TCR_Public/020206.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

           Wednesday, February 6, 2002, Vol. 6, No. 26     


360NETWORKS: Committee Seeks Approval to Initiate Rule 2004 Exam
ACCUHEALTH INC: Obtains Final Court Nod to Use Cash Collateral
ACTERNA CORP: Revises Financial Covenants Under Credit Agreement
ADVANTICA RESTAURANT: Senior Notes Exchange Offer Expires Today
ALLIED HOLDINGS: S&P Maintains Watch Negative After Refinancing

AMERICA WEST: Net Loss Balloons 50% to $61MM in 4th Quarter 2001
APPLIED DIGITAL: IBM Credit Extends Formal Waiver to Month-End
ARTHUR D. LITTLE: Files for Chapter 11 Restructuring in Delaware
ARTHUR D. LITTLE: Case Summary & 20 Largest Unsecured Creditors
ARMSTRONG HOLDINGS: Wants Removal Period Extended to July 29

BURNHAM PACIFIC: Closes Sale of Assets for $24.8 Million + Debt
CASUALTY INSURANCE: S&P Assigns R Financial Strength Rating
COMDISCO INC: Court Approves Sale of Lab Leasing Assets to GECC
DTE BURNS: S&P Keeps BB Rating on CreditWatch Negative
DAIRY MART: Wins Court Approval to Extend Exclusive Periods

DOE RUN: Debt Restructuring Spurs S&P to Further Junk Ratings
EASYRIDERS: Disclosure Statement Hearing Scheduled for April 10
ELEKTRYON INC: Ocean Power Inks Pact to Acquire Certain Assets
ENRON CORP: Trading Creditors Want to Block ENA's Use of Cash
ENRON: Union Ask Accountants' Group to Probe Lord Wakeham

EXODUS COMMS: Seeks Extension of Plan Filing Period to March 25
FOSTER WHEELER: S&P Cuts Ratings on Weakening Credit Protection
FRUIT OF THE LOOM: Proposes Solicitation & Voting Procedures
GENEVA STEEL: Bringing-In Parr Waddoups as Special Counsel
GLOBAL CROSSING: Signs-Up Weil Gotshal for Legal Services

GLOBAL CROSSING: Responds to Allegations re Accounting Practices
GLOBAL CROSSING: DebtTraders Keeps SELL Recommendation on Notes
HMG WORLDWIDE: Court Approves Retention of Magrill Auctioneers
HAYES LEMMERZ: Wants Lease Decision Deadline Moved to June 3
HEALTH NEW ENGLAND: S&P Junks FS Rating on Weak Capitalization

HEARTLAND TECH: Weighing Debt Workout Options to Resolve Default
ICH CORP: Files for Chapter 11 Reorganization in New York
INTEGRATED HEALTH: Inks Pact to Resolve Claims with Rotech
INTERACTIVE TELESIS: Takes Measures After Client's Bankruptcy
JUNIPER: Fitch Downgrades CBO Backed by High Yield Bonds

KMART CORP: Obtains Interim OK to Access $1.15MM DIP Financing
MEMC ELECTRONIC: Reschedules Reporting of 2001 Annual Report
MARINER POST-ACUTE: Court Sets Confirmation Hearing for March 25
MCLEODUSA INC: Overview of Debtor's Prepackaged Chapter 11 Plan
NATIONAL STEEL: Seeking Alternatives to Meet Liquidity Covenant

NETWORK PLUS: Files Voluntary Chapter 11 Petition in Delaware
NETWORK PLUS: Case Summary & 30 Largest Unsecured Creditors
OUTSOURCE INT'L: Closes Sale of Business Operations to Cerberus
PACIFIC GAS: Disclosure Statement Hearing to Continue Tomorrow
PENNSYLVANIA FASHIONS: Files for Chapter 11 Reorganization in NJ

PENNSYLVANIA FASHIONS: Chapter 11 Case Summary
POLAROID: Retiree Committee Taps Greenberg Traurig as Counsel
POLYMER GROUP: Senior Lenders Agree to Forbear Until February 22
SAFETY-KLEEN CORP: DIP Facility Maturity Extended to March 15
SERVICE MERCHANDISE: Proposes Contract Rejection Procedures

SUN HEALTHCARE: Secures Approval to Hire Richard Matros as CEO
TERAGLOBAL COMMS: Continues to Evaluate Recapitalization Options
TERRA INDUSTRIES: DebtTraders Recommends BUY on 10.5% Sr. Notes
TRITON NETWORK: Files Certificate of Dissolution in Delaware
U.S. INDUSTRIES: Asset Sales Keep Junk Ratings on Watch Positive

UNIFORET: Gets CCAA Protection Extension through May 2
W.R. GRACE: PD Panel Hires Hamilton Rabinovitz as Claims Expert
WILLIAMS COMMS: Fitch Further Junks Ratings over EBITDA Concerns
WINSTAR COMMS: Court Approves Modified Stipulation with WorldCom
WOLVERINE TUBE: S&P Keeps Ratings on Watch Neg. over Q4 Losses

WORLD ACCESS: Court Fixes March 8 Bar Date for Admin. Claims

* Meetings, Conferences and Seminars


360NETWORKS: Committee Seeks Approval to Initiate Rule 2004 Exam
The Official Committee of Unsecured Creditors of 360networks,
inc., ask Judge Gropper to compel the Debtors to produce
documents and make witnesses available for depositions.

Norman N. Kinel, Esq., at Sidley Austin Brown & Wood, in New
York, relates that the Committee has many unanswered questions

  (i) certain transactions by and between the Debtors and:

      (a) Greg Maffei, the Debtors' Chief Executive Officer;

      (b) Ledcor Industries Inc., the largest shareholder of the
          Debtors' ultimate Canadian parent.

(ii) payments made by the Debtors to insiders, their
      professionals and the largest transfers to third parties
      made during the applicable periods prior to the petition
      date; and,

(iii) transactions between the Debtors and the Pre-petition
      Lenders under a certain Credit Agreement.

According to Mr. Kinel, the Committee's made numerous requests
to the Debtors and their counsel about these matters.  However,
each of the requests has been met with stiff opposition.  While
the Committee had hoped to resolve this issue without
litigation, Mr. Kinel says, the Debtors' unwillingness to
cooperate has left the Committee with no other alternative but
to seek discovery under Rule 2004.

                     The Maffei Agreements

  Based on the United States Securities and Exchange Commission
  filing by the Debtors, Maffei entered into a highly complex
  agreement for the purchase of certain stock of the Canadian
  Parent.  This was followed by a series of unusual
  transactions assigning Maffei's debt to Worldwide Fiber
  Holdings Inc. -- an entity that appears to be a subsidiary or
  affiliate of Ledcor and a direct stockholder of the Canadian
  Parent.  Pursuant to a certain Stock Purchase Agreement dated
  December 22, 1999, Maffei purchased 52,160,000 of the
  Canadian Parent's Subordinate Voting Shares and 9,840,000 of
  its Multiple Voting Shares for an aggregate purchase price of
  $77,400,000. The Canadian Parent advanced an amount equal to
  the purchase price to Maffei under a limited recourse
  promissory note maturing December 22, 2005, with an interest
  rate of 6.2% per annum compounded annually.  Apparently,
  Maffei may be able to sell back a certain number of shares to
  the Canadian Parent or, under certain conditions, at the
  option of the Canadian Parent to Worldwide Fiber Holdings
  Ltd., at fair market value to repay the promissory note.

  Further, in April 2001 (less than 90 days prior to the
  Petition Date), Worldwide Fiber Holdings Ltd. assumed the
  Canadian Parent's obligation to accept Maffei's put, and sold
  his promissory note to Worldwide Fiber Holdings Ltd. in
  exchange for its recourse promissory note. In addition, some
  of the terms of the note and put were amended, resulting in
  an increase in interest rate, further limitations on the put
  amount, a forbearance of the put right for a limited time
  under certain circumstances and the note being made non-
  recourse, except with respect to the shares acquired from the
  Canadian Parent for the note owned by Maffei.

  After giving effect to the transactions, Maffei is reportedly
  indebted to Worldwide Fiber Holdings Ltd. in the amount of
  $82,305,000, plus accrued interest from December 22, 2000.
  The Canadian Parent alleges to retain the right in certain
  circumstances to repurchase some of Maffei's shares. In
  addition, Worldwide Fiber Holdings Ltd. appears to have
  granted the Canadian Parent the right to purchase from it any
  shares put to it by Maffei, which are subject to the Canadian
  Parent's repurchase option at the time they are put.

Mr. Kinel reports that the Committee requested from the Debtors'
counsel information sufficient to investigate the circumstances
surrounding Maffei's stock purchase and the Canadian Parent's
subsequent assignment of the note to Worldwide Fiber Holdings.
However, the Debtors refused to provide information arguing that
the transactions all relate to Canadian entities.

"The Debtors' refusal to provide the Committee with the
information requested is both baseless and suspicious," Mr.
Kinel notes.  While these transactions may have largely been
with the Canadian Parent, Mr. Kinel asserts, this does not
conclusively prove that the U.S. Debtors and their creditors
could not have an interest in these transactions or that they
did not sustain an injury as a result.  "Conversely, when it
suits their needs, the Debtors argue that they are effectively a
single "North American" enterprise.  The Debtors cannot have it
both ways," Mr. Kinel states.  The bottom line is -- Mr. Kinel
points out -- that based upon what little the Committee knows,
these transactions are highly complex and unusual and require
further investigation.

Moreover, Mr. Kinel adds, the Debtors' opposition is
indefensible since the Court has already ruled that the
Committee is entitled to receive such information.

Mr. Kinel explains that it is given in Chapter 11 cases that a
Committee will investigate the Debtors' financial arrangements
with its senior management especially where:

    (i) the Debtors allege that ultimately there may be no cash
        distribution to unsecured creditors on a strict priority

   (ii) the Debtors' Chief Executive Officer engaged in a highly
        irregular transaction for the purchase of stock worth

  (iii) the Chief Executive Officer's obligation was transferred
        to the Debtors' largest shareholder, an entity which the
        Debtors admit "controls" the company; and,

   (iv) the Debtors repeatedly refuse to produce the documents
        requested - in direct contravention of the Court's
        direction to do so.

Furthermore, Mr. Kinel reports that the necessity for the
production of the Maffei Agreements was recently heightened by
an application filed by the Canadian Debtors seeking
authorization from the Canadian Court to enter a highly complex
agreement among various insiders which calls for the transfer
without apparent consideration of all Maffei's shares.

                    Ledcor Transactions

Mr. Kinel also observes that the Debtors appear to have engaged
in numerous transactions with Ledcor.  Ledcor supposedly has the
ability to control the Canadian Parent's affairs and business.
Accordingly, Mr. Kinel reasons out that since the Debtors are a
subsidiary to the Canadian Parent, Ledcor then indirectly
controls the U.S. Debtors.  The Debtors also admit that Ledcor's
interests could conflict with those of the Canadian Parent.
Moreover, Mr. Kinel asserts that Ledcor is an "insider" of the
Debtors as that term is defined in section 101 of the Bankruptcy

Mr. Kinel tells Judge Gropper that the complete scope of the
Debtors' dealings with Ledcor cannot be ascertained unless a
full production of all documents is promptly made.  "What little
is known, however, warrants a full investigation of the Debtors'
relationship with Ledcor," Mr. Kinel adds.

Mr. Kinel reports that information was requested by the
Committee to investigate the Debtors' relationship with Ledcor.  
However, the Debtors have been unresponsive aside from the
production of a few documents.  Rather than forthrightly sharing
the requested information with the Committee, Mr. Kinel notes
that the Debtors continue to be uncooperative and ask the
Committee to simply "take their word" that theses agreements are
none of the Committee's concern.

"The Debtors should be directed to provide the Committee with
the information requested so that it may conduct an
investigation of the Debtors' transactions with Ledcor.  To
continue to permit the Debtors to withhold production of the
documents inequitably permits the Debtors to shield its
insiders," Mr. Kinel asserts. The Debtors have a fiduciary duty
to align their interests with their unsecured creditors.

                  Payments to Insiders, et al.

Mr. Kinel also relates that the Committee has conducted an
initial review of the Debtors' Statements of Financial Affairs
particularly concerning transfers made by the Debtors to
insiders, their professionals and the largest transfers to third
parties.  The Committee has requested a written explanation for
each transfer with respect to the date, nature of and basis for
each transfer and copies of any underlying agreements or other
documentation.  Mr. Kinel reports that although the Debtors
indicated that they were undertaking such analysis, the Debtors
made no firm commitment as to when they would share their
results with the Committee.  Mr. Kinel asserts that the
Committee has:

  (i) an independent right and fiduciary obligation to
      investigate transfers to insiders, professionals and third
      parties during the applicable periods prior to the
      petition date; and,

(ii) such need is especially acute in these cases since:

   (a) the Debtors assert that there is little likelihood of a
       return to unsecured creditors on a strict priority basis;

   (b) both the Debtors' insiders and professionals may be the
       subject of preference or other types of actions, avenues
       of potential recovery which the Debtors will clearly have
       no incentive to pursue.

Accordingly, Mr. Kinel ask the Court to set a date by which the
Debtors must supply the Committee with its preliminary
preference analysis and compel the Debtors to turn over those
documents to the Committee.

              Transactions with Pre-Petition Lenders

Mr. Kinel informs the Court that the Canadian Parent, the U.S.
Debtors, the Pre-Petition Lenders and the Chase Manhattan Bank
entered into a Credit Agreement which provides for a seven year
$300,000,000 revolving credit facility, a seven year
$550,000,000 tranche A term loan facility and a seven year
$340,000,000 tranche B term loan facility.  Under the Agreement,
the obligations includes:

  (i) payment of principal, interest, fees, costs, expenses,
      indemnities, reimbursements and all other obligations
      owing under the agreement or other documents;

(ii) performance of all agreements, obligations and liabilities
      of the Borrower and other loan parties under the loan

(iii) payment of all obligations of any loan party under each
      hedging agreement entered into with a counterparty that
      was a Lender; and,

(iv) payment of all obligations in respect of overdrafts and
      related liabilities of the Agent of any affiliate arising
      from treasury depository and cash management services.

Mr. Kinel states that the Committee has a fiduciary duty to the
unsecured creditors of the Debtors' estates thus, must
investigate any avenue of potential recovery.  The Committee and
the Pre-Petition Lenders have agreed that the Committee shall
have until April 1, 2002 to commence any action that may exist
against the Lenders.  Accordingly, the Committee requested the
Debtors to produce certain agreements and other documents that
are related to the investigation of the Lenders' liens and
security interests.  However, Mr. Kinel reports that the Debtors
only agreed to provide a limited amount of the information
requested and refused to produce more.  The Debtors reasoned out
that they refuse to provide such documents since they don't
understand what the Committee is trying to accomplish.  Mr.
Kinel argues that there is no question that an examination of
the Debtors' pre-petition relationship is not only appropriate
but is in fact specifically agreed between the Committee and the
Lenders.  "The Debtors appear to seek to hinder such
investigation," Mr. Kinel notes.  Moreover, Mr. Kinel adds, the
deadline for the commencement by the Committee of any action
against the Pre-Petition Lenders is rapidly approaching thus
time is of the essence. (360 Bankruptcy News, Issue No. 18;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   

ACCUHEALTH INC: Obtains Final Court Nod to Use Cash Collateral
The U.S. Bankruptcy Court for the Southern District of New York
grants Accuhealth, Inc., and its debtor-affiliates' request for
a final consent order authorizing them to continue using their
secured creditor's cash collateral and providing that creditor
with adequate protection for any diminution in the value of that

The Debtors will continue to collect their accounts in
accordance with the Prepetition Documents by delivering all
checks and other payments to Rosenthal & Rosenthal, Inc.  
Rosenthal, in turn, will then fund the Debtors' operating
account so that the Debtors can pay Permitted Expenditures.

As adequate protection for the Debtors' use of Cash Collateral,
the Debtors grant the Senior Creditors a valid, perfected and
enforceable security interest.

The Debtors are expressly authorized to use Cash Collateral
until December 14, 2001 or until an event of default has
occurred.  The Term may be extended without further Order of the
Court provided that the Debtors, Rosenthal and the Committee all

Accuhealth, Inc. provides home health care services in the New
York Metropolitan Areas, filed for Chapter 11 petition on August
10, 2001. Gerard Sylvester, Esq., Catalanello at Baer, Marks &
Upham, LLP and Jay L. Gottlieb, Esq., at Baer Marks & Upham, LLP
represent the Debtors in their restructuring efforts. When the
Company filed for protection from their creditors, they listed
total assets of $1,850,000 and estimated debts of approximately

ACTERNA CORP: Revises Financial Covenants Under Credit Agreement
Acterna Corporation (Nasdaq: ACTR), the holding company for
Acterna, the world's second largest provider of communications
test and management solutions, Itronix Corporation, AIRSHOW and
da Vinci Systems, reported its results for the third quarter of
fiscal 2002, ended December 31, 2001.

Net sales for the third quarter of fiscal 2002 were $248.8
million, down 33 percent from $370 million for the same period
last year and down 21 percent sequentially. Net sales of
communications test products were $187.2 million, which compared
to $296.2 million a year earlier and $243.9 million in the
second quarter of fiscal year 2002.

Orders were $223.8 million in the third quarter, up 20 percent
sequentially on a pro forma basis (which adjusts for
acquisitions and dispositions of businesses to present results
on a comparable basis), but down 39 percent from the prior year
on a comparable pro forma basis.

Communications test product orders were $169 million, a 10
percent improvement from the previous quarter, but down 45
percent from the prior year.

For the third quarter of fiscal 2002, the company reported a net
loss of $74 million, which includes total charges and other
special items of $28.2 million.

These charges include: a $15 million adjustment for inventory
and other reserve actions, a restructuring charge of $9.3
million primarily related to severance, and a $3.9 million
goodwill impairment charge associated with da Vinci Systems. For
the same period a year ago, the company reported a net loss of
$18.3 million.

Pro forma loss from operations (earnings (loss) before interest,
taxes, amortization and special charges) after integration
expenses was a loss of $21.3 million for the third quarter.

Gross margin for the third quarter was 47 percent, versus 62
percent for the year ago quarter on a pro forma basis. The gross
margin was impacted by a $15 million charge for inventory and
other reserve actions. Excluding these charges, the gross margin
would have been approximately 53 percent for the quarter.

As of December 31, 2001, the company had total debt of $1.1
billion, cash of $51 million and available cash of $25 million
under its senior credit agreement. On January 15, 2002, the
company closed a $75 million investment in senior secured
convertible notes by a fund managed by Clayton, Dubilier & Rice,

In addition, Acterna also announced an amendment to its senior
credit agreement, which provides additional operating
flexibility through a revised set of financial covenants
applicable through June 2003.

For the nine months ending December 31, 2001, Acterna
Corporation reported net sales of $920.2 million, down 5 percent
compared to the prior year. The year to date pro forma net sales
of $885 million is down 12.3 percent from a year ago on a
comparable basis.

For the nine months ending December 31, 2001, reported net loss
was $228 million, as compared to a net loss of $151 million for
the same period last year. Year to date pro forma profit from
operations was $35.4 million, compared to $116.7 million last
year on a comparable basis.

"We are pleased that during these difficult economic times the
company was able to execute well and meet its revenue and
earnings objectives for the quarter," said Ned C. Lautenbach,
chairman and CEO. "Our communications test business showed
improvement with bookings up 10 percent from the previous
quarter. We were able to reduce operating expenses by $14
million from last quarter and remain on track to meet previously
announced cost reduction targets. The company also made
significant progress with its working capital by reducing
receivables by $50 million and inventory by $33 million during
the quarter. In addition, Itronix delivered impressive top line

During the quarter, the company introduced nine new products,
adding to its portfolio of communications test and management
solutions used by service providers and network equipment
manufacturers to better optimize their networks.

The company also signed numerous customer agreements for its
test systems, software, and services, including Allegiance
Telecom, BellSouth Telecommunications, Inc., and Verizon
Wireless. Itronix, Acterna Corporation's mobile computing
subsidiary, increased revenue by 47 percent over the same period
last year through a combination of new orders and working off a
strong backlog.

"We have been successful adding revenue from our new products
and in expanding our presence in faster growing segments such as
systems, wireless and data," said John Peeler, Acterna
Corporation president. "While we still cannot predict when
industry growth will resume, we continue to work aggressively to
maximize all sales opportunities and to improve our operational
effectiveness and customer service."

               Fourth Quarter Management Outlook

Management guidance for revenue for the fourth quarter is $210 -
$225 million, which is in line with the current analyst range of
$202-245 million.

Based in Germantown, Maryland, Acterna Corporation (NASDAQ:
ACTR) is the holding company for Acterna, AIRSHOW, da Vinci
Systems and Itronix. Acterna is the world's second largest
communications test and management company.

The company offers instruments, systems, software and services
used by service providers, equipment manufacturers and
enterprise users to test and optimize performance of their
optical transport, access, cable, data/IP and wireless networks
and services.

AIRSHOW supplies in-flight passenger information systems to the
aviation industry while da Vinci Systems designs and markets
video color correction systems to the video postproduction
industry. Itronix sells ruggedized computing devices for field
service applications to a range of industries. The company has
more than 5000 employees worldwide.

Additional information on Acterna is available at

DebtTraders reports that Acterna Corp.'s  9.750% bonds due 2008
(ACTR1) are trading between 30 and 35. See  
real-time bond pricing.

ADVANTICA RESTAURANT: Senior Notes Exchange Offer Expires Today
Advantica Restaurant Group, Inc., (OTCBB: DINE) announced that
it has extended to 5:00 p.m., New York City time, on February 6,
2002, its offer to exchange up to $204.1 million of registered
12.75% senior notes due 2007 to be jointly issued by Denny's
Holdings, Inc., and Advantica for up to $265.0 million of
Advantica's 11.25% senior notes due 2008, of which $529.6
million aggregate principal amount is currently outstanding.

The exchange offer was originally scheduled to expire at 5:00
p.m., New York City time, on February 1, 2002. Except for the
extension of the expiration date, all other terms and provisions
of the exchange offer remain as set forth in the exchange offer
prospectus previously furnished to the holders of the Old Notes.

To date, an aggregate of approximately $63.9 million Old Notes
have been tendered for exchange.

Advantica Restaurant Group, Inc. is one of the largest
restaurant companies in the United States, operating over 2,300
moderately priced restaurants in the mid-scale dining segment.
Advantica owns and operates the Denny's, Coco's and Carrows
restaurant brands. FRD Acquisition Co., the parent company of
Coco's and Carrows and a wholly owned subsidiary of Advantica,
is classified as a discontinued operation for financial
reporting purposes and is currently under the protection of
Chapter 11 of the United States Bankruptcy Code effective as of
February 14, 2001. For further information on the Company,
including news releases, links to SEC filings and other
financial information, please visit Advantica's Web site at

DebtTraders reports that Advantica Restaurant Group's 11.250%
bonds due 2008 (ADVRES1) currently trade from 73 to 76. See  
real-time bond pricing.

ALLIED HOLDINGS: S&P Maintains Watch Negative After Refinancing
Allied Holdings Inc. (B/Watch Neg/--) has refinanced its $170
million secured revolving credit facility ($99 million currently
outstanding), which was maturing on January 31, 2002, and $40
million in unrated subordinated notes. Standard & Poor's ratings
on Allied remain on CreditWatch with negative implications.

