+';

     -- Union County Utilities Authority, NJ solid waste
facility senior lease revenue bonds (Ogden Martin Systems of
Union, Inc. Project), series 1998A (insured: Ambac), unenhanced
rating of 'BBB+';

     -- Union County Utilities Authority, NJ solid waste
facilities subordinate lease revenue bonds, series 1998A (Ogden
Martin Systems of Union, Inc. Project), series 1998A (insured:
Ambac), unenhanced rating of 'BBB';

     -- Onondaga County Resource Recovery Agency, NY project
revenue bonds, series 1992, and system revenue bonds, series
1992, unenhanced rating of 'BBB-';

     -- Suffolk County Industrial Development Agency, NY solid
waste disposal facility revenue bonds (Ogden Martin Systems of
Huntington LP), series 1999 (insured: Ambac), unenhanced rating
of 'A';

     -- Massachusetts Industrial Finance Agency and
Massachusetts Development Finance Agency resource recovery
revenue refunding bonds (Ogden Haverhill Project), unenhanced
rating of 'BBB+';

     -- Northeast Maryland Waste Disposal Authority, MD solid
waste revenue bonds (Montgomery County Resource Recovery
Project), series 1993 A and B, unenhanced rating of 'AA-';

     -- Montgomery County, MD solid waste system revenue bonds,
series 1993A, unenhanced rating of 'AA-';

     -- Greater Detroit Resource Recovery Authority, MI resource
recovery revenue refunding bonds, series 1996A and 1996B
(insured: Ambac), unenhanced rating of 'A+'.


ENRON CORP: Wants Lease Decision Period Extended to Year-End
------------------------------------------------------------
Enron Corporation, and its debtor-affiliates ask the Court for
an order extending the deadline by which they must assume or
reject their unexpired non-residential real property Leases
through and including December 31, 2002.

Albert Togut, Esq., at Togut, Segal & Segal LLP, in New York,
New York, tells Judge Gonzalez that the Debtors are parties to
approximately 1,000 Leases, which include office leases and
other unexpired agreements for the use of nonresidential real
property.

Since the Petition Date, Mr. Togut relates, the Debtors and
their professionals have been working diligently to identify all
of the Leases.  At the same time, Mr. Togut says, the Debtors
have been busy administering these Chapter 11 cases and
addressing a vast number of administrative and business issues.  
All the while, Mr. Togut notes, the Debtors continue to operate
their businesses, despite a reduced work force, in an effort to
maximize asset values.

According to Mr. Togut, the Leases pertain to wide-ranging
segments of the Debtors' business operations.  "The Debtors need
to devote considerable time and effort to carefully evaluate
each Lease," Mr. Togut says.

Mr. Togut tells the Court that the Debtors' decision to assume
or reject the Leases will depend upon, among other things, the
Debtors' review of their overall businesses and an analysis of
each Lease location and purpose.  "But because there are so many
Leases, the Debtors will need a considerable amount of time to
analyze each of the Leases," Mr. Togut explains.  However, Mr.
Togut emphasizes that the Debtors are trying their best to make
informed decisions regarding the Leases as promptly as is
possible.

The current deadline for the Debtors to make decisions on the
Leases expires on January 31, 2002.

"It's simply impossible for the Debtors to make a reasoned and
informed decision whether to assume or reject each of the Leases
by this time," Mr. Togut emphasizes.

If the Court will not extend the current deadline, Mr. Togut
warns that the Debtors may be forced prematurely assume the
Leases, which could lead to unnecessary administrative claims
against their estates if the Leases are ultimately terminated.
On the other hand, Mr. Togut says, the Debtors may forego
significant value in Leases that they prematurely rejected, in
addition to creating large unwarranted rejection damage claims
in these cases.

The Debtors assure Judge Gonzalez that they can continue to
perform timely on all of their post-petition obligations under
the Leases pending a determination as to whether to assume or
reject the Leases.  Mr. Togut reminds the Court that the Debtors
already obtained interim access to its $250,000,000 post-
petition financing, and the Debtors have revenues from their
ongoing businesses. (Enron Bankruptcy News, Issue No. 10;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


EXODUS COMMS: GE Capital Wants Payment & Lease Decision Now
-----------------------------------------------------------
General Electric Capital Corporation, as assignee of certain
leases of Sun Microsystem Finance, asks the Court to:

     A. compel Exodus Communications, Inc., and its debtor-
        affiliates to assume or reject leases;

     B. compel immediate payment of administrative rent as well
        as all other lease obligations and other ancillary
        relief.

In the alternative, GE Capital requests that it be granted
relief from the automatic stay to terminate the GE Capital
Leases and to exercise its rights and remedies with respect to
the GE Capital Equipment because the Debtors:

     A. are in default under the GE Capital Leases by failing to
        make payments when due;

     B. have failed to comply with the lease obligations;

     C. are using the GE Capital Equipment in the operation of
        their business without making rental payments;

     D. are attempting to transfer the Debtors' rights in the GE
        Capital Leases without assuming and assigning the GE
        Capital Leases and/or otherwise complying with Section
        365 of the Bankruptcy Code; and

     E. have failed to provide GE Capital with adequate
        protection of its interest in property in the form of
        monthly rent as set forth in the contract.

Michael DeBaecke, Esq., at Blank Rome Comisky & McCauley LLP in
Wilmington, Delaware, submits that the Debtors are in default of
their post-petition obligations in respect of the leases for the
GE Capital Equipment. Moreover, the Debtors are seeking to sell
substantial assets to Cable & Wireless PLLC, including the
Debtors' rights under the GE Capital Leases without complying
with 11 U.S.C.  365.

On January 24, 2000, Mr. DeBaecke relates that Debtors entered
into a Master Lease #1 and on November 22, 2000, a certain
Master Lease #2 with Sun Microsystems Finance, which details the
terms and conditions upon which Debtors would lease certain
equipment from Sun for use in its business operations. In
conjunction with the Master Lease, Sun and Debtors entered into
numerous lease schedules and, as of September 1, 2001, the
Debtors owe GE Capital in excess of $20,000,000 on an
accelerated basis. Upon information and belief, the GE Capital
Leases are unexpired "true leases" of personal property and
virtually all contain fair market value purchase options and as
such, are entitled to the protections of 11 U.S.C. Section 365.

Mr. DeBaecke tells the Court that Debtors intend on reserving
the right after the sale to potentially recharacterize the GE
Capital Leases as leases intended as security. Furthermore, it
appears that the Debtors intend on permitting a non-debtor, non-
GE Lease party to potentially utilize the GE Capital Equipment
without GE Capital's consent and without paying the full rental
value of the equipment, all in violation of Section 365 of the
Bankruptcy Code. Finally, it appears that the Debtors are
seeking to sell certain of the GE Capital Equipment as if the
Debtors are the rightful owner of the equipment which the
Debtors cannot do since they do not own the equipment.

To the extent the Debtors seek to sell GE Capital Equipment
subject to the GE Capital Leases without assuming or assigning
the applicable GE Capital Leases, Mr. DeBaecke contends that
such action violates  365 of the Bankruptcy Code. GE Capital is
also prejudiced because the Debtors have failed and continue to
fail to pay when due the requisite rental payments due and
otherwise comply with all lease obligations under the GE Capital
Leases.

Regardless of the Debtors' unilateral determination of certain
of the GE Capital Leases as leases intended as security, Mr.
DeBaecke believes that the Debtors must file an adversary
proceeding and obtain an adjudication by the Court to change the
status of the "true leases" prior to the sale hearing. The
Debtors have mistakenly taken the position that because they
have booked certain GE Capital Leases as "capital leases" then
such leases are necessarily "leases intended as security" and
not "true leases." To the contrary, the concept of recording a
lease as a capital lease is an "accounting concept" and does not
necessarily mean that such leases are not "true leases" under
the Uniform Commercial Code and Bankruptcy Code.

Mr. DeBaecke points out that the Schedules also provide that the
Debtors have the option to purchase the GE Capital Equipment at
the end of the lease term for the fair market value of the GE
Capital Equipment determined at the time the option is to be
exercised. Accordingly, the GE Capital Leases are "true leases"
for the Uniform Commercial Code and Bankruptcy Code purposes.
Therefore, GE Capital requests that this Court compel the
Debtors to determine to assume or reject the GE Capital Leases
upon the earlier of two days prior to the scheduled sale or two
days after the entry of this Order on the docket. If the Debtors
do not immediately assume and cure all amounts under the GE
Capital Leases, then the GE Capital Leases should be rejected
and GE Capital should be entitled to the return of its
equipment.

Mr. DeBaecke notes that the Debtors still owe $703,137.90 for
remaining unpaid rent accruing during the first 59 days of these
cases, within which GE Capital is entitled to an administrative
expense. Accordingly, GE Capital requests that the Debtors be
immediately compelled to pay to GE Capital $703,137.90,
representing the remaining unpaid rent which accrued during the
first 59 days of the case.

In addition, under Section 365(d)(10) of the Bankruptcy Code,
Mr. DeBaecke argues that the Debtors are obligated to timely
perform all obligations under the terms of the GE Capital
Leases, which terms include timely payment of any rent due, late
fees, and attorney's fees and other costs and expenses from and
after 60 days after the order for relief is entered. It also
entitles GE Capital to immediate payment for rent accruing after
November 26, 2001 for the GE Capital Equipment for which the
Debtors have failed to pay amounting to $1,577,771.99 as of
December 1, 2001 and continues to accrue. (Exodus Bankruptcy
News, Issue No. 12; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


FEDERAL-MOGUL: Court Extends Lease Decision Period to April 1
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
Federal-Mogul Corporation and its debtor-affiliates' motion to
extend the period within which to decide whether to assume,
assume and assign, or reject unexpired non-residential property
lease through and including April 1, 2002.


FLEMING: Kmart Bankruptcy Spurs S&P to Put Low-B's on Watch Neg.
----------------------------------------------------------------
Standard & Poor's placed its ratings on Fleming Cos. Inc. on
CreditWatch with negative implications. The placement reflects
uncertainty about the impact of Kmart Corp.'s bankruptcy filing
on Fleming.

These uncertain issues include the extent of Kmart's downsizing
of its store base and the resulting impact on Fleming's capacity
utilization and profitability, and what changes, if any, may be
made to the existing supply contract between Kmart and Fleming.
Fleming's $4.5 billion 10-year supply chain agreement with Kmart
Corp., effective June 2001, covers distribution of substantially
all of Kmart's food and consumables products.

Although Fleming has stopped shipping to Kmart, it intends to
resume Kmart deliveries upon receiving assurances from Kmart via
the bankruptcy court. Although Kmart is Fleming's largest
customer, anticipated store closings are likely to be lower-
volume stores, accounting for significantly less sales than
their relative percentage of the total Kmart store base.

Fleming has made good operational improvements in its core
distribution business, including growing the base of non-Kmart
customers. Fleming added $1.5 billion in gross annualized
distribution sales (as of Oct. 6, 2001), excluding the Kmart
alliance. Still, Kmart represents a key business for Fleming,
accounting for over 20% of revenues. Fleming has about $16
billion in annual revenues.

Standard & Poor's will meet with management to review its plans
for dealing with the impact of the Kmart bankruptcy, and monitor
progress on Kmart's reorganization plan.

                  Ratings Placed on CreditWatch
                    with Negative Implications

     Fleming Cos. Inc.
       Corporate credit rating     BB
       Senior secured debt         BB+
       Senior unsecured debt       BB-
       Subordinated debt           B+


FLEMING: Pleased with Moody's Swift Review of Ratings Outlook
-------------------------------------------------------------
Fleming (NYSE: FLM) commented on the notification by Moody's
Investors Service that it has confirmed all ratings on Fleming's
debt and pronounced its rating outlook as stable.

"We are very pleased by this latest action by Moody's and we
appreciate their swift review of our outlook," said Neal Rider,
Executive Vice President and Chief Financial Officer of Fleming.  
"We believe much uncertainty -- financial and otherwise -- has
been removed with Fleming's appointment as a critical vendor to
Kmart," said Rider.  "Our objective is to continue employing the
Fleming low-cost supply chain to assist Kmart as it repositions
its business.  Concurrently, our goal is to continue to address
the numerous growth opportunities available to us across a
variety of market channels."

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 its Web site at
http://www.fleming.com


GENEVA STEEL: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Geneva Steel LLC
        aka Geneva Steel Company  
        10 South Geneva Road
        Vineyard, UT 84058

Bankruptcy Case No.: 02-21455

Type of Business: The Debtor owns and operates an integrated
                  steel mill located near Provo, Utah. The
                  Debtor produces and markets a variety of
                  products, including flat and coiled plate,
                  sheet, pipe, and slabs. In addition, the
                  Debtor sells finished products to various end
                  users of steel products, including
                  manufactures of welded tubing, storage tanks,
                  railcars, barges, and agricultural and
                  industrial equipment.

Chapter 11 Petition Date: January 25, 2002

Court: District of Utah (Salt Lake City)

Judge: Glen E. Clark

Debtors' Counsel: Andrew A. Kress, Esq.
                  Keith R. Murphy, Esq.
                  Stephen E. Garcia, Esq.
                  Kaye Scholer LLP
                  425 Park Avenue
                  New York, NY 10022
                  212-836-8000

                  Roger D. Henriksen
                  Parr Woddoups Brown Gee & Loveless
                  185 South State
                  Suite 1300
                  Salt Lake City, UT 84111
                  801-532-7840

                           -and-

                  Steven J. McCardell
                  LeBoeuf Lamb Greene & MacRae
                  1000 Kearns Building
                  136 South Main Street
                  Salt Lake City, UT 84101
                  (801) 320-6700

Total Assets: $264,440,000

Total Debts: $192,875,000

Debtor's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Union Pacific               Trade Creditor        $4,303,607
Mary Ann Kilgore
1416 Dodge St. MC10056
Omaha, NE 68179
Tel: 402 271 4195
Fax: 402 271 5610

US Steel                    Trade Creditor        $3,000,000
Terry O'Connor
600 Grant St. #2382
Pittsburgh, PA 15219-2749
Fax: 412 433 4465
Tel: 412 433 4583

Hackett Multiserv           Trade Creditor        $1,419,538
Thomas K. Conley, Counsel   
Division of Harxco Corp.
612 N. Main St.
Butler, PA 16001
Tel: 724 283 5741
Fax: 724 283 2410

Voest-Alpine Service & Tech Trade Creditor        $1,087,760
Michael R. Davin
Attn: VA Tech America Corp.
PO Box 7247-8095
Philadelphia, PA 19170-8095
Tel: 412 747 4696
Fax: 412 747 4690

Geneva Steel Defined        Employee benefits       $647,806
   Benefit Plan
Richard M. Seltzer, Counsel
c/o Wells Fargo, Administrator
PO Box 91070
Seattle, WA 98111
Tel: 212 563 4100
Fax: 212 695 5436

Finova Capital Corp.        Trade Creditor          $619,230
Bill Breitman
115 W. Century Rd
3rd Floor
Paramus, NJ 07652
Tel: 201 634 3372
Fax: 201 634 3439

Chemical Lime Co.           Trade Creditor          $541,068
Kitty Bookout
3700 Hulen St.
Fort Worth, TX 76107
Tel: 817 732 8164
FaxL 817 377 3107

SAP America Inc.            Trade Creditor          $423,511
Brad C. Brubaker
VP and Assist General
   Counsel
3999 West Chester Pike
Newton Square, PA 19073
Tel: 610 355 2500
Fax: 610 355 2501

Bredero Price Co            Trade Creditor          $351,939
Lee Evans
7211 Regency Square
Blvd #104
Houston, TX 77036
Tel: 713 974 7211
Fax: 713 260 4528

Lodestar Energy             Trade Creditor          $347,426
Gene Stone
Section #661
Louisville, KY 40289
Tel: 859 255 4006
Fax: 859 231 0101

Praxair                     Trade Creditor          $329,524
Curtis Bernel
1220 W. Fletcher
Chicago, IL 60657-3211
Tel: 773 244 7101
Fax: 773 244 7103

The Blackstone Group        Service/Supply          $321,345
Timothy Coleman
345 Park Ave
New York, NY 10154
Tel: 212 583 5352
Fax: 212 583 5707

Rossborough-Remacor Inc.    Trade Creditor          $320,138
PO Box 72191
Cleveland, OH 44192-0191
Tel; 724 535 4357
Fax: 724 535 7761

David Joseph Co.            Trade Creditor          $313,439
Diane Kirkpartrick
Firstar Service Ctr.
5065 Wooster Pike
Cincinnati, OH 45226
Tel: 513 345 4339
Fax: 513 345 4395

Air Liquide America Corp    Trade Creditor          $312,794
L.Scott Hartshorn,
Division Counsel
2700 Post Oak Blvd.
Houston, TX 77056-8229
Tel: 713 624 8386
Fax: 713 624 8794

Geneva Steel Voluntary      Employee Benefits       $304,058
   Emp Benefit Assoc
c/o Wells Fargo,
   Administrator
PO Box 91070
Seattle, WA 98111
Tel: 212 563 4100
Fax: 212 695 5436

CSX Transportation          Trade Creditor          $251,830
Ruth Salter
PO Box 502227
St. Louis, MO 63150-2227
Tel: 904 633 4807

Minteq Internation Inc.     Trade Creditor          $245,901

Fosbel, Inc.                Trade Creditor          $213,906

Ainge Enterprises Inc.      Trade Creditor          $209,616


GIMBEL VISION: Fails to Meet Certain TSE Listing Requirements
-------------------------------------------------------------
Gimbel Vision International Inc. (TSE: GBV) received notice from
the Toronto Stock Exchange that the TSE had determined to
suspend trading of GVI's common shares effective the close of
market on Wednesday, February 20, 2002. The suspension occurred
as a result of the Company's failure to meet certain continued
listing requirements of the TSE.