The revolver and subordinated notes are being replaced by a
$202.75 million secured credit facility that matures in February
2005 and consists of a revolver and term loans. Allied will be
purchasing the unrated subordinated notes, which originally
matured in February 2003, from the noteholders for a total
consideration of $37.25 million, consisting of $8 million in
cash and $29.25 million in financing being provided by the
noteholders. Creditors for the motor carrier have agreed to
extend the current revolver until February 28, 2002, and extend
the February 1, 2002, interest payment on the subordinated notes
to February 15, 2002, as the new facility is expected to close
in February.

Allied used the proceeds from the sale of a U.K. joint venture
of its Axis Group, real estate sales, and cash from operations
to reduce the revolver to its current $99 million balance from
$158 million at the end of September 2001. Although the
refinancing is a positive development and resolves Allied's
short-term liquidity needs, poor operating performance due to
lower automobile production by the "Big 3" U.S. automakers, the
company's still onerous debt burden, and limited financial
flexibility will make improvements in its credit profile
unlikely in the near term. Standard & Poor's expects to resolve
the CreditWatch when the refinancing is completed.

According to DebtTraders, Allied Holdings Inc.'s 8.625% bonds
due 2007 (ALDHLGS1) are trading between 48 and 51. See  
real-time bond pricing.

AMERICA WEST: Net Loss Balloons 50% to $61MM in 4th Quarter 2001
America West Holdings Corporation (NYSE: AWA), parent company of
America West Airlines, Inc. and The Leisure Company, reported a
fourth quarter net loss of $60.9 million.  For the same period a
year ago, America West reported a net loss of $41.7 million.

The results include approximately $8.8 million of pre-tax, non-
recurring employee benefit expenses ($5.5 million after taxes)
and $2.7 million of pre-tax special charges ($1.7 million after
taxes) related to the early termination of aircraft leases
offset by an $8.8 million pre-tax gain from an insurance
settlement ($5.5 million after taxes).  The results also include
approximately $48 million of pre-tax federal financial
assistance ($29.9 million after taxes) following the September
11 terrorist attacks.

Excluding the non-recurring items and federal grant, the
company's net loss for the quarter was $89.1 million, or $2.64
per share.

"America West's fourth quarter results reflect the continued
impact on the airline industry of the September 11 terrorist
attacks," said W. Douglas Parker, chairman and chief executive
officer.  "Despite the difficult times facing the airline
industry, we are encouraged by our improved liquidity position,
our incredible turnaround in operations and the trends in
revenue performance."

Operating revenues for the quarter were $400 million, down 30
percent from the same period in 2000.  Available seat miles
(ASMs) declined 14.8 percent due to a reduction in scheduled
flights after September 11, driven by reduced demand.  Revenue
passenger miles were 4.0 billion, down 14.8 percent from fourth
quarter 2000, consistent with the reduction in capacity.  The
airline's passenger load factor was 68.5 percent.

Passenger yields fell 17.8 percent to 9.38 cents due to an
industry-wide decline in business travel and aggressive fare
sales since September 11.  The decrease in yields caused
passenger revenue per available seat mile (RASM) to decline 17.7
percent to 6.42 cents.  RASM improved throughout the quarter,
however, as December's year-over-year decline in RASM of 15.1
percent was significantly better than the 21.1 percent recorded
in October or 17.4 percent in November.

Operating cost per available seat mile (CASM) for the fourth
quarter of 2001 declined 2.3 percent due to a 33 percent decline
in average fuel price. Average fuel price excluding tax was 71.8
cents per gallon versus $1.08 in the fourth quarter of 2000.  
Excluding fuel and non-recurring items, CASM increased 7.7
percent as ASMs were reduced significantly without a
commensurate reduction in costs.

For the full year 2001, America West reported a net loss of
$147.9 million.  Revenues for the full year decreased 11.9
percent to $2.1 billion.

America West continued its dramatic climb in operating
performance through the fourth quarter of 2001.  For the fourth
quarter, as reported to the Department of Transportation (DOT),
85.2 percent of America West flights arrived on-time, compared
with 64.1 percent in the same quarter of 2000. Completion factor
increased to 99.3 percent from 95.4 percent.  Additionally,
America West posted a 39 percent improvement in mishandled

As a result of the dramatic improvements, the airline currently
ranks near the top of the industry in these important service
measurements, and customer complaints to the DOT have dropped 55

"Our employees deserve credit for the outstanding job they've
done in improving the airline's operations in 2001, and for
maintaining this level of service while providing a heightened
level of security for our customers," added Parker.  "It's clear
that America West is operating a far different airline today
than it was 18 months ago."

On January 18, 2002, America West closed a term loan in the
amount of $429 million and completed arrangements for more than
$600 million in concessions, financing and financial assistance
following final approval by the Air Transportation Stabilization
Board (ATSB) of approximately $380 million in loan guarantees
under the Air Transportation Safety and Stabilization Act.  Key
terms of the loan agreement and related transactions are
disclosed in the company's Form 8-K to be filed with the
Securities and Exchange Commission Thursday last week.

America West Holdings Corporation is an aviation and travel
services company.  Wholly owned subsidiary America West Airlines
is the nation's eighth largest carrier serving 88 destinations
in the U.S., Canada and Mexico.  The Leisure Company, also a
wholly owned subsidiary, is one of the nation's largest tour

APPLIED DIGITAL: IBM Credit Extends Formal Waiver to Month-End
Applied Digital Solutions, Inc. (Nasdaq: ADSX), an advanced
technology development company, said it has been granted a
second extension of the formal waiver and amendment to its
credit agreement with its senior lender, IBM Credit Corporation,
through February 28, 2002.

Commenting on the extension, Richard J. Sullivan, Chairman and
CEO of Applied Digital Solutions, Inc., stated: "We have agreed
to a term sheet with IBM that outlines the majority of the final
restructuring issues. The Restructuring Agreement and related
documents have been drafted and are under review by counsel. We
are very optimistic that this will be the last extension that is
necessary prior to the formal execution of the Agreement."

Applied Digital Solutions is an advanced digital technology
development company that focuses on a range of early warning
alert, miniaturized power sources and security monitoring
systems combined with the comprehensive data management services
required to support them. Through its Advanced Wireless unit,
the Company specializes in security-related data collection,
value-added data intelligence and complex data delivery systems
for a wide variety of end users including commercial operations,
government agencies and consumers. For more information, visit
the company's Web site at

ARTHUR D. LITTLE: Files for Chapter 11 Restructuring in Delaware
Arthur D. Little announced that it has signed a definitive
agreement, subject to bankruptcy court approval, to sell all of
the assets of Arthur D. Little and its subsidiaries to ADL
Acquisition Company LLC, an affiliate of Cerberus Capital
Management L.P. of New York. ADL values the transaction at
approximately $71 million. The Company also announced a Debtor
in Possession facility provided by Ableco Finance LLC and
Foothill Capital Corporation which, subject to bankruptcy court
approval, provides for total availability of $68 million through
the restructuring process. The facility is intended to enable
the company to operate the business in the ordinary course until
the sale is consummated.

"The agreement with ADL Acquisition is the cornerstone of a new
future for Arthur D. Little," said Pamela W. McNamara, a
director of Arthur D. Little. "As part of the restructuring
process, the company will be able to clean up its balance sheet
and position itself for further growth while it continues to
deliver excellent results for its clients worldwide. We believe
that the ADL Acquisition transaction and the voluntary Chapter
11 filing are in the best interest of all of Arthur D. Little's

As Arthur D. Little enters this period of transition, McNamara
has resigned as CEO and as an employee of the firm, but has
agreed to continue to be a member of the firm's Board of

Ableco Finance LLC, an affiliate of Cerberus, has been Arthur D.
Little's primary lender since June 2001. At that time, the
company secured a bridge loan from Ableco Finance and Foothill
Capital as it sought a strategic transaction for the company.

"We have worked closely with Arthur D. Little over the last
several months and have confirmed our belief that the value of
the company and its affiliates lies in the quality and strength
of its professionals and the exceptional value it provides to
clients worldwide," said Stephen A. Feinberg, CEO of Cerberus.
"We look forward to playing an active role in guiding the firm
to further growth and profitability and helping it achieve its
full potential in the marketplace."

As an initial step in the sale process, Arthur D. Little and its
principal U.S. subsidiaries filed voluntary petitions for
reorganization under Chapter 11 of the U.S. Bankruptcy Code. The
proposed sale is subject to bankruptcy court approval as well as
governmental approvals customary for transactions of this sort
and other customary conditions. The consideration for the
purchase is the assumption of the amounts outstanding under the
DIP facility and certain other liabilities. The aggregate of the
assumed debt liabilities is anticipated to be $71 million. To
maximize the value for all constituencies, the company will seek
permission of the court to conduct a sale under section 363 of
the U.S. Bankruptcy Code. A key element of this process will be
a competitive bid auction at which qualified parties can bid for
all or parts of the company's business. The sale agreement is
subject to bids that are determined separately or in the
aggregate to provide greater value to the estates. As part of
the purchase, ADL Acquisition will assume certain contractual
and other liabilities of Arthur D. Little from Ableco Finance.
The Chapter 11 filing also provides a framework for the company
to obtain the additional liquidity to support its day-to-day

Arthur D. Little plans to continue operating its businesses in
the normal course during the Chapter 11 process and to fulfill
client projects. The company's operations have remained vibrant
and the vast majority of its employees are expected to
transition into strengthened operating units based on the
company's lines of business: Global Management Consulting,
Technology & Innovation, Global Environment and Risk, and
Cambridge Consultants Limited.

For the past three years, Arthur D. Little's annual gross
revenues have been on the order of $500 million. However during
recent years, it funded several major initiatives, most
significantly the planned spin-off and public offering of its
telecom consulting venture, c-quential, which was withdrawn in
late 2000 due to market conditions. The company also incurred a
significant one-time loss associated with the sale and leaseback
of its worldwide headquarters at Acorn Park in Cambridge,

Established in 1886, Arthur D. Little --  
is the world's first management and technology consulting firm
working at the interface of business and the technologies that
drive innovation and growth. Drawing on its unique blend of
knowledge and hands-on experience with a broad range of
industries worldwide, the firm collaborates with its clients to
achieve breakthroughs in practices, products, and processes that
lead to dramatic growth and the creation of new value. Company
milestones include the invention and commercialization of
fiberglass, the patent for the first synthetic penicillin, the
design and development of key experiments for NASA's first
mission to the moon, and the creation of a non-toxic, non-
hazardous decontaminant foam that neutralizes chemical and
biological warfare agents. Arthur D. Little has more than 2,000
employees in 30 countries worldwide.

Cerberus Capital Management L. P. manages funds and accounts of
more than $7 billion with investments in debt and equity
securities of middle-market companies exhibiting the potential
for business improvement. Such companies may be underperforming
due to poor cost controls, overleveraged balance sheets, lack of
liquidity or down turns in business or economic cycles. The
funds and accounts managed by Cerberus have holdings in the
United States and worldwide.

ARTHUR D. LITTLE: Case Summary & 20 Largest Unsecured Creditors
Lead Debtor: Arthur D. Little, Inc.
             aka ADL Capital
             aka SciRox
             aka Global Management Consulting
             aka Global Envirnonment and Risk
             aka Technology and Innovation
             25 Acorn Park
             Cambridge, MA 02140

Bankruptcy Case No.: 02-10348-PJW

Debtor affiliates filing separate chapter 11 petitions:

Entity                                     Case No.
------                                     --------
c-quential, Inc.                           02-10346-PJW
Arthur D. Little International, Inc.       02-10349-PJW
Arthur D. Little Enterprises, Inc.         02-10350-PJW
c-quential holdings, Inc.                  02-10347-PJW
SRT, Inc.                                  02-10351-PJW
Enterprise Computer, Inc.                  02-10352-PJW
Enterprise Medical Technologies, Inc.      02-10353-PJW

Chapter 11 Petition Date: February 05, 2002

Court: District of Delaware

Judge: Peter J. Walsh

Debtors' Counsel: David M. Fournier, Esq.
                  Pepper Hamilton LLP
                  1201 Market Street, Suite. #1600
                  Wilmington, DE 19801
                  Tel: 302 777-6500
                  Fax: 302-656-8865

                  Daniel M. Glosband, Esq.
                  Goodwin Procter LLP
                  Exchange Place
                  Boston, MA 02109
                  Tel: 617 570 1000

Estimated Assets: $50 million to $100 million

Estimated Debts: $50 million to $100 million

Debtor's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
ESOP                        Repurchase liability    $4,415,000
Harland Riker               for Termination
114 Brattle Stree
Cambridge, MA 02138
Tel: 617 491 7802
Fax: 617 491 7802

Beal & Company, Inc.        Past due rent           $2,340,727
177 Milk Street
Boston, MA 02109-3410
Steve Faber
Accounts Receivable
Tel: 617 451 2100
Fax: 617 451 1801

Lorenzo C. Lamadrid         Settlement Agreement    $2,300,000
Mark Auerbach
Kirkpatrick Lockhart
Suite 2000
201 South Biscayne Rd.
Miami, FL 33131
Tel: 305 539 3304
Fax: 305 358 7095

Deloitte & Touche LLP       Audit and Tax Services  $1,849,540
Dan Sunderland
PO Box 11221
Boston, MA
Tel: 617 437 2000
Fax: 617 437 2111

Payton Construction        Contractor               $1,587,080
Paul Carter
273 Summer Street
Boston, MA 02210
Tel: 617 423 9035
Fax: 617 423 0975

Comdisco                   Computer equipment         $820,128
Laura Beirne               lease               
6111 N. River Rd.
Rosemont, IL
Tel: 847 518 7878
Fax: 847 518 5060

Digital Evolution Inc.     GMC Commercial             $335,029
Eric Pulier                sub-contractor          
1452 Second Street
Santa Monica, CA 90401
Tel: 310 570 4100
Fax: 310 260 6433

RR Donnelley Receivable    Printing costs             $312,281
Mathew Axelrod
PO Box 13654
Newark, NJ 07188-0001
Tel: 617 428 3256
Fax: 617 428 3500

Sprint Corporation         Telephone Services         $281,000
PO Box 200188
Dallas, TX 75320-0188
Tel: 800 793 5823
Fax: 800 793 5824

Bingham Dana LLP           Legal services             $223,790

KPMG                       Due diligence service      $210,000

Onesource Info Services    __________                 $144,800

Corporate Software         IT vendor                  $143,555

77 West Wacker Drive LLC   Rent, Chicago office       $132,872

Parpinelli Tecnon          Sub-contractor             $130,700

TRC                        Sub-contractor             $116,689

Florida State Univerity    Sub-contractor             $115,773

Oracle Corporation         Sub-contractor             $101,210

Paul Weiss Rifkind         Legal services             $100,255
   Wharton & Garrison

Worldtravel Partners       Travel Agency              $98,907

ARMSTRONG HOLDINGS: Wants Removal Period Extended to July 29
Armstrong World Industries, Inc., Nitram Liquidators, Inc., and
Desseaux Corporation of North America, ask Judge Randall J.
Newsome to again extend the time period during which the Debtors
may file notices of removal of litigative and administrative
matters which were pending on the Petition Date.  Specifically,
the Debtors propose that the time by which they must file
notices of removal with respect to any actions pending on the
Petition Date be extended through and including the later of (i)
July 29, 2002, or (ii) 30 days after entry of an order
terminating the automatic stay with respect to any particular
action sought to be removed.

The Debtors explain that they are parties to numerous judicial
and administrative proceedings currently pending in various
courts or administrative agencies throughout the country and
involving a wide variety of claims.  Due to the number of
proceedings involved, and the wide variety of claims these
proceedings present, the Debtors require additional time to
determine which, if any, of the proceedings should be removed
and, if appropriate, transferred to this district. Accordingly,
the Debtors seek entry of an order extending the removal period
by an additional 180 days.

The requested extension is necessary to afford the Debtors with
additional time to assess whether the proceedings can and should
be removed, thereby protecting the Debtors' valuable right to
economically adjudicate lawsuits if the circumstances warrant
removal.  Accordingly, the Debtors submit that the requested
extension is in the best interests of the creditors and their

The requested extension will not prejudice the Debtors'
adversaries because such adversaries may not prosecute the
actions and proceedings pending relief from the stay.  
Furthermore, the Debtors say that nothing in this Motion will
prejudice a party to a proceeding that the Debtors seek to
remove because the party may seek remand of any removed action
or proceeding.  Accordingly, the requested extension will not
cause prejudice to any party to an action or proceeding.

Unless the requested extension is granted, the Debtors will be
forced to address these claims and proceedings in a piecemeal
fashion to the detriment of their creditors. (Armstrong
Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   

BURNHAM PACIFIC: Closes Sale of Assets for $24.8 Million + Debt
Burnham Pacific Properties, Inc., (NYSE: BPP) announced that it
has closed on the sale of three properties and one leasehold to
a joint venture led by affiliates of PO'B Montgomery & Company
and Apollo Real Estate Advisors (pursuant to their joint venture
known as Pacific Retail, L.P.) for an aggregate purchase price
of approximately $24.8 million in cash and the assumption of
mortgage debt.  

This sale represents the second transaction with the joint
venture under a previously announced Purchase and Sale
Agreement, as amended, with Pacific Retail, L.P., which
contemplates the sale of the Company's interests in fifteen
properties.  The first transaction, which closed in December
2001, involved the sale of eight properties for an aggregate
purchase price of approximately $91.8 million.  The remaining
three properties targeted for sale under the agreement have an
aggregate purchase price of approximately $32.3 million and are
expected to close if and when the necessary applicable ground
lessor and lender approvals are received.

The Company's interest in the three properties totals
approximately 208,790 square feet of gross leaseable area and
include Ontario Village Shopping Center in Ontario, California;
the Village East center in Salem, Oregon; and Fairwood Square in
Renton, Washington.  The leasehold contains approximately 52,850
square feet of gross leaseable area and is located in the James
Village Center in Lynnwood, Washington.

The Company also announced that it will make a $0.45 per share
liquidating distribution on February 22, 2002 to stockholders of
record as of the close of business on February 14, 2002.

In addition, the Company announced that it has completed the
transfer of the 280,900 square foot Mountaingate Plaza, located
in Simi Valley, California, to its lender in full satisfaction
of the Company's mortgage obligation.

Strip mall kingpin Burnham Pacific Properties is stripping
itself bare. The real estate investment trust (REIT), unable to
agree on a price with potential buyers, is liquidating its
assets. Burnham Pacific at one time boasted a portfolio
containing ownership and management interest in some 60
properties, including several office buildings as well as strip
malls and shopping centers anchored by supermarkets, drugstores,
and theaters. Most of its holdings were in California, although
it also owned real estate in New Mexico, Oregon, Utah, and
Washington. The REIT has entered into a liquidation services
agreement with DDR Real Estate Services, an affiliate of
shopping center REIT Developers Diversified Realty. More
information on Burnham may be obtained by visiting the Company's
Web site at  

Wachovia Securities served as financial advisor and placement
agent for the joint venture led by affiliates of PO'B Montgomery
& Company and Apollo Real Estate Advisors.  P.O'B. Montgomery &
Company, based in Dallas, Texas, is an owner, operator and
developer of neighborhood and community shopping centers,
currently owning and operating approximately 2.5 million square
feet of shopping centers.  Apollo Real Estate Advisors is a real
estate investment firm with extensive experience in all facets
of real estate ownership, development and management.  Since its
inception in 1993, Apollo through its real estate investment
funds has invested over $3.7 billion of equity in over 190
transaction with an aggregate purchase price of $9.5 billion.  
P.O'B. Montgomery and Apollo currently jointly own and operate
18 shopping centers.

CASUALTY INSURANCE: S&P Assigns R Financial Strength Rating
Standard & Poor's assigned its 'R' financial strength rating to
Republic Casualty Insurance Co.  

On Nov. 2, 2001, Republic Casualty was placed under an order of
conservation. On Dec. 10, 2001, Oklahoma Insurance Commissioner
Carroll Fisher was granted court approval to place the company
into receivership, declaring that the company is insolvent. By
placing the company in receivership, Fisher can tap into the
Oklahoma Life and Health Insurance Guaranty Association Fund,
which could pay up to $4 million of the company's outstanding

Shortly after Republic Casualty was placed into receivership,
Oklahoma County District Judge Carolyn Ricks approved the sale
of Republic Casualty's existing policies and certain assets to
Top Flight Insurance Co., for $80,000. Top Flight will also
assume responsibility for future claims.

Republic Casualty has been in business for five years. The
company provides auto insurance to more than 5,000 high-risk
drivers in Oklahoma.

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

COMDISCO INC: Court Approves Sale of Lab Leasing Assets to GECC
Comdisco Inc., and its debtor-affiliates sought and obtained the
Court's authority to sell its Electronics and Laboratory &
Scientific leasing businesses to General Electric Capital

The Assets include:

    (a) all Purchased Financing Contracts of the Electronics and
        Laboratory & Scientific segments;

    (b) all Credit Enhancements (except cash associated with
        Advance Payments) related to the Purchased Financing
        Contracts of the Electronics and Laboratory & Scientific

    (c) all alliance agreements, service provider agreements,
        consulting agreements, purchase orders, marketing
        agreements, etc., of the Electronics and Laboratory &
        Scientific segments;

    (d) the leasehold interest of the Electronics segment in the
        San Diego Facility located at 3655 Nobel Drive, Suite
        600 in San Diego, California;

    (e) all equipment, furniture, vehicles and all other
        tangible personal property used in the Electronics
        Segment and located at the San Diego Facility, except
        for inventory;

    (f) all equipment and inventory of the Laboratory &
        Scientific segment;

    (g) all rights under manufacturers' and vendors' warranties
        relating to the Purchased Assets of the Electronics and
        Laboratory & Scientific segments;

    (h) all Authorizations related to the Purchase Assets of the
        Electronics and Laboratory & Scientific segments;

    (i) all related books and records of the Electronics and
        Laboratory & Scientific segments; and

    (j) any assets related to the Purchased Financing Contracts
        of the Electronics and Laboratory & Scientific segments.

The purchase price for the Electronics segment is:

-- 67% of the Net Book Value of all Purchased Assets of the
    Electronics Segment, minus

-- 100% of the Assumed Liabilities.

On the other hand, the purchase price of the Laboratory &
Scientific segment is:

-- 95% of the Net Book Value of all Purchased Assets of the
    Laboratory & Scientific Segment, minus

-- 100% of the Assumed Liabilities.

GE Capital is further obligated to make a single additional
payment to the Debtors in the amount of $10,000,000.

The Court also permits the Debtors to enter into Transactional
Services Agreements with GE Capital.  With 150 days after the
Closing Date, the Debtors will provide GE Capital with
necessary to permit an orderly transition of the Purchase
Financing Contracts and other Purchased Assets to GE Capital by:

  (i) developing a transition schedule and appropriate
      interfaces for, and allowing the transfer, in a prompt and
      timely manner, of all Business Records related to the
      Purchased Financing Contracts, and

(ii) assisting in extracting data relating to the Purchase
      Financing Contracts from Comdisco's files and providing
      documentation adequate to permit data mapping and data

In return for the transitional services, GE Capital agrees to
pay the Debtors fees and any reasonable out-of-pocket expenses

Under the Transitional Agreement, Comdisco also consents to
indemnify GE Capital from and against any damages, other than as
a result of fraud or intentional misconduct. (Comdisco
Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   

DTE BURNS: S&P Keeps BB Rating on CreditWatch Negative
Standard & Poor's double-'B' rating on DTE Burns Harbor LLC's
(DTE LLC) $163 million senior secured notes remains on
CreditWatch with negative implications where it was placed on
May 4, 2001. The proceeds from the notes were used by DTE LLC to
purchase the number one coke battery from Bethlehem Steel Corp.

Standard & Poor's left the rating unchanged and on CreditWatch
following the filing of Chapter 11 bankruptcy protection by
Bethlehem Steel Corp., in October 2001. The rating remains on
CreditWatch as a result of DTE LLC's reliance on sales of coke
to Bethlehem Steel for a portion of its cash flow.

As anticipated, Bethlehem Steel and the Burns Harbor facility
have continued to operate. More importantly, Bethlehem Steel did
not seek to vacate the contract and has remained current in its
payments, with the exception of an outstanding receivable for a
1-1/2-month period leading up to the filing. The project
continues to operate well and has funded its January debt
service payment. It still benefits from an LOC that provides a
six-months' debt service reserve. Given that the notes mature in
January 2003, only one more debt service payment would need to
be funded out of project cash flows in order to ensure full and
timely repayment of the notes.

The rating will remain on CreditWatch due to the fact that
Bethlehem's status operating under Chapter 11 could change
rapidly. Cash flow from other revenue sources, specifically
Section 29 tax credits, is not sufficient to completely cover
debt service. The ability of the project to sell coke on the
spot market if any of Bethlehem Steel's facilities do not
require coke, combined with the acceptance of DTE Energy Co.
(triple-'B'-plus/Stable/'A-2') of any changes in law, or later
disallowances with respect to Section 29 tax credits, provide
support for the rating. It is still possible that the project
could be forced to operate on the spot market, or that there
could be a substantial delay in future payments that would
threaten the project's solvency. In such a case, a substantial
downgrade should be expected. However, Standard & Poor's does
not expect such a scenario because Bethlehem Steel has continued
to operate and make payments even in bankruptcy.

DAIRY MART: Wins Court Approval to Extend Exclusive Periods
The U.S Bankruptcy Court for the Southern District of New York
extends the Exclusive Periods of Dairy Mart Convenience Stores,
Inc., and its debtor-affiliates -- again.  The Court extends the
Debtors' exclusive period to propose and file a plan through
April 5, 2002. The exclusive period within which the Debtors may
solicit acceptances of the plan is extended through
June 4, 2002.

DMC and its subsidiaries operate one of the nation's largest
regional convenience stores filed for chapter 11 protection on
September 24, 2001. Dennis F. Dunne, Esq., at Milbank, Tweed,
Hadley & McCloy LLP, represents the Debtors in their
restructuring efforts. When the Company filed for protection
from its creditors, it listed estimated debts and assets at more
than $100 million.

DOE RUN: Debt Restructuring Spurs S&P to Further Junk Ratings
Standard & Poor's lowered its ratings on The Doe Run Resources
Corp. and placed them on CreditWatch with negative implications
following the company's 8K filing to initiate restructuring
discussions with certain holders of its outstanding notes. Doe
Run also stated that it is unlikely to make its March 15, 2002,
interest payments on all outstanding notes.

For the past two years, the company has experienced poor cash
flows, increasing debt, and diminished financial flexibility due
primarily to a difficult pricing environment for lead, zinc, and
other metals, as well as to lower metal-treatment charges. Also,
metal demand, driven by auto battery manufacturers and the
telecommunications industry, has continued to decline,
exacerbated by the events of September 11.

In the event of missed interest payments or an exchange offer,
Standard & Poor's will lower the ratings to 'D'. In the event of
an exchange offer, Standard & Poor's would consider the
completion of such a transaction tantamount to a default, as the
total value of the exchange offer will most likely be
significantly less than the par value of the existing notes.

          Ratings Lowered and Placed on CreditWatch
               with Negative Implications

  The Doe Run Resources Corp.   To               From
     Corporate credit rating     CC/Watch Neg/-  CCC/Negative/-
     Senior secured debt         CC               CCC
     Senior unsecured debt       C                CCC-

EASYRIDERS: Disclosure Statement Hearing Scheduled for April 10
The U.S. Bankruptcy Court for the Central District of California
approves the motion of Easyriders, Inc., and its debtor-
affiliates, extending the time period during which the Company
has the exclusive right to propose and file a plan of
reorganization through February 28, 2002.

Additionally, at the Debtors' behest, Judge Arthur M. Greenwald
scheduled a disclosure statement hearing in the Debtor's cases
on April 10, 2002.

Easyriders, Inc., the self-described lifestyle publisher with a
born-to-be-wild attitude, filed for chapter 11 protection on
July 17, 2001, in San Fernando Valley.  Ron Bender, Esq. at
Levene, Neale, Bender & Rankin represents the Debtors in their
restructuring effort.

ELEKTRYON INC: Ocean Power Inks Pact to Acquire Certain Assets
Ocean Power Corporation (OTCBB:PWRE) has signed an Asset
Purchase Term Sheet with Elektryon, Inc., located in Odessa,
Texas, to acquire certain assets including rights to the 100kW
Powr/Mastr product line.  The Powr/Mastr product is a packaged
generator designed to operate on natural gas as a backup or peak
power supplier. The term sheet extends Ocean Power's existing
exclusive license to the Powr/Mastr product outside the U.S. and
nonexclusive license within the U.S. through the period
necessary to complete a definitive Asset Purchase Agreement,
obtain a fairness opinion from Ocean Power's investment banker
and obtain satisfaction of all other conditions of sale.

The price for the purchase will be paid in stock only against
three milestones:

     1) $7,000,000 in Ocean Power common stock (at the 20 day
average price at the time of closing or $2.00 per share,
whichever is higher) upon final transfer of all assets to Ocean

     2) $8,000,000 in common stock (at the 20 day average price
or $4.00 per share, whichever is higher) when the Powr/Mastr
product achieves 10,000 hours of continuous, failure-free
operation or when the Company achieves $6,250,000 of sales over
a three month period with a minimum gross margin of 30%,
whichever comes first; and

     3) $10,000,000 of common stock (at the 20 day average price
or $6.00 per share, whichever is higher) when the Powr/Mastr
product meets certain applicable regulatory requirements.

The purchase is subject to the satisfaction of certain other
conditions set forth in the term sheet, including approval by
the Board of Directors of the respective companies, a fairness
opinion from Ocean Power's investment banker and court approval
of the purchase as part of a Chapter 11 plan of reorganization
by Elektryon.

"This transaction gives Ocean Power a product that can be
immediately sold as backup power systems," said Joseph P.
Maceda, President of Ocean Power. "It also gives us the system
integration capabilities to package our own Stirling and fuel
cell technology as we move them into the distributed generation

ENRON CORP: Trading Creditors Want to Block ENA's Use of Cash
The Wiser Oil Company, Nuevo Energy Company, BreitBurn Energy
Company LLC, Denbury Resources, Inc., EnerVest Energy LP,
EnerVest Management Partners Ltd., Vernon E. Faulconer and
Vernon E. Faulconer Inc. -- the "Trading Creditors" -- ask the
Court for an order:

    (a) excepting Enron North America Corporation and its direct
        and indirect subsidiaries from the Debtors' existing
        Centralized Cash Management System,

    (b) directing Enron North America to implement a new cash
        management system segregating all cash of Enron North
        America and preventing such cash from being disbursed or
        otherwise transferred to or for the benefit of other
        Debtors, and

    (c) directing Enron North America to provide an accounting:

         (i) identifying all direct and indirect subsidiaries of
             Enron North America, and the respective ownership
             of each such subsidiary,

        (ii) describing the relationship of each such subsidiary
             to the other, and to Enron North America Corp., and

       (iii) as to Enron North America Corp. and each such
             subsidiary, produce an accounting of all cash on
             hand as of the Petition Date, and as of the date of
             such accounting.

Deborah A. Reperowitz, Esq., at Reed Smith LLP, in Newark, New
Jersey, points out that from a review of the Petition filed by
Enron North America, it appears that Enron North America is
solvent on a book value basis.  "It appears that Enron North
America's total assets exceed its liabilities by
$4,900,000,000," Ms. Reperowitz says.  However, Enron North
America states that the amount of its debts as listed on its
Petition does not include "off-balance sheet and contingent
obligations", which include the liabilities owed under hedge,
swap, collar and other forward agreements similar to those
entered into between the respective Trading Creditors and Enron
North America.

The Trading Creditors believe that the other Debtors are
plundering Enron North America's estate through the Debtors'
existing Centralized Cash Management System.  In order to
minimize and prevent this in the future, Ms. Reperowitz asserts
that an order should be entered excepting Enron North America
from the Debtors' existing Centralized Cash Management System
and directing that Enron North America immediately implement a
new cash management system whereby the cash and other assets of
Enron North America remain segregated, fully accounted for, and
used only to pay the creditors of Enron North America.

Specifically, Ms. Reperowitz lists the facts compelling the
implementation of a new cash management system for Enron North
America and the accompanying accounting:

  (i) the commingling of the cash of all of the Debtors,
      including Enron North America, under the existing
      Centralized Cash Management System for use by all of the
      Enron entities,

(ii) the fact that Enron North America has been the financial
      "jewel" of the Debtors, generating the lion's share of the
      Debtors' collective revenue,

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

(iv) the effect of the Interim DIP Facility to create liens on
      the proceeds of sale of the previously unencumbered assets
      of Enron North America,

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

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

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

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

(ix) the complete lack of financial disclosure by the Debtors
      to date.

The Trading Creditors fear that -- unless a new cash management
system segregating and securing Enron North America's cash and
receivables is implemented immediately by Enron North America --
such cash and receivables will be plundered by the other Debtors
and used to pay the creditors of Debtors other than Enron North

Furthermore, Ms. Reperowitz notes that any supposed claims of
Enron North America's estate against those Debtors resulting
from such Debtors' use of Enron North America's cash likely will
prove worthless, as there is no indication that those Debtors
will be sufficiently solvent to repay such debts.

Several other creditors supporting this motion are:

      -- Dominion Resources Inc.,
      -- Dominion Exploration & Productions Inc.,
      -- Dominion Oklahoma Texas Exploration & Production Inc.,
      -- Dominion Field Services Inc.,
      -- Virginia Electric and Power Company,
      -- Virginia Power Energy Marketing Inc.,
      -- Pure Resources Inc.,
      -- Tenaska Marketing Ventures,
      -- Forest Oil Corp.,
      -- Devon Energy Corporation,
      -- Spinnaker Exploration Company,
      -- Petro-Hunt LLC,
      -- Dunhill Resources I LLC,
      -- Pioneer Natural Resources Company,
      -- KCS Energy Inc., and
      -- the Southern Ute Indian Tribe (doing business as Red
         Willow Production Company).

Pure Resources, et al., further ask Judge Gonzalez to require
Enron North America to stop advancing or lending funds to other
debtor and non-debtor entities.

Aaron R. Cahn, Esq., at Carter Ledyard & Milburn, in New York,
points out that prior to the Petition Date, Enron North America
generated more than 90% of the Debtors' total revenue.  "Now,
collections from the existing Enron North America trading book
are being depleted at an alarming rate to pay expenses of debtor
and non-debtor Enron entities," Mr. Cahn observes.  According to
Mr. Cahn, Enron North America is acting as an involuntary,
unrestricted debtor-in-possession lender in respect of Enron
Corp. and its direct and indirect, debtor and non-debtor,
subsidiaries, without adequate protection, or protection of any
kind, for the Enron North America estate, and without any terms
for repayment of the hundreds of millions (soon to be billions)
of dollars in depleted Enron North America funds.

                      Debtors Object

According to Martin J. Bienenstock, Esq., at Weil, Gotshal &
Manges LLP, in New York, the response to the Wiser Cash
Management Motion is simple: "The Debtors' cash management
system works to protect Enron North America and its creditors as
well as each other Debtor and its respective creditors."

Mr. Bienenstock emphasizes that the accounts of Enron North
America are not being "plundered" by other Debtors for their own
uses.  In fact, Mr. Bienenstock tells the Court, almost all the
Debtors in these chapter 11 cases are operating on a cash flow
positive basis, including Enron North America.  Moreover, Mr.
Bienenstock adds, the Debtors have instituted certain controls
and safeguards to ensure the cash management system protects the
rights and interests of Enron North America and its creditors.
These controls include, without limitation:

  (a) the Debtors' cash management system has the capability and
      integrity to manage and account for all transactions
      including any intercompany transfers;

  (b) the administering of each Debtors' cash flows will
      continue to be subject to the guidelines of budgets and
      business plans particularized for each individual Debtor;

  (c) each Debtor repaying any part of the post-petition
      financing loan will have a superpriority claim against the
      other Debtors to recover the amount paid; and

  (d) the Debtors will continue to work with the statutory
      creditors' committee to ensure that borrowed money will be
      repaid by entities whose creditors benefit from the
      borrowed money (unless creditors of other Debtors will not
      be prejudiced).

                Net Cash Collected Reconciliation
           For the Period Dec. 3, 2001 - January 23, 2002

Companies                             Net Cash(Used)/Collected
---------                             ------------------------
Enron Corporation                             $15,000,000
Enron Energy Services                          55,020,000
Enron Metal and Commodity                       4,030,000
Enron North America                           347,410,000
Enron Global Markets                           10,890,000
Enron Industrial Markets                       12,170,000
Enron Freight Markets                             200,000
Enron Principle Investments                       480,000
Enron Broadband                                 4,260,000
Enron Engineering and Construction                (80,000)
Garden State Paper                                 55,000
Enron Net Works *                              (4,390,000)
Enron Transportation Services                    (190,000)

      * (3,500,000) Used for Netco Transition

Mr. Bienenstock points out that the Net Cash Collected
Reconciliation shows that the Debtors and their vertical
subsidiaries are virtually all cash positive. The three
exceptions are:

    a) Enron Engineering & Construction Company which had a
       deficit of approximately $80,000 that will be filled by
       collections of receivables;

    b) Enron Transportation Services Company which had a deficit
       of approximately $190,000 to be filled by collection of
       receivables and future allocations; and

    c) Enron Net Works LLC, which had an approximate deficit of
       $4,400,000, approximately $3,500,000 of which was to
       purchase new servers and equipment to allow for the
       consummation of the wholesale trading transaction with
       UBS AG.

Mr. Bienenstock relates that the balance of the deficit will be
filled by overhead allocations.  Furthermore, Mr. Bienenstock
says, the amounts in the reconciliation will be subsequently
reduced by overhead allocations attributable to each business
group of Debtors and non-debtors.

Mr. Bienenstock asserts that the Debtors do not intend to use
monies to fund deficits that will not be filled by subsequent
positive operating cash flows or asset sales.  "Also, loan
proceeds may be used to fund certain deficits," Mr. Bienenstock

With these protections and because the Debtors are cash flow
positive, Mr. Bienenstock insists that no separate cash
management system is necessary for Enron North America.
Moreover, Mr. Bienenstock notes that the proposed budget for
Enron North America, as well as certain other information with
respect to the accounts of Enron North America, have already
been disclosed pursuant to confidentiality agreements to the
Committee and the lenders of the Debtors' post-petition
financing. Additionally, Mr. Bienenstock informs Judge Gonzalez
that the Committee's accountants, Ernst & Young LLP, are on site
at Enron and are thoroughly reviewing all budgets to protect
each Debtor's creditors.  "To the extent the Trade Creditors are
requesting additional accounting of the financial records of
Enron North America and each of its subsidiaries, more
information will be produced in accordance with the Court's
order that the Debtors' Statements and Schedules be filed on or
before June 18, 2002," Mr. Bienenstock maintains. (Enron
Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service,
Inc., 609/392-0900)

ENRON: Union Ask Accountants' Group to Probe Lord Wakeham
Citing new information from the report issued by the Special
Investigative Committee of Enron's Board of Directors on the
role of the directors in Enron's collapse, the AFL-CIO and the
British TUC (Trades Union Congress) jointly called on the
Institute of Chartered Accountants to investigate whether Lord
Wakeham breached their professional and ethical standards in his
role as a director of the now bankrupt energy trading giant,
Enron Corp.

The complaint comes a week after the AFL-CIO called on the 21
public companies with Enron directors on their corporate boards
to refuse their re- nomination.  Lord Wakeham serves on the
board of Enron and four British public companies.  He holds a
dozen more private directorships.  On Thursday, January 31 Lord
Wakeham temporarily resigned from his public post as Chairman of
the Press Complaints Commission.

"Enron's employees and shareholders built their dreams for the
future on the illusion that Enron was a profitable and
functioning company," stated AFL- CIO Secretary Treasurer
Richard Trumka. "The Institute must investigate whether Lord
Wakeham had any role in destroying the futures of Enron's
employees and shareholders and if necessary, pursue the
appropriate discipline."

"Unless Lord Wakeham can prove that he took meaningful steps to
protect Enron's employees and investors, he should leave the
boards of other public companies," said Trumka.  "If it turns
out that Enron executives behaved illegally and Lord Wakeham was
either involved or knew about it then he should be removed from
the Institute of Chartered Accounts in England and Wales."

TUC General Secretary John Monks said, "Enron's workers have
lost not just their jobs, but their pensions and savings too.  
The pensions funds of many other US and UK workers have taken a
major hit.  As a member of the company's audit and compliance
committee, Lord Wakeham has some very hard questions to answer.
The ICA must ask whether its rules and standards were breached."

Since joining Enron, Lord Wakeham not only served on the board's
audit and compliance committee but also simultaneously worked
for Enron as a paid consultant.  In the last year, Lord Wakeham
collected $72,000 (51,000 pounds Sterling) in consulting fees.

The TUC represents more than 70 member unions representing
nearly seven million working people from all walks of life in
the United Kingdom.

The AFL-CIO represents 13 million working men and women and is
the largest union federation in the United States.  The AFL-CIO
affiliate sponsored benefit funds have over $400 billion in
assets and hold an estimated 3.1 million shares in Enron.

EXODUS COMMS: Seeks Extension of Plan Filing Period to March 25
Exodus Communications, Inc., and its debtor-affiliates ask for
an extension, through March 25, 2002, of their exclusive periods
during which to file a plan of reorganization.  The Debtors ask
for a concomitant extension of their exclusive period to solicit
acceptances of that plan through May 24, 2002.  The Debtors make
it clear that these requests are without prejudice to their
right to seek further extensions of the exclusive periods.

Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP in
Wilmington, Delaware, explains that the exclusive periods are
intended to afford the Debtors a full and fair opportunity to
negotiate and propose a plan without the disruption that might
be caused by the filing of competing plans of reorganization by
non-debtor parties.  Mr. Chehi makes it clear that Exodus will
be proposing a liquidating chapter 11 plan.

The Debtors submit that an extension of the exclusive periods
for an additional 60 days is fully justified for these reasons:

A. the Debtors cases are very large and complex;

B. the Debtors have made good faith progress towards proposing a
       Plan; and

C. this is the Debtors' first request for an extension of their
       exclusive periods, which extension is not being sought to
       pressure creditors to accede to any of the Debtors'

To terminate the exclusive periods would prematurely deny the
Debtors meaningful opportunity to negotiate with creditors and
propose a confirmable plan and, thus, would be antithetical to
the purpose of chapter 11, Mr. Chehi argues.  Termination of the
exclusive periods at this time and the concomitant threat of
multiple plans could lead to unwarranted confrontations,
resulting in increased administrative costs.

Mr. Chehi assures the Court that the requested extension of the
exclusive periods will not prejudice the legitimate interests of
any creditor or equity security holder. To the contrary, the
extension will further the Debtors' efforts to preserve value
and avoid unnecessary and wasteful motion practice.

Mr. Chehi asserts that the Debtors should be afforded a full and
fair opportunity to negotiate, propose and seek acceptances of a
chapter 11 plan. Debtors submit that the extension requested
will increase the likelihood of a greater distribution to
creditors than would be possible if the Debtors were required to
file a plan prior to having such a full and fair opportunity.
Accordingly, the Debtors believe that the requested extension is
warranted and appropriate under the circumstances.

A hearing on this motion is scheduled on March 19, 2002.
Accordingly, pursuant to Local Rule 9002-1, the Debtors'
exclusive period is automatically extended through the
conclusion of that hearing. (Exodus Bankruptcy News, Issue No.
13; Bankruptcy Creditors' Service, Inc., 609/392-0900)

FOSTER WHEELER: S&P Cuts Ratings on Weakening Credit Protection
Standard & Poor's lowered its ratings on Foster Wheeler Ltd. At
the same time, the ratings remain on CreditWatch with negative

At December 31, 2001, Foster Wheeler had about $548 million in
rated debt securities outstanding.

The rating action reflects Standard & Poor's expectation that
the credit protection measures and financial flexibility will
not strengthen to a level consistent with the previous ratings
in the near to intermediate term. At the former rating level,
Standard & Poor's had expected EBITDA to interest coverage in
the 3 times to 4x range and total debt (including operating
leases, the receivable securitization but excluding nonrecourse
project debt) to EBITDA around 3.5x.

On January 30, 2002, Foster Wheeler announced a $257 million
charge due to poor execution on six heat recovery steam
generator (HRSG) projects; to write down disputed claims and
other receivables, to reduce headcount, and to write-off its
deferred tax assets in accordance with FASB statement 109. In
conjunction with these charges, which are expected to be about
cash neutral, the company announced a comprehensive operating
plan, which is focused on improving core engineering and
construction disciplines, including project estimation, bidding
procedures, and project management. These activities, combined
with poor working capital management, have been key reasons for
the company's weak profitability and stretched balance sheet.
Nonetheless, it will be a formidable challenge for the company
to effect meaningful and lasting change within the context of a
highly cyclical industry.

Foster Wheeler has obtained a waiver on its revolving credit
bank facility's financial covenants through April 15, 2002, and
a waiver on its financial covenants on a synthetic lease through
February 28, 2002. The ratings will remain on CreditWatch until
the company and its lenders come to terms on a long-term
arrangement. The company had about $224 million in cash and
equivalents on hand at December 31, 2001, and the firm expects
to generate the majority of its projected $80 million to $100
million in operating cash flow in the first half of 2002, which
should provide sufficient liquidity until an agreement is

Should negotiations between Foster Wheeler and its senior
lenders result in maintaining a fair liquidity position,
Standard & Poor's would not expect to lower the corporate credit
rating further. If the senior lenders obtain a collateral
package as part of the negotiations, Standard & Poor's would
review both the bank facility and senior unsecured debt to
determine whether those securities should be notched relative to
the corporate credit rating. Should lender negotiations become
more challenging than expected, or lead to further erosion of
financial flexibility, the ratings could be lowered.

Standard & Poor's continues to view Foster Wheeler's asbestos
liability as meaningful but manageable, and is not a material
driver of the current rating action.

       Ratings Lowered, Remain on CreditWatch Negative

     Foster Wheeler Ltd.                    TO         FROM
       Corporate credit rating              B+         BB-
       Senior unsecured ratings             B+         BB-
       Subordinated debt rating             B-         B
       415 shelf registration:
       Senior unsecured (prelim.)           B+         BB-
       Subordinated     (prelim.)           B-         B

DebtTraders reports that Foster Wheeler Corporation's 6.750%
bonds due 2005 (FWC) are trading between 80 and 83. See real-
time bond pricing.