GVI is currently reviewing this situation which includes
possible action that may be taken to remedy the suspension order
by February 20, 2002 and thereby retain the Company's TSE
listing, or moving to an alternate exchange.

It is GVI's intention to maintain liquidity of its stock for the
common shareholders of GVI.

Gimbel Vision International Inc. is a public Corporation that
owns or is partnered with refractive vision correction centers
in Canada, the United States, Thailand and China. To date, GVI's
surgeons have performed over 80,000 refractive eye surgeries.  
Gimbel Vision International Inc. shares are listed on The
Toronto Stock Exchange and trade under the symbol "GBV".


GLOBAL CROSSING: Files for Chapter 11 Restructuring in New York
---------------------------------------------------------------
Global Crossing (NYSE: GX) said that it has signed a letter of
intent with Hutchison Whampoa Limited and Singapore Technologies
Telemedia Pte. Ltd., for a $750 million cash investment for a
joint majority stake in the company's equity in connection with
a restructuring of the company's balance sheet. In order to
begin the restructuring process, Global Crossing and certain of
its affiliates commenced Chapter 11 cases in the United States
Bankruptcy Court for the Southern District of New York and
coordinated proceedings in the Supreme Court of Bermuda.

Under the terms of the proposed investment, which is conditional
on, among other things, the confirmation of a plan of
reorganization by the courts before the end of August 2002,
creditors would share in a combination of cash, new debt, and
new equity in the restructured company. Existing common equity
and preferred shareholders would not participate in the new
capital structure.

John Legere, Chief Executive Officer of Global Crossing stated,
"We believe this new equity investment from parties as strong as
Hutchison Whampoa and Singapore Technologies Telemedia validates
our confidence in the strong future of our company. This
investment, along with the financial and operational
restructuring that we're implementing, will strengthen our
balance sheet and enable Global Crossing to build a sustainable
business upon its existing unmatched global network. With this
restructuring, we believe we can become the global leader
providing networking services among the world's top 200 cities
to global enterprises and carriers."

Mr. Legere said that business would continue as usual during the
restructuring process. Employees will continue to be paid their
wages and other benefits without interruption. Worldwide
operations will be unaffected by the filing and customers will
not experience any changes in their service.

"Ours is a balance sheet issue, not an operational one," Mr.
Legere said, "and [Mon]day's actions are intended to directly
address this issue. Even with the financial uncertainty we've
recently experienced, customers have continued to choose our
network over many others. With this restructuring, we'll put
financial uncertainty behind us and the power of our network
will once again become the primary factor in the minds of our
customers. Hutchison Whampoa and Singapore Technologies
Telemedia are perfect matches for Global Crossing. They bring
considerable financial resources and business acumen, which we
are confident will add significant value to Global Crossing's
prospects."

"With a strengthened balance sheet and reduced debt, we are
confident that Global Crossing will be in an excellent position
to take advantage of its unique global network, growing customer
base, and outstanding service capabilities to create substantial
value in the coming years. We are committed to an expedited
restructuring process," Mr. Legere added.

Mr. Canning Fok, Group Managing Director of Hutchison Whampoa,
and Mr. Lee Theng Kiat, President and CEO of Singapore
Technologies Telemedia, said, "We are excited about the prospect
of working with Global Crossing's management team and the
opportunity presented by this transaction to develop and
strengthen Global Crossing's business."

Hutchison Whampoa and Singapore Technologies Telemedia already
have business relationships with Global Crossing and its
affiliates. Asia Global Crossing and Hutchison Whampoa each own
50 percent of Hutchison Global Crossing, a leading
telecommunications service provider in Hong Kong providing
fixed-line, Internet and data services. Asia Global Crossing and
a subsidiary of Singapore Technologies Telemedia each own 50
percent of StarHub Crossing, which owns and operates a high
capacity backhaul network in Singapore.

Global Crossing (NYSE: GX) provides telecommunications solutions
over the world's first integrated global IP-based network, which
reaches 27 countries and more than 200 major cities around the
globe. Global Crossing serves many of the world's largest
corporations, providing a full range of managed data and voice
products and services. Global Crossing operates throughout the
Americas and Europe, and provides services in Asia through its
subsidiary, Asia Global Crossing (NYSE: AX). Please visit
http://www.globalcrossing.comor  
http://www.asiaglobalcrossing.comfor more information.

Hutchison Whampoa is a Hong Kong-based multinational
conglomerate with origins dating back to the 1800s. Hutchison is
also part of the Li Ka-shing group of companies, which together
represent about 15% of the total market capitalization of the
Hong Kong stock market. In 2000, consolidated turnover
(including associates) was over US$10 billion, and consolidated
net profit was approximately US$4.4 billion. With over 100,000
employees worldwide, Hutchison operates five core businesses in
36 countries: ports and related services; telecommunications and
e-commerce; property and hotels; retail and manufacturing; and
energy and infrastructure. For more information, visit
http://www.hutchison-whampoa.com  

Singapore Technologies Telemedia is a leading info-
communications group that provides voice, data and video
services. It focuses on three core businesses: data & voice,
broadband, & multimedia. Through its subsidiaries and associate
companies, Singapore Technologies Telemedia provides fixed and
mobile telecom services, wireless data communications services,
Internet mobile services, global IP network services, managed
hosting services, satellite services, broadband cable and e-
business software development services. Singapore Technologies
Telemedia is a wholly-owned subsidiary of the Singapore
Technologies group.

DebtTraders reports that Global Crossing Holdings Ltd's 9.625%
bonds due 2008 (GBLX3) currently trade from 7 to 8. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=GBLX3for  
real-time bond pricing.


GLOBAL CROSSING: Case Summary & 50 Largest Unsecured Creditors
--------------------------------------------------------------
Lead Debtor: Global Crossing Ltd.
             fka Global Crossing Holdings Ltd.
             Wessex House, 1st Floor
             45 Reid Street
             Hamilton, HM12 Bermuda

Bankruptcy Case No.: 02-40188-reg

Debtor affiliates filing separate chapter 11 petitions:

Entity                                            Case No.
------                                            --------
Global Crossing North America, Inc.               02-40187-reg
Atlantic Crossings Ltd.                           02-40189-reg
Atlantic Crossing Holdings Ltd.                   02-40190-reg
Atlantic Crossing II Ltd.                         02-40191-reg
Global Crossing Holdings Ltd.                     02-40192-reg
Global Crossing International, Ltd.               02-40193-reg
Global Crossing Network Center Ltd.               02-40194-reg
Mid-Atlantic Crossing Holdings Ltd.               02-40195-reg
Mid-Atlantic Crossing, Ltd.                       02-40196-reg
Pan American Crossing Holdings Ltd.               02-40197-reg
Pan American Crossing Ltd.                        02-40198-reg
South American Crossing Holdings Ltd.             02-40199-reg
ALC Communications Corporation                    02-40200-reg
Atlantic Crossing Holdings U.K. Limited           02-40201-reg
Budget Call Long Distance, Inc.                   02-40202-reg
Business Telemanagement, Inc.                     02-40203-reg
Equal Access Networks, LLC                        02-40204-reg
GC Dev Co., Inc.                                  02-40205-reg
GC Mart LLC                                       02-40206-reg
GC Pacific Landing Corp.                          02-40207-reg
GC Pan European Crossing Holdings B.V.            02-40208-reg
GC Pan European Crossing Luxembourg I S.a.r.l.    02-40209-reg
GC Pan European Crossing Luxembourg II S.a.r.l.   02-40210-reg
GC St. Croix Company, Inc.                        02-40211-reg
Global Crossing Advanced Card Services, Inc.      02-40212-reg
Global Crossing Bandwith, Inc.                    02-40213-reg
Global Crossing Billing, Inc.                     02-40214-reg
Global Crossing Cyprus Holdings Limited           02-40215-reg
Global Crossing Development Center                02-40216-reg
Global Crossing Employee Services, Inc.           02-40217-reg
Global Crossing Global Center Holdings, Dnc.      02-40218-reg
Global Crossing Government Markets USA, Inc.      02-40219-reg
Global Crossing Holdings U.K. Limited             02-40220-reg
Global Crossing Holdings USA LLC                  02-40221-reg
Global Crossing Internet Dial-Up, Inc.            02-40222-reg
Global Crossing Latin America & Caribbean Co.     02-40223-reg
Global Crossing Local Services, Inc.              02-40224-reg
Global Crossing Management Services, Inc.         02-40225-reg
Global Crossing North American Holdings, Inc.     02-40226-reg
Global Crossing North American Networks, Inc.     02-40227-reg
Global Crossing Telemanagement VA, LLC            02-40229-reg
Global Crossing Telemanagement, Inc.              02-40230-reg
Global Crossing USA Inc.                          02-40231-reg
Global Crossing Ventures, Inc.                    02-40232-reg
GT Landing Corp                                   02-40233-reg
GT Landing II Corp.                               02-40234-reg
IXNet, Inc.                                       02-40235-reg
MAC Landing Corp.                                 02-40236-reg
Metaclorin Investco, II Inc.                      02-40237-reg
PAC Landing Corp.                                 02-40238-reg
Pan American Crossing U.K. Ltd.                   02-40239-reg
Subsidiary Telco, LLC                             02-40240-reg
US Crossing, Inc.                                 02-40241-reg  

Type of Business: Global Crossing Ltd., along with its direct
                  and indirect subsidiaries, has built the
                  world's most extensive fiber-optic network,
                  spanning over 100,000 route miles and
                  reaching five continents, 27 countries and
                  more than 200 major cities . The markets in
                  those cities represent approximately 85% of
                  the world's international telecommunications
                  traffic. The Network took over four years,
                  multiple acquisitions and partnerships, and
                  billions of dollars of capital to reach its
                  current state of near-completion.

Chapter 11 Petition Date: January 28, 2002

Court: Southern District of New York (Manhattan)

Judge: Robert E. Gerber

Debtors' Counsel: Harvey R. Miller, Esq.
                  Michael F. Walsh, Esq.
                  Paul M. Basta, Esq.
                  Weil, Gotshal & Manges LLP
                  767 Fifth Avenue
                  New York, New York 10153
                  (212) 310-8000

Total Assets: $22,438,000,000

Total Debts: $12,394,000,000

Debtor's Consolidated List of 50 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
U.S. Trust Company,         Bond Debt            $1,100,000,000
Trustee
9.5% Senior Notes
due 2009
Cynthia Chaney
114 West 47th St
New York, NY 10036
Tel. 212-852-1661
Fax. 212-852-1626

U.S. Trust Company          Bond Debt           $1,000,000,000
8.7% Senior Notes
due 2007
Cynthia Chaney
114 West 47th St
New York, NY 10036
Tel. 212-852-1661
Fax: 212-852-1626

U.S. Trust Company,         Bond Debt             $900,000,000
Trustee
9.125% Senior Notes
due 2006
Cynthia Chaney
114 West 47th St
New York, NY 10036
Tel. 212-852-1661
Fax. 212-852-1626

U.S. Trust Company,         Bond Debt             $800,000,000
Trustee
9.625% Senior Notes
due 2008
Cynthia Chaney
114 West 47th St
New York, NY
10036
Tel. 212-852-1661
Fax. 212-852-1626

JP MorganChase               Bond Debt            $100,000,000
Bank, Trustee
9% Medium Term
Notes due 2021
Ken Fowlerd
Corporate Trust Services
2001 Bryan St, 9th Floor
Dallas, TX 75201
Tel. 214-468-6105
Fax. 214-468-6094

Lucent Technologies          Trade Debt           $31,357,050
Patricia Russo
Henry Schact
Frank D'Amelio
Janet Davidson
600 Mountain Avenue
Murray Hill, NJ 07974
Tel. 908-528-8500
Fax. 908-508-2576

Alcatel                      Trade Debt           $31,056,980
Jay Hilbert
P.O. Box 911476
Dallas, TX 75391-1476
1000 Coit Road CHB
Plano, TX 75075
Tel. 972-477-2555
Fax. 972-519-3999 (fax)

Tycom US Inc.                Trade Debt           $29,160,213
Mellon Bank Centre
Pittsburgh, PA 15259
Tel. 441-298-9770
Fax. 441-298-9777

SBC Communications           Trade Debt           $26,840,151
Dawn Callier
31100 Plymouth Rd, Rm 301
Livonia, MI 48150
Tel. 312-331-3815
dc8033@miomail.sbc.com
21454 Network Place
Chicago, IL 60673-1214
175 E. Houston
San Antonio, TX 78205
Tel. 210-821-4105
Fax. 210-351-2071

Verizon                      Trade Debt           $23,936,607
Alice Bednark
180 Washington Valley Rd
Bedminister, NJ 07921
Paul Lacouture
1095 Avenue of Americas
New York, NY 10013
Tel. 212-395-1087

Chase Manhattan              Bond Debt            $20,000,000
Bank, Trustee
9.3% Medium Term
Notes due 2004
Edwina Osborne
Chase Manhattan Bank
55 Water Street, Rm. 234
New York, NY 10041
Tel. 212-638-5279
Fax. 212-638-7375

Nortel Networks              Trade Debt           $13,802,224
Gary Donahee
2221 Lakeside Blvd.
Richardson, Texas 75082-4399
1500 Concord Terrace
Sunrise Florida, FL 33323-2815
Tel. 905-863-0000
Fax. 905-863-8423

Cincinnati Bell Telephone    Trade Debt           $13,375,868
Jack Mueller
201 E. Fourth Street
Room 102-602
P. O. Box 2301
Cincinnati, OH 45201
Tel. 513-397-0766

Cisco                        Trade Debt           $12,626,693
John Chambers
William Nuti
170 West Tasman Drive
San Jose, California 95134
P.O. Box 91232
Chicago, IL 60693-1232
Tel. 408-526-4000
Fax. 408-526-4100

Level 3                      Trade Debt           $10,112,149
1025 Eldarado Blvd.
Broomfield, CO 80021
720-888-1000

Bell South Corporation       Trade Debt            $9,716,900
600 N. 19th Street
3rd Fl. BIN NO
Birmingham, AL 35203
Petra Pryor
1155 Peachtree Street, N.E.
Atlanta, GA 30309
Tel. 404-249-2000
Fax. 404-249-2071

Mastec North America Inc.    Trade Debt            $9,426,946
Randy Gunlar
P.O. Box 266
Purcell, OK 73080
Tel. 405-527-2616
Fax. 405-527-1908

MCI Telecommunications       Trade Debt            $8,406,507
Dr. Clinton, MS 39056
500 Clinton Center Dr.
Clinton, MS 39056
Tel. 601-460-5600
Fax. 601-974-8350

Qwest                        Trade Debt            $6,930,864
Carol Schneider
1801 California Street
Suite 2530
Denver, CO 80244-0001
Tel. 303-992-1400
Fax. 303-992-1724

Citizens Communications/     Trade Debt            $5,523,030
Frontier Communications
8800 N. Central Expressway
Suite 800
Dallas, TX 75231

Z Tel                        Trade Debt            $5,484,333
601 S. Harbour Island
Suite 220
Tampa, FL 33602
Tel. 813-273-6261
Fax. 813-273-6861

AT&T                         Trade Debt            $3,916,049
P. O. Box 5186
Chicago, IL 60680-5186
32 Avenue of the Americas
New York, NY 10013
Tel. 212-387-5400
Fax. 908-221-2528