FRUIT OF THE LOOM: Proposes Solicitation & Voting Procedures
Bankruptcy Rule 3017(d) specifies the materials to be
distributed to claimants and equity security holders after
approval of a disclosure statement. Pursuant to Bankruptcy Rule
3017(d), Luc A. Despins, Esq., of Milbank, Tweed, Hadley &
McCloy tells Judge Walsh, Fruit of the Loom proposes to transmit
to the United States Trustee and mail to all claimants entitled
to vote, no later than February 11, 2002, a solicitation package
containing a copy or conformed printed versions of:

  (a) the Notice of

      (1) Approval of the Disclosure Statement;

      (2) the Hearing on Confirmation of the Plan;

      (3) the Deadline and Procedures for Filing Objections to
          Confirmation of the Plan;

      (4) the Deadline and Procedures for Temporary Allowance of
          Claims for Voting Purposes;

      (5) Treatment of Certain Unliquidated, Contingent or
          Disputed Claims for Notice, Voting, and Distribution

      (6) Omnibus Objections to Claims for Voting Purposes;

      (7) Record Date; and

      (8) Voting Deadline for Receipt of Ballots;

  (b) the Disclosure Statement;

  (c) the Plan (which will be furnished in the Voting
      Solicitation Package as Exhibit A to the Disclosure

  (d) solicitation letters from Fruit of the Loom, the
      Creditors' Committee, the Prepetition Secured Creditors,
      and other parties in substantially the form(s) approved at
      the Disclosure Statement Hearing;

  (e) the Proposed Disclosure Statement Approval Order (without
      exhibits thereto) (in the form in which it has been
      entered by the Court); and

  (f) a ballot (and a pre-addressed, postage prepaid, return-
      envelope) appropriate for the specific creditor.

Fruit of the Loom proposes to send the Solicitation Package by
United States mail (first class postage prepaid), by hand, or by
overnight courier to:

   (1) claimants holding Administrative Expense Claims, Priority
       Tax Claims, and Priority Non-Tax Claims;

   (2) claimants holding Claims designated as impaired and
       entitled to vote on the Plan (a) who have filed timely
       proofs of claim (or untimely proofs of claim which have
       been allowed as timely by the Court on or before the
       Record Date) that have not been disallowed by an order of
       the Court entered on or before the Record Date, or (b)
       whose Claims are scheduled in the Schedules or any
       amendment thereto filed on or before the Record Date
       (other than those scheduled as unliquidated, contingent
       or disputed).

To avoid duplication and reduce expenses, Fruit of the Loom
proposes that holders of Claims in a Class that is designated as
impaired and entitled to vote under the Plan need receive only
the Voting Solicitation Package appropriate for that impaired
Class.  Fruit of the Loom believes that transmittal and mailing
of the Voting Solicitation Package as described above provides
adequate notice to holders of Priority Tax and Non-Tax Claims,
unimpaired Classes, and Classes entitled to vote, and complies
with the applicable Bankruptcy Rules. These procedures will give
29 days notice of the Voting Deadline, 25 days notice of the
Objection Date, and 43 days notice of the Confirmation Hearing
Date. (Fruit of the Loom Bankruptcy News, Issue No. 47;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   

GENEVA STEEL: Bringing-In Parr Waddoups as Special Counsel
Geneva Steel LLC requests permission from the U.S. Bankruptcy
Court for the District of Utah to retain and employ the law firm
of Parr Waddoups Brown Gee & Loveless as Special Counsel.

Parr Waddoups will provide Geneva with services pertaining to:

    a) environment matters;

    b) litigation and other proceedings in nonbankruptcy courts
       and administrative agencies to the extent not stayed by
       Section 362(a) of the bankruptcy Code; and

    c) to the extent bankruptcy issues are involved, interface
       with the Debtor's bankruptcy counsel on business matters.

The Debtor wishes to retain Parr Waddoups because of its past
representation and extensive knowledge about the Debtors'
business and legal affairs. Parr Waddoups will be paid according
to the firm's customary hourly rates presently ranging from $125
to $160.

Geneva Steel owns and operates an integrated steel mill located
near Provo, Utah. The Company filed for chapter 11 protection on
January 25, 2002. Andrew A. Kress, Esq., Keith R. Murphy, Esq.
and Stephen E. Garcia, Esq. at Kaye Scholer LLP represent the
Debtor in its restructuring efforts. When the Company filed for
protection from its creditors, it listed $264,440,000 in total
assets and $192,875,000 in total debts.

GLOBAL CROSSING: Signs-Up Weil Gotshal for Legal Services
Global Crossing Ltd., and its debtor-affiliates seek court
approval pursuant to Bankruptcy Code section 327(a) to employ
Weil, Gotshal & Manges LLP as their attorneys in connection with
the commencement and prosecution of their chapter 11 cases under
a general retainer, to perform the extensive legal services that
will be necessary during their chapter 11 cases in accordance
with Weil Gotshal's normal hourly rates in effect when services
are rendered and normal reimbursement policies.

Mitchell C. Sussis, Corporate Secretary of the Debtors, tells
the Court that the Debtors selected Weil Gotshal because of the
firm's knowledge of the Debtors' businesses and financial
affairs and its extensive general experience and knowledge, and
in particular, its recognized expertise in the field of debtors'
protections and creditors' rights and business reorganizations
under chapter 11 of the Bankruptcy Code. The Debtors believe
that Weil Gotshal is both well qualified and uniquely able to
represent them in their chapter 11 cases in a most efficient and
timely manner.  Were the Debtors required to retain attorneys
other than Weil Gotshal in connection with the prosecution of
these chapter 11 cases, the Debtors, their estates, and all
parties in interest would be unduly prejudiced by the time and
expense necessarily attendant to such attorneys' familiarization
with the intricacies of the Debtors and their business

The Debtors will look to Weil Gotshal to:

A. take all necessary action to protect and preserve the estates
     of the Debtors, including the prosecution of actions on the
     Debtors' behalf, the defense of any actions commenced
     against the Debtors, the negotiation of disputes in which
     the Debtors are involved, and the preparation of objections
     to claims filed against the Debtors' estates;

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

C. negotiate and prepare on behalf of the Debtors a plan of
     reorganization and all related documents thereto; and

D. perform all other necessary legal services in connection
     with the prosecution of these chapter 11 cases.

Michael F. Walsh, Esq., discloses that in the one-year period
prior to December 30, 2001, the Debtors paid Weil Gotshal
approximately $800,000 for services performed prior to the
commencement of the chapter 11 cases and the Firm received an
additional $2,000,000 retainer.  Weil Gotshal will bill for
services at its customary hourly rates:

      Members and Counsel      $375 to $700
      Associates               $165 to $440
      Paraprofessionals        $ 50 to $175

Mr. Walsh submits that the members and associates of Weil
Gotshal do not have any connection with or any interest adverse
to the Debtors, their creditors, or any other party in interest,
or their respective attorneys and accountants, except that the
firm has previously has represented, currently represents, and
may represent in the future the entities described below, in
matters totally unrelated to the Debtors:

A. Significant Stockholder: Microsoft Corporation;

B. Strategic Partner: Cisco Systems Inc., EMC Corporation,
     Hitachi Affiliate;

C. Indenture Trustee: Manufacturer's Hanover Trust Company,
     United States Trust Company of New York;

D. Litigation Party: 360networks Inc., Bellsouth, CompUSA, Inc.,
     Denmark Military Equipment Company, Ericsson UK, Qwest
     Communications, Southwestern Bell Telephone Company,
     Travelers Casualty and Surety Company of America, Verizon
     Public Communications;

E. Lenders: ABN AMRO Bank, AEGON, Allstate Affiliate, American
     Express Asset Management, BAIN Capital Inc., Bank of
     Hawaii, Bank of Montreal, Bank of New York, Bank of Nova
     Scotia, Bank of Scotland, Bank of Tokyo, BankAmerica,
     Barclays Bank, Bayerische Landesbank, Banc One, BHF Bank,
     Centre Pacific, Chase Manhattan Bank, CIBC Oppenheimer,
     Citibank, City National Bank, Credit Lyonnais, Credit
     Suisse Asset Management Group, Credit Suisse First Boston,
     Dai Ichi Kangyo Bank Ltd., Dresdner Kleinwort Wasserstein,
     Deutsche Bank Alex Brown, Hypo Vereinsbank IBJ, Schroder
     Bank & Trust, Imperial Credit Industries, ING Capital
     Advisors, JP Morgan Chase, KBC, KBC Bank, Kreditanstait Fur
     Wierderaufbau, Leumi & Co., Erste Bank, FleetBoston,
     Franklin Advisors Inc., Fuji Bank Ltd., General Electric
     Capital Corp., General Reinsurance - New England Asset
     Management, Goldman Sachs & Co., Merrill Lynch Asset
     Management, Merrill Lynch Pierce Fenner Smith, Mitsubishi
     Trust & Banking, Morgan Stanley Dean Witter, Morgan Stanley
     Dean Witter Advisors, Oppenheimer Funds, Inc., PPM America
     Inc., Rabobank Nederland, Royal Bank of Canada, Societe
     Generale, Stanfield Capital, Sumitomo Bank Ltd., Textron
     Financial Corporation, Toronto Dominion Bank, Travelers
     Companies, UBS Warburg, Wachovia Bank, Washington Mutual
     Inc., Washington Mutual Insurance, Westdeutsche Landesbank;

F. Vendor: Avaya, Bell Atlantic Nynex Mobile, Bellsouth, Falck,
     GTE Airfone, GTS Carrier Services, Iberdrola Redes SA, ICA
     Fluor Daniel S.D., KPN, Louis Dreyfus, Pacific Century
     Cyberworks, Siemens, Swisscom AG, Telia;

G. Underwriter: Canadian Imperial Bank of Commerce, Chase
     Manhattan Bank, CIBC Oppenheimer, Citibank, Deutsche Bank
     Alex Brown, Goldman Sachs & Co., Salomon Smith Barney,
     Inc., West LB;

H. Affiliate of Outside Director: Avon Inc., Cendant
     Corporation, Cnet, E.W. Scripps, Intermedia Partners, MCI
     Communications, National Cable Televisions Assoc., Starwood
     Hotels & Resorts, TCI Music Inc., TD Waterhouse Group,
     Inc., Tele-Communications, Inc., The Carlyle Group, Yahoo!,

                              * * *

Judge Gerber entered an interim order approving Weil Gotshal's
employment, with objections due by February 22, 2002 and a
hearing on March 1, 2002. If no objections are filed, Judge
Gerber orders that this interim order shall be deemed a final
order. (Global Crossing Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

GLOBAL CROSSING: Responds to Allegations re Accounting Practices
Global Crossing issued more details on previously reported
allegations by a former employee regarding the company's
accounting practices.

In August 2001, Global Crossing received a letter from Roy
Olofson, who was at that time a vice president-finance of the
company, raising concerns about certain accounting and financial
reporting matters of Global Crossing and its subsidiary Asia
Global Crossing.  Mr. Olofson claimed that it was improper for
the company to have reported pro forma values for cash revenue
and adjusted EBITDA (earnings before interest, taxes,
depreciation and amortization) because the numbers are not
measures of cash receipts or earnings and because the amounts
were allegedly inflated by including amounts for which cash was
not received or where there had been non-monetary exchanges of

After a review of the letter and consultation with outside
counsel, the company determined that the financial and reporting
topics raised in the letter had been reviewed by its internal
finance and accounting personnel and by Arthur Andersen in
connection with the audit of the company's annual financial
statements and its review of the company's interim financial
statements. The company also determined that there had been
appropriate disclosure in the company's press releases and
filings with the U.S. Securities and Exchange Commission (SEC)
describing how the pro forma numbers were prepared and making it
clear that this information should not be considered as an
alternative to any measure of performance defined under GAAP
(generally accepted accounting principles). The company also
determined that there were reasons to question the motives of
Mr. Olofson.  Accordingly, no further action was taken in
response to Mr. Olofson's allegations.

As disclosed in the company's filings with the SEC, the
company's management has used recurring adjusted EBITDA to
monitor compliance with the financial covenants contained in its
debt instruments and to measure the performance and liquidity of
its business segments. The company's press releases and filings
with the SEC have also disclosed the fact that the company has
purchased significant amounts of assets from carriers who were
also customers of the company. The disclosures have presented
the amounts of cash received by the company and included in cash
revenue and adjusted EBITDA, as well as the amounts of the cash
commitments to those customers.

Shortly after Mr. Olofson wrote to the company, and
notwithstanding the fact that he was still an employee, the
company received a letter from an attorney alleging that Mr.
Olofson had been "constructively terminated" from his employment
and therefore would no longer be reporting to work. Furthermore,
the employee and his counsel demanded, as a condition to
dropping his wrongful termination claim, an up-front multi-
million dollar payment and a minimum seven-figure annual cash
compensation package for a five-year period. After a review of
this claim and consultation with outside counsel, the company
concluded that this claim was without merit and refused to agree
to this demand.

Subsequently, Mr. Olofson's attorney provided the company with a
draft complaint which elaborated on the allegations expressed in
the employee's August 2001 letter and added an allegation that
the company had delayed the announcement of a downward revision
of its guidance for 2001 earnings because of recent stock
transactions entered into by senior executives of the company.
After a review of these additional allegations and consultation
with outside counsel, the company concluded that the allegations
were without merit.

The company continued to refuse to agree to the employee's
multi-million dollar demand and, over the following months, the
employee's attorney gradually reduced his settlement demand to
an amount representing less than one-tenth of the original
demand. The company terminated the employee's employment on
November 30, 2001 in connection with a substantial reduction in
its workforce.  

On January 18, 2002, the company received a letter from a
different attorney for Mr. Olofson, attaching a revised draft of
the initial complaint and containing renewed threats to commence
an action for wrongful termination against the company and
certain of its officers and directors unless a multi-million
dollar payment was made by February 1, 2002. The company again
refused to agree to this demand.

Although the company had determined that the allegations made by
Mr. Olofson were without merit and that the issues raised in his
letter had been properly addressed in the company's news
releases and its filings with the SEC, the company's January 28,
2002 bankruptcy filing and recent events not involving the
company have created a heightened sensitivity to any alleged
accounting improprieties.  Accordingly, on January 28, 2002, the
company first disclosed to Arthur Andersen the existence of Mr.
Olofson's letter and on January 29, 2002 provided a copy of the
letter to Arthur Andersen. On January 29, 2002, the company also
first disclosed the letter's existence to the current members of
the company's audit committee and on January 30, 2002 provided
copies to these individuals.

The company has provided a copy of Mr. Olofson's letter to the
SEC and has received an inquiry from the SEC for the voluntary
production of certain additional information regarding the
issues raised in Mr. Olofson's letter. The company is
cooperating with the SEC in providing this information.

Although the company continues to believe that Mr. Olofson's
motivations are questionable and continues to believe that its
accounting and reporting are entirely appropriate, at the
request of the company's audit committee and Arthur Andersen, it
has decided to form a special committee of independent
directors, including members of its audit committee, to conduct
a further review of the allegations made in the August 2001
letter and related draft complaints. The special committee will
retain independent counsel and a firm of independent accountants
other than Arthur Andersen to review the matter.

Global Crossing 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).

On January 28, 2002, Global Crossing and certain of its
affiliates (excluding Asia Global Crossing and its subsidiaries)
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. Please visit
http://www.asiaglobalcrossing.comfor more information about  
Global Crossing and Asia Global Crossing.

GLOBAL CROSSING: DebtTraders Keeps SELL Recommendation on Notes
On January 28, 2002 Global Crossing Ltd. and certain of its
subsidiaries filed for reorganization under Chapter 11 of the
U.S. Bankruptcy Code. At the same time, winding-up proceedings
commenced in Bermuda, where the Company is incorporated.

DebtTraders analyst Matthew Breckenridge, CFA says that "[t]he
filing comes as no surprise. We expected the Company to file for
bankruptcy in the very near term, as a $43.5 million coupon
payment was due on February 1, 2002, and the waivers to covenant
violations on the Company's bank loans expire February 13, 2002
(see DebtTraders report on Global Crossing Ltd dated 1/30/02)."

In addition, DebtTraders also reports that pending the
acceptance of the plan in bankruptcy, Hutchison Whampoa and
Singapore Technologies signed a letter of intent to make a $750
million strategic investment for a 60% stake in the Company. The
plan is contingent upon the approval of the plan by the
bankruptcy courts prior to the end of August 2002. "We suspect
that the Hutchison/SingTech investment is a prelude to something
much bigger for the new company, possibly the creation of a new
global telecommunications provider, which we have dubbed 'Li Ka-
shingTel'," says Mr. Breckenridge. "Despite the $750 million
cash infusion, we still believe that bondholders will not
recover anything of value in the reorganization (see DebtTraders
report on Global Crossing Ltd dated 1/30/02). After revising our
model for the cash infusion and increasing revenue growth due to
Hutchison's and SingTech added support, we are still unable to
envision a scenario where bondholders receive any value
substantially more than the current market price of the bonds.
This is based upon our belief that the $750 million will not be
sufficient to fund the Company until free cash flow breakeven
under the current business model."

He continues, "Given the uncertainty of the timing, the cost,
and ultimate completion of the reorganization and our continued
belief that the network does not generate sufficient revenue to
support its costs, we are maintaining our SELL recommendation on
Global Crossing's notes. Furthermore, we consider the two
strategic investors to be savvy and unlikely to offer existing
investors much in the way or recovery value."

DebtTraders reports that Global Crossing Holdings Ltd.'s 9.625%
bonds due 2008 (GBLX3) are trading between 4.25 and 5.75. See  
real-time bond pricing.

HMG WORLDWIDE: Court Approves Retention of Magrill Auctioneers
HMG Worldwide Corporation and its debtor-affiliates obtained
approval from the U.S. Bankruptcy Court for the Southern
District of New York to retain Magrill Auctioneers Company,
Inc., to conduct an auction of personal property located at the
Debtors' premises located at 38 Sindereen Avenue in Brooklyn,
New York.

The Debtors selected Magrill as its auctioneer to take the steps
necessary to liquidate the Property by public auction in order
to realize the highest return possible.

HMG Worldwide Corporation engages primarily in identifying in-
store, retail-based marketing objectives of its clients and
integrating research, creative design, engineering, production,
package design and related services to provide point-of purchase
merchandising fixtures and display systems. The Company filed
for chapter 11 protection on October 23, 2001. Ira L. Herman,
Esq., at Robinson Silverman et al., represents the Debtors in
their restructuring effort. When the Company filed for
protection from its creditors, it listed total assets of
$34,542,000 and total debts of $61,946,000.

HAYES LEMMERZ: Wants Lease Decision Deadline Moved to June 3
Hayes Lemmerz International, Inc., and its debtor-affiliates ask
the Court to extend the time within which they must assume or
reject unexpired leases of non-residential real property through
June 3, 2002, subject to the right of each lessor to ask for the
Court to shorten the extension period and specify a time in
which the Debtors must act on an unexpired lease.

Mark S. Chehi, Esq., at Skadden Arps Slate Meagher& Flom LLP,
tells the court that the unexpired leases are for properties
used by the Debtors for the operation of their corporate and
manufacturing facilities and are assets of the estates and are
thus integral to the Debtors' continued operations as they seek
to reorganize.  Although the Debtors may seek the court's
permission to reject some of the unexpired leases prior to the
conclusion of these chapter 11 cases, at this time, the Debtors
believe that most of the unexpired leases will either prove to
be desirable -- or necessary -- to the continued operation of
the Debtors' business.

Mr. Chehi states that the Debtors are currently assessing the
value and marketability of all of the unexpired leases but at
this point in these chapter 11 cases, it is not yet possible for
the Debtors to determine whether or not each of the locations
covered by the unexpired leases will play a part in the Debtors'
business going forward or will give value to the Debtors by
being assumed and assigned to other parties.

Mr. Chehi submits it is undisputed that the Debtors' chapter 11
cases are large and complex.  In addition, because the unexpired
leases are used to support the Debtors' corporate and
manufacturing operations, many of them remain vital to the
Debtors' reorganization efforts and an integral component of
their strategic business plan.  Finally, Mr. Chehi contends that
to the best of the Debtors' knowledge, they have remained
current on all of their post-petition lease obligations and will
continue to remain so going forward.  Thus, the request for
extension will not prejudice landlords under the unexpired

Mr. Chehi assures the Court that the Debtors' and their
professionals are currently assessing the value and
marketability of all of the unexpired leases and whether there
is sufficient value for the Debtors to assume and assign such
leases rather than reject them.

Mr. Chehi claims that the decision to assume, assign or reject
an unexpired lease is necessarily tied to the Debtors' business
plan, which is currently being formulated. If the extension
period is not extended, the Debtors will be compelled
prematurely to assume substantial, long-term liabilities under
the unexpired leases, possibly creating administrative expense
claims or forfeit benefits associated with some leases, to the
detriment of the Debtors' ability to operate and preserve the
going-concern value of their business for the benefit of their
creditors and other parties-in-interest.

Mr. Chehi believes that the four-months extension will give the
Debtors sufficient time to formulate their long-term business
plan and reorganization strategy and decide on the unexpired

A hearing on the motion is scheduled on February 14, 2002, and
pursuant to Local Rule 9006-2, the Debtors' time to make lease-
related decisions is automatically extended through the
conclusion of that hearing. (Hayes Lemmerz Bankruptcy News,
Issue No. 6; Bankruptcy Creditors' Service, Inc., 609/392-0900)

HEALTH NEW ENGLAND: S&P Junks FS Rating on Weak Capitalization
Standard & Poor's affirmed its triple-'Cpi' counterparty credit
and financial strength ratings on Health New England Inc.  

The rating action reflects the HMO's extremely weak risk-based
capitalization and earnings profile, offset by good liquidity.

HNE, headquartered in Springfield, Mass., is licensed and
operates within Massachusetts.  It was incorporated in 1985 and
formed by initial capital contributions from three Massachusetts
hospitals and their affiliated private- care physicians.  HNE is
95.8% owned by Baystate Hlth Sys Inc. (Baystate).

Major Rating Factors:

     -- HNE's level of risk-based capitalization is considered
extremely weak, as reflected by a Standard & Poor's capital
adequacy ratio of 9.2% as of year-end 2000.  Total net worth
increased to $5.7 million in 2000 from $2.8 million in 1999, of
which $4.6 million is in surplus notes from Baystate.

     -- Although HNE's earnings are also considered extremely
weak, they have rebounded to $1.8 million in 2000. Liquidity is
good, with a Standard & Poor's liquidity ratio of 116.4% based
on HNE's year-end financial statements for the five years ending
Dec. 31, 2000.

     -- Enrollment growth is marginal, based on an average
participant enrollment growth of 1.6% over the past three years.

Ratings with a 'pi' subscript are insurer financial strength
ratings based on an analysis of an insurer's published financial
information and additional information in the public domain.  
They do not reflect in-depth meetings with an insurer's
management and are therefore based on less comprehensive
information than ratings without a 'pi' subscript.  Ratings with
a 'pi' subscript are reviewed annually based on a new year's
financial statements, but may be reviewed on an interim basis if
a major event that may affect the insurer's financial security
occurs.  Ratings with a 'pi' subscript are not subject to
potential CreditWatch listings.

Ratings with a 'pi' subscript generally are not modified with
"plus" or "minus" designations.  However, such designations may
be assigned when the insurer's financial strength rating is
constrained by sovereign risk or the credit quality of a parent
company or affiliated group.

HEARTLAND TECH: Weighing Debt Workout Options to Resolve Default
Heartland Technology (Amex: HTI) said it has received written
demand for payment from two holders of the company's 13%
Subordinated Notes.  These holders have 13% Subordinated Notes
with an aggregate principal amount of $750,000. One of the
holders has also filed suit in federal court in Chicago,
Illinois.  That holder has a 13% Subordinated Note with the
principal amount of $250,000.  The company had reported on
January 22, 2002 that it had not made payments of interest and
principal due on those notes, but at that time had not received
any written demand for payment from holders.