Tekelec                      Trade Debt            $3,722,460
26580 West Agoura Rd.
Calabasas, CA 91302
Tel. 800-835-3532
Tel. 818-800-5656
Fax. 818-880-6993

Juniper Networks             Trade Debt            $3,698,199
5661 Collections Ctr Dr
Chicago, IL 60693
Tel. 408-745-2000
Fax. 408-745-2100

Accenture                    Trade Debt            $3,665,633
Roxanne Taylor
1345 Avenue of the
Americas
New York, NY 10105
Tel. 917-452-5106
Fax: 917-527-9915
100 Campus Drive
Florham Park, NJ 07932
Tel. 973-301-1000
Fax. 973-301-1005

Alltel                       Trade Debt            $2,913,655
7001 Chatham Center Drive
Suite 1000
Savannah, GA 31405
One Allied Drive
Little Rock, AR 72202
Tel. 501-905-8000
Fax. 501-905-0962

Sprint                        Trade Debt           $2,891,535
William Esrey
P. O. Box 740504
Atlanta, GA 30374-0504
Mike Fuller
6480 Sprint Parkway
Overland Park, KS 66251
mike.fuller@mail.sprint.com
460 Herndon Pkwy
Herndon, VA
Tel. 703-467-5391
Fax. 703-467-5410

Anixter                       Trade Debt           $2,657,302
Dennis Latham
4711 Golf Road
Skokie, IL 60076-1278
Tel. 847-677-2600
Fax. 847-677-9480

United Telephone              Trade Debt           $2,112,207
P. O. Box 419114
Kansas City, MO 64141-6114
120 Taylor Street
Chapel Hill,TN 37034
Tel. 931-364-2289
Fax. 931-364-7202

Century Telephone             Trade Debt           $1,887,362
2615 East Avenue
La Crosse, WI 54601
100 Century Park Drive
Monroe, LA 71203
Tel. 318-388-9000
Fax. 318-388-9562

Kajima                        Trade Debt           $1,742,043
John Kovacs
3445 Peachtree Road
NE Ste 200
Atlanta, GA 30326
kovacsj@kajimausa.com
395 W. Passaic Street
2nd Floor
Rochelle Park, NJ 07662
Tel. 201-518-2100
Fax. 201-518-1535

Telcobuy.com                  Trade Debt           $1,657,185
P.O. Box 952120
St. Louis, MO 63195-2120
60 Weldon Parkway
St. Louis, MO 63043
Tel. 314-983-2826
Fax. 314-569-8310

Mercer Consulting             Trade Debt           $1,550,250
P.O. Box 91787
Washington, DC 20090-1787
Tel. 202-778-7000
1166 Avenue of the Americas
New York, NY 10036
Tel. 212-345-8000
Fax. 212-345-8075

Encompass                     Trade Debt           $1,512,740
Barbara Macba
12100 Baltimore Avenue
Beltsville, MD 20705
Tel. 443-334-1063
3 Greenway Plaza, Suite 2000
Houston, TX 77046
Tel. 713-860-0100
Fax. 713-626-4766

Gotham Incorporated           Trade Debt           $1,440,566
Don Hoye
P.O. Box 19073
Newark, NJ 07195-0073
100 Fifth Avenue
New York, NY 10011
Tel. 212-414-7000

PM Contracting                Trade Debt          $1,214,247
Mike Jacobs
40 Exchange Place
19th Floor
New York, NY 10005
Tel. 212-785-8080
515 North Cedar Ridge
Suite 70
Duncanville, TX 75116
Tel. 972-709-8818
Fax. 972-709-8846

Polycom                       Trade Debt          $1,143,525
Dave Nelson
P.O. Box 402198
Atlanta, GA 30384-2198
9040 Roswell Rd., Suite 450
Atlanta, GA 30350-1877
Tel: 770-641-4400
Fax: 770-641-4444
1565 Barber Lane
Milpitask, California 95035
Tel. 408-526-9000
Fax. 408-526-9010

Madison Communications        Trade Debt          $1,055,281
Scott Carr
1050 E Piedmont Rd.
Suite E232
Marietta, GA 30062
Tel. 404-550-8342
Fax. 770-541-6090

Greenwich Tech Partners       Trade Debt          $1,002,741
Kevin Lynch
P.O. Box 18530
Newark, NJ 07191-8530
123 Main Street
White Plains, NY 10601
Tel. 914-289-8000
Fax. 914-289-8001

DGI Technologies              Trade Debt            $907,526
Jeannie Wood
501 West George Bush Hwy
Suite 100
Richardson, TX 75080
Tel. 214-644-7444

Bell Atlantic                 Trade Debt            $700,389
Cabs Rem
Trenton, NJ 08650-4832
1095 Avenue of the Americas
36th floor
New York, NY 10036
Tel. 212-395-2121
Fax. 212-921-2971

Comp USA                      Trade Debt            $690,763
Doris Kurran
14951 N Dallas Pkwy.
Dallas, TX 75320-0670
Tel. 972-528-4507

Shipley Logan                 Trade Debt            $686,723
Communications
Michael Norcia
1191-C Brock Mcvey Dr.
Lexington, KY 40509
Tel. 561-564-0065 x 203
Fax. 561-564-0965

Sonus Networks Limited        Trade Debt            $656,043
Barbara Teng
5 Carlisle Road
Westford, MA 01886
Tel. 978-692-8999
Fax. 978-692-9118

Primus Telecommunications     Trade Debt            $652,417
1700 Old Meadow Rd.
3rd Floor
Mclean, VA 22102
Tel. 703-902-2800
Fax. 703-902-2877

Media Partnership/Gotham      Trade Debt            $647,630
P.O. Box 30548
Hartford, CT 06150
Garden Studios 11-15
Betterton Street
London, England WC 2H 9BP
Tel. 011-202- 7470 8781
Fax. 011-202- 7470 8782

Hitachi Telecom USA Inc.      Trade Debt            $635,203
Drawer CS 198306
Atlanta, GA 30384-8306
Tel. 800-446-8820
Fax. 770-242-1414

Frontline                     Trade Debt            $633,100
Brian Homeyer
1 Blue Hill Plaza
PO Box 1548
Pearl River, NY 10965
Tel. 845-623-8553
Fax. 845-623-8669
909 Hidden Ridge Drive,
Suite 450
Irving, TX 75038
Tel. 972-580-7778 x245
150 East 58th St, 28th Floor
New York, NY 10155
Tel. 212-688-2332

Novo Relationship             Trade Debt            $621,568
   Architects
222 Sutter St, 6th Floor
San Francisco, CA 94108

MCSI Dept 0231                Trade Debt            $619,448
Columbus, OH 43265-0231
4750 Hempstead Station
Dayton, OH 45429
Tel. 937.291.8282
Fax. 937.291.8288


HALO INDUSTRIES: Completes Sale of Businesses in MI and Canada
--------------------------------------------------------------
HALO Industries, Inc., a promotional products industry leader,
said that it has completed the previously announced and
Bankruptcy Court approved sale of its Troy, MI-based business
and the stock of HALO Canada, Inc., its wholly owned subsidiary,
to The Beanstalk Group.  Terms of the transactions were not
disclosed.

"The sale of these businesses is significant to our
transformation strategy and will help us reemerge from Chapter
11 a stronger business by virtually eliminating our remaining
bank debt," said Marc S. Simon, HALO's president and chief
executive officer.

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

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

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


HELLER EQUIPMENT: Fitch Concerned About Decline in Asset Quality
----------------------------------------------------------------
Fitch downgrades these classes of securities:

      Heller Equipment Asset Receivables Trust 1999-2

                                             To       From

     Class B receivable-backed notes         AA-      AA

     Class C receivable-backed notes         BBB      A

     Class D receivable-backed notes         BB       BBB

     Class E receivable-backed notes         B-       BB

All classes, including classes A-3 and A-4 remain on Rating
Watch Negative.

The class A-1 and A-2 receivable-backed notes, both rated 'AAA',
have been fully repaid.

In addition, the class C and class D of Heller Equipment Asset
Receivables Trust 1999-1 remain on Rating Watch Negative.

These rating actions are the result of adverse collateral
performance and deterioration of asset quality outside of
Fitch's original base case expectations. Specifically, both the
aggregate amount and the rate of gross defaults and net losses
is impairing the collateralization position in the transaction,
which is reducing the remaining credit enhancement available to
all classes of securities. Cumulative gross defaults and
cumulative net losses through the Jan. 14, 2002, distribution
date are 5.64% and 3.89%, respectively. These levels are
significantly higher than historical static pool data provided
to Fitch before the transaction closed.

On Oct. 9, 2001, Fitch placed all classes of HEART 1999-2
securities on Rating Watch Negative. Fitch has closely monitored
the performance of the transaction to assess the ability of
General Electric Capital Corporation (GE Capital purchased
Heller Financial, Inc. on Oct. 25, 2001) to accurately forecast
and realize on expected future recoveries. While recovery
realizations have served to partially offset the amount of gross
defaults, both the pace and the percentage of these recoveries
are occurring slower than Fitch's expectations based on the
company's historical performance.

To date, the recovery realization experience in the HEART 1999-2
transaction is 33.5%. However, when isolating just the gross
defaults that have been fully written off (contracts where all
recovery effort exhausted) the recovery realization percentage
is approximately 89%. The significant differential in recovery
realization rates is attributed to the time it takes the
servicer to remarket, repossess and recover on defaulted
contracts. Historically, the timing lag in recovery realization
was between three and six months, but in the HEART 1999-2
transaction, Fitch is observing timing lags of more than one
year.

The rate and timing of recovery realizations becomes a critical
remedy impacting credit enhancement because of the severe
undercollaterization position in HEART 1999-2. Fitch will
continue to closely monitor this transaction and may take
additional rating action in the event of further default and
recovery deterioration.


HOULIHAN'S RESTAURANTS: Case Summary & Unsecured Creditors
----------------------------------------------------------
Lead Debtor: Houlihan's Restaurants, Inc.
             dba Houlihan's
             dba Darryl's
             dba J. Gilbert's
             dba Bristol
             dba Chequers
             dba Devon
             dba Braxton
             dba Houlihan's Restaurant Group  
             Two Emanuel Cleaver II Boulevard
             Kansas City, MO 64112

Bankruptcy Case No.: 02-40359-abf

Debtor affiliates filing separate chapter 11 petitions:

             Entity                        Case No.
             ------                        --------
             Houlihan's/Milwaukee, Inc.    02-40360-abf
             Houlihan's of Union Station,
                Inc.                       02-40362-abf
             Houlihan's of Chesterfield,
                Inc.                       02-40365-abf
             Darryl's of Overland Park,
                Inc.                       02-40367-abf
             Darryl's of St. Louis
                County, Inc.               02-40369-abf
             Red Steer, Inc.               02-40371-abf
             Sam Wilson's/Kansas, Inc.     02-40372-abf
             Houlihan's/California, Inc.   02-40373-abf
             Houlihan's/San Francisco,
                Inc.                       02-40374-abf
             Houlihan's of Farmingdale,
                Inc.                       02-40376-abf
             Darryl's of Kissimmee, Inc.   02-40378-abf

Chapter 11 Petition Date: January 23, 2002

Court: Western District of Missouri (Kansas City)

Judge: Arthur B. Federman

Debtors' Counsel: Cynthia Dillard Parres, Esq.
                  Laurence M. Frazen, Esq.
                  Bryan Cave LLP
                  1200 Main St., Suite 3500
                  One Kansas City Place
                  Kansas City, MO 64105-2122
                  Tel: 816-374-3274
                  Fax: 816-374-3300

Estimated Assets: more than $100 million

Estimated Debts: more than $100 million

Debtor's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Alliant Food Service, Inc.  Vendor                $1,875,306
John E. Fahey
Director of Credit
One Parkway North
Deerfield, IL 60015
Phone: 847-405-8095
Fax: 847-405-8563

Maines Paper and Food        Vendor                 $579,055
   Service
PO Box 642530
Pittsburgh, PA 15264-2530
Melody Marinich
101 Broome Corporate Pkwy
PO Box 450
Conklin, NY 13748
Phone: 607-779-1200
Fax: 607-779-1594

Glendale Centre, LLC         Judgment               $570,000
   Barnes & Thornburg
Charles P. Edwards, Esq.
11 S. Meridian Street
Indianapolis, IN 46204
Phone: 317-231-7438
Fax: 317-231-7433

Discover Financial            Vendor                $163,837
   Services

4836 - The Retail             Landlord              $149,416
   Property Trust

Middendorf Meat Co.           Vendor                $143,493

Pavilion Properties           Landlord              $132,636
Landmark Centre

Ecolab (Center North)         Vendor                 $96,443

Allen Brothers Inc.           Vendor                 $76,345

Edward Don & Co               Vendor                 $68,855

BP Development LP             Landlord               $68,835
Copaken White & Blitt

Squirrel Companies Inc.       Landlord               $58,598

Advertisers Printing          Vendor                 $56,668
Company, Inc.

Metro West Realty LLC         Landlord               $56,096

Get Fresh Produce             Vendor                 $48,928

Short Hills Associates        Landlord               $47,359

Peoplesoft, USA               Vendor                 $44,398

Royal Food Service Inc.       Vendor                 $43,027

Lockton Companies, Inc.       Vendor                 $42,829

Steve Connolly Seafood        Vendor                 $42,364


ICG COMMS: Committee Taps Chaim J. Fortgang as Lead Co-Counsel
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of ICG
Communications, Inc., et al., asks Judge Walsh to approve the
retention of Chaim J. Fortgang, Esq., as its lead co-counsel.

Derek C. Abbott, Esq., at Morris, Nichols, Arsht & Tunnell,
which acts as local counsel for the Committee, explains that on
January 12, 2001, the Committee filed its Application to retain
Wachtell, Lipton, Rosen & Katz as its counsel by Order entered
on March 1, 2001, the Court approved the retention of Wachtell
as counsel for the Committee nunc pro tunc to November 29, 2000.  
Chaim J. Fortgang and Richard Mason were the principal attorneys
at Wachtell responsible for the representation of the Committee.

As of November 26, 2001, Mr. Fortgang is no longer with the
Wachtell firm and presently practices as a sole practitioner.
The Committee desires to continue the services of both Mr.
Fortgang and Wachtell. Continuation of the services of both Mr.
Fortgang and Wachtell will affect no change in the current
representation of the Committee other than that the fee and
expense applications of Mr. Fortgang and Wachtell, respectively,
will be sent by and eventually paid to the two parties
separately, effective as of November 26, 2001.

Mr. Fortgang's hourly rate for work of this nature is $750 per
hour, which rate is subject to periodic adjustments to reflect
economic and other conditions.

Mr. Fortgang has continued to perform services for the Committee
since he began his solo practice on November 26, 2001.
Accordingly, the Committee requests that Judge Walsh authorize
the retention of Mr. Fortgang as of November 26, 2001, nunc pro
tunc.

In support of this Application, Mr. Fortgang avers that he has
no connection with the Debtors, their creditors, or any other
parties in interest in these cases, or their respective
attorneys, other than as outlined in the previous Declaration he
made in support of the original retention of the firm of
Wachtell, Lipton, Rosen & Katz, nor does he represent any
interests adverse to the Debtors or these estates in the matters
upon which he is to be engaged.  He promises he will not
represent any party in these cases other than the Committee.  To
the extent he holds any claims against the Debtors, they are
waived.  Mr. Fortgang concludes that he is a disinterested
person and meets the Code's requirements for employment. (ICG
Communications Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service, Inc., 609/392-0900)  


IT GROUP: Seeks Okay to Continue Use of Existing Business Forms
---------------------------------------------------------------
The IT Group, Inc., and its debtor-affiliates request that they
be authorized to continue to use all correspondence, business
forms and checks existing immediately prior to the Petition Date
without reference to the Debtors' status as debtors-in-
possession, until the Debtors' stock of existing Business Forms
is exhausted.

According to Harry J. Soose, the Debtors' Senior Vice President,
Chief Financial Officer and Principal Financial Officer, prior
to the Petition Date, in the ordinary course of business, the
Debtors used a variety of business forms.  Requiring the Debtors
to change their business forms would be expensive and burdensome
to the Debtors' estates and extremely disruptive to the Debtors'
business operations. Accordingly, Mr. Soose believes that it
would be appropriate for this Court to authorize the Debtors to
use existing checks and business forms without being required to
place the label "Debtor-in-Possession" on each.

Marion M. Quirk, Esq., at Skadden Arps Slate Meagher & Flom LLP
in Wilmington, Delaware, contends that parties doing business
with the Debtors undoubtedly will be aware of the their status
as debtors-in-possession as a result of the size and notoriety
of these cases, the press releases issued by the Debtors and
general press coverage. Furthermore, a requirement that the
Debtors change their business forms would be expensive and
burdensome to the Debtors' estates and extremely disruptive to
the Debtors' business operations. (IT Group Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-0900)  


IT GROUP: Inks Definitive Sale Agreement with Shaw Group
--------------------------------------------------------
The Shaw Group Inc., (NYSE:SGR) said that it has signed a
definitive Asset Purchase Agreement with The IT Group, Inc. Shaw
and The IT Group had previously announced on January 16, 2002
that they had signed a letter of intent. Under terms of the
definitive agreement, Shaw will purchase substantially all of
the assets and businesses of The IT Group for approximately $105
million and the assumption of certain liabilities. Up to 50% of
the purchase price is payable in Shaw stock at either party's
option. Shaw's agreement to purchase The IT Group is subject to
bankruptcy court approval, and also approvals under the Hart-
Scott-Rodino Act.

In addition, the U.S. Bankruptcy court has approved Shaw's plan
to provide a secured revolving debtor-in-possession credit
facility of up to $55 million. The credit facility will provide
The IT Group with liquidity for operation of its businesses
until the asset sale is finalized.

The Court has set a hearing for February 12, 2002 to approve
bidding procedures for the receipt of qualified bids. Shaw
currently contemplates that, absent a superior competing
proposal, the transaction with Shaw will be completed before the
end of March.

The IT Group is a leading provider of diversified, value-added
consulting, engineering and construction, remediation and
facilities management services. Through its diverse group of
specialized companies, with domestic and international offices,
its clients take advantage of extensive expertise to meet their
global environmental needs. The IT Group's broad range of
services includes the identification of contaminants in soil,
air, and water and the subsequent design and execution of
remedial solutions. These services are provided through several
principal business lines including, Government Services,
Commercial Engineering and Construction, Solid Waste, Real
Estate Restoration and Consulting.

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


IMEXSA EXPORT: S&P Junks Export Certificate Rating
--------------------------------------------------
Standard & Poor's lowered its rating on Imexsa Export Trust No.
96-1's, a subsidiary of Ispat International N.V., structured
export certificates to double-'C' from single-'B'-plus. The
rating on the certificates remains on CreditWatch with negative
implications.

The lowered rating on the certificates reflects the fact that
Imexsa is preparing to enter into restructuring negotiations
with the holders of the export certificates due in 2003. The
restructuring entails a moratorium on all capital repayments
until 2005. Standard & Poor's would view the implementation of
such a moratorium as a default on the structured export
certificates because bondholders would have no alternative but
to accept this coercive offer, and would not receive the
originally scheduled payments. Upon completion of the exchange,
the rating on the structured export certificates will be lowered
to 'D'. The lowered rating on the certificates also reflects the
downgrade of Imexsa's local currency corporate credit rating to
double-'C' from single-'B'-plus on Jan. 25, 2002, which also
remains on CreditWatch with negative implications.

The corporate rating action is based on Imexsa's restructuring
negotiations. Standard & Poor's will be closely monitoring the
development of the restructuring negotiations going forward.

In the last year, Imexsa has faced difficult steel slab market
conditions, high-energy prices, and a strike that lasted from
Dec. 20, 2001 until Jan. 17, 2002 that caused the stoppage of
all production of steel slabs.

The structured export certificate transaction is based on a
long-term supply contract between Imexsa and Mitsubishi Corp.,
in which the latter is required to purchase enough shipments of
steel slabs from Imexsa at the then prevailing market price to
cover 1.3 times the maximum debt service for each quarterly debt
service period.

The structured export certificates entered into early
amortization after being downgraded to double-'B'-minus on
Nov. 23, 2000.


INTEGRATED HEALTH: Pushing for Amendment of DIP Financing Pact
--------------------------------------------------------------
Integrated Health Services, Inc., and its debtor-affiliates seek
entry of interim and final orders authorizing and approving,
pursuant to section 364(c) of the Bankruptcy Code and Rule
4001(c) of the Bankruptcy Rules,

(1) the amendment and extension of DIP Credit Agreement (more
    specifically, the Secured Super-Priority Debtor in
    Possession Revolving Credit Agreement, dated as of February
    3, 2000 as amended), by and among IHS, as borrower, Citicorp
    USA, Inc., as agent (DIP Agent), and the lenders (DIP
    Lenders) and

(2) the payment of certain related fees in connection with the
    extension and amendment.

The Debtors' DIP Credit Agreement will terminate by its terms on
February 3, 2002, absent an extension thereof. Pursuant to the
Final DIP Financing Order, the Court has authorized the Debtors
to borrow up to $300 million under this DIP Credit Agreement
(subsequently voluntarily reduced by IHS to $200 million).

To continue normal operations pending the consummation of the
Rotech Plan, the Debtors need an extension of the DIP Credit
Agreement. In the Debtors' contemplation, upon consummation of
the Rotech Plan, the DIP Credit Agreement will either be further
amended or possibly refinanced to provide for the working
capital and capital expenditure needs of the IHS Debtors on a
prospective basis following the separation of the IHS Debtors
and the Rotech Debtors in accordance with the Rotech Plan.

The Debtors also need the amendment because, among other things,
the Rotech Plan will not become effective unless and until the
DIP Credit Agreement is amended in a manner reasonably
satisfactory to the IHS Debtors, the Creditors' Committee and
the unofficial working group of the holders of the Senior Lender
Claims (as defined in the Rotech Plan).

By this Motion, the Debtors seek authority to enter into an
amendment of the DIP Credit Agreement, pursuant to which, inter
alia:

(a) The Maturity Date (as defined in the DIP Credit Agreement)
    will be extended to May 3, 2002;

(b) The total Commitment of the DIP Lenders will be voluntarily
    reduced by the Debtors from $200 million to $100 million and
    accordingly, there will be a change in the composition of
    the DIP Lenders and the DIP Lenders' allocation of the total
    Commitment;

(c) In addition to the fees and expenses of the DIP Agent and
    the DIP Lenders payable by the Debtors under the DIP Credit
    Agreement, which will be prorated to reflect the 90 day
    extension of the Maturity Date, the Amendment provides for
    the following fees to be paid by the Debtors:

    (i)  a structuring fee in the amount of $200,000, payable to
         the DIP Agent upon execution of the Amendment and

    (ii) an extension fee in the amount of .45% of the
         Commitment, payable to the DIP Lenders upon execution
         of the Amendment; and

(d) The DIP Credit Agreement will be amended accordingly.

    The Debtors believe that a postpetition credit facility in
    the amount of $100 million will be more than sufficient to
    enable them to continue operating in the normal course
    pending the consummation of the Rotech Plan.

The Debtors submit that the terms of the DIP Credit Agreement,
and the amendment and extension sought in this motion were
negotiated at arm's-length and in good faith by the Debtors and
the DIP Lenders, and are fair and reasonable under the
circumstances. The Debtors believe that the fees related to the
Amendment are fair and reasonable under the circumstances as
well. (Integrated Health Bankruptcy News, Issue No. 28;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   


INTERFACE: Completes 10.275% Note Offer to Refinance Revolver
-------------------------------------------------------------
Interface, Inc., (Nasdaq: IFSIA) announced the closing on
January 17, 2002 of its private offering of $175 million
aggregate principal amount of 10.375% senior notes due in 2010.
Four investment banks participated as initial purchasers in the
notes offering.  The $171.5 million of net proceeds from the
sale of the notes were used to refinance the Company's revolving
credit facility, which was amended and restated in connection
with the offering.

The amended and restated credit facility provides for $100
million of revolving credit, with varying interest rates based
on the Company's ability to meet certain performance criteria.  
The facility will mature on May 15, 2005, subject to a possible
extension of that maturity date to January 17, 2007 if the
Company meets certain conditions relating to the repayment of
long-term debt.

Daniel T. Hendrix, President and Chief Executive Officer,
commented, "We are pleased to have the continued strong support
of the bond market and our lenders in the issuance of our new
senior notes and in the restructuring of our credit facility.  
Through these transactions and other initiatives, we continue to
improve our financial position and to enhance our ability to
weather the current soft economic environment."

Mr. Hendrix continued:  "Our longer-term strategy in this area
is to use our strong free cash flow generation position to repay
debt more rapidly than required and increase shareholder value
on the strength of our favorable operating margins."

The notes were sold to qualified institutional buyers in
reliance on Rule 144A under the Securities Act of 1933, as
amended, and to non-U.S. persons in reliance on Regulation S
under the Securities Act.  The notes have not been registered
under the Securities Act or any state securities laws.  
Therefore, the notes may not be offered or sold in the United
States absent registration or an applicable exemption from such
registration requirements.

Interface, Inc., is a recognized leader in the worldwide
commercial interiors market, offering floorcoverings, fabrics,
interior architectural products and specialty chemicals.  The
Company is the world's largest manufacturer of modular carpet
under the Interface, Heuga, Bentley and Prince Street brands,
and through its Bentley Mills and Prince Street brands, enjoys a
leading position in the high quality, designer-oriented segment
of the broadloom carpet market.  The Company provides
specialized carpet replacement, installation, maintenance and
reclamation services through its Re:Source Americas service
network.  The Company is a leading producer of interior fabrics
and upholstery products, which it markets under the Guilford of
Maine, Stevens Linen, Toltec, Intek, Chatham, Camborne and
Glenside brands.  The Company provides specialized fabrics
services through its TekSolutions business.  In addition, the
Company produces raised/access flooring systems under the C-Tec,
Intercell and Atlantic brands; produces adhesives and chemicals
used in various rubber and plastic products; offers Intersept, a
proprietary antimicrobial used in a variety of interior
finishes; and sponsors the Envirosense Consortium in its mission
to address workplace environmental issues.


KMART CORP: Brings-In Skadden Arps to Prosecute Chapter 11 Cases
----------------------------------------------------------------
Kmart Corporation and its 37 of its debtor- affiliates ask the
Court for permission to employ Skadden, Arps, Slate, Meagher &
Flom to prosecute their chapter 11 cases.

Kmart CEO Charles C. Conaway tells the Court that Skadden Arps
has served as Kmart's corporate, financing, litigation,
restructuring, securities, and tax counsel since 1988.  On
January 7, 2002, Kmart executed an Engagement Agreement
employing Skadden for advice regarding restructuring matters in
general and in preparation for the potential commencement of
these chapter 11 cases.

Specifically, Kmart will look to Skadden Arps to:

(a) advise the Debtors with respect to their powers and duties
    as debtors and debtors-in-possession in the continued
    management and operation of their business and properties;

(b) attend meetings and negotiate with representatives of
    creditors and other parties in interest and advise and
    consult on the conduct of the case, including all of the
    legal and administrative requirements of operating in
    chapter 11;

(c) advise the Debtors in connection with any contemplated sales
    of assets or business combinations, including the
    negotiation of asset, stock purchase, merger or joint
    venture agreements, formulate and implement bidding
    procedures, evaluate competing offers, draft appropriate
    corporate documents with respect to the proposed sales, and
    counsel the Debtors in connection with the closing of such
    sales;

(d) advise the Debtors in connection with postpetition financing
    and cash collateral arrangements and negotiating and
    drafting documents relating thereto, provide advice and
    counsel with respect to prepetition financing arrangements,
    and provide advice to the Debtors in connection with the
    emergence financing and capital structure, and negotiate and
    draft documents relating thereto;

(e) advise the Debtors on matters relating to the evaluation of
    the assumption, rejection or assignment of unexpired leases
    and executory contracts;

(f) provide advice to the Debtors with respect to legal issues
    arising in or relating to the Debtors' ordinary course of
    business including attendance at senior management meetings,
    meetings with the Debtors' financial and turnaround advisors
    and meetings of the board of directors, and advice on
    employee, workers' compensation, employee benefits, labor,
    tax, environmental, banking, insurance, securities,
    corporate, business operation, contracts, joint ventures,
    real property, press/public affairs and regulatory matters
    and advise the Debtors with respect to continuing disclosure
    and reporting obligations, if any, under securities laws;

(g) take all necessary action to protect and preserve the
    Debtors' estates, including the prosecution of actions on
    their behalf, the defense of any actions commenced against
    those estates, negotiations concerning all litigation in
    which the Debtors may be involved and objections to claims
    filed against the estates;

(h) prepare on behalf of the Debtors all motions, applications,
    answers, orders, reports and papers necessary to the
    administration of the estates;

(i) negotiate and prepare on the Debtors' behalf plan(s) of
    reorganization, disclosure statement(s) and all related
    agreements and/or documents and take any necessary action on
    behalf of the Debtors to obtain confirmation of such
    plan(s);

(j) attend meetings with third parties and participate in
    negotiations with respect to the above matters;

(k) appear before this Court, any appellate courts, and the U.S.
    Trustee, and protect the interests of the Debtors' estates
    before such courts and the U.S. Trustee; and

(l) perform all other necessary legal services and provide all
    other necessary legal advice to the Debtors in connection
    with these chapter 11 cases.

Mr. Conaway discloses that Kmart paid Skadden Arps a $2,325,000
retainer in connection with these chapter 11 cases.  In the year
prior to the Petition Date, Kmart paid Skadden Arps $3,253,270.

Kmart agrees to pay Skadden by the hour for services performed
in these chapter 11 cases, under the Firm's bundled rate
structure:

           Partners                            $480 to $695
           Counsel and Special Counsel         $470
           Associates                          $230 to $470
           Legal Assistants and Support Staff   $80 to $160

John Wm. Butler, Jr., Esq., the co-leader of Skadden, Arps'
worldwide corporate restructuring practice, leads the team of
lawyers representing Kmart.  Mr. Butler, Peter A. Atkins, and
David J. Friedman will coordinate Skadden, Arps' overall
representation of Kmart.  Other principal Skadden, Arps partners
with principal responsibility in the areas of corporate
restructuring, corporate, finance, human capital and real estate
are Lawrence D. Frishman, N. Lynn Hiestand, J. Eric Ivester and
Marian P. Wexler.

Mr. Butler assures the Court that he, his partners and his Firm
(a) do not have any connection with the Debtors or their
affiliates, their creditors, the U.S. Trustee or any person
employed in the office of the U.S. Trustee, or any other party
in interest, or their respective attorneys and accountants, (b)
are "disinterested persons," as that term is defined in section
101(14) of the Bankruptcy Code, and (c) do not hold or represent
any interest adverse to the estates.  Out of an abundance of
caution, Mr. Butler discloses that Skadden, Arps represented,
represents and in the future likely will represent, in matters
unrelated to the Debtors:

      TRUSTEES, LARGEST HOLDERS AND UNDERWRITERS OF THE NOTES:
affiliates of AEGON U.S.A. Investment Management, Inc.;
affiliates of Appaloosa Management; BancBoston Robertson
Stephens and other of its affiliates; affiliates of Banc One
Capital Markets; The Bank of New York; Bank One, N.A.; affiliate
of Bank Pekao SA; affiliates of Everest Reinsurance Co.;
affiliates of Fleet Securities; affiliates of GE Financial
Assurance Holdings, Inc.; affiliate of Hartford Investment
Management Company (HIMCO); affiliates of Industrial Bank of
Japan; ING Capital; affiliates of ING Investment Management
Inc.; affiliates of Invesco; John Hancock Life Insurance
Company; Lehman Brothers and other of its affiliates; affiliates
of Loomis, Sayles & Company L.P.; Merrill Lynch and other of its
affiliates; Metropolitan Life Insurance Company and other of its
affiliates; affiliate of MFS Investment Management; Morgan
Stanley; affiliates of Morgan Stanley Investment Management
Inc.; affiliate of New York Life Investment Management LLC;
affiliates of Northwestern Investment Management Company;
affiliates of Northwestern Mutual Series Fund; affiliate of
Pacific Investment Management Co. (PIMCO); affiliate of Pilgrim
America; affiliates of Prudential Global Asset Management (Fixed
Income); Prudential Insurance Co. of America; Putnam
Investments; affiliate of SAFECO Asset Management Company;
affiliates of Smith Barney Asset Management and Smith Barney
High Income Fund; Teachers Insurance & Annuity Association;
affiliates of Transamerica Business Credit; affiliates of
Transamerica Life Insurance & Annuity Co. S/A; Transamerica
Occidental Life Insurance Co.; affiliates of Travelers Asset
Management and The Travelers Insurance Co.; UBS Warburg;
Utendahl Capital Partners; affiliates of The Vanguard Group,
Inc.; affiliates of Van Kampen; and affiliate of Zurich Scudder
Investments, Inc.