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

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

ICH CORP: Files for Chapter 11 Reorganization in New York
I.C.H. Corporation (AMEX:IH) announced that, in order to
separate its ongoing Arby's business from various holding
company liabilities related primarily to the Company's former
ownership of the California-based Lyon's restaurant chain, and
to enhance the overall financial condition of the Company's
operating subsidiaries, the Company and its principal
subsidiaries have voluntarily filed for financial restructuring
under Chapter 11 of the United Stated Bankruptcy Code.

The filings, which were made Tuesday in the United States
Bankruptcy Court for the Southern District of New York, will
allow the Company to resolve its non-Arby's related holding
company liabilities, while preserving and enhancing the value of
the underlying Arby's restaurant operations of its subsidiaries.
Through its principal operating subsidiaries, the Company
currently operates 240 Arby's restaurants located primarily in
Michigan, Texas, Pennsylvania, New Jersey, Connecticut and
Florida. As part of the restructuring proceedings, the Company
expects that those Arby's restaurant operations will continue
without interruption. The Company currently expects to close
only one Arby's restaurant in connection with the Chapter 11

ICH is a Delaware holding corporation which, through its
principal operating subsidiaries, currently operates 240 Arby's
restaurants located primarily in Michigan, Texas, Pennsylvania,
New Jersey, Connecticut and Florida.

INTEGRATED HEALTH: Inks Pact to Resolve Claims with Rotech
In accordance with the proposed Rotech Plan, Integrated Health
Services, Inc., and its debtor-affiliates have submitted an
application for approval of a settlement and compromise
resolving all claims between (i) Rotech Medical Corporation and
its direct and indirect subsidiaries, and (ii) IHS and its
direct and indirect subsidiaries other than the Rotech Debtors.

As previously reported, Rotech is a direct subsidiary of IHS and
the Rotech Debtors operate one of the three principal business
segments -- home respiratory services. The other two divisions
are the Long-Term Care division and the Symphony Division which
provides contract rehabilitation and other contract services.

Pursuant to the Rotech Plan, the Rotech Debtors will be
substantively consolidated for plan purposes, and the Rotech
Debtors will be reorganized separately from and prior to the IHS
Debtors. The Plan also requires the settlement of all claims and
issues between the Rotech Debtors, on the one hand, and the IHS
Debtors, on the other hand. The Plan provides that IHS' 100%
ownership interest in Rotech will be extinguished and 100% of
Rotech's new common stock will be issued to the holders of the
Senior Lender Claims. The Senior Lender Claims are, by far, the
dominant creditor group in both the IHS Debtors' and Rotech
Debtors' bankruptcy cases. In respect of the Rotech Debtors, the
Senior Lender Claims are approximately $2.3 billion and the
remainder of the unsecured claims (excluding the IHS
intercompany claim) are less than $50 million.

The Intercompany claims between Rotech and IHS arise from two
major sources:

(I)  As of the Filing Date, approximately $495 million is owed
     by Rotech to IHS. This intercompany debt was substantially
     incurred prior to the Filing Date, at the time IHS acquired
     Rotech and loaned money to Rotech to repay pre-acquisition
     institutional debt owed by Rotech to third parties.

(II) Under the cash management system which started pre-petition
     and continued after the Filing Date with authorization
     granted by the Court, the Rotech Debtors and the IHS
     Debtors pooled their cash under a centralized

Assuming allocation of corporate overhead based on the
respective revenues generated, the Rotech Debtors advanced an
estimated $79 million to the IHS Debtors after the Filing Date
through September 1, 2001. This amount remains unpaid. As of
December 31, 2001, the IHS Debtors and the Roteeh Debtors
collectively held approximately $85 million in cash (the Cash
Reserves) in their various bank accounts.

The Rotech Debtors did not have the operational problems that
the IHS Debtors had when the Debtors' bankruptcy cases were
filed. If not for the Rotech Debtors' obligations to the Senior
Lenders, the Rotech Debtors would not have filed for bankruptcy.
Since their acquisition, the Rotech Debtors have, for the most
part, operated independently from IHS. The Rotech Debtors are
ready to emerge from bankruptcy and realize their full earnings
potential, but the IHS Debtors are not. In order for the Rotech
Debtors to emerge, they need to become completely separate from
the IHS Debtors. To accomplish that goal, the Settlement needed
to be reached which basically divides the Cash Reserves,
reconciles the intercompany pre-Filing Date and post-Filing Date
claims against each other, and provides for certain transition
services to effectuate the final separation of the two debtor

                   The Settlement Agreement

The Settlement and Stipulation provide for the following,

   (A) Apportioning of Cash Reserves

Upon the Effective Date of the Rotech Plan, and subject to the
adjustments provided for in the Stipulation, the Cash Reserves
will be apportioned between the IHS Debtors and the Rotech
Debtors as follows:

       -- $45 million will be transferred to the Reorganized
Rotech Debtors and the remainder held in the Cash Reserves
accounts will be retained by the IHS Debtors.

       -- If, under the Rotech Plan, the Restructuring
Transactions are implemented, in lieu of the $45 million, New
Rotech will receive $40 million, plus Reorganized Rotech will
receive a $5 million note (the Note) issued by IHS. The IHS
Debtors will receive the additional $5 million cash reflected by
the Note.

       -- The allocation of the Cash Reserves will be adjusted
based on a formula in the Stipulation if Rotech performs
contrary (either positively or negatively) to present

   (B) General Releases

The Rotech Debtors and the IHS Debtors will be deemed to have
exchanged general releases with each other, the effect of which
will cause, among other things, the following:

(1) The elimination of the IHS prepetition unsecured
    intercompany claim against Rotech in the amount of
    approximately $495 million, with such amount being treated
    as a capital contribution by IHS to Rotech; and

(2) The elimination of any administrative claim that the Rotech
    Debtors arguably would have against the IHS Debtors for
    advances made by Rotech for the benefit of the IHS Debtors
    after the Filing Date.

   (C) Transition

The Settlement also contains provisions to effectuate the
transition into making Rotech totally independent from IHS:

(1) IHS will administer and fund all obligations of the Rotech
    Debtors for the general and professional retained liability
    under the IHS insurance programs after the Effective Date of
    the Rotech Plan for occurrences which took place at the
    Rotech Debtors prior to such date. IHS will provide to
    Rotech monthly reports of all claims paid by IHS on its

(2) All corporate overhead and administrative expenses incurred
    prior to the Effective Date of the Rotech Plan will be paid
    for jointly by the IHS Debtors and the Rotech Debtors from
    the Cash Reserves. After the Effective Date of the Rotech
    Plan, if the IHS Debtors provide any services to Reorganized
    Rotech or New Rotech, IHS will collect from Reorganized
    Rotech or New Rotech a market rate of return for such

(3) IHS will file consolidated tax returns for the IHS Debtors
    and the Rotech Debtors for the year 200l and that portion of
    the year 2002 up and until the Effective Date of the Rotech
    Plan. Rotech will promptly reimburse IHS for for the
    incremental out-of-pocket costs incurred by IHS in including
    the Rotech Debtors as part of the consolidated returns. IHS
    will pay the taxes, if any, which may be incurred by it for
    the income resulting from the consummation of the Rotech
    Plan up to $2 million, and Rotech will pay the balance, if
    any. Notwithstanding this, if the Restructuring Transactions
    are implemented, then IHS, Reorganized Rotech and New Rotech
    will enter into a Tax Sharing Agreement and this latter
    provision on tax arrangement will supersede the former

  (D) Release of Senior Lender Interest to Consummate Litho Sale

In order to ensure additional liquidity to the IHS Debtors after
the Settlement takes effect, the holders of Senior Lender Claims
have agreed to release certain guaranty claims and stock pledges
(Interests) that they held against certain of the subsidiaries
of Litho Group, Inc. which were sold by the IHS Debtors to allow
the Litho Sale to be consummated.

The value of the Interests given up by such holders attached to
the proceeds of the Litho Sale, without prejudice to the rights
of either the IHS Debtors or the Creditors' Committee to
challenge in the future the validity, priority and/or extent of
the Interests. The holders of the Senior Lender Claims have
agreed under the Stipulation to permit the IHS Debtors to use
the Litho Sale proceeds in the ordinary course of business,
subject to the following conditions:

(1) The IHS Debtors have segregated the Litho Sale proceeds, and
    have agreed not to use them without following the procedures
    as described in (2) through (4) below.

(2) Subject to (3), the IHS Debtors will be able to utilize the
    Litho Sale proceeds 20 days after the delivery of notice of
    their Intent to use such proceeds is provided to the Bank
    Group's counsel and Creditors' Committee counsel. The IHS
    Debtors will use their best efforts to adequately protect
    the Interests of the Senior Lender Claims with respect to
    any use of the Litho Sale proceeds by the IHS Debtors.

(3) The Senior Lenders agree that the Litho Sale proceeds may be
    used as collateral for the amended IHS DIP Credit Facility.

(4) The Debtors may not use the Litho Sale proceeds if an order
    is entered by the Bankruptcy Court prohibiting such use by

To reflect the consideration received by the Senior Lenders
under the Rotech Plan, the Senior Lenders also have agreed under
the Settlement to reduce their claims in the IHS Debtors'
bankruptcy cases by $1 billion.

                     Basis for Settlement

In allocating the Cash Reserves and reconciling the intercompany
claims, the following facts were considered.

The Senior Lenders are the dominant creditors of both the IHS
Debtors and the Rotech Debtors. The Senior Lender Claims
constitute more than 95% of the claims against the Rotech
Debtors. After taking into account the effect of the
subordination provisions in the IHS bond indentures, and without
taking into account the reduction provided under the Rotech Plan
pursuant to the Settlement, the Senior Lender Claims constitute
approximately 85% of the claims of the IHS Debtors.

Any allocation of cash between the IHS Debtors and the Rotech
Debtors is, in significant respect, a paper exchange of moving
consideration from the left pocket of the Senior Lenders, to the
right pocket of the Senior Lenders. Further, if the pre-Filing
Date intercompany claim against Rotech in favor of IHS is
treated pari passu with the other general unsecured claims
against the Rotech Debtors, IHS' claim would he entitled to a
distribution under the Rotech Plan in excess of $l5O million in
value. The holders of Senior Lender Claims have a lien on this
intercompany claim, and thus the right to receive the putative
$150 million distribution. Assuming the Rotech Debtors' post-
Filing Date Claim against the IHS Debtors is approximately $79
million (after making certain assumptions as to how to allocate
corporate overhead based on post-Filing Date revenues), then
there is a $71 million difference in value in favor of IHS
(after netting out the post-Filing Date inter-company claim in
favor of Rotech against the distribution on the pre-Filing Date
intercompany claim in favor of IHS). The Senior Lenders, which
have a lien on this $71 million difference, are agreeable to
relinquishing this claim, in exchange for an approximate 50/50
split of the Cash Reserves.

Motivating the parties to this compromise are the following

* avoiding litigation relating to the assumptions behind the
  calculation ofthe intercompany claims, the value of the
  consideration given under the Rotech Plan, and the relative
  priority of the intercompany claims.

* the desire to see the Rotech Debtors emerge from bankruptcy in
  an expeditious manner, and the need to ensure that IHS has
  appropriate liquidity to operate after the Roteeh Debtors
  cease to be a part ofthe illS corporate family.

* the substantial overlap in claims between the Rotech Debtors
  and the IHS.

The IHS Debtors, the Rotech Debtors, the Creditors' Committee,
and the Bank Group have determined that entering into Settlement
in accordance with the Stipulation is in their respective best
interests. As such, the IHS Debtors and the Rotech Debtors
believe that the Settlement is in the best interest of each of
their respective estates, creditors, and all parties in
interest. The Debtors submit that the Settlement fully and
finally resolves, on fair and reasonable terms, the claims among
the IHS Debtors and the Rotech Debtors, the litigation of which
undoubtedly would be both costly and time-consuming. The Rotech
Debtors' prompt emergence from bankruptcy serves the best
interests of their creditors. In addition, the Settlement
provides for additional liquidity for the IHS Debtors for the
period after the IHS/Rotech separation, by use of the Litho Sale
proceeds, to ensure ample liquidity for the IHS Debtors after
the Effective Date of the Rotech Plan.

The Settlement was proposed by the chief executive officer of
IHS, after significant consultation with the president of Rotech
and the general counsel of Rotech. The Settlement was then
discussed and refined with the Creditors' Committee and the
unofficial committee representing the majority interests of
Senior Lender Claims (the Bank Group).

At the Court's direction, at the hearing for approval of the
Settlement, the Rotech Debtors will have independent counsel,
which counsel will have reviewed the merits of the Settlement,
and will, upon information and belief, advocate the approval of
the Settlement.

Accordingly, the IHS Debtors and the Rotech Debtors request
approval of the Stipulation authorizing and approving the
proposed settlement among the IHS Debtors and the Rotech
Debtors, and authorizing the execution of any documents
necessary to effectuate the settlement, and granting such other
and further relief as is just and proper. (Integrated Health
Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   

INTERACTIVE TELESIS: Takes Measures After Client's Bankruptcy
Interactive Telesis Inc. (OTCBB:TSIS), a provider of customized
interactive voice response (IVR) and speech-enabled products and
services, announced cost cutting measures and changes to its
board of directors.

In order to align costs with revenues, the company has elected
to put a portion of its staff on a temporary part time status.
This decision came after the company's largest client, Global
Crossing, representing more than 60 percent of its annual
revenue, filed for Chapter 11 bankruptcy. The move from full
time to part time status will allow the company to evaluate the
quality of the ongoing revenue stream and determine what other
actions are required from an ongoing business perspective.

"After reviewing the various alternatives available and the
underlying business climate, we concluded that putting a portion
of our staff on a temporary part time status provides the most
effective means to restructure the company in a process that
will enable us to continue uninterrupted daily operations," said
Al Staerkel, president and CEO of Interactive Telesis.

The company also announced that Cindy Mersky has resigned from
the board of directors, effective immediately. Mersky cited
responsibilities for other clients as the reason for her
resignation The board plans to appoint an ad hoc nominating
committee to identify and recruit qualified candidates to fill
the vacancy resulting from Mersky's departure.

                    Recent Investor Activity

BH Capital Investments LP and Excalibur Ltd. Partnerships have
made demands to convert their share position into a debt
position pursuant to their right to do so under specified
conditions set forth in their original investment agreement of
June 2000. The company has declined their request at this time
because it does not meet the specified conditions.

Interactive Telesis specializes in custom interactive voice
response (IVR) services and deployment of automated speech
recognition (ASR) technologies. Interactive Telesis presents a
very compelling offering for companies wishing to leverage the
benefits of IVR and speech recognition without the high cost of
ownership, capital outlay and internal IT staff requirements.
Clients include industry leaders such as 3D Systems, Global
Crossing, Lucent, MCI, Nike, Sprint, Wells Fargo, Worldcom and
Verizon, among others. Interactive Telesis is headquartered in
San Diego. For additional information, call 858/523-4000 or

JUNIPER: Fitch Downgrades CBO Backed by High Yield Bonds
Fitch Ratings has downgraded its ratings on six classes and
affirmed its ratings on two classes issued by Juniper CBO 1999-
1, Ltd.  The deal is a collateralized bond obligation (CBO)
backed predominantly by high yield bonds.

The following securities have been downgraded and removed from
Rating Watch Negative:

    * $34,000,000 class A-2 notes to 'AA+' from 'AAA';

    * $60,000,000 class A-3A notes to 'BB-' from 'A-';

    * $40,000,000 class A-3B notes to 'BB-' from 'A-';

    * $26,000,000 class B-1 notes to 'B-' from 'BBB';

    * $13,000,000 class B-2 notes to 'CC' from 'BB-';

    * $10,000,000 class B-2A notes to 'CC' from 'BB-'.

The following securities have been affirmed and removed from
Rating Watch Negative:

    * $135,738,855 class A-1L notes rated 'AAA';

    * $134,000,000 class A-1 notes rated 'AAA'.

According to its January 2, 2002 trustee report, Juniper CBO
1999-1, Ltd.'s collateral included a par amount of $28.5 million
(6.35%) defaulted assets.

The deal also contained another 15.25% assets rated 'CCC+' or
below. The A OC test was failing at 107.7% with a trigger of
115% and the B OC test was failing at 95.6% with a trigger of

In reaching its rating actions, Fitch reviewed the results of
its cash flow model runs after running several different stress
scenarios. Also, Fitch had conversations with Wellington
Management, the portfolio manager, regarding the portfolio.

KMART CORP: Obtains Interim OK to Access $1.15MM DIP Financing
At the close of business on January 2, 2002, Kmart Corporation
and its debtor-affiliates had approximately $795,000,000 in
cash.  That's a lot of money, but not enough to fund all of the
Debtors' working capital needs during this chapter 11
restructuring and give vendors, suppliers, employees, and other
stakeholders comfort that Kmart will be able to meet all of its
post-petition obligations.

Prior to the Petition Date, the Debtors approached JPMorgan
Chase Bank and other financial institutions about providing
postpetition financing.  The Debtors ultimately determined that
the $2,000,000,000 proposal arranged by JPMorgan was, under the
circumstances, the most favorable and addressed the Debtors'
working capital needs.  Accordingly, John Wm. Butler, Jr., Esq.,
tells Judge Sonderby, in their sound business judgment, the
Debtors ultimately decided to accept the JPMorgan DIP Financing.
Given the size of the proposed Postpetition Financing, the
Debtors have been advised that no other alternate proposal is

The salient terms of the $2,000,000,000 Postpetition Financing
package are:

Borrower:        Kmart Corporation

Guarantors:      All Kmart Debtor-Affiliates.

Agent:           JPMorgan Chase Bank

Co-Arrangers:    JPMorgan Securities and Fleet Securities, Inc.

Lenders:         Initially, the Facility is underwritten by:

                     JPMorgan Chase Bank          $500,000,000
                     Fleet Retail Finance Inc.    $500,000,000
                     GECC                         $500,000,000
                     CSFB                         $500,000,000

                 And then the Co-Arrangers will co-arrange a
                 syndicate of financial institutions to replace
                 the Initial Underwriters.

Agents:          Credit Suisse First Boston, Cayman Islands
                 Branch, and General Electric Capital

Monitors:        JPMorgan Chase, GECC, and
                 Fleet Retail Finance Inc.

Agent:           FRFI

Commitment:      $2,000,000,000, with a sublimit of $850 million
                 for Letters of Credit

Availability:    Borrowings may not exceed the sum of:

                 (x) the Borrowing Base less

                 (y) a $225,000,000 reserve less

                 (z) any other availability reserves established
                     by the Co-Collateral Monitors.

Borrowing Base:  To be defined in a manner mutually satisfactory
                to the Agent, the Co-Collateral Monitors and the
                Borrower, limiting aggregate extensions of
                credit to the lowest of:

                (1) the Total Commitments,

                (2) a percentage to be determined of the net
                    orderly liquidation value of inventory as
                    determined by the outside inventory
                    consultants/appraisers retained by the Agent

                (3) a percentage to be determined of inventory
                    meeting such eligibility standards;

Use of Proceeds: The Commitment is available:

                (a) for working capital and other general
                    corporate purposes and

                (b) for payment of prepetition claims permitted
                    by the Court pursuant to the "first day"
                    orders and other prepetition claims
                    permitted under the DIP Credit Agreement.

Maturity Date: April 22, 2004, or upon substantial consummation
                of a plan of reorganization.

Priority:      Direct borrowings and reimbursement obligations
                under the Letters of Credit and other
                obligations under the DIP Credit Agreement have
                superpriority status under section 364(c) of the
                Bankruptcy Code, subject to the Carve-Out.

Liens:         All DIP Loan Obligations are secured by (a)
                perfected first priority liens on all
                unencumbered prepetition and postpetition
                property of the Debtors, including (without
                limitation) substantially all inventory of the
                Debtors and all cash in the Letter of Credit
                Account, other than causes of action arising
                under sections 502(d) 544, 545, 547, 548, 549,
                550 or 551 of the Bankruptcy Code and (b)
                perfected junior security interests and liens
                upon all prepetition and postpetition property
                of the Debtors that is subject to valid,
                perfected and non-avoidable liens in existence
                on the Petition Date, or to valid liens in
                existence on the Petition Date that are
                perfected subsequent to the Petition Date as
                permitted by section 546(6) of the Bankruptcy
                Code, subject to the Carve-Out.

Carve-Out:     The Lenders consent to a $5,000,000 Carve-Out
                from their Liens to allow for payment of any
                unpaid professional fees, fees of the U.S.
                Trustee and the Court Clerk's costs, following
                an event of default.

Interest Rate: Chase's Alternate Base Rate plus 2.5% or LIBOR
                plus 3.5%.  In the event of a default, the
                Interest Rate increases by 2.0%.

Fees:          The Debtors agree to pay a variety of fees to
                the Agents and Lenders:

                * a Commitment Fee based on a scale of
                  percentages (based on usage of the Commitment)
                  per annum on the average unused amount of the
                  Commitment (with the issuance of Letters of
                  Credit being treated as usage of the

                    Commitment Fee           Amount Borrowed
                    --------------           ---------------
                       1.00%                 33-1/3% or less
                       0.75%                 66-2/3% or less
                       0.05%                 66-2/3% or more

                * Letter of Credit Fees equal to 3.5% per annum;

                * All other Fees itemized in certain non-public
                  Fee Letters.

The Lenders won't lend a dime under the DIP Facility until they
receive drafts of Kmart's projected operating plan (which shall
include income statements, balance sheets and cash flow
statements, each integrated with relevant assumptions) for its
fiscal years ending on or about January 31, 2003 (on a monthly
basis) and January 31, 2004 (on a monthly or quarterly basis)
and those drafts must be acceptable to the Agent and the

The Debtors covenant that they will limit their Capital
Expenditures to an aggregate amount of:

                    Period                 Maximum CapEx
                    ------                 -------------
     February 1, 2002 to January 31, 2003   $650,000,000
     February 1, 2003 to January 31, 2004    800,000,000
     February 1, 2004 to April 22, 2004      212,000,000

provided that (i) no more than 55% of the Capital Expenditures
permitted in any fiscal year may be made in the first two
quarters thereof and (ii) 20% of the unused portion of permitted
Capital Expenditures in any fiscal year may be carried forward
to and used in the following fiscal year.

The Debtors covenant that they will not permit cumulative EBITDA
for each period beginning on May 31, 2002 and ending in each
case on the last day of each month falling thereafter through
the Maturity Date to be less than an amount that is satisfactory
to the Agent and the Banks . . . and the Debtors give no hint
whether these satisfactory targets will ever be made public.

On an interim basis, Judge Sonderby authorizes the Debtors to
borrow up to $1,150,000,000 under the DIP Credit Agreement,
pending a Final DIP Financing Hearing to be held on February 13,
2002. (Kmart Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   

MEMC ELECTRONIC: Reschedules Reporting of 2001 Annual Report
MEMC Electronic Materials, Inc. (NYSE:WFR) says it is
rescheduling the reporting of its fourth quarter and 2001 annual

The Company has until March 31, 2002 to report these results.

As previously announced, the Company filed with the Securities
and Exchange Commission a preliminary proxy statement containing
certain pro forma financial statements, relating to a special
stockholders' meeting being called to consider and vote on the
November 13, 2001 debt restructuring transactions. The Company
was recently notified that the SEC staff is reviewing the
preliminary proxy statement and will provide comments to the

The Company will issue an announcement when it is ready to
report final fourth quarter results.