      LENDERS: Allfirst Bank; affiliates of BankBoston, N.A.;
Bankers Trust Company and other of its affiliates; Bank of
America, N.A. and other of its affiliates; The Bank of New York;
affiliate of Bank Polska Kasa Opieki S.A.; Bank One, N.A. and
other of its affiliates; affiliates of Banque Worms Capital
Corporation; The Chase Manhattan Bank; Chase Securities;
Citibank and its affiliates; affiliate of Comerica Bank; Credit
Suisse First Boston; The Dai-Ichi Kangyo Bank, Ltd.; Deutsche
Bank AG and its affiliates; Eaton Vance CDO III, Ltd.; Eaton
Vance Institutional Senior Loan Fund; Eaton Vance Senior Income
Trust; affiliates of Firstar Bank, N.A.; affiliates of First
Union Bank; First Union National Bank; Fleet National Bank; The
Fuji Bank, Limited; affiliate of Grayson & Co; JPMorgan Chase
Bank and other of its affiliates; affiliates of Lehman
Commercial Paper Inc.; affiliates of Mercantile Bank National
Association; affiliates of Merrill Lynch Capital Corporation;
affiliates of Morgan Guaranty Trust Company of New York;
affiliate of Natexis Banque Populaires; National Bank of Kuwait
SAK; affiliate of National City Bank; affiliates of NBD Bank;
affiliates of Prudential Securities Credit Corp.; Sumitomo
Mitsui Banking Corporation; affiliate of Tokai Bank, Limited;
UBS AG, Stamford Branch and other of its affiliates; Union Bank
of California, N.A. and other of its affiliates; affiliates of
U.S. Bank National Association; and Wells Fargo Bank, N.A.

      50 LARGEST UNSECURED CREDITORS: Activision Inc; affiliates
of American Greetings; affiliates of Buena Vista Home; affiliate
of Duracell International; affiliates of Electronic Arts; Exide
Corp.; affiliate of Frito Lay Inc.; Gillette Company; affiliates
of Handleman Co; affiliate of Hoover Co; Johnson & Johnson;
affiliates of Martha Stewart; affiliates of Paramount Pictures;
Pepsi Cola Company; Rayovac Corporation; affiliates of Rival
Company; Rubbermaid Inc.; affiliate of Russell Corp./Knit
Apparel Div.; Samsung Electronics; affiliate of Sara Lee
Underwear; Slim Fast Foods; affiliates of Sony Computer;
Twentieth Century; Universal Music; U S Electronics; affiliates
of Warner Home Video; Warner Lambert; and affiliates of
Westpoint Stevens Home Fashion.

      JOINT VENTURE PARTNERS: Penske Auto Centers.

      MAJOR COMPETITORS: Costco; affiliates of Fred Meyer;
affiliates of Kohls; Montgomery Ward; affiliates of Shopko;
affiliates of Target; and Wal-Mart.

      REAL ESTATE LESSORS: affiliate of Malcolm Glazer.

      SHAREHOLDERS, OFFICERS, DIRECTORS AND EMPLOYEES: Barclays
Global Investors; affiliate of Fidelity International Ltd
(Bermuda); Fidelity Management & Research; affiliate of Franklin
Advisers, Inc.; affiliates of John A. Levin & Company, Inc.; PPM
America, Incorporated; affiliate of Putnam Investment
Management, Inc.; affiliate of State Street Global Advisors; and
affiliates of Vanguard Group, Inc. and Vanguard Windsor II Fund.

      PROFESSIONALS: Dresdner Kleinwort Wasserstein, Inc. and
PricewaterhouseCoopers LLP.

      OTHER DISCLOSURES:  In the past, pursuant to waivers
granted by the Debtors, Skadden, Arps' briefly represented
Deluxe Corp on an proposed agreement with Kmart to provide or
service ATMs at Kmart stores.  This matter is no longer active.  
Also, one of Mr. Butler's relatives is a partner in a Michigan
general partnership that is a landlord of Kmart for a store
located in western Michigan.  Skadden, Arps does not represent,
nor does Mr. Butler have any economic interest in, or control
over, that partnership. Rena M. Samole, a Corporate
Restructuring associate employed by Skadden, Arps in its Chicago
office, worked as a judicial extent to Judge Erwin I. Katz
during the summer of 1998, and also is a distant relative of
Judge Katz.

Many of the firm's representations of these clients consist of
representations in episodic transactional matters, Mr. Butler
says, assuring that representation of these entities will not
affect the firm's representation of the Debtors in these cases.
Mr. Butler makes it clear that Skadden, Arps does not presently
represent these entities in any matters adverse or related to
the Debtors.

Mr. Butler comments that Skadden, Arps is one of the largest law
firms in the world and has a diverse client base.  Mr. Butler
discloses that in the period beginning December 1, 2000, and
ending December 1, 2001, no single client accounted for more
than 2.97% of Skadden, Arps' total value of time billed to
client matters for that period.  With the exception of Credit
Suisse First Boston, Merrill Lynch and Metropolitan Life
Insurance, no single client referenced in this Affidavit
accounted for 1% or more of Skadden, Arps' total value of time
billed during that same period. (Kmart Bankruptcy News, Issue
No. 2; Bankruptcy Creditors' Service, Inc., 609/392-0900)   


LTV CORP: Taps Skadden Arps as Co-Counsel on Int'l Trade Matters
----------------------------------------------------------------
The LTV Corporation, and its debtor-affiliates make application
to employ Skadden Arps Meagher & Flom as special international
trade counsel to serve these estates along with Dewey
Ballantine.

Skadden 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.

Robert E. Lighthizer, Esq., a member of Skadden Arps, discloses
that Skadden Arps 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) Skadden Arps 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.  
Skadden Arps 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; and

       (2) The Debtors are obligated to Skadden Arps for unpaid
prepetition legal and public policy services in the amount of
$548,318.00, including the Debtors' share of Skadden Arps' bills
for the months of October, November, and December 2000.

As in the case of Dewey Ballantine, Judge Bodoh enters his Order
authorizing and approving this employment on the terms stated in
the Application. (LTV Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service, Inc., 609/392-00900)


LERNOUT & HAUSPIE: Bolts Settlement Agreement with the Bakers
-------------------------------------------------------------
As directed by Judge Wizmur's interim holding, the Debtors file
a joint motion asking - not for approval of the Baker settlement
-- but for its disapproval.  Each of Lernout & Hauspie Speech
Products N.V., Dictaphone Corporation, and L&H Holdings USA,
Inc., Debtors, through Donna L. Harris, Esq., at Morris,
Nichols, Arscht & Tunnell, place before Judge Wizmur a
memorandum of law in further opposition to the Motion of Janet
and James Baker and the Baker LLCS To Enforce Settlement
Agreement.

                    The Settlement Negotiations

In July 2001, the Debtors and the Bakers began settlement
negotiations. A number of potential structures and settlements
were discussed while the parties agreed to delay action on the
Bakers' appeal of the subordination order previously entered
against them on some of their claims.  In a joint telephone
conference with Judge Sue Robinson, before whom the appeal was
pending, the Debtors admit that the parties "apprised" her that
they had reached an "agreement in principle".  In a hearing
before Judge Wizmur in August, 2001, counsel for L&H and
Holdings confirmed that those two debtors and the Bakers had
arrived at a "settlement in principle" that was in the process
of being documented.

The Debtors say that the overriding rationale for their
settlement was "to buy peace with the Bakers by buying out their
equity interest position in Holdings", an interest "created by"
the Court's subordination order which subordinated the Bakers'
claims to the same level as that of the holders of common stock.  
As to L&H, which the Debtor says is saddled with hundreds of
millions in regular claims, this equity position promised the
Bakers no return.  However, as to Holdings, the general
expectation of L&H, Holdings and the Bakers at the time was that
there would be a quantifiable distribution to equity holders
such as the Bakers.  Indeed, the Debtors say they anticipated
that the creditors of Holdings would be paid in cash and in
full, permitting a cash distribution to equity holders.

At this same time, the claims against Holdings that were not
subject to subordination were estimated to total approximately
$5-6 million. Preliminary expressions of interest for other
technology assets of the Debtors suggested that Holdings' assets
might sell for in excess of $30 million.  Using these offers as
a frame of reference, there plainly would have been an amount
sufficient to fund both the cash payment in full of all of
Holdings' creditors, and to the Bakers.  L&H and Holdings would
have had no interest in prosecuting the subordination order if
this had not been the situation.

With this expectation in mind, and "on the understanding that
the Bakers' prepetition equity interest could not be satisfied
outside of a Holdings plan of reorganization that provided for
full payment to creditors, L&H, Holdings and the L&H Committee
undertook the Baker negotiations.  The chosen solution was a
settlement structure that provided for a cash payment to the
Bakers that was linked to confirmation and consummation of a
Holdings plan of reorganization that provided for full payment
in cash to all of Holdings' creditors.

The Debtors say that L&H and Holdings "always believed [the
settlement was] subject to further negotiation and execution by
the parties".  The draft settlement agreement addressed all of
the Baker claims and had three key terms: 1) a lump sum payment
by Holdings (with an administrative claim against Holdings in
the same amount as security for such payment) to the Bakers of
$1.75 million in satisfaction of the Baker merger claims against
Holdings, 2) an allowed claim in favor of the Bakers against L&H
in the amount of $25 million, in satisfaction of the Baker non-
subordinated claims; and 3) a substantial contribution claim by
counsel for the Bakers capped at $500,000.

The terms and timing of the contemplated $1.75 million payment
by Holdings to the Bakers was the most heavily negotiated issue.  
This cash payment in settlement of the merger claims was
arguably the most valid and valuable of the various claims made
by the Bakers.  The timing of this payment was linked to
consummation of a plan of reorganization for Holdings.  The
payment was to be made "within the earlier of (i) consummation
of a plan of reorganization; or (ii) ninety days of the date on
which the Bankruptcy Court approves this Stipulation".

Since the Debtors then planned to file a joint plan for all
three debtors in late August "it was reasonably anticipated"
that the cash payment would not have to be made until after
confirmation and consummation of Holdings' plan.

Moreover, the Debtors say that they "further linked" the cash
payment to consummation of Holdings' plan by assigning the Baker
merger claims against Holdings to L&H in order to prevent any
other claimants with these types of claims against Holdings from
blocking confirmation of a Holdings plan which incorporated the
Bakers' settlement agreement.

                The Debtors' "Withdrawal of Support"
                        For the Settlement

"Believing that they had reserved the right to do so in what
they always regarded as no more than a 'settlement in
principle', L&H and Holdings continued to assess the merits of
the Settlement Agreement as negotiations proceeded and the true
financial condition of Holdings came into focus", says Ms.
Harris.

By the second half of September, it became clear in the wake of
unsuccessful efforts to obtain bids for certain assets of
Holdings that the settlement originally proposed to the Bakers
no longer made economic "or by necessary implication legal"
sense.  In the weeks since August 2001, the total amount of
claims against Holdings had multiplied more than three-fold,
while the proceeds likely to be realized from any sale of
Holdings' assets had decreased significantly, with the result
that it appeared - at least to the Debtors - "virtually certain
that the claims of all Holdings' creditors would not be paid in
full".

                    The Increase in Claims

This increase in the amount of non-subordinated claims against
Holdings resulted largely from the combined consequences of
contingent claims filed on behalf of the Pension Benefit
Guaranty Corporation prior to the claims bar date, and a
subsequent decision by Dictaphone management to terminate or
reject a pension plan that was covered by Title IV of the
Employee Retirement Income Security Act, and insured by PBGC.

The PBGC took the position that when a pension plan terminates,
the PBGC becomes the statutory trustee of the plan and
guarantees the payment of certain benefits to the plan
participants and beneficiaries and, on this basis, filed
contingent claims against the bankruptcy estates of Dictaphone,
L&H and Holdings asserting that if the Dictaphone plan were
terminated during the Chapter 11 cases, then Dictaphone and all
of its controlled group members (L&H and Holdings) would be
jointly and severally liable for unfunded benefit liabilities,
unfunded minimum contributions, and unpaid premiums.  The
confluence of these "circumstances" caused PBGC to assert a
claim for $13 million. As a result, the total amount of non-
subordinated claims against Holdings increased from the $5-6
million to potentially the $18-19 million range.

                  The Decrease In Asset Value

The Debtors say that "the most probable explanation for the
decrease in the dollar value of offers for Holdings' assets
would be the combined effects of the long-term decline in the
technology and speech technology market, and the financial
consequences of the events of September 11, 2001."  By way of
example, Ms. Harris cites the offer by Speechworks of $50
million for the purchase of L&H's "text to speech" assets in
late July 2001, revised in early September to $30 million for a
slightly different bucket of assets, and then to $15 million and
finally to $12.5 million in early October for a different
version of the same assets.

                  The Debtors "Walk Away"

Faced with these developments and the likelihood that Holdings'
creditors would not be paid in full, L&H and Holdings
"determined to exercise what they believed to be their expressly
reserved right to walk away" from the Baker settlement and so
informed the Bakers' counsel on October 2, 2001, that it was
"more likely than not" that L&H and Holdings would not go
forward with the settlement.

              The Rationale for Non-Approval of the
                    Baker Settlement Agreement

Repeating that in their view the Baker settlement is not now and
will not be in the future in the best interests of Holdings and
L&H's creditors, the Debtors "expressly decline to support its
approval", although nominally the moving party.

The Debtors now say that the settlement agreement 1) lacks the
support of both L&H and Holdings, and the L&H Committee; 2) the
Settlement Agreement's sole supporters are the Bakers, "who
stand to reap a windfall" under its terms at the expense of L&H
and Holdings' other creditors; and 3) the Settlement Agreement
is "plainly not in the best interests of all L&H and Holdings
creditors because it expressly contemplates a cash payment to
claimants holding 'equity-level' interests before L&H and
Holdings' creditors are paid in full.

                The Debtors' Supplemental Argument

On November 5, 2001, the Court reached an avowedly "preliminary"
determination that the settlement proposal that was under
negotiation between L&H, Holdings and the Bakers in August and
September 2001 and that is now before the Court for Rule 9019
consideration was enforceable by its terms against L&H and
Holdings. The Court did so, in large measure, by distinguishing
the precedent that L&H and Holdings cited regarding unfulfilled
"execution" conditions precedent as limited to circumstances
involving "letters of intent." In doing so, however, the Court -
- L&H and Holdings suggest -- overlooked a substantial body of
case law in which courts have deemed unenforceable agreements
with unfulfilled "execution" conditions precedent in other than
"letter of intent" contexts.

The Debtors now cite Abrams v. Unity Mutual Life Ins. Co., 70 F.
Supp.2d 846 (N.D. Ill. 1999), for the proposition that "if the
parties do not intend to be bound by an agreement until it is in
writing and signed, then there is no contract until those events
actually occur." In making the enforceability determination,
moreover, the Abrams court continued, "[c]onsiderable weight is
given to a party's explicit statement that it does not wish to
be bound until there is a written and signed agreement."

On these premises, and confronted with a situation where
"discussions about the business arrangement were reduced to a
series of six draft agreements, none of which was signed by the
parties," the Abrams court concluded that "the parties [had]
adequately signaled their intent to be bound by a written
agreement via the integration clause contained in all six
agreements." Since the party seeking to enforce the agreement
"had many opportunities during the nearly two years in which the
draft agreements were being negotiated to remove the integration
clause , but [it] never did," the court's ultimate finding was
that that party's "inaction establishe[d] an intent not to be
bound until execution of formal documents."

Similarly, in Reprosystem, B.V. v. SCM Corp., 727 F.2d 257 (2d
Cir. 1984), matters had proceeded far beyond the "letter of
intent" stage. Indeed, much as in the case at hand, the parties
had reached an "agreement in principle" and thereafter engaged
in months of negotiations. The product of these negotiations
were no fewer than 16 drafts of a "Global Agreement," each of
which contained a "condition precedent" requiring "formal
execution as a prerequisite to binding effect." When one of the
parties claimed that the "final drafts" of the "Global
Agreement" constituted "binding contracts," the Reprosystem
court rejected the argument, inter alia, because "[d]espite
their many other differences over the proposed contracts,
neither party took exception to these provisions that
conditioned their binding effect on formal execution and
delivery."