MEMC is a leading worldwide producer of silicon wafers for the
semiconductor industry. Silicon wafers are the fundamental
building block from which almost all semiconductor devices are
manufactured, such as are used in computers, mobile electronic
devices, automobiles, and other consumer and industrial
products. Headquartered in St. Peters, MO, MEMC operates
manufacturing facilities directly or through joint ventures in
every major semiconductor manufacturing region throughout the
world, including Europe, Japan, Malaysia, South Korea, Taiwan
and the United States.

MARINER POST-ACUTE: Court Sets Confirmation Hearing for March 25
Mariner Post-Acute Network, Inc., obtains Court an order:

(1) approving the retention of Poorman-Douglas Corporation as
     the Debtors' balloting agent;

(2) approving solicitation and voting procedures.

Additionally, as approved by the Court, January 16, 2002 shall
be the record date for holders of Claims and Equity Interests
for notice and voting purposes only, provided, however, that
February 1, 2002 shall be the record date for holders of MPAN
Senior Credit Facility Claims and MHG Senior Credit Facility
Claims, for notice and voting purposes only. The indenture
trustees for the MPAN Subordinated Notes and MHG Subordinated
Notes shall have no obligations with respect to the
establishment of the Record Holder Date, including, but not
limited to, obtaining lists of all holders of such notes as of
the Record Holder Date.

The Confirmation Hearing is scheduled for March 25, 2002 at 9:00
a.m., Eastern Time, in the courtroom of the Honorable Mary F.

The Confirmation Objection Deadline is set at 4:00 p.m. Eastern
Time, March 5, 2002.

The Debtors, the Committees and the Senior Credit Facility Claim
Holders are permitted to file reply papers by no later than 4:00
p.m. Eastern Time on March 15, 2002.

Only the holders of Claims in Classes SP-1 through SP-6, SP-8,
SM-1 through SM-5, SM-7, SM-9 through SM-12, SJ-1, SJ-2, UP-1,
UP-2, UM-1, UM-2, UJ-1, GP-1 and GM-1 (the Voting Classes) will
be entitled to vote to accept or reject the Plan . (Mariner
Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service,
Inc., 609/392-0900)  

MCLEODUSA INC: Overview of Debtor's Prepackaged Chapter 11 Plan
McLeodUSA Incorporated proposes a Plan of Reorganization under
chapter 11 of the U.S. Bankruptcy Code premised on continued
operation of the Company's business, sales of non-core assets,
and a $3 billion reduction of debt.

Houlihan, Lokey, Howard & Zulkin estimates Reorganized
McLeodUSA's equity value is $1,150,000,000.  That valuation
takes into account McLeodUSA's operating business, the expected
present value of certain non-core assets and the estimated debt
balances at and beyond an assumed April 30, 2002, Effective Date
for the Plan, and gives further effect to the divestiture of
McLeodUSA Media Group, Inc. (known as Pubco), on the Effective
Date and to the divestiture of ICTC and McLeodUSA's South Dakota
ILEC, CLEC and cable assets, assumed to occur within 14 months
of the Effective Date.

McLeodUSA provides its financial projections through 2005:

                         McLeodUSA, Inc.
            Projected Consolidated Income Statement
                      (Dollars in Millions)

                            2001    2002    2003    2004    2005
                            ----    ----    ----    ----    ----
  Communication services  $1,408  $1,166  $1,110  $1,294  $1,536
  Directory                  303     108       0       0       0
  Local exchange             108      88       0       0       0
                          ------  ------  ------  ------  ------
TOTAL REVENUES             1,819   1,362   1,110   1,294   1,536

Operating Expenses
  Cost of service          1,072     785     643     705     765
  SG&A                       665     441     356     376     394
  Depreciation               620     599     513     532     554
  Restructuring            2,955      45       0       0       0
                          ------  ------  ------  ------  ------
TOTAL OPERATING EXPENSES   5,312   1,871   1,511   1,614   1,713

OPERATING LOSS           (3,493)   (509)   (401)   (320)   (178)

Nonoperating Expenses
  Interest income             11       4       4       4       3
  Interest expense         (257)   (101)    (68)    (72)    (68)
  Other income               117   1,353      20       0       0
                          ------  ------  ------  ------  ------
NONOPERATING EXPENSE        (130)  1,256      44      68      65
                          ------  ------  ------  ------  ------
NET INCOME (LOSS)       ($3,623)   $746   ($445)  ($388)  ($243)
                          ======  ======  ======  ======  ======

Houlihan's valuation imputes a $3.47 price per share for the
325,000,000 shares of New Common Stock to be outstanding
following the Effective Date, after giving effect to the
potentially dilutive impact of the New Warrants, New Preferred
Stock and the Management Incentive Plan.

The Plan groups McLeodUSA's creditors and equity holders and
details how those stakeholders claims and interests are treated:

Class  Description           Treatment
-----  -----------           ---------
  N/A   Administrative        Paid in full, in Cash, as
        Claims and            and when due
        Professional Fees

  N/A   Priority Tax Claims   Paid in full, in Cash, as
                              and when due

   1    Senior Secured        Reinstated on the Effective Date
        Lender Claims

   2    Other Secured Claims  Reinstated on the Effective Date

   3    Non-Tax Priority      Reinstated on the Effective Date

   4    General Unsecured     Reinstated on the Effective Date

   5    Note Claims           The Note Claims are Allowed Claims
                             under the Plan in amounts to be
                            agreed upon by McLeodUSA and the
                            Note Trustee by the Effective Date.
                            On or as soon as reasonably
                            practicable after the Distribution
                            Date, each holder of an Allowed Note
                            Claim shall receive, in full
                            satisfaction, release, and discharge
                            of its Allowed Note Claim, its pro
                            rata share of

                            (A) $670,000,000 in Cash, subject to
                                a reduction of $200,000 per day
                                from May 1, 2002, through the
                                earlier of:

                                  (1) the date of closing of the
                                      Pubco Stock Purchase
                                      Agreement or

                                  (2) August 1, 2002,


                              (B) the New Series A Preferred
                                  Stock; plus

                              (C) one-half of the New Warrants

   6    Old Preferred        Old Preferred Stock Interests are
        Stock Interests     Allowed Interests under the Plan. On
                            or as soon as reasonably practicable
                            after the Distribution Date,

                            (A) Holders of the Old Series A
                                Preferred Stock shall receive,
                                in full satisfaction, release,
                                and discharge of their Allowed
                                Old Series A Preferred Stock
                                Interests, their pro rata share
                                of 33,696,559 shares -- about
                                10.4% -- of the New Common

                            (B) Holders of the Old Series D
                                Preferred Stock shall receive,
                                in full satisfaction, release,
                                and discharge of their Allowed
                                Old Series D Preferred Stock
                                Interests, their pro rata share
                                of 78,203,135 shares -- about
                                24.1% -- of the New Common
                                Stock; and

                            (C) Holders of the Series E
                                Preferred Stock shall receive,
                                in full satisfaction, release,
                                and discharge of their Allowed
                                Old Series E Preferred Stock
                                Interests, their pro rata share
                                of 35,546,879 shares -- about
                                10.9% -- of the New Common

                            in each case subject to Dilution.

   7    Class A Common      Class 7 is impaired by the Plan and
        Stock Interests     is deemed to reject the Plan.  On or
                            as soon as reasonably practicable
                            after the Distribution Date, each
                            Holder of an Allowed Class A Common
                            Stock Interest shall share with the
                            Holders of Claims in Class 8, in
                            full satisfaction, release and
                            discharge of their Allowed Class A
                            Common Stock Interest, a pro rata
                            share of approximately 54,775,662
                            shares -- about 16.9% -- of the New
                            Common Stock, on a fully diluted

   8    Securities Claims   Class 8 is impaired by the Plan and
                            is deemed to reject the Plan.  On or
                            as soon as reasonably practicable
                            after the Distribution Date, each
                            Holder of an Allowed Securities
                            Claim, if any, in full satisfaction,
                            release and discharge of their
                            Allowed Securities Claim, shall
                            share with the Holders of Interests
                            in Class 7, a pro rata share of
                            approximately 54,775,662 shares --
                            about 16.9% -- of the New Common
                            Stock, on a fully diluted basis.

   9    Other Equity        Cancelled on the Effective Date and
       Interests, including  not entitled to any distribution.
       options, warrants,
       call rights, puts or
       other equity-related

The Debtor believes the Plan delivers greater value to
stakeholders than they would receive in a liquidation of the
estate.  In a liquidation scenario, the Debtor estimates that
its assets would convert to a $1,539,911,000 pile of cash.  
After payment of wind-down costs and fees for a trustee and
other professionals, $1,128,801,000 would be available to pay
secured claims.  Secured creditors would eat-up $1,045,221,000,
leaving $83,580,000 to satisfy unsecured claims totaling
$3,393,366,000 -- or a 2.5% dividend to unsecured creditors.

As of the Effective Date, the Plan provides that McLeodUSA
McLeodUSA, Reorganized McLeodUSA, and Holders of Claims and
Interests, will be deemed to forever release, waive and
discharge all claims, obligations, suits, judgments, damages,
demands, debts, rights, causes of action and liabilities will
grant broad releases to (i) the current and former directors,
officers and employees of McLeodUSA (other than for money
borrowed from or owed to McLeodUSA or its subsidiaries by any
such directors, officers or employees as set forth in
McLeodUSA's books and records) and McLeodUSA's agents and
professionals, (ii) the Senior Secured Lenders and the Bank
Agents, (iii) any DIP Lenders and agent, (iv) Forstmann Little,
and (v) the respective affiliates, and current and former
officers, directors, employees, agents, members, shareholders,
and professionals of the foregoing. (McLeodUSA Bankruptcy News,
Issue No. 1; Bankruptcy Creditors' Service, Inc., 609/392-0900)  

NATIONAL STEEL: Seeking Alternatives to Meet Liquidity Covenant
National Steel Corporation (NYSE: NS) reported a net loss of
$280.3 million for the fourth quarter of 2001.  This compares to
a net loss of $83.4 million for the fourth quarter of 2000.  Net
sales for the quarter decreased approximately 9% to $592.7
million on shipments of 1,397,000 tons as compared to net sales
of $651.6 million on shipments of 1,434,000 tons during the
fourth quarter of 2000.  The Company's average selling price of
$397 per ton, down $33 per ton from the fourth quarter of 2000,
continues to be negatively impacted by the severe economic
downturn and its impacts on the markets the Company serves.
Fourth quarter 2001 net income was also negatively impacted by
approximately $17 million due to the idling of the National
Steel Pellet Company, which resumed production on January 2,

Additionally, the Company recorded a charge of approximately $21
million for potentially uncollectible accounts receivable from
various customers.  The Company recorded a total income tax
expense during the fourth quarter of 2001 of $89.6 million,
which was required to properly reflect the year-end deferred tax
asset on the Company's balance sheet.

For the full-year 2001, the Company reported a net loss of
$652.1 million on sales of $2,492.3 million.  This compares to a
reported net loss of $129.8 million on sales of $2,978.9 million
for the year 2000.  The 16% decrease in net sales reflects a
decrease in shipments from 6,254,000 tons in 2000 to 5,904,000
tons in 2001.  For the year 2001, the Company's average selling
price declined $57 per ton or 13% from year 2000 average selling
prices, which, along with a total deferred tax asset write-down
for the year of $148 million, significantly impacted the
Company's 2001 results.

During the fourth quarter of 2001, the Company continued to
aggressively pursue cost reduction initiatives and liquidity
management.  Manpower reductions during the fourth quarter
totaled 290 people.  For the full year, manpower reductions
totaled about 1,000, which equals an annualized manpower savings
of approximately $60 million.  Inventory reductions during the
fourth quarter 2001 amounted to $90 million.  Steel inventory
levels of approximately 1,140,000 tons at December 31, 2001 were
at the lowest levels since 1991.

"We are very disappointed by the financial results for 2001.  
The severe impacts of the current economic environment continue
to affect our performance," said Hisashi Tanaka, Chairman and
CEO.  "Our employees have worked hard to achieve and surpass our
$100 million cost reduction target for 2001 and the significant
inventory reductions achieved have assisted in supporting our
liquidity," he said.

               Financial Position and Liquidity

Total liquidity from cash and available short-term credit
facilities amounted to $106 million at December 31, 2001, as
compared to $160 million at September 30, 2001.  During the
quarter the Company utilized an additional $46 million,
increasing total short-term borrowings from $368 million at
September 30, 2001 to $414 million at December 31, 2001.  During
the fourth quarter, the Company increased the commitments under
its credit facility from $450 million to $465 million.  At
December 31, 2001, availability under the facility had decreased
to $444 million due to lower levels of inventories and accounts
receivable.  Capital expenditures for the quarter amounted to
$7.9 million, bringing total capital spending for 2001 to $48.8
million.  This is $168.5 million lower than total capital
spending in 2000.


The Company has seen an increase in demand for its products in
the early first quarter 2002.  While one of the Company's five
blast furnaces remains idled, the order book is improving and at
near capacity for a four blast furnace operation.  In addition,
the Company believes that its product mix will improve as
automotive orders have increased and that manpower reductions
and other cost reduction initiatives should result in continued
cost improvements.  Spot market price increases have been
achieved for January and February orders.  Nevertheless, because
average selling prices and shipments remain below the levels
required for the Company to operate profitably, the Company will
be required to implement a number of strategic initiatives if it
is to maintain adequate liquidity and to meet the minimum
liquidity covenant under its credit facility.  These may include
relaxing the minimum liquidity requirement under its credit
facility, obtaining alternative sources of capital, engaging in
asset sales and achieving cost reductions and other operating
performance enhancements.  There can be no assurance that the
Company will be able to implement any of these or other
strategic initiatives.

                         Other Matters

The Company recorded a charge of $374 million to stockholders'
equity related to its year-end pension valuation.  This non-cash
adjustment was the result of a lower discount rate assumption,
which increased projected liabilities, and the market
performance of its pension assets.

On January 17, 2002, the Company, NKK and United States Steel  
announced the signing of an option agreement pursuant to which
NKK has granted to USS an option to purchase NKK's interest in
the Company, subject to certain conditions.  The Company is
working with USS to develop a definitive merger agreement among
the parties.  The consummation of this transaction is dependent
on a number of significant conditions, including the approval of
a strong remedy in connection with the pending proceedings under
Section 201 of the Trade Act of 1974, enactment of a program
sponsored by the federal government to provide relief from a
significant portion of the steel industry's retiree legacy
liabilities, a new contract with the United Steel Workers of
America to provide labor cost savings and efficiencies, approval
by the relevant antitrust authorities and a substantial
restructuring of National Steel's existing debt and other

Headquartered in Mishawaka, Indiana, National Steel Corporation
is one of the nation's largest producers of carbon flat-rolled
steel products, with annual shipments of approximately six
million tons. National Steel employs approximately 8,300
employees.  Please visit the National Steel's Web site at
http://www.nationalsteel.comfor more information on the Company  
and its products and facilities.

DebtTraders reports that National Steel Corp.'s 8.375% bonds due
2006 (NATSTL1) are trading between 40 and 45. See  
real-time bond pricing.

NETWORK PLUS: Files Voluntary Chapter 11 Petition in Delaware
Network Plus Corp., (NASDAQ:NPLS), announced that it, along with
its operating subsidiary, has filed a voluntary petition with
the U.S. Bankruptcy Court in Delaware for reorganization under
Chapter 11 of the U.S. Bankruptcy Code. The Company is in
current discussions with its existing secured bank lenders to
obtain debtor-in-possession financing to enable the Company to
continue to operate while it seeks to conduct an auction to find
a buyer for its business. The Company is also seeking from its
secured bank lenders the right to use cash collateral. If the
Company is unable to timely identify an acceptable Buyer or is
unable to work out acceptable arrangements with its secured bank
lenders and other creditors, the Company will seek to keep
operating for as long as possible while it explores all

The Company's secured bank lenders include Fleet National Bank,
Goldman Sachs Credit Partners L.P., Netplus Funding, Inc. (an
affiliate of DLJ) and IBM Credit Corporation.

Network Plus currently serves in excess of 300,000 local access
lines, 300,000 long distance lines and thousands of data lines,
and reaches approximately 75,000 customers and has significant
penetration of its markets ranging as high as an estimated 7.4%.
Robert T. Hale, Jr., President and Chief Executive Officer of
Network Plus, said, "This was a very difficult decision.
However, at this time, we believe that our actions are in the
best interests of our creditors, employees and customers."

Network Plus is a network-based integrated communications
provider headquartered in Randolph, Massachusetts. Network Plus
offers telecommunications and broadband data services, primarily
to small and medium-sized business customers located in major
markets in the Northeastern and Southeastern regions of the
United States. The Company's bundled product offerings include
local and long distance service as well as enhanced, high-speed
data and Internet services. For more information on Network Plus
Corp., please visit the Company's Web site at

NETWORK PLUS: Case Summary & 30 Largest Unsecured Creditors
Lead Debtor: Network Plus Corp.
             aka Hale and Father Company
             aka Hale & Father Co.
             aka 800 Sales, Inc.
             aka 800 Savings, Inc.
             aka 800 Plus, Inc.
             aka Save 800, Inc.
             aka 800 Group, Inc.
             aka Connectivity Solutions, Inc.
             aka Network Plus Management, Inc.
             aka Office Plus, Inc.
             aka Hale & Father, Inc.
             41 Pacella Park Drive
             Randolph, MA 02368

Bankruptcy Case No.: 02-10341-PJW

Debtor affiliates filing separate chapter 11 petitions:

             Entity                        Case No.
             ------                        --------
             Network Plus, Inc.            02-10342-PJW

Type of Business: The Debtors are a network-based
                  communications provider offering a
                  comprehensive suite of broadband data,
                  telecommunications and Internet Data Center
                  hosting services. The Debtors' services  
                  include local and long distance voice, high-
                  speed data, Internet and web server and
                  managed server hosting.

Chapter 11 Petition Date: February 04, 2002

Court: District of Delaware

Judge: Peter J. Walsh

Debtor's Counsel: Edward J. Kosmowski, Esq.
                  Joel A. White, Esq.
                  Maureen D. Like, Esq.
                  Young Conaway Stargatt & Taylor
                  The Brandywine Building
                  1000 West Street, 17th Floor
                  PO Box 391
                  Wilmington, DE 19899
                  Tel: 302 571-6600
                  Fax: 302-571-1253


                  Michael Appelbaum, Esq.
                  Hale & Dorr LLP
                  60 State Street
                  Boston, NA 02109
                  Tel: 617 526 6000
                  Fax: 617 526 5000

Total Assets: 433,239,000

Total Debts: 206,899,000

Debtors' Consolidated List of 30 Largest Unsecured Creditors:

Entity                                  Claim Amount
------                                  ------------
Verizon                                 $10,422,339
Karen Maguire
1095 Avenue of the Americas
Room 2317
New York, NY 10036
Tel: 212 395 3403
Fax: 212 302 6287

Lucent Technologies                      $5,495,102
Gerry Cafaro
15 Farmersville road
Tewksbury Township, NJ
Tel: 908 832 1073
Fax: 908 832 9721

Epik Communications                      $4,952,346
Craig Sanders
Suite 225
3501 Quadrangle Boulevard
Orlando, FL 32817
Tel: 407 736 8110
Fax: 407 482 8404

Bellsouth                                $2,324,214
Robert Baul
1133 21st Street NW, Suite 900
Washinton, DC 20036-3351
Tel: 202 463 4108
Fax: 202 463 4631

Sprint                                   $2,324,214
Art McDowell
2002 Edmund Halley Drive
Reston, VA 20191
Tel: 703 295 5656
Fax: 703 295 5929

Comdisco                                 $2,136,942
Larry Tiney
3rd Floor South
Totton Pond Office Center
Waltham, MA 02451
Tel: 781 398 8030
Fax: 781 398 8099

Hugh O'Kane Electric Co. LLC             $1,900,000
88 White Street
New York, NY 10013
Tel: 646 256 9003
Fax: 212 334 0847

Southern New England Telephone (SNET)    $1,753,137
Paul Brandy
530 Preston Avenue
Meriden, CT 16450
Tel: 203 634 6301
Fax: 203 634 9331

Qwest                                    $1,406,530
Frank Noyes
1801 California Street
51st Floor
Denver, CO 80202
Tel: 303 992 2597
Fax: 303 992 2597

Williams Construction Services Inc.      $1,007,848
Bill Shoemaker
708  Ginesi Drive
Morganville, NJ 07751
Tel: 732 972 2600
Fax: 732 972 2508

MCI Worldcom                              $942,855
Sarah Beardsley
205 North Michigan Avenue
Chicago, IL 60601
Tel: 312 470 5000
Fax: 312 470 3274

Telecom Italia of North America, Inc.     $847,615
Christian Lana
499 Park Avenue
23rd Floor
New York, NY 10022
Tel: 212 755 5280
Fax: 212 755 5766

FNBC Leasing Corp.                        $768,261
55 west Monroe Street
17th Floor
IL 10502
Chicago, IL 60670
Tel: 312 732 2220
Fax: 312 732 3634

Startec Global Communications             $614,034
Tony Das
1151 Seven Locks Road
Potomac, MD 20854
Tel: 301 610 4300
Fax: 240 314 4183

ADCO Electric Co.                         $598,427
Steven Fluppazo
380 Chelsea Road
Stanton Island, NY 10314
Tel: 718 494 4440
Fax: 718 370 1670

Global Crossing Telecommunications        $579,788
Anthony Agroi
180 South Clinton Avenue
Rochester, NY 14646
Tel: 716 777 4766
Fax: 716 232 9168

Universal Service                         $502,817
Lori Terraciano
c/o NECA
80 South Jefferson Road
Whippany, NJ 07981
Tel: 973 560 4426
Fax: 973 560 4441

Worldcom                                  $457,858
Robert Mullins
3 Whitehall Street
15th Floor
New York, NY 10004
Tel: 212 843 3022
Fax: 212 843 7474

JJ Cacchio Enterpises Inc.                $415,151
Joe Chachio
Westtown Professional Center
Building A-6
1515 West Chester Pike
West Chester, PA 19382
Tel: 610 399 9750
Fax: 610 701 7024

Teleglobe USA Inc.                        $381,059
Bill Mocarski
11480 Commerce Park Drive
Reston, VA 20191
Tel: 703 755 2531/800 318 3005
Fax: 703 755 2600

Integrated Builders                       $363,885
Daniel Russell
1515 Washinton Street
Braintree, MA 02184
Tel: 781 356 3838
Fax: 781 356 3851

Transamerica Technology                   $346,121
Allen Sailer
76 Batterson Park Road
Farminton, CT 06032
Tel: 860 677 6466
Fax: 860 677 6766

Comarck Corp. Sales Inc.                  $333,598
John Freeley
19B Crosby Drive
Suite 230
Bedford Heights, MA 01730
Tel: 781 280 5710
Fax: 781 280 5701

National Payphone Clearinghouse          $280,790
Susan Maggard
201 E. 4th Street
Cincinnati, OH 45202
Tel: 513 397 6260
Fax: 513 721 2646

First United National Bank               $248,964

Forval International Telecom Inc.        $239,060

Advanced Fibre Communications            $219,887

Vina Tech                                $211,892

Communications Data Group                $211,024

KDD International America Inc.           $194,262

OUTSOURCE INT'L: Closes Sale of Business Operations to Cerberus
Outsource International, Inc., (OTC Bullletin Board: OSIX) a
leading national provider of human resource services focusing on
the flexible industrial staffing market, says it has completed
the sale of business operations to Cerberus Outsource SPV, LLC.  
The new business will continue to be operated under the
Tandem(R) trade name.