The same principles -- which are as applicable in the settlement
agreement context as in any other contractual context -- should
have controlled disposition of the Settlement Motion. L&H,
Holdings, and the Bakers engaged for almost two months in
negotiations over a draft Settlement Agreement that, like the
agreements at issue in Abrams and Reprosystem, contained an
express condition precedent requiring execution by the parties
as a prerequisite to enforceability. It is undisputed that the
required "execution" never took place. Hence, the Court should
have given full effect to the "execution" condition precedent
and deemed the draft Settlement Agreement unenforceable.

For all the foregoing reasons, Ms. Harris submits that Judge
Wizmur should (a) make a "final" determination that the draft
Settlement Agreement is not enforceable by its terms against L&H
and Holdings; and (b) deny the Settlement Motion in its
entirety. (L&H/Dictaphone Bankruptcy News, Issue No. 17;
Bankruptcy Creditors' Service, Inc., 609/392-0900)  


MILLENIUM SEACARRIERS: Hires Thacher Proffitt for Legal Services
----------------------------------------------------------------
Millenium Seacarriers, Inc., and its debtor-subsidiaries ask the
U.S. Bankruptcy Court for the Southern District of New York for
permission to employ Thacher Proffitt & Wood as their attorneys
to perform legal services in these chapter 11 cases.  

The Debtors will pay TPW its customary hourly rates. TPW's
hourly rates range from $350 to $550 per hour for partners and
counsel, $190 to $350 per hour for associates and $95 to $155
per hour for legal assistants.

The Debtors will look to TPW to:

    a. take all necessary action to protect and preserve the
       Debtors' estates;

    b. prepare on behalf of the Debtors, as debtors-
       in-possession, all necessary motions, applications,
       answers, orders, reports, and papers in connection with
       the administration of the Debtors' estates;

    c. assist the Debtors in obtaining confirmation of their
       Chapter 11 plan of reorganization; and

    d. perform all other necessary legal services in connection
       with these Chapter 11 cases.

The Debtors want to retain TPW because of the firm's extensive
knowledge on their business and financial affairs, in addition
to the firm's extensive experience, knowledge and expertise in
the field of debtors' protection, creditors rights and business
reorganizations under chapter 11.

Millenium Seacarriers, Inc. is a holding company for
international shipping company subsidiaries engaged in the
transportation of cargo around the world on vessels acquired and
operated through its subsidiaries.  The Company filed for
chapter 11 protection on January 15, 2002 in the Southern
District of New York.  Christopher F. Graham, Esq., at Thacher
Proffitt & Wood represents the Debtors in their restructuring
effort.  When the Company filed for protection from its
creditors, it listed $85,078,831 in assets and $112,874,053 in
liabilities.


MOTIENT CORP: Signs-Up Bankruptcy Services as Claims Agent
----------------------------------------------------------
Motient Corporation and its debtor-affiliates wish to employ
Bankruptcy Services LLC as the Notice and Claims Agent for the
Clerk of the Bankruptcy Court.  The Debtors ask permission from
the U.S. Bankruptcy Court for the Eastern District of Virginia
for permission to retain the firm.

Pursuant to the Bankruptcy Code, the Court is empowered to use
outside agents and facilities for those purposes, provided that
the costs of such services are paid by the debtor's estate. The
Debtors submit that the most efficient manner to facilitate the
process of reviewing, docketing, maintaining, photocopying, and
transmitting proofs of claim in these cases is for the Clerk and
the Debtors to engage an independent third party to act as the
claims processing agent of the Court, likewise relieving the
Clerk of the burden.

The Debtors indicate that there are likely more than 500
creditors, record equity holders and parties in interest in
their chapter 11 cases. The burden of docketing thousands of
proofs of claim, establishing and maintaining an official claims
register, maintaining a claims database for effecting service of
notices and other matters in these cases will be tremendous.

As agent and custodian of the records in these cases, BSI will
maintain a proof of claim docket and register to reflect the
claims filed in these chapter 11 cases in sequential or
alphabetical order.

As agent for the Clerk, BSI will be responsible for mailing
notices to creditors and other parties in interest as directed
by the Court.

BSI and the Clerk will establish mutually acceptable procedures
for the transmittal of proofs of claim between the Clerk's
office and BSI, including transmittal of claims to the Clerk's
office upon the close of these chapter 11 cases. BSI will submit
a duplicate claims register to the Clerk or the Debtors upon
request.

The Debtors also propose to employ BSI to assist them in
fulfilling all of their claims-related and notice-related
obligations, including:

    (a) providing the Debtors with consulting support necessary
to manage and reconcile claims and to provide the requisite
notices throughout these chapter 11 cases, and

    (b) providing such other administrative services that may be
requested by the Debtors.

The Debtors do not disclose how much BSI will charge for its
services.  

Motient Corporation, a provider of two-way, wireless mobile date
services and mobile internet services, filed for chapter 11
protection on January 10, 2002.  Erin E. McDonald, Esq. and
Sarah Beckett Boehm, Esq. at McGuire Woods, LLP represent the
Debtors in their restructuring efforts.  When the Company filed
for protection from its creditors, it listed total assets of
$238,229,000 and total debts of $494,710,000.


NATIONSRENT: Has Until April 16 to File Schedules & Statements
--------------------------------------------------------------
As approved by the U.S. Bankruptcy Court for the District of
Delaware at the January 18 hearing, NationsRent Inc., and its
debtor-affiliates now have until April 16, 2002, to file their
schedules of assets and liabilities and statements of financial
affairs.


OPTI INC: Will Pay Cash Dividends to Shareholders on February 15
----------------------------------------------------------------
OPTi Inc., (NasdaqNM: OPTI) said that its Board of Directors has
declared a cash dividend of $1.50 per share on each share of the
Company's common stock.

The dividend will be payable on February 15, 2002. The record
date for the dividend will be February 8, 2002. The ex-dividend
date will be February 19, 2002.

As previously announced on January 3, 2002, the Company has
postponed its plan of voluntary liquidation and dissolution but
has decided to proceed with a cash distribution to shareholders.
The Board made the determination to provide the cash dividend
based upon the Company's current cash position. The Company
believes that cash remaining after payment of the dividend will
be sufficient to satisfy the Company's working capital,
liabilities and other cash requirements while the Company
continues to review the proposed liquidation plan. The Board
believes that the cash distribution is in the best interests of
the shareholders.

Also, as announced on January 3, the Company expects to announce
soon details of its plans to distribute its holdings of shares
of common stock in Tripath Technology, Inc. (Nasdaq NM: TRPH) in
a separate distribution.

OPTi Inc., is an independent supplier of semiconductor products
and is headquartered in Mountain View, California. OPTi's stock
is traded on the National Market System under NASDAQ symbol
OPTI.


ORIUS CORP: S&P Junks Ratings Following Bank Loan Amendment
-----------------------------------------------------------
Standard & Poor's lowered its ratings on Orius Corp. At the same
time, the ratings were placed on CreditWatch with negative
implications.

At September 30, 2001, the company had about $659 million in
debt outstanding.

The rating actions follow the company's 8-K report filed on
January 18, 2002, which states that the firm has negotiated an
agreement with its secured bank lenders on a fifth amendment to
its bank credit agreement, including the secured lender's
consent to the delivery of a payment blockage notice by the
agent regarding interest payments under the subordinated notes.

As a result, the company will be in default on its subordinated
debt as of the next interest date, February 2, 2002. At that
time, the subordinated debt rating will be lowered to 'D' and
the corporate credit rating will be lowered to 'SD'--both will
be removed from CreditWatch. The fifth amendment expires on
February 28, 2002, at which time the company will likely be in
default with its bank credit agreement, potentially leading the
secured lenders to accelerate the loan. The rating on the bank
debt would then be changed to 'D'.

Orius competes in the large and highly fragmented
telecommunications infrastructure service industry. For the past
several quarters, the industry has rapidly deteriorated due to a
weak U.S. economy and the inability of many customers in the
telecommunications and cable markets to access the capital
markets, which has further constrained their capital spending
plans. Relative to other rated telecommunications infrastructure
providers, Orius has historically generated a higher percentage
of sales from project-specific agreements, making the company
more vulnerable to softening market conditions.

As a result, the company's operations and financial performance
have been severely affected by the rapid decline in new
construction activity in the telecommunications infrastructure
sector during the past few quarters. For the first nine months
of 2002, revenues declined 23%, and EBIT dropped by 95%. Had the
company completed either of its IPO attempts in 2000, it is
possible that financial flexibility would have been sufficient
to weather the decline in industry fundamentals.

          Ratings Lowered, Placed on CreditWatch Negative

     Orius Corp.                    TO      FROM
       Corporate credit rating      CC      B-
       Secured debt                 CC      B-
       Subordinated debt            C       CCC


PACIFIC GAS: Hiring of Real Estate Appraisers & Brokers Approved
----------------------------------------------------------------
Pacific Gas and Electric Company sought and obtained the Court's
authority to employ 11 real estate appraisers and 15 brokers,
pursuant to Section 327(a) of the Bankruptcy Code and Rule
2014(a) of the Bankruptcy Rules, in the manner it has been doing
since pre-petition. PG&E may file from time to time a
Supplement(s) to the Application seeking authority to employ
additional appraisers or brokers and shall serve such
Supplement(s) on the Committee and the Office of the United
States Trustee.

As a large utility, PG&E maintains a large portfolio of real
estate assets. PG&E owns approximately 5,000 parcels of real
estate and, as a tenant, leases space in approximately 240
buildings in addition to a number of land leases. Therefore, in
the ordinary course of its business, PG&E regularly employs real
estate appraisers and brokers in order to facilitate lease,
purchase, and sale transactions and to advise PG&E on real
estate strategy and planning. PG&E also maintains a high-level
of in-house expertise to monitor the validity and reasonableness
of appraisal fees and costs.

In the vast majority of appraisals obtained by PG&E pre-
petition, PG&E has paid no more than $10,000 per appraisal, fees
and costs inclusive.

The Appraisers also conduct valuation consulting services, such
as determining the highest and best use for a parcel of real
estate, in situations where an appraisal is not needed. In such
cases, the Appraiser would be paid on an hourly basis. PG&E has
paid varying amounts of appraiser-related consulting services
conducted pre-petition, ranging up to $20,000 per year. PG&E
expects it will require additional valuation consulting services
as it focuses on real estate disposition in its reorganization
process. PG&E estimates that consulting fees for the Appraisers
will average $5,000 per month.

The Appraisers also act as Expert Witnesses in connection with
property acquisitions because PG&E is a government-regulated
utility and accordingly, all real property to be acquired by
PG&E is treated as a potential condemnation action in light of
PG&E's power to condemn property. PG&E is required to hire an
appraiser to comply with the procedural requirements of the
eminent domain law. Although in many cases PG&E reaches an
agreement with a landowner before a condemnation action is
actually filed, the appraiser is hired specifically to prepare
an appraisal to be used in a condemnation action.

PG&E employs Brokers for consulting services in addition to
standard brokerage services.

PG&E also employs certain Brokers solely for purposes of an
exclusive listing to sell property. These Listing Brokers are
not expected to perform any consulting services. The only
Listing Broker currently under contract with PG&E is Terra
Properties, which has two prepetition exclusive listing
agreements with PG&E for properties that have not yet sold.

Historically, the commissions paid by PG&E for property sales
are negotiable based on the amount of time and expertise
required to complete the assignment and are calculated as a
percentage of the sale price. Commissions paid by PG&E pre-
petition for sale transactions ranged from 3% to 10%, with the
vast majority in the 4% to 6% range. A 10% fee has typically
been paid only for low value ($50,000 or less) rural property.
In most other transactions, the highest fee PG&E has paid is 6%.
PG&E anticipates that most of its real estate transactions will
consist of property sales. In the event of a purchase, however,
PG&E typically pays no broker's commission but may pay a broker
for hourly consulting services in connection with the
transaction. Similarly, in lease transactions, PG&E is typically
the lessee and does not pay a broker's commission but may pay a
broker for hourly consulting services in connection with the
transaction.

Consulting Brokers perform consulting services for PG&E, such as
when PG&E seeks market research in connection with real estate
strategy and planning or seeks advice from a broker in
connection with a transaction. In such cases, the broker is paid
on an hourly basis at the agreed upon hourly rate. In connection
with broker-related consulting services conducted pre-petition,
PG&E has paid varying amounts, depending upon its real estate
needs at any particular time, ranging up to $50,000 per year.
Currently, PG&E expects that it will require additional broker
consulting services as it focuses on real estate disposition and
strategic planning in its reorganization process, and PG&E
estimates that such services will average $15,000 per month in
hourly consulting fees for the Brokers.

Brokers are typically paid at the closing of a lease or sale
transaction and appraisers are typically paid in full upon
receipt of the completed appraisal report. Consulting fees are
typically paid on a monthly basis based on invoices submitted.

Although the Appraisers and Consulting Brokers have existing
Appraiser Contracts and Broker Contracts in place, PG&E has not
actually employed any of the Appraisers or Brokers post-
petition, except on acquisition matters. Furthermore, there are
no outstanding amounts due to any of the Appraisers.

The following appraisers and brokers have been presented to the
Court in the original motion and a supplemental motion and
endorsed by the Court. The employment of broker Terra Properties
is nunc pro tunc to April 6, 2001.

Appraisers:   Carneghi-Bautovich & Partners, Inc.
              Clark-Wolcott Company, Inc.
              David Tattersall & Company
              Diaz, Diaz & Boyd, Inc.
              Garland & Associates
              Gregory D. Bynum & Assoc.
              Real Property Analysts
              Reeder, Gilman & Assoc.
              Robert Ford & Assoc.
              Shaw & Associates
              Vice Appraisal Co.

Brokers:      Belvedere Associates, Inc.
              BT Commercial
              CM Realty
              Colliers ILIFF Thorn Real Estate Services, Inc.,
              Grubb & Ellis
              LOH Realty Inc., dba LOH Realty & Investments
              Robert M. Krantz dba North Pacific Coast Company
              The Axiant Group
              CB Richard Ellis, Inc.
              Coldwell Banker Grass Roots Realty
              Montclair Better Homes Realty
              Pearson Realty
              Tremolada & Company
              TRI Commercial Real Estate fka Sylva-Kirk
              Terra Properties

In granting the motion, the Court has authorized PG&E to make
payments within specified parameters as follows:

(a) Appraisal Fees.

    On an interim basis, and subject to final allowance by the
    Court, PG&E shall be authorized to pay all fees incurred by
    the Appraisers to the extent such fees do not exceed a total
    of $10,000 per appraisal (inclusive of any reimbursable
    expenses);

(b) Broker Commissions.

    PG&E shall be authorized to pay all fees incurred by the
    Brokers to the extent such fees consist of broker
    commissions and do not exceed: (i) 10% of the sale price for
    rural property with a value of $50,000 or less; or (ii) 6%
    of the sale price for all other property. The Order granting
    this motion shall constitute a Final Order allowing the
    commissions paid by PG&E to Brokers.

(c) Consulting Fees.

    On an interim basis, and subject to Final Order, PG&E shall
    be authorized to pay: (i) the Appraisers' hourly consulting
    fees to the extent such fees, in total, do not exceed $5,000
    per month (inclusive of any related reimbursable expenses);
    and (ii) the Brokers' hourly consulting fees to the extent
    such fees, in total, do not exceed $15,000 per month
    (inclusive of any related reimbursable expenses).

(d) Excess Fees.

    If the fees and expenses are in excess of the amounts as
    described in (a), (b) and (c) above, then PG&E shall provide
    written notice to the UST and to counsel for the the
    Committee, either in advance of the employment (for
    appraisal fees and broker commissions) or upon receipt of an
    invoice or statement from an Appraiser or Broker (for
    consulting fees); provided, however, that PG&E shall be
    authorized to pay all amounts that are within the parameters
    set forth in (a), (b) and (c) above. If neither the UST nor
    the Committee provide PG&E with a written objection to the
    Excess Fees within 7 days of delivery of the Notice, then
    PG&E shall be authorized to pay the Excess Fees when due and
    payable. In the event that the UST or the Committee timely
    object, and such objection is not resolved consensually,
    then counsel for PG&E shall obtain a hearing date on such
    objection as promptly as the Court's calendar permits.

PG&E shall provide the Committee and the UST with a Real Estate
Professional Fees Report no less frequently than every 120 days,
covering the Reporting Period which is the period commencing 150
days and concluding 30 days prior to the date of the Report.