The transaction value totaled over $56 million in cash provided
and debt assumed, and represents a significant affirmation of
the strength of the business and its employees.  The new
business will be bolstered with $6 million of new equity to
support both the current business and future growth.  As part of
the transaction, the company's liabilities have been reduced by
approximately $25 million.

The executive management team that has led the company through
the recent restructuring is remaining with the business.  The
Board of Directors expresses its appreciation to each of the
company's customers, employees and service workers for their
perseverance and loyalty.  The company's top priority will
continue to be providing the best available service to its
customers through company-owned offices and franchisees.

The new business will be named Tandem Staffing Solutions, Inc.,
which is a wholly owned subsidiary of Cerberus Outsource SPV,
LLC, and will continue to operate the Tandem division.  Tandem
partners with its service workers and industrial employers to
provide flexible workforce solutions to maximize client
production and profitability.  With 120 offices nationwide,
Tandem services approximately 3,000 industrial clients on a
daily basis with over 18,000 temporary employees.

PACIFIC GAS: Disclosure Statement Hearing to Continue Tomorrow
No ruling has been issued on the adequacy of the Amended
Disclosure Statement proposed by Pacific Gas & Electric Co. and
its Parent, PG&E Corp.  Judge Montali will convene a continued
disclosure statement hearing on February 7, 2002 at 1:30 p.m. in
San Francisco.

The January 25 hearing focused on the issue of whether the Plan
can bypass, or preempt, state laws.  The California Public
Utilities Commission leads a band of entities arguing that the
Disclosure Statement should not be approved because it describes
a Plan that is not confirmable on its face because it tramples
on the State's Eleventh Amendment sovereign immunity and calls
for an impermissible preemption of state laws.

As previously reported, the proposed Plan seeks to transfer the
utility's generation and transmission assets to three new
limited liability companies -- (i) ETrans LLC (ETrans), (ii)
GTrans LLC (GTrans) and (iii) Electric Generation LLC (Gen),
under federal regulations, not State regulations.  A
corporation, Newco Energy Corporation, will be created to hold
the membership interests of ETrans, GTrans and Gen.  The
reorganized Pacific Gas and Electric utility would continue to
distribute energy to 13 million people in Northern and Central
California.  As a public utility the Debtor is subject to the
regulatory jurisdiction of the CPUC with respect to retail
service customers in California.  Therefore, there are certain
things that a business can do but the Debtor cannot do outside
of bankruptcy without applying to, and receiving authorization
from, the CPUC.  The Plan Proponents seek to preempt state
regulation from interfering with the implementation and
consummation of a plan under Section 1123(a) of the Bankruptcy

Walter Rieman, Esq., at Paul, Weiss, Rifkind, Wharton &
Garrison, representing the CPUC, told Judge Montali the
utility's "blanket intention is to strike down state laws,"
including the core "obligation to serve" law that governs energy
utilities, and Congress did not intend that in adopting
bankruptcy laws.

Harvard Law School Professor Laurence H. Tribe, arguing for PG&E
Corporation, contended that federal bankruptcy law and past
decisions override state regulations.  Prof. Tribe argued that
preemption of state laws must be allowed to confirm the
restructuring plan in order "to maximize assets and reconfigure
the company" into the new units while repaying creditors.

Judge Montali peppered Mr. Rieman and Prof. Tribe with questions
on federal versus state laws and regulations, especially in the
environmental area and how the restructuring plan may affect
state rules.

After hours of argument, Judge Montali concluded the hearing
telling those present, "I don't know what, when or how I will
issue a ruling but I will think about it."  The State and the
Plan Proponents also agreed to Judge Montali's suggestion that
they begin talking under the supervision of a paid mediator.  
"Go out and try to make peace break out on any and all issues,"
Judge Montali told the parties.

While the argument in the courtroom was tempered and polite, the
rhetoric escalated once the lawyers left the courthouse.

Gary Cohen, Esq., general counsel for the CPUC, said after the
hearing PG&E's argument "was breathtaking in its scope.  PG&E
said it was above the law."

Prof. Tribe told reporters Congress "must be taken at its word"
and the bankruptcy laws can override the state's.

The CPUC and consumer advocates argue that the Plan if
implemented would lead to higher electric rates for PG&E's
customers because PG&E could then charge market rates for
energy.  According to the Associated Press, consumer advocates
fear a federally regulated PG&E would control much of
California's power market and use the advantage to drive up
prices, just as officials allege out-of-state power companies
forced prices skyward last year.  The Utility Reform Network
says PG&E's plan would cost ratepayers $20 billion extra over
the next 12 years, based on its analysis of PG&E's bankruptcy
plan and financial figures. PG&E disputes that. PG&E says
customers won't see rates rise under the plan because it plans
to lock in a price for the next 12 years.

The AP also points out that the bankruptcy's resolution will
have broader consequences because farmers, environmental groups
and campers worry that a post-bankruptcy PG&E might sell some of
the nearly 140,000 acres it owns, which could block grazing and
public recreation in the wilderness due to logging, and
compromise access to irrigation and drinking water that pours
through the utility's dams in the Sierra Nevada. (Pacific Gas
Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   

PENNSYLVANIA FASHIONS: Files for Chapter 11 Reorganization in NJ
Pennsylvania Fashions, Warrendale, PA, voluntarily files for
Chapter 11 Reorganization to address financial challenges
resulting primarily from a tough retail environment. The filing
was made in the U.S. Bankruptcy Court in New Jersey. The
Company's stores, distribution center and headquarters will
continue to remain open for business as usual and the company is
determined to complete the reorganization process as quickly as

Pennsylvania Fashions has secured a Senior Secured Debtor-In-
Possession (DIP) Financing Facility from BNP Paribas, Agent
Bank, for the Company's reorganization requirements.

The Company's majority owner is Saunders Karp & Megrue, one of
the leading private equity investment firms, located in
Stamford, CT, which is participating in the DIP Facility.

The company intends to use the Chapter 11 process to re-evaluate
its real estate portfolios, improve its systems capabilities,
further develop its rue 21 brand and remodel certain of its

rue 21 will continue to be one of the dominant value specialty
retailers for junior and young men's apparel in the outlet
sector and in regional malls. The Company will continue to focus
and build on the rue 21 brand with an emphasis on fashion,
value, quality and customer loyalty and service. As part of its
reorganization strategy, the company will be closing some of its
store locations in the United States during the next few months.

The Company has entered into an agreement with Keen Realty
Consultants to assist in the selling of the leases of the
closing stores.

An experienced management team, led by the current CEO and
President, has been assembled over the past few months to lead
the necessary turnaround of the business. The management team
will concentrate on developing the rue 21 brand, store
operations, marketing, financial goals and employing experienced

The Company currently operates 247 stores in outlets and malls
in 39 states.

PENNSYLVANIA FASHIONS: Chapter 11 Case Summary
Debtor: Pennsylvania Fashions, Inc.
        dba Rue 21
        dba Rue 21 Company Store
        dba Capers Outlet
        dba 9.99 StockRoom
        dba Capers
        dba StockRoom
        20 Enterprise Avenue N.
        Secaucus, NJ 07094

Bankruptcy Case No.: 02-31152

Chapter 11 Petition Date: February 4, 2002

Court: District of New Jersey (Newark)

Judge: Novalyn L. Winfield

Debtor's Counsel: Kenneth Rosen, Esq.
                  Lowenstein Sandler
                  65 Livingston Ave.
                  Roseland, NJ 07068
                  Tel: 973-597-2500

POLAROID: Retiree Committee Taps Greenberg Traurig as Counsel
The Official Committee of Retirees of Polaroid Corporation and
its debtor-affiliates seeks the Court's authority to employ and
retain Greenberg Traurig LLP as its counsel, nunc pro tunc to
December 6, 2001.

Karl V. Farmer, Chairperson of the Retirees' Committee, informs
the Court that Greenberg Traurig was chosen by the Retiree
Committee because of its experience and knowledge in Chapter 11
cases as shown in his past and present clients like:

    * E.I. DuPont de Nemours & Company;
    * Enron North America Corp., Enron Pipeline Group and Enron
      Capital and Trade Resources;
    * Eastman Kodak Company;
    * Triton Leasing, Triton Properties Corporation and Triton
      Network Systems; and
    * Safety-Kleen Consulting, Inc.

As counsel to the Retirees' Committee, Greenberg Traurig will:

  (a) investigate the actions taken by the Debtors to terminate
      the Polaroid Retiree Health Plan, the Retiree Life
      Insurance Plan and the severance payments to former U.S.
      employees; and

  (b) perform other related services.

Greenberg Traurig shall be paid by its customary hourly rates of
its principal attorneys and paralegals in the amount of:

    Gary R. Greenberg            $ 450
    Scott D. Cousins               440
    Jeffrey M. Wolf                375
    Alfred A. Gray, Jr.            325
    Scott Salermi                  230
    Allyson Lantolf                130

Other necessary expenses shall be reimbursed in accordance with
the applicable law. These expenses may include:

    a) telephone and telecopier toll and other charges;

    b) mail and express mail charges;

    c) special or hand delivery charges;

    d) document processing;

    e) photocopying charges;

    f) travel expenses;

    g) expenses for "working meals";

    h) computerized research and transcription costs; and

    i) other non-ordinary overhead expenses like overtime of
       secretaries and other staffs.

Scott D. Cousins, a shareholder of Greenberg Traurig, assures
Judge Walsh that the firm has no connection with the Debtors,
its creditors, any other party in interest, their respective
attorneys or professionals, the U.S. Trustees or any other
entity having adverse interest in connection with the Debtors'
cases. Upon completion of Greenberg Traurig's analysis or as
additional creditor information becomes available, Mr. Cousins
promises to file a supplemental affidavit with the Court.
(Polaroid Bankruptcy News, Issue No. 10; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

POLYMER GROUP: Senior Lenders Agree to Forbear Until February 22
Polymer Group, Inc., (NYSE: PGI) says that its senior lenders
have approved an amendment to the existing Forbearance Agreement
dated as of December 30, 2001. The amendment gives the Company
until February 22, 2002, to deliver to the senior lenders, among
other things, a complete and comprehensive recapitalization
proposal.  As a result of this amendment, the Company is now in
full compliance with the terms of the Forbearance Agreement.

Polymer Group, Inc., the world's third largest producer of
nonwovens, is a global, technology-driven developer, producer
and marketer of engineered materials.  With the broadest range
of process technologies in the nonwovens industry, PGI is a
global supplier to leading consumer and industrial product
manufacturers.  The Company employs approximately 4,000 people
and operates 25 manufacturing facilities throughout the world.  
Polymer Group, Inc. is the exclusive manufacturer of Miratec(R)
fabrics, produced using the Company's proprietary advanced
APEX(R) laser and fabric forming technologies. The Company
believes that Miratec(R) has the potential to replace
traditionally woven and knit textiles in a wide range of
applications.  APEX(R) and Miratec(R) are registered trademarks
of Polymer Group, Inc.

DebtTraders reports that Polymer Group Inc.'s 9.000% bonds due
2007 (PGI1) currently trade in the high 30s. See  
real-time bond pricing.

SAFETY-KLEEN CORP: DIP Facility Maturity Extended to March 15
As previously reported, on July 19, 2000, the Bankruptcy Court
granted final approval of Safety-Kleen Corp.'s one-year $100
million Revolving Credit, Term Loan, and Guaranty Agreement
underwritten by the Toronto Dominion Bank as general
administrative agent and the CIT Group, Inc., as collateral
agent (for GSCP Recovery, Inc., GSC Recovery II, L.P., Bank One,
NA, Goldman Sachs Credit Partners, L.P., and Senior Debt
Portfolio, as Lenders) with a $35,000,000 sublimit for letters
of credit.  The amount available under the DIP Facility is
subject to a borrowing base

The DIP Facility has now been amended on nine occasions.

The Seventh Amendment and Agreement, dated as of October 16,
2001, and the Eighth Amendment and Waiver, dated as of November
27, 2001, increase the sublimits for letters of credit to
$96,000,000, in four buckets:

  $35,000,000 to backstop automobile, liability, workers'
              compensation and similar insurance programs;

  $15,000,000 for performance bonds on new bids by Safety-Kleen;

  $31,000,000 to provide additional financial assurance as
              required for compliance with Environmental Laws
              with respect to those facilities identified in the
              Consent Agreement and Final Order with the United
              States Environmental Protection Agency, as Amended
              on May 16, 2001; and

  $15,000,000 to provide additional financial assurance as
              required for shoring up existing Indian Harbor

The Debtors report that, as of January 11, 2002, no amounts were
drawn on the DIP Facility and approximately $74 million of
letters of credit were issued.  As of January 11, 2002, the
Company had issued letters of credit in excess of the amount
allowed by the borrowing base computation included in the DIP
Facility.  Under the DIP Facility, the Company is required to
repay the excess plus 5%.  On January 14, 2002, Safety-Kleen
obtained a waiver of non-compliance which exempted the Company
from repaying such amounts.

The DIP Facility was scheduled to mature by its own terms on
January 31, 2002.  Safety-Kleen spokesman John Tyne advises that
the Ninth Amendment and Waiver, dated January 14, 2002, grants
the Company an extension of the maturity date through the
earlier of March 15, 2002, or the effective date of a plan of
reorganization. (Safety-Kleen Bankruptcy News, Issue No. 26;
Bankruptcy Creditors' Service, Inc., 609/392-0900)    

SERVICE MERCHANDISE: Proposes Contract Rejection Procedures
Service Merchandise Company, Inc., and its debtor-affiliates ask
the Court to approve these proposed Contract Rejection

  (i) the Debtors will be presently authorized to reject any or
      all of their executory contracts;

(ii) any future rejection will be effective upon the tenth day
      following written notice of the rejection to the notice
      parties, unless an objection to the rejection notice is

(iii) the notice parties shall have ten days following receipt
      of the rejection notice to file and serve an objection to
      the proposed rejection by facsimile upon counsel for the
      Debtors; and,

(iv) if a timely objection is filed and served, the rejection
      shall be heard at the next scheduled hearing in these
      cases and the Debtors shall retain the burden of proof on
      establishing the merits of the rejection decision;
      provided, however, if the Court overrules the objection
      and approves the rejection, the effective date of
      rejection shall be the date set forth in the rejection

Paul G. Jennings, Esq., at Bass, Berry & Sims, in Nashville,
Tennessee, contends that these procedures will enable the
Debtors to promptly and effectively reject executory contracts
without further Court approval.

Without such procedures, Mr. Jennings asserts, the Debtors would
have to wait until the Court is able to hear a motion to reject
an executory contract, unnecessarily exposing the Debtors to
administrative liability to contracts they no longer need.  
"Such delay would diminish the assets of the estates and the
recovery of the Debtors' creditors," Mr. Jennings says. (Service
Merchandise Bankruptcy News, Issue No. 25; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

SUN HEALTHCARE: Secures Approval to Hire Richard Matros as CEO
Sun Healthcare Group, Inc., and its debtor-affiliates sought and
obtained the Court's approval to enter into an employment
agreement with Richard Matros, the new Chief Executive Officer
and Chairman of the Board of Directors.   Mr. Matros replaced
Mark Wimer who resigned on November 7, 2001.

The Debtors' Board of Directors has thoroughly checked Mr.
Matros' credentials and found him to be "highly qualified for
the position of CEO", prompting his election as Chairman of the
Board as well. Mr. Matros was also highly recommended by the
Senior Lenders and the Creditors Committee.

Prior to joining Sun Healthcare, Mr. Matros was the CEO of
Regency Health Services, a nursing home chain purchased by the
Debtors. Mr. Matros had also held many positions in the
healthcare industry since then.

Mark D. Collins, Esq., at Richards, Layton & Finger, PA, in
Wilmington, Delaware, convinced Judge Walrath that there is a
need to enter into an agreement with Mr. Matros to compensate
his efforts on the "expedient, efficient and successful
conclusion of the chapter 11 cases." The salient points of the
Agreement are:

  a) Term: The Agreement shall commence on November 7, 2001 and
     ends on November 6, 2005 with automatic one-year renewals
     thereafter unless either party provide written notice of
     non-renewal of the term of employment prior to extension;

  b) Compensation and Benefits: Mr. Matros shall receive a Base
     Salary of $650,000 annually. Mr. Matros shall also be
     entitled to an annual bonus if certain financial
     performance targets are met;

  c) Equity Incentives: Subject to shareholder approval, Mr.
     Matros shall be entitled to receive 1.5% of the total
     outstanding shares of common stock on the emergence date on
     a fully diluted basis and options to purchase shares of
     common stock equal to 1.5% of the total outstanding shares
     of common stock on the emergence date on a fully dilated

  d) Termination by the Debtors: The Debtors may, at any time in
     their sole discretion, terminate Mr. Matros upon 5 business
     days prior written notice and shall make certain payments
     to Mr. Matros as a result of such termination;

  e) Termination by Mr. Matros: Mr. Matros may, at any time at
     his option within 60 days following an event of condition
     that constitutes "Good Reason", resign by 30 days prior
     written notice to the date of termination; provided that
     the Debtors have not substantially corrected the event that
     constitute Good Reason prior to the date of termination.
     Mr. Matros may also, at any time with 30 days written
     notice, voluntarily resign without Good Reason subject to
     payment. The Debtors may terminate Mr. Matros, given a
     prior 5 days notice, by reason of his "Disability";

  f) Payment to Mr. Matros upon termination without Good Cause
     or with Good Reason: If Mr. Matros is terminated by the
     Debtors without Good Cause, or if Mr. Matros resigns with
     Good Reason, Mr. Matros shall be entitled to a severance
     payment in the amount equal to the lesser of:

      (i) the unpaid and unearned portion of his Base Salary for
          the remainder of the term of his Agreement, or

     (ii) two year's Base Salary.

     Mr. Matros shall also be entitled to payment of any earned
     but unpaid bonus and any accrued paid time off through the
     date of termination.

  g) Payment to Mr. Matros Upon Termination for Good Cause,
     Resignation without Good Reason, or upon Death or
     Disability: Mr. Matros shall be paid any earned but unpaid
     Base Salary and any accrued and unused paid time off
     through the date of termination. In the event that Mr.
     Matros is terminated by the Debtors upon his Death or
     Disability, Mr. Matros or his estate will be entitled to
     certain benefits.

  h) Non-solicitation: Mr. Matros shall not, during his
     employment, and for 2 years following the termination of
     the Agreement, for whatever reason or cause, in any manner
     induce any employee, agent, representative or other person
     associated with the Debtors or any customer, patient or
     client of the Debtors to terminate his or her association
     or contract with the Debtors, nor in any manner, directly
     or indirectly, interfere with the relationship between the
     Debtors and any of such persons or entities. (Sun
     Healthcare Bankruptcy News, Issue No. 31; Bankruptcy
     Creditors' Service, Inc., 609/392-0900)   

TERAGLOBAL COMMS: Continues to Evaluate Recapitalization Options
TeraGlobal Communications Corp., (OTCBB:TGCC) announced that it
has effected a further restructuring of its work force to reduce
operating expenses and it is continuing to evaluate
recapitalization opportunities.

The company has reduced its full-time employee base from 46 to
33 employees. This reduction follows a reduction on Jan. 22,
2002 from 57 employees, for an aggregate reduction of 42 percent
since the beginning of the year.

Nearly all of the reduction has been in sales, sales support and
administrative positions. The company continues to employ 22
engineers and support personnel in its research and development
department, who are completing development of Session
collaboration software, an audio and video conferencing,
application sharing and shared workspace application for the
Windows(R) operating system. Session is scheduled for release in
February 2002.

"Overall, the company is focusing its resources on technology
development and completion of the Session product," said Larry
Karagheusian, vice president of sales. "Our sales efforts are
going to have to focus on the beta program for Session and an
increased emphasis on the channel market."

The company is actively evaluating a number of alternatives for
recapitalizing the corporation, including the issuance of
additional Preferred Stock and a reverse split of the
outstanding Common Stock. The company is also evaluating the
formation of an operating subsidiary to receive the assets of
TeraGlobal. That subsidiary could then sell debt or equity
securities, the proceeds of which would be used to finance its
operations. The board of directors is actively evaluating these
alternatives, and expects to take action on these issues over
the next few days.

"Sales of TeraMedia(R), our product for the Apple platform, have
not met our revenue expectations," said James A. Mercer III,
chief financial officer for TeraGlobal. "That shortcoming has
increased our need for external capital in the midst of a very
tight capital market. As a result, we are taking steps to
minimize operating costs and maximize our opportunities to meet
our capital requirements."

The company has continued to receive bridge financing from
existing investors, principally WallerSutton 2000 L.P., to
support its operations on an as needed basis. 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. WallerSutton currently holds
outstanding Warrants which, if exercised, would result in
WallerSutton holding outstanding shares representing 62.4% of
the voting power of the company. In a recent filing with the
SEC, WallerSutton has stated that it currently intends to
exercise a number of those warrants. Such exercise would give
WallerSutton voting control of the company.

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 Windows(R) operating

TeraGlobal's corporate office is in San Diego. TeraGlobal stock
is traded on the OTCBB under the symbol "TGCC."

TERRA INDUSTRIES: DebtTraders Recommends BUY on 10.5% Sr. Notes
DebtTraders analyst Michael B. Kanner, CFA, maintains his BUY
recommendation made on August 22 on the 10.50% senior notes due
2005 of Terra Industries. Mr. Kanner says, "[DebtTraders'] BUY
recommendation is based on a combination of the relatively high
yield (15.82%) and SAFETY rating on the issue of 86%, which
aggregate to an ATTRACTIVENESS of 86%. This rating is lowered
slightly from our update of October 29."

On January 31, 2002, Terra Industries reported a net loss for
the fourth quarter of $28.9 million, versus net income for the
fourth quarter of last year of $4.1 million. Revenues for the
quarter were pegged at $234.2 million, as compared to $271.9
million for the same period the previous year.

DebtTraders also reports that Terra Capital Inc.'s 12.875% bonds
due 2008 (TERRA3) are trading slightly above par, between 101
and 102. For real-time bond pricing, see

TRITON NETWORK: Files Certificate of Dissolution in Delaware
Triton Network Systems, Inc., (Nasdaq:TNSI) announced that on
January 31, 2002 it filed a Certificate of Dissolution with the
Secretary of State of Delaware and requested the Nasdaq Stock
Market to delist the company's common stock. The company also
closed its stock transfer books and discontinued recording
transfers of common stock simultaneous with the filing of the
Certificate of Dissolution.

The company's actions were in accordance with the Plan of
Liquidation and Dissolution approved by its stockholders in
October 2001.

U.S. INDUSTRIES: Asset Sales Keep Junk Ratings on Watch Positive
Standard & Poor's ratings on U.S. Industries Inc. (USI) and its
related entities remain on CreditWatch with positive

The January 2002 sale of the Ames True Temper lawn and garden
tools business for $165 million as well as proceeds of $107
million from the sale of the 12.5% senior notes of Strategic
Industries LLC enabled USI to pay down more than the $200
million of amortization payments due cumulatively through March
31, 2002, as required under its bank facilities. Still, absent a
refinancing of its credit facilities, a major divestiture such
as the planned sale of the Lighting Corp. of America (LCA)
subsidiary is necessary in the next few months to allow USI to
meet the $180 million due by June 30, 2002. The divestiture of
LCA, a commercial and residential lighting products operation,
would also bolster prospects USI would be able to restructure
its debt load before October 15, 2002, when $150 million is due.
Total debt is just under $1 billion and includes a senior note
issue due in 2003. Availability under the credit facilities is
reasonable at approximately $160 million. USI is in compliance
with the covenants under the credit agreement.