PG&E is aware that certain of the Appraisers and Brokers may now
or in the future represent creditors or other interested parties
on matters unrelated to PG&E or this case. In order to address
any potential conflict issues, the Appraisers and Brokers have
testified, as set forth in their declarations, that during the
period of their employment by PG&E, (i) they will not represent
any adverse parties in any matter related to PG&E or the
bankruptcy case, and (ii) to the extent that an Appraiser or
Broker represents any adverse parties in unrelated matters, no
single adverse party accounts for or will account for more than
5% of such Appraiser's or Broker's total annual revenue. In
addition, the Brokers have all testified in their declarations
that they will not engage in a dual agency involving PG&E as
buyer or seller unless authorized by a prior Court order.

PG&E is informed and believes that the Appraisers and Brokers
are disinterested persons under Section 101(14) of the Code, and
that the Appraisers and Brokers do not hold or represent any
interests adverse to the estate. (Pacific Gas Bankruptcy News,
Issue No. 20; Bankruptcy Creditors' Service, Inc., 609/392-0900)   


PACIFICARE HEALTH: Bank Group Waives Covenants Under Credit Pact
----------------------------------------------------------------
PacifiCare Health Systems Inc., (Nasdaq:PHSY) obtained approval
from the majority of the company's bank syndicate to exclude its
$60 million pre-tax restructuring charge to be recorded in the
fourth quarter of 2001 from financial covenants.

Also included in the waiver is the elimination of a requirement
that the company retain a financial consultant. PacifiCare
expects to remain in compliance with these and all other terms
of its credit facility.

"We are pleased that our bank group continues to show their
support for our turnaround and to work collaboratively with us
to achieve that objective," said Gregory W. Scott, PacifiCare's
executive vice president and chief financial officer.

PacifiCare Health Systems is one of the nation's largest health-
care services companies. Primary operations include health
insurance products for employer groups and Medicare
beneficiaries in eight Western states and Guam serving
approximately 3.6 million members.

Other specialty products and operations include pharmacy benefit
management, behavioral health services, life and health
insurance, and dental and vision services. More information on
PacifiCare can be obtained at http://www.pacificare.com


PILLOWTEX: Deadline to Challenge Obligations Extended to Feb. 15
----------------------------------------------------------------
In a stipulation presented to the Court and approved by Judge
Robinson, the Pre-petition Secured Lenders and the Official
Committee of Unsecured Creditors of Pillowtex Corporation, and
its debtor-affiliates, agree to extend the Committee's deadline
for filing challenges to pre-petition obligations to February
15, 2002 at 4:00 p.m. Eastern Time.

Edmon L. Morton, Esq., at Young Conaway Stargatt & Taylor, LLP,
in Wilmington, Delaware, acted on behalf of the Committee, while
John H. Knight, Esq., at Richards, Layton & Finger, PA, in
Wilmington, Delaware, represented the Pre-petition Secured
Lenders in this matter.  (Pillowtex Bankruptcy News, Issue No.
21; Bankruptcy Creditors' Service, Inc., 609/392-0900)    


PSINET INC: Closes Sale of Japanese Unit to C&W for $16.6 Mill.
---------------------------------------------------------------
Cable and Wireless plc (NYSE:CWP), the global telecommunications
group, said that it has, through its subsidiary Cable & Wireless
IDC, completed the acquisition of PSINet Japan, Inc., from
PSINet Inc. for US$16.6 million (approximately (pound)11.5
million).

The increase in the purchase price originally announced on 10
December 2001 results from Cable & Wireless bidding against
another party at the court supervised auction which forms part
of the sale process under Chapter 11 of the US Bankruptcy Code.

PSINet Japan provides IP (Internet Protocol) connectivity and
web hosting services for enterprise customers in Japan. The
company has points of presence within key Japanese cities, a
data centre in Tokyo and provides services to several thousands
of business customers.

The acquisition is intended to reinforce Cable & Wireless'
position in Japan's growing internet market and accelerate the
delivery of Cable & Wireless' strategy to provide IP and data
services to business customers in Japan.

PSINet Japan's unaudited revenue in the first half year 2001 was
(pound)28 million, generating positive EBITDA (under US GAAP) of
(pound)3.4 million in the same period, and the acquisition is
expected to more than double Cable & Wireless's IP revenue
within Japan.

Commenting on the announcement, Simon Cunningham, President and
CEO Cable & Wireless IDC, said: "This acquisition highlights our
commitment to the Japanese market and clearly fits our strategy
to grow our IP business within Japan. We will realize cost
synergies through sharing a much larger infrastructure, while
our continued commitment to quality will bring benefit to a much
broader customer base."

Cable & Wireless is a major global telecommunications business
with revenue of over (pound)8 billion (US$11 billion) in the
year to 31 March 2001 and customers in 70 countries. Cable &
Wireless' focus for future growth is on IP (Internet protocol)
and data services and solutions for business customers.

It is developing advanced IP networks and value-added services
in the US, Europe and the Asia-Pacific region in support of this
strategy. With the capability of its global IP infrastructure
and its strength in key markets, Cable & Wireless holds a unique
position in terms of global coverage and services to business
customers. For more information about Cable & Wireless, go to
http://www.cw.com

DebtTraders reports that PSINET Inc.'s 11.000% bonds due 2009
(PSINET2) are trading from 8 to 9. For real-time bond pricing,
see http://www.debttraders.com/price.cfm?dt_sec_ticker=PSINET2


SENSE TECH: Falls Short of Nasdaq Capitalization Requirement
------------------------------------------------------------
Sense Technologies, Inc., (Nasdaq: SNSG), a leading provider of
rearward collision detection technology for the automotive
industry, said that on December 18, 2001, Nasdaq Staff notified
the Company that its common stock market capitalization had been
below the minimum $35 million required for continued inclusion
set forth in Marketplace Rule 4310(C)(2)(B)(ii) for the previous
10 consecutive trading days.  Therefore, in accordance with
Marketplace Rule 4310(C)(8)(C), the Company was provided 30
calendar days, or until January 17, 2002, to regain compliance
with the Rule.  As of January 24, 2002, market capitalization is
$44,473,133.

On January 18, 2002, the Company received notification from
Nasdaq that it had not regained compliance in accordance with
Marketplace Rule 4310(C)(8)(C), and would be subject to
delisting from The Nasdaq SmallCap Market at the opening of
business on January 28, 2002.

The Company appealed the determination and has requested an oral
hearing before a Nasdaq Listing Qualifications Panel to review
the Staff's Determination.  The decision to delist the Company's
common stock from The Nasdaq SmallCap Market may be stayed until
the Nasdaq Listings Qualification Panel reaches a final
decision.  However, there can be no assurance that the panel
will grant the Company's request for continued listing.

Mr. Mark Johnson, president of Sense Technologies stated that
"there have been significant changes undertaken over recent
months, including the Company's new focus on commercialization
of its products as well as the recently announced new additions
to the Board of Directors, which places Sense Technologies in a
strong position to expand its presence in the automotive OEM and
aftermarkets and capitalize on the inherent value of the
Company's technology.  The executive management team and Board
of Directors are also in the process of securing additional
capital for the purpose of commercializing the technology."

Sense Technologies Inc., is a leading developer of rearward
obstacle detection and collision avoidance technology for the
motor vehicle industry. Sense's patented Guardian Alert Backup
Warning System is the only all- weather, maintenance-free, back-
up warning device that deploys Doppler- sensing, microwave-radar
technology to alert drivers to obstacles behind them when the
vehicle is in reverse. Founded in 1997, the company is publicly
traded on the NASDAQ: SNSG. For more information on Sense
Technologies Inc., visit http://www.sensetech.com


SERVICE MERCHANDISE: Gets Third Extension of Exclusive Periods
--------------------------------------------------------------
Service Merchandise Company, Inc., and its debtor-affiliates
sought and obtained a Court order (i) extending the Company's
exclusive period during which to file a chapter 11 plan through  
September 30, 2002, and (ii) extending the time within which the
Company may solicit acceptances of that plan through November
30, 2002.

Paul G. Jennings, Esq., at Bass, Berry & Sims PLC, in Nashville,
Tennessee, tells the Court that the tasks to be completed can be
divided into four areas of focus:

    (a) complete the going-out-of-business sales;

    (b) disposition of the Debtors' real estate portfolio;

    (c) claims reconciliation; and

    (c) prosecution of estate causes of action.

According to Mr. Jennings, the Debtors will be in a position to
file liquidation plans and make initial distributions to their
creditors by September 30, 2002.  Mr. Jennings explains that
this projection is based upon the substantial completion of the
Debtors' task of winding-down. (Service Merchandise Bankruptcy
News, Issue No. 25; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


STATIA TERMINALS: Special Shareholders' Meeting Set for Feb. 22
---------------------------------------------------------------
Statia Terminals Group N.V., (Nasdaq: STNV) said that it has
begun mailing definitive proxy material (to shareholders of
record at the close of business on Tuesday, January 22, 2002)
related to a special general meeting of shareholders to be held
on Friday, February 22, 2002, in Curacao, Netherlands Antilles.
As previously announced on November 13, 2001, at the special
general meeting, shareholders will be asked to approve

     (i) the sale of substantially all of the assets of the
Company consisting of the stock of our three subsidiaries
(Statia Terminals International N.V., Statia Technology, Inc.,
and Statia Marine, Inc.) to Kaneb Pipe Line Operating
Partnership, L.P., a limited partnership which is affiliated
with Kaneb Pipe Line Partners, L.P. (NYSE:KPP),

    (ii) an amendment to the Company's Articles of Incorporation
implementing a distribution mechanism for the proceeds of the
sale, and

   (iii) the subsequent liquidation of the Company. The sale
transaction was approved by the Board of Directors of Statia,
which also recommends that the holders of the Company's class A
and class B shares amend the Articles of Incorporation, approve
the proposed distribution of the sale proceeds and approve the
liquidation of the Company.

Shareholders are encouraged to promptly mail their voting
instruction card and proxy so that their shares may be voted in
accordance with their wishes. Should shareholders approve these
matters, it is anticipated that distributions will be paid
shortly after closing to shareholders of record on the date of
the closing of the sale. Shareholders requesting additional
information on these matters may contact the Company's proxy
solicitation agent, Morrow & Co., Inc., located at 445 Park
Avenue, New York, NY 10022; Telephone: (212) 754-8000; Call
Toll-Free: (800) 654-2468.

The Company also announced that it would release its fourth
quarter 2001 earnings at approximately 5:00 p.m. EST, Tuesday,
January 29, 2002. The Company will hold a conference call at
10:00 a.m. EST, Thursday, January 31, 2002, to discuss its
fourth quarter 2001 earnings and other matters that may be of
interest to investors. Interested parties may listen to the
conference call live by calling toll-free 888-428-4474. This
conference call will be recorded and a written transcript will
be available approximately one week after the call. Those
persons wishing to ask questions during the question and answer
session must call Lorie Reiking at 954-698-0705 to register in
advance and obtain a separate toll-free phone number. Lorie can
also provide the written transcript of the call when available.

During 2001, the Company paid four distributions to its class A
common shareholders aggregating $1.55 per share. For 2001 U.S.
federal income tax purposes, the Company has determined that 99%
of the 2001 distributions will be reported as ordinary dividends
(fully taxable) and 1% as nontaxable distributions (return of
capital). This information will be reported to shareholders on
U.S. IRS Form 1099-DIV which will be mailed no later than
January 31, 2002, by agents for shareholders of record.
Shareholders are advised to consult with their personal tax
advisors regarding the tax consequences of these distributions.

Statia provides storage, blending, processing, and other marine
terminaling services for crude oil, refined products, and other
bulk liquids to crude oil producers, integrated oil companies,
traders, refiners, petrochemical companies, and others at its
facilities located on the island of St. Eustatius, Netherlands
Antilles, and at Point Tupper, Nova Scotia, Canada. The
Company's facilities, with their deep-water ports, can
accommodate substantially all of the world's largest oil
tankers. In connection with its terminaling activities, Statia
also provides value-added services, including delivery of bunker
fuels to vessels, other petroleum product sales, emergency and
spill response services, and ship services. The Company is
headquartered in Curacao, Netherlands Antilles, and maintains an
administrative office in Deerfield Beach, Florida.


SUN HEALTHCARE: Court Okays Innisfree M&A as Balloting Agent
------------------------------------------------------------
Sun Healthcare Group, Inc., and its debtor-affiliates obtained
Judge Walrath's permission to employ Innisfree M&A Incorporated
as their balloting and tabulation agent to assist in the
solicitation of votes from the holders of the public secured
debt in the Debtors' chapter 11 cases.

Judge Walrath emphasizes that Debtors are authorized to
compensate Innisfree in accordance with the Retention Agreement
-- provided, however that Innisfree shall be required to file a
formal fee application with the Court for compensation of
consulting services rendered for the Debtors that exceed
$25,000. (Sun Healthcare Bankruptcy News, Issue No. 30;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   


SYNBIOTICS CORP: Completes Debt Restructuring with Comerica Bank
----------------------------------------------------------------
Synbiotics Corp., (OTCBB:SBIO) announced that it has completed a
$2.8 million convertible preferred equity financing with Redwood
West Coast LLC, a private investment firm based in Cincinnati,
Ohio.

In conjunction with the equity financing, 41 Synbiotics
employees converted approximately $1.5 million of contractual
stay-bonus payments due them into shares of Synbiotics common
stock. Following the financing, Redwood will own approximately
54 percent and the employees will own approximately 21 percent,
on an as converted basis, of the outstanding shares of
Synbiotics common stock.

Synbiotics also announced that it has restructured the terms of
its debt with Comerica Bank. Under the amended Comerica
Agreement, the prior line of credit and term debt totaling $7.1
million due in March, 2002 has been consolidated into a single
$7.1 million term loan. The new term loan will involve minimal
financial covenants and is due in January 2004.

Paul A. Rosinack, president and CEO of Synbiotics, said, "The
Redwood and Comerica transactions complete the restructuring
program begun in 2000 and will enable the company to return its
focus to day-to-day business issues. These transactions, coupled
with cash flow from business operations, should enable
Synbiotics to be self-sustaining, profitable and to return to a
growth track."

Rosinack also noted that Synbiotics was no longer seeking
opportunities to be acquired.

Synbiotics Corp. develops, manufactures and markets veterinary
diagnostics, instrumentation and related products for the
companion animal, large animal and poultry markets worldwide.
Headquartered in San Diego, California, Synbiotics manufactures
and distributes its products through its operations in San
Diego, CA, Rome, NY, and Lyon, France. For information on
Synbiotics and its products, visit the company's Web site at
http://www.synbiotics.com


TELESYSTEM INT'L: Extends Purchase Offer for Units Until Feb. 4
---------------------------------------------------------------
Telesystem International Wireless Inc., announces that it has
given proper notice to the depository to extend its purchase
offer for all of its outstanding Units in exchange for 5.46
subordinate voting shares of TIW for each Unit tendered.  The
Offer will expire at 12:00 noon, Montreal time, on February 4,
2002 unless further extended or withdrawn.  The other terms of
the Offer remain unchanged.  The Offer is part of TIW's overall
recapitalization plan announced in November 2001.

Telesystem Ltd, Caisse de depot et placement du Quebec and all
its subsidiaries, and Rogers Telecommunications (Quebec) Inc.,
which together hold 25,255,678 Units representing approximately
55.1% of the Units outstanding, have agreed to tender their
Units in the Offer.

TIW is a global mobile communications operator with 4.9 million
subscribers worldwide. The company owns stakes in and operates
mobile telecom networks in Asia, Europe, and Latin America,
including cellular, paging, and SMR (specialized mobile radio)
units. The economic downturn has hit the holding company,
however, and forced TIW to reduce its stake in ClearWave, which
operates in Central and Eastern Europe, to 46%. UK subsidiary
Dolphin Telecom has filed for bankruptcy protection. Affiliate
TIW Asia manages wireless operations in China and India.
Interests in its various affiliates give TIW more than 725,000
proportionate subscribers. Chairman Charles Sirois controls
holding company Telesystem Ltd., TIW's largest shareholder. The
Company's shares are listed on the Toronto Stock Exchange
("TIW") and NASDAQ ("TIWI").


TELESYSTEM: Amaranth and TAL Global Agree to Tender Debentures
--------------------------------------------------------------
Telesystem International Wireless Inc., (TIW) has given proper
notice to the depository to amend and extend its purchase offer
and consent request related to its outstanding 7.00% Equity
Subordinated Debentures (ESD) maturing February 15, 2002.  The
Amended Offer is part of TIW's overall recapitalization plan
announced in November 2001.

TIW also reached an agreement with Amaranth LLC and TAL Global
Asset Management Inc., two institutional investment funds that
hold a combined total of CDN$ 53.3 million of ESDs.  Under the
agreement, Amaranth and TAL have agreed to tender their
debentures pursuant to terms of the Amended Offer.

The Amended Offer provides for an option to receive 308
subordinate voting shares of TIW and 30 warrants for each
CDN$1,000 in principal amount of ESD tendered and all accrued
and unpaid interest.  If all ESD holders take the Share Option,
they will receive a total of 46.2 million subordinate voting
shares of TIW.  Each warrant under the Share Option will allow
the holder to purchase one subordinate voting share of TIW at a
price of CDN$1.61 at any time until September 30, 2002.  Up to
4.5 million warrants will be reserved or issuance to holders of
ESDs who choose the Share Option.

Under the Amended Offer, TIW is also adding 109 warrants to the
CDN$300 in cash offered for each CDN$1,000 in principal amount
of ESDs tendered and all accrued and unpaid interest thereon
(the Cash Option).  Each warrant under the Cash Option will
allow the holder to purchase one subordinate voting share of TIW
at a price of CDN$1.61 at any time until March 31, 2003.  Up to
16.4 million warrants will be reserved for issuance to holders
of ESDs who choose the Cash Option.

In conjunction with the Amended Offer, TIW is requesting
consents from ESD holders to amend the existing indenture
governing the ESD as stipulated in the original offer.  The
Amended Offer is subject to certain conditions, including the
consent from ESD holders representing at least 66-2/3% in
aggregate principal amount.

Holders tendering their ESDs to the Amended Offer will be deemed
to have consented to the amendments of the existing indenture
governing the ESD. Those holders who consent without tendering
will be entitled to a CDN$100 consent fee and will keep their
ESDs which will be amended to reflect, among other things, a
reduced principal amount of CDN$250 as further described in the
Offering Circular dated November 29, 2001, as amended by the
Notice of Change and Variation pertaining to the Amended
Offer.  Detailed instructions on how to validly tender and
consent are also included in the Offering Circular.

The agreement with investors relating to the previously
announced US$ 90 million equity private placement in the form of
Special Warrants has also been amended.  The private placement
investors have agreed to reduce their investment in TIW by up to
US$28.1 million to account for ESD holders opting for the Share
Option, while however maintaining their funding commitment in
respect thereof to assure financing for the Cash Option.  For
each CDN$1,000 in principal amount of ESD tendered under the
Share Option, the private placement investors will relinquish
their rights to be issued 306 Special Warrants at approximately
US$0.61, while such investors will be allotted 109 warrants to
purchase one subordinate voting share of TIW at a price of
US$1.00 at any time until March 31, 2003.  In the aggregate, the
investors will maintain their funding commitment for US$90
million but instead of being assured of receiving 146.9 million
subordinate voting shares, they will receive a minimum of 101
million subordinate voting shares plus 16.4 million warrants
in the event that all ESD holders take the Share Option.  On the
other hand, if all ESD holders take the Cash Option, the
investors will receive 146.9 million subordinate voting shares
but no warrants.

This Amended ESD Offer and the changes to the terms of the
private placement agreement will result in approximately the
same number of shares of TIW being outstanding as initially
contemplated in its recapitalization plan. The issuance of
warrants as a dividend in kind to holders of TIW's subordinate
and multiple voting shares currently outstanding (approximately
16.3 million) which was previously contemplated in the
recapitalization plan will no longer take place.

The Offer will expire at 12:00 noon, Montreal time, on February
4, 2002 unless further extended or withdrawn.

TIW is a global mobile communications operator with 4.9 million
subscribers worldwide.  The Company's shares are listed on the
Toronto Stock Exchange ("TIW") and NASDAQ ("TIWI").


TERAGLOBAL COMMS: Continues Exploring Financing Alternatives
------------------------------------------------------------
TeraGlobal Communications Corp., (OTCBB:TGCC) announced that it
has effected a restructuring of its work force to reduce
operating expenses while it continues to explore alternatives
for financing the company's ongoing operations.

The company has reduced its full-time employee base from 57 to
46 employees, a reduction of 19 percent of its work force. The
positions were eliminated primarily from sales, sales support
and customer support.

"We have been fortunate in employing some extremely talented
individuals, making this restructuring difficult," said James A.
Mercer III, chief financial officer for TeraGlobal. "But under
current market conditions, we are focusing our resources on
completion of the Session product and its introduction to
broader market opportunities."

There are currently 23 engineers and support personnel in the
company's research and development department. That department
is continuing development efforts for its Session collaboration
software, which will operate on the Windows(R) and Mac OS X
operating systems. The initial Session release, which includes
audio and video conferencing, application sharing and shared
workspace applications for Windows(R) operating system is
scheduled for February 2002.

TeraMedia(R) software sales and installation continue primarily
into education, media, medical and government accounts. The
solution, which was developed for the Apple Mac OS 9 operating
system, offers state of the art audio and video conferencing and
collaboration applications.

The company is continuing to finance its operations through
bridge financing from existing investors on an as needed basis.
The company is actively evaluating a number of alternatives for
recapitalizing the corporation. However, no definitive agreement
or plans for a financing or recapitalization have been reached,
and no firm commitments for further funding exist at this time.

TeraGlobal presently employs 38 people at its corporate
headquarters in San Diego, with an additional 8 employees
working in regional field sales offices throughout the United
States.

TeraGlobal Communications Corp. develops software for real-time
collaboration and communication over computer networks.
TeraGlobal's TeraMedia(R) collaboration software, is industry
leading technology combining extensive collaboration tools with
integrated IP voice and video communications on the Apple Mac OS
9 operating system. The Company is currently developing Session?
collaboration software to run on the Windowsr operating system.

TeraGlobal's corporate office is in San Diego, with regional
field sales offices throughout the Unites States. TeraGlobal
stock is traded on the OTCBB under the symbol "TGCC."

TeraGlobal and TeraMedia are registered trademarks of TeraGlobal
Communications Corp. Other trademarks are properties of their
respective owners.


UNICAPITAL: Fitch Cuts Ratings to D over Asset Deterioration
------------------------------------------------------------
These classes of UniCapital Equipment Lease Securitizations are
downgraded by Fitch and removed from Rating Watch Negative.

      UCP 99-1 LLC I and UCP 99-1 LLC II, series 1999-1

     -- The class B notes are downgraded to 'D' from 'CCC';
     -- The class C notes are downgraded to 'D' from 'C'.

     UniCapital 2000-1 LLC I & UniCapital 2000-1 LLC II,
                 series 2000-1

     -- The class B notes are downgraded to 'D' from 'CCC'.

These rating actions are the result of adverse collateral
performance and deterioration of asset quality well outside of
Fitch's original base case expectations. Losses from defaulted
leases have significantly reduced the remaining credit
enhancement available for each class of securities.
Delinquencies have also been significantly higher than
historical levels.

Fitch will continue to closely monitor these transactions and
may take additional rating action in the event of further
deterioration.


UNITED AIR: S&P Drops Ratings on Ongoing Losses & Labor Issues
--------------------------------------------------------------
Standard & Poor's lowered its ratings on UAL Corp., and its
principal subsidiary, United Air Lines Inc., reflecting
substantial ongoing losses and lack of progress in crucial
negotiations aimed at containing the airline's high labor costs.
All ratings remain on CreditWatch with negative implications,
where they were placed September 13, 2001 (along with those of
other rated U.S. airlines).

United and its mechanics union are locked in thus-far
unsuccessful negotiations to reach a new contract, and over the
weekend a Presidential Emergency Board issued recommendations
that, while persuaded of the airline's difficult financial
situation, would result in raising the mechanics' pay to levels
comparable to those at American Airlines Inc. and Northwest
Airlines Inc.

The negotiations highlight the conflict between the union's
desire to match pay gains achieved by other United unions and by
mechanics at other large U.S. airlines, and the company's
ongoing efforts to secure pay and productivity concessions from
labor in order to trim United's high operating cost structure in
response to weak revenues. UAL and United were losing
substantial amounts of money even prior to September 11, 2001,
due to industry-wide revenue weakness and United's high
operating costs ($678 million net loss during the first half of
2001), and recorded a further $1.16 billion net loss in the
third quarter.

United was unable to reach agreement with its mechanics last
year and President Bush appointed a Presidential Emergency Board
(PEB) to head off a threatened strike in December. Under
applicable labor law, if management and labor still cannot reach
agreement, the PEB recommends a settlement that can then be
imposed by Congress after 30 days. The PEB provided that
recommendation on January 19.

It stated, "(United) persuasively asserts that, unless the
economics of the industry improve beyond any reasonable
expectation (existing cost-cutting) efforts are simply not
enough, by themselves, to stave off reorganization under the
bankruptcy laws at some future time," and that a "financial
recovery plan" might well require employee concessions. Even so,
the PEB asserted that "Any fair and reasonable (contract)
agreement must provide for immediate and significant increases
in compensation to bring the UAL mechanics and utility employees
to their proper position in parity with the top of the
industry." The PEB did offer management some relief in  
suggesting that the pay raises be phased in over time and that
United be allowed to defer payment for higher wages retroactive
to July 2000, when the contract became amendable.

United and the mechanics union leadership had continued
negotiations into the weekend, but remain far apart. The
company's efforts to secure labor cost concessions are
complicated by the situation facing the leadership of United's
mechanics union: United's pilots received a substantial pay
increase in 2000, mechanics at other large airlines (most
recently at Northwest Airlines and American Airlines) have
received substantial pay increases, and a rival union is
attempting to take over representation of mechanics from the
current union (the International Assn. of Machinists).
Accordingly, it is difficult for the mechanics union leadership
to recommend, or for its membership to accept, a contract that
does not provide for substantial pay increases before any
discussion of concessions begins.

The PEB's recommendations were consistent with the general
approach of federal labor mediation-to encourage the two sides
to reach their own agreement and, failing that, to look to
settlements at comparable companies for guidance in recommending
an outcome. Still, the PEB's action will likely force United, at
least initially, to agree to substantial pay raises and then
immediately enter into talks with all unions about securing  
concessions to improve the airline's financial situation. If the
two sides do not reach agreement in 30 days, the mechanics could
strike unless Congress imposes the PEB's recommendations. The
threat of a strike will undermine United's already weak revenue
generation, and an actual strike would be financially ruinous.

Any broader package of labor concessions would necessarily
include United's pilots and probably its flight attendants.
Reaching a contract settlement with the mechanics and then
attempting to negotiate with several unions regarding
concessions, even if successful, could take an extended period.
UAL, meanwhile, would be incurring further, if declining, losses
during this period, and the gradually improving airline industry
environment may over time erode the sense of urgency to reduce
labor costs. Given United's long history of difficult labor
relations, it is also possible that attempts to secure pay and
productivity concessions could be unsuccessful.

UAL will report its fourth-quarter 2001 financial results on
Feb. 1, 2002, with a large loss expected. Still, as at other
U.S. airlines, revenue is recovering gradually from its
September 2001 low point, and cash is sufficient to avert any
near-term liquidity concerns. UAL had $2.7 billion of cash at
Sept. 30, 2001, and faced $969 million of debt and capital lease
payments in the succeeding 12 months.

Ratings could be lowered further if a strike occurs or if it
appears unlikely that United will be able to reach a reasonable
settlement with its various unions.

       Ratings Lowered, Remain on CreditWatch Negative

                                             To        From
   UAL Corp.
     Corporate credit rating                 B+        BB-
     Preferred stock                         CCC+      B-

   United Air Lines Inc.
     Corporate credit rating                 B+        BB-
     Senior secured debt                     B+        BB-
     Senior unsecured debt                   B-        B
     All equipment trust certificates rated
                                             AA-       AA
                                             A-        A
                                             BBB+      A-
                                             BBB-      BBB
                                             BB+       BBB-
                                             BB        BB+

DebtTraders reports that United Air Lines' 10.250% bonds due
2021 (UAL1) are trading between 77 and 80. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=UAL1for  
real-time bond pricing.


UNITEDGLOBALCOM: IDT Waives Conditions to Note Tender Offer
-----------------------------------------------------------
IDT United, Inc., a corporation formed by IDT Venture Capital
Corporation and Liberty UGC Bonds, Inc., a wholly-owned
subsidiary of Liberty Media Corporation (NYSE: L, LMC.B), said
it has waived all remaining, unsatisfied conditions of its
tender offer and consent solicitation in respect of all 10-3/4%
Senior Secured Discount Notes due 2008 of UnitedGlobalCom, Inc.

IDT United has notified the depositary that it is accepting for
payment all Notes validly tendered to the depositary as of 5:00
p.m., New York City Time, on Wednesday, January 23, 2002, and
that all Notes validly tendered pursuant to the Offer after that
time up to 5:00 p.m., New York City Time, on Friday, February 1,
2002, the Expiration Date for the Offer, will also be accepted
for payment, upon tender.

The purchase price for each $1,000 principal amount at maturity
of Notes accepted for purchase by IDT United is $400.  IDT
United expects to pay for validly tendered Notes promptly, and
will wire to the depositary on Monday, January 28, 2002, funds
for the purchase of Notes validly tendered pursuant to the Offer
as of 5:00 p.m., New York City Time, on Wednesday, January 23,
2002.

IDT United's waiver of all remaining conditions and acceptance
of Notes for purchase follows the previously announced
satisfaction of the consent condition of the Offer and
termination of withdrawal rights.  UnitedGlobalCom, Inc., has
met with the trustee under the Indenture for the Notes and has
executed a supplemental indenture which effects the amendments
to and waivers under the Indenture referred to in IDT United's
offer documents.  UnitedGlobalCom, Inc., has also met with the
collateral agent under the related pledge agreements and has
executed an agreement which releases the lien of the pledge
agreements from the collateral being held by the collateral
agent, and terminates the pledge agreements.  The amendments and
termination will take effect upon the first payment for the
Notes pursuant to the Offer.  The waiver became effective at the
time the supplemental indenture was executed, and would have
become inoperative had IDT United not purchased Notes pursuant
to the Offer.

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

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


UNITED GLOBALCOM: S&P Drops 10.75% Senior Secured Notes to D
------------------------------------------------------------
Standard & Poor's lowered its rating on United Globalcom Inc.'s
10.75% senior secured discount notes to 'D' from single-'C', and
lowered its corporate credit rating on the company to 'SD'
(selective default) from double-'C'.

The ratings were simultaneously removed from CreditWatch. The
downgrade follows the completion of a subpar tender offer for
the 10.75% senior secured notes from a subsidiary of Liberty
Media Corp.


VERTEX INTERACTIVE: Fails to Meet Nasdaq Listing Requirement
------------------------------------------------------------
Vertex Interactive, Inc. (NASDAQ:VETXE), a leading provider of
supply chain execution solutions, announced that it has elected
to appeal the delisting of its common stock from The Nasdaq
Stock Market at the opening of business on January 28, 2002.

Vertex received a Nasdaq Staff Determination on January 18, 2002
indicating that the Company fails to comply with Marketplace
Rule 4310(C)(14) for continued listing due to its failure to
file its Annual Report on Form 10-K in a timely fashion. The
Company has requested an oral hearing before a Nasdaq Listing
Qualifications Panel to review the Staff Determination. A
hearing request will stay the delisting of the Company's
securities pending the Panel's determination. There can be no
assurance the Panel will grant the Company's request for
continued listing.

Vertex Interactive is a global provider of business-to-business,
supply chain execution technologies and enterprise applications
integration. The company offers a comprehensive service
including consultancy and systems-integration as well as fixed
and mobile hardware, to support its broad range of software
systems. Vertex Interactive solutions enhance productivity
across the supply chain, with a portfolio of products ranging
from fixed and mobile order entry and processing, through
inventory and warehouse management to distribution and
transportation planning. Vertex's inventory and warehousing
applications include "light directed" technologies for picking
and packing and technology for handheld devices including auto
ID and printing solutions (for standard and 3d bar coding), and
a proprietary WMS tool that enhances the functionality of SAP/R3
implementations.

Vertex has a rapidly growing international presence, with
operations currently throughout North America and Europe.
Vertex's customers include leading companies such as Air Express
International, Avery Dennison, Bacardi Martini, Bristol Myers
Squibb, Daimler Chrysler, Express Dairies, Georg von Opel, IBM,
Kraft Jacob Suchard, Maastricht University, Merck, Nestle, North
Sea Ferries, Parts Express, Pfizer, Warner Lambert and Wal-Mart.
For additional information, please visit their Web site at
http://www.vertexinteractive.com

                          *********

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

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

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

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

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

                          *********

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

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

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

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

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

                     *** End of Transmission ***