In addition to LCA, smaller noncore units in the USI's disposal
plan include manufacturers of hand tools and lawn and garden
tools in the U.K.; grilles, registers, and gas vents for the
heating, venting and air conditioning markets; and lighting
fixtures. LCA as well as these other businesses have been
classified as discontinued operations.

Assets of significant U.S. subsidiaries equally secure the
senior notes through a collateral trust. Senior notes consist of
$250 million due October 2003 and $125 million due December
2006. Pro rata proceeds from the asset sales have become cash
collateral--about $71 million is in this account--for the senior
notes and the balance of proceeds was used to pay down bank

USI's continuing operations consist of bath and plumbing
products, sold under the Jacuzzi, Zurn, Eljer, and Sundance Spas
brand names, and Rexair consumer vacuum cleaners. It appears
these businesses will not have to be put on the block in the
near term to meet coming maturities. For the fiscal year ended
September 30, 2001, sales from continuing operations were $1.1
billion, and operating income before corporate expenses and non-
recurring charges was $105.2 million. These lower than previous
earnings reflect weak economic conditions and unfavorable
fluctuations in currency exchange rates.

Whether the company will be able to consummate the asset
disposals or debt refinancing in time to meet scheduled
amortizations to its lenders remains uncertain. Consequently,
the company's independent auditors issued a qualified opinion in
its report on the fiscal 2001 financial statements with respect
to the ability of the company to continue as a going concern.

Although the company has been successful in divesting of some
assets in a difficult market environment, potential ratings
improvement awaits the outcome of further asset disposals as
well as a restructuring of the company's credit facilities.

               Ratings Remaining on CreditWatch
                  with Positive Implications

     U.S. Industries Inc.                       Ratings
        Corporate credit rating                   CCC+
        Senior secured debt                       CCC+

     USI American Holdings, Inc.
       Senior secured debt                        CCC+

     USI Global Corp
       Senior secured debt                        CCC+

UNIFORET: Gets CCAA Protection Extension through May 2
Uniforet Inc., and its subsidiaries, Uniforet Scierie-Pate Inc.,
and Foresterie Port-Cartier Inc., announced that they have
obtained from the Superior Court of Montreal an order extending
for an additional period of 90 days expiring on May 2, 2002, the
Court protection afforded to the Company under the "Companies'
Creditors Arrangement Act".

As already announced, the meeting of the class of US
Noteholders-creditors to vote on the amended plan of arrangement
is still temporarily suspended, following the institution of
proceedings, until settlement of the composition of that class
of creditors. The representations concerning these proceedings
shall be completed by March 8, 2002.

The Company intends to keep on its current operations and its
customers are not affected by the Court order. Suppliers who
will provide goods and services necessary for the operations of
the Company will continue to be paid in the normal course of

Uniforet Inc., is an integrated forest products company which
manufactures softwood lumber and bleached chemi-thermomechanical
pulp. It carries on its business through its subsidiaries
located in Port-Cartier (pulp mill and sawmill) and in the
Peribonka area in Quebec (sawmill). Uniforet Inc.'s securities
are listed on The Toronto Stock Exchange under the trading
symbol UNF.A, for the Class A Subordinate Voting Shares, and
under the trading symbol UNF.DB, for the Convertible Debentures.

W.R. GRACE: PD Panel Hires Hamilton Rabinovitz as Claims Expert
The Official Committee of Asbestos Property Damage Claimants in
the chapter 11 case of W. R. Grace & Co., speaking through
Darrell Scott, as designee of Mr. Marco Barbanti, Co-Chairman,
and Daniel Speights, as designee of Anderson Memorial Hospital,
Co-Chairman, seeks entry of an order authorizing the retention
and employment of Hamilton, Rabinovitz, & Alschuler, Inc. as
consultants to the PD Committee and for approval of HRA's
proposed terms of employment, nunc pro tunc to May 2, 2001.  HRA
is a consulting firm, providing analytical services focused on
the estimation of claims and the development of claims
procedures with regard to payments and assets of a claims
resolution trust.

On June 4, 2001, the Committee reminds Judge Judith Fitzgerald
that the Debtors filed the Motion of the Debtors for the Entry
of an Order Authorizing the Retention of Experts wherein the
Debtors sought an order approving the retention by the Debtors
(and any official committee appointed in the Chapter 11 Cases)
of certain experts, without requiring the submission of separate
retention applications for such experts, arguing, among other
things, that the experts were not "professional persons" under
11 U.S.C. Sec. 327. The types of experts identified in the
Experts Retention Motion include experts engaged to assist with
the litigation of threshold tort liability issues and with
proceedings concerning the allowance/disallowance, estimation
and liquidation of claims.

On or about June 19, 2001, the PD Committee filed the only
objection to the Experts Retention Motion, arguing, among other
things, that because the Experts would facilitate the
reorganization of the Debtors, the Experts were indeed
"professional persons" under 11 U.S.C. Sec. 327.  Thus, the PD
Committee objected to the retention of Experts by the Debtors,
the PD Committee or any other officially committee appointed in
the Chapter 11 Cases without filing retention applications with
this Court.

On June 22, 2001, the Court denied the PD Committee's objection
and entered the order approving the Experts Retention Motion.
Thereafter, in accordance with such order and the Court's May 3,
2001 administrative order approving interim compensation and
reimbursements of expenses for professionals in the Chapter 11
Cases, counsel to the PD Committee has included the fees and
costs of HRA as a line item on its monthly and quarterly interim
fee applications.

Recently, however, the office of the United States Trustee has
informally voiced concerns to counsel to the PD Committee --
similar to those raised by the PD Committee in its objection --
about the propriety of the Debtors and any official committee in
the Chapter 11 Cases retaining Experts without filing retention
applications and disclosing the Experts to the Court and other
parties in interest. Accordingly, at this juncture, the PD
Committee has concluded that it is in the best interest of the
estates to disclose and formally retain HRA as an Expert.

Thus, the PD Committee respectfully requests that the Court
enter an order authorizing the retention and employment of HRA
as its consultants in connection with the Chapter 11 Cases.  The
PD Committee requests that such retention be nunc pro tunc to
May 2, 2001, the date HRA commenced postpetition services for
the PD Committee. HRA also requests that this Application be
granted nunc pro tunc to May 2, 2001 to allow HRA to be
compensated for work it performed for the PD Committee from and
after May 2, 2001, but prior to the submission of this
Application or the order granting it.

The PD Committee anticipates that HRA will render consulting
services for the PD Committee as needed throughout the course of
the Chapter 11 Cases, including:

       (a) Estimation of the number and value of present and
future asbestos claims;

       (b) Development of claims procedures to be used in the
development of financial models of payments and assets of an
asbestos settlement trust;

       (c) Analyzing and responding to issues relating to the
setting of a bar date regarding the filing of property damage

       (d) Assessing proposals made by the Debtors or other
parties, including, without limitation, proposals from other
creditors' committees;

       (e) Assisting the PD Committee in negotiations with
various parties;

       (f) Rendering expert testimony as required by the PD
Committee; and

       (g) Such other advisory services as may be requested by
the PD Committee from time to time.

HRA has agreed to accept as compensation for its services in
this case such sums as may be allowed by this Court in
accordance with law, based upon the services rendered, the
results achieved, the difficulties encountered, the complexities
involved, and other appropriate factors.  HRA has agreed to be
compensated for its services on an hourly basis, in accordance
with its normal billing practices, subject to allowance by this
Court in accordance with the Administrative Fee Order and other
applicable law. The current hourly rates HRA charges are:

           Position                        Charge Per Hour*
           --------                        ----------------
        Senior Partners                          $375
        Junior Partners                          $325
        Principals                               $275
        Directors                                $200
        Managers                                 $175
        Senior Analysts                          $150
        Analysts                                 $100
        Research Associates                      $ 75

     * Depositions, arbitration hearing or trial testimony hours
       are billed at time and one-half.

Francine F. Rabinovitz, a member of the firm of Hamilton,
Rabinovitz, & Alschuler, Inc., which maintains an office in Los
Angeles, California, avers to Judge Fitzgerald that to the best
of her knowledge, information and belief, insofar as Ms.
Rabinovitz has been able to ascertain after due inquiry, the
members and professionals of HR&A do not have any connections
with the Debtors, their creditors, any other parties in
interest, their respective attorneys or accountants, the United
States Trustee, or any person employed in the office of the
United States Trustee, except as follows:

       (a) In unrelated matters, HR&A has provided expert
analysis on behalf of W.R. Grace in two different cases in
different phases of "Maryland Casualty v. W.R. Grace & Co."
regarding property liability damage. HR&A will not provide
professional services to such entities or persons in the future
on matters related to the Chapter 11 Cases.

       (b) Ms. Rabinovitz also advises that it is possible that
certain employees of HR&A hold interests in mutual funds or
other investment vehicles that may own the Debtors' securities.

In addition to the above relationships, given the large number
of unsecured creditors and other parties in interest in the
Chapter 11 Cases, Ms. Rabinovitz cautions that there may be
other unsecured creditors and parties in interest that have been
served by HR&A. While HR&A may have provided, or may in the
future provide, services to parties in interest in these cases,
none of those relationships or matters have or will have any
connection with the Chapter 11 Cases. HR&A will file
supplementary affidavits regarding this retention
if additional relevant information is obtained. Mr. Rabinovitz
sums up by saying that, to the best of her knowledge,
information and belief, HR&A is a "disinterested person" as such
term is defined by the Bankruptcy Code. (W.R. Grace Bankruptcy
News, Issue No. 18; Bankruptcy Creditors' Service, Inc.,

WILLIAMS COMMS: Fitch Further Junks Ratings over EBITDA Concerns
Fitch Ratings has downgraded Williams Communication Group,
Inc.'s senior unsecured rating to 'CCC-' from 'CCC+' and the
convertible preferred stock to 'CC' from 'CCC-'. The rating of
Williams Communications, Inc. senior secured credit facility has
also been downgraded to 'CCC+' from 'B'. All of the ratings
remain on Rating Watch Negative.

The rating action reflects Fitch's concern over the company's
slower than anticipated revenue ramp-up, EBITDA generation and
improvement in credit protection metrics, coupled with continued
sluggish demand for broadband services and depressed asset
values securing the senior secured credit facility. The Rating
Watch Negative is likely to be resolved pending the outcome of
WCG's ongoing discussions with its bank group regarding WCG's
capital structure and the credit facility's current covenant
structure in light of WCG's business outlook and cash

Fitch believes that WCG's key asset entering 2002 will be cash
and management's ability to manage the company's liquidity
position. Fitch estimates that WCG entered 2002 with
approximately $1.5 billion of available liquidity, and Fitch
expects that WCG's current liquidity position should be
sufficient to satisfy obligations during 2002. Fitch does not
foresee the demand for broadband services improving during 2002,
which could stress revenue growth, EBITDA generation during this
year and WCG's liquidity position entering 2003. Fitch however
does recognize the revenue growth potential stemming from WCG's
strategic relationships with companies such as SBC, Telmex, and

The overbuild of broadband capacity combined with business
failures within the broadband transport space have driven down
the value of telecom assets pressuring the loan to value metric
of the senior secured credit facility. The recovery prospects of
unsecured bondholders have been significantly diminished. Absent
a restructure of the covenants contained in the senior secured
credit facility, ongoing pressure on revenue growth and EBITDA
generation could trigger a covenant violation during 2002.

Given the need to effectively manage its liquidity during 2002
and the amount of cash required to meet debt service
requirements together with WCG's limited access to public
capital markets, Fitch believes the potential exists for WCG to
restructure its capital structure to reduce interest expense and
leverage. This scenario is magnified especially if industry
conditions do not stabilize.

According to DebtTraders, Williams Communications Group Inc.'s
10.875% bonds due 2009 (WCG2) are trading between 36 and 38.5.
real-time bond pricing.

WINSTAR COMMS: Court Approves Modified Stipulation with WorldCom
Winstar Communications, Inc., and its debtor-affiliates sought
and obtained an order approving a stipulation with WorldCom
Inc., concerning the assumption and modification of the adequate
assurance stipulation.

The salient terms of the stipulation are:

A. Rejection of Long Term Lease: The Debtors hereby reject, and
     this Court hereby approves the Debtors' rejection of, the
     Long Term Lease, effective as of September 1, 2001. The
     Service Providers' claim for rejection damages based on
     such rejection shall, to the extent such claim is an
     allowed claim, be a general unsecured pre-petition claim.

B. Provision of Services Formerly Provided Under The Rejected
     Long Term Lease: Notwithstanding the rejection of the Long
     Term Lease, the Service Providers shall continue to provide
     to the Debtors the Long Term Lease Services for a period
     not exceeding the original unextended term of the Long Term

C. Debtors' Request for Termination of Services: The Debtors'
     may request the termination of one or more circuits by
     which the Debtors receive Long Term Lease Services or MSA
     Services upon 30 days advance written notice to the Service
     Providers if the Service Providers terminate service
     pursuant to such a request in less than 30 days, the
     Debtors shall not be liable for charges associated with
     such services after the date of termination.

D. Termination Liability: The Debtors shall not incur any
     liability associated with the early termination of services
     provided under the MSA or Long Term Lease Services where
     such services were provided to the Debtors as of the
     Petition Date. Notwithstanding the foregoing, if the
     Service Providers will incur any third-party liability
     associated with the Debtors' termination of any Long Term
     Lease Services, the Debtors shall pay to the Service
     Providers the amount of such liability within 5 days after
     receiving written notice of such liability. The Debtors
     shall also be liable for any early termination charges
     associated with services that were not provided to the
     Debtors as of the Petition Date. The charge for such early
     termination shall be the charge that would have been
     incurred by the Debtors under the Long Term Lease.

E. Five Million Dollar Credit for Long Term Lease Services: The
     Debtors shall receive a credit not to exceed $5,000,000
     against invoices for Long Term Lease Services or MSA
     Services. The Debtors shall receive the Credit over time
     against the monthly billings for such services commencing
     with invoices for services provided in September 2001. If
     the Long Term Lease Services and MSA Services arc
     terminated and the Debtors have incurred $5,000,000 in Long
     Term Lease Services and/or MSA Services, the Debtors shall
     not be entitled to any further credit or portion of the
     Credit. Under no circumstances shall the Debtors be
     entitled to receive cash in exchange for all or any portion
     of the Credit.

F. Limit on Total Billing for Long Term Lease Services:
     Notwithstanding any other provision of this Stipulation and
     Order, the Adequate Assurance Stipulation, the MSA, the any
     Voice Agreement, the total monthly billing for Long Term
     Lease Services shall not exceed $1,022,040.19.

G. Assumption of Agreement: Treatment of Cure. The Debtors
     hereby assume, and this Court hereby approves the Debtors'
     assumption of the MSA, as modified by this Stipulation and
     Order. If and only if the Debtors' estates have any funds
     to pay administrative expense claims or the MSA is
     assigned, the Net Pre-Petition Claim shall be paid in
     accordance with the priorities set forth in the Bankruptcy
     Code or pursuant to the Sale Order.

H. Allowance of Cure Claim. The Service Providers have an
     allowed administrative expense claim pursuant to Sections
     503(b) and 507 of the Bankruptcy Code in the amount of the
     Net Pre-Petition Claim (i.e., $3,000,000). (Winstar
     Bankruptcy News, Issue No. 22; Bankruptcy Creditors'
     Service, Inc., 609/392-0900)

WOLVERINE TUBE: S&P Keeps Ratings on Watch Neg. over Q4 Losses
Standard & Poor's placed its ratings on Wolverine Tube Inc. on
CreditWatch with negative implications. The action follows the
company's announcement that it expects a fourth-quarter loss
from operations in the range of $0.23 to $0.28 per share.
Including a non-cash LIFO charge and other non-operating
charges, the loss per share for the quarter is expected to be
$0.36 to $0.41 per share.

The company's earnings have been severely affected by the
deterioration in global economic conditions. Moreover, the
magnitude of customer sales deferrals and plant shutdowns in the
latter part of the fourth quarter were unexpected. For the 12
months ended September 30, 2001, total debt to EBITDA was
aggressive for the ratings, at 4.2 times and EBITDA interest
coverage had eroded to 3.7x. The company could be in violation
of some of the financial covenants of its revolving credit
facility because of the fourth-quarter results. Wolverine is
expected to remedy any financial covenant violation in
conjunction with a refinancing that is expected to be completed
prior to the facility's maturity on April 30, 2002.

Wolverine, a major manufacturer of custom engineered, value-
added copper and copper alloy tubing, holds leading market
shares in commercial products, which account for roughly 60% of
the pounds shipped and most of its gross profits. A primary
market is the heating, ventilation, air conditioning, and
refrigeration industry; Wolverine supplies all five of the North
American original equipment manufacturers of large commercial
units. Substantial activity is related to the ordinary
replacement of unitary air conditioners, sales of which are
sensitive to weather patterns of the cooling season. The
consumer appliance, transportation, automotive heavy equipment,
and marine industries are also served.

The CreditWatch placement will be resolved once Standard &
Poor's has discussed with management Wolverine's business
prospects and steps to shore up the financial profile.

                  Ratings Placed on CreditWatch
                    with Negative Implications

      Wolverine Tube Inc.
       Corporate credit rating    BB+
       Bank loan facility         BB+
       Senior unsecured debt      BB+

WORLD ACCESS: Court Fixes March 8 Bar Date for Admin. Claims

                               Chapter 11
IN RE:                      )  Case No. 01 B 14633
WORLD ACCESS, INC., et al., )  Chief Judge Susan P. Sonderby
         Debtors.           )  (Jointly Administered)


   PLEASE TAKE NOTICE that on January 24, 2002, the Honorable
Susan Pierson Sonderby, Chief Judge of the United States
Bankruptcy Court for the Northern District of Illinois, Eastern
Division, entered an Order fixing March 8, 2002 (the
"Administrative Claim Bar Date") as the deadline for any person
or entity who requests payment of an administrative expense from
FaciliCom International, L.L.C. ("FaciliCom") and World Access
Telecommunications Group, Inc. ("WATG" and collectively with
FaciliCom, the "Debtors") of the kind specified in section
503(b) of title 11 of the United States Bankruptcy Code (the
"Bankruptcy Code") and entitles to priority pursuant to section
507 (a)(1) of the Bankruptcy Code (but not including
professionals retained pursuant to order of the Court), and who
asserts an Administrative Claim against the Debtors which arose
from and between April 24, 2001 and December 31, 2001 (each, an
"Administrative Claim") to, on or prior to the Administrative
Claim Bar Date, file an application asserting such
Administrative Claim (each, an "Application") with the Clerk of
the United States Bankruptcy Court for the Northern District of
Illinois, Eastern Division, 219 South Dearborn Street, Room 710,
Chicago, Illinois 60604 (the "Clerk") and serve a copy of the
application on:  Kenneth J. Ottaviano, Esq., Katten Muchin
Zavis, 525 W. Monroe Street, Suite 3350, Chicago, Illinois,
60606, and Michael Edelman, Esq., Cadwalader, Wickersham & Taft,
100 Maiden Lane, New York, NY 10038.  The Administrative Claim
Bar Date applied to all Administrative Claims whether matured or
unmatured, disputed or undisputed, liquidated or unliquidated,
fixed or contingent, legal or equitable.  Therefore any creditor
having an Administrative Claim, or potential Administrative
Claim, against either of the Debtors, no matter how remote or
contingent, must file an application on or before the
Administrative Claim Bar Date.  IF YOU ARE REQUIRED TO FILE AN

                              Mark K. Thomas, Esq.
                              Kenneth J. Ottaviano, Esq.
                              Katten Muchin Zavis
                              525 West Monroe Street, Suite 1600
                              Chicago, IL 60661-3693
                              PH: (312) 902-5200
                              Counsel for FaciliCom                
                                International, L.L.C. and World
                                Access Telecommunications Group,
                                Inc., Debtors and Debtors-in

* Meetings, Conferences and Seminars
February 25-26, 2002
   American Conference Institute
      Chapter11 Bankruptcy
         Hyatt Regency in Los Angeles, California
            Contact: 1-888-224-2480 or

February 27-28, 2002
    Information Management Network
       The Distressed Real Estate Symposium
          Crowne Plaza, New York, New York
             Contact: 1-212-768-2800 or

February 28-March 1, 2002
      Corporate Mergers and Acquisitions
         Renaissance Stanford Court, San Francisco, CA
            Contact: 1-800-CLE-NEWS or

March 3-4, 2002
   Association of Insolvency and Restructuring Advisors
      Business Valuation Conference (Held in conjunction with
      The Norton Bankruptcy Litigation Institute I)
         Park City Marriott, Park City, UT
            Contact: (541) 858-1665 Fax (541) 858-9187 or

March 3-6, 2002
      Norton Bankruptcy Litigation Institute I
         Park City Marriott Hotel, Park City, Utah
            Contact:  770-535-7722 or

March 7-8, 2002
      Third Annual Conference on Healthcare Transactions
         The Millennium Knickerbocker Hotel, Chicago
            Contact: 1-800-726-2524 or

March 8, 2002
   American Bankruptcy Institute
      Bankruptcy Battleground West
         Century Plaza Hotel, Los Angeles, California
            Contact: 1-703-739-0800 or

March 14-15, 2002
   American Conference Institute
      Commercial Loan Workouts
         The New York Marriott Marquis in New York City
            Contact: 1-888-224-2480 or
March 20-23, 2002
      Spring Meeting
         Sheraton El Conquistador Resort & Country Club
         Tucson, Arizona
            Contact: 312-822-9700 or

April 11-14, 2002
      Norton Bankruptcy Litigation Institute II
         Flamingo Hilton, Las Vegas, Nevada
            Contact:  770-535-7722 or

April 18-21, 2002
   American Bankruptcy Institute
      Annual Spring Meeting
         J.W. Marriott, Washington, D.C.
            Contact: 1-703-739-0800 or

April 25-27, 2002
      Fundamentals of Bankruptcy Law
         Rittenhouse Hotel, Philadelphia
            Contact:  1-800-CLE-NEWS or

May 13, 2002 (Tentative)
   American Bankruptcy Institute
      New York City Bankruptcy Conference
         Association of the Bar of the City of New York
         New York, New York
            Contact: 1-703-739-0800 or

May 15-18, 2002
   Association of Insolvency and Restructuring Advisors
      18th Annual Bankruptcy and Restructuring Conference
         JW Marriott Hotel Lenox, Atlanta, GA
            Contact: (541) 858-1665 Fax (541) 858-9187 or

May 26-28, 2002
   International Bar Association
      International Insolvency 2002 Conference
         Dublin, Ireland
            Contact: Tel +44 207 629 1206 or

June 6-9, 2002
   American Bankruptcy Institute
      Central States Bankruptcy Workshop
         Grand Traverse Resort, Traverse City, Michigan
            Contact: 1-703-739-0800 or

June 20-21, 2002
      Fifth Annual Conference on Corporate Reorganizations
         The Millennium Knickerbocker Hotel, Chicago
            Contact: 1-800-726-2524 or

June 27-30, 2002
      Western Mountains, Advanced Bankruptcy Law
         Jackson Lake Lodge, Jackson Hole, Wyoming
            Contact: 770-535-7722 or

July 11-14, 2002
   American Bankruptcy Institute
      Northeast Bankruptcy Conference
         Ocean Edge Resort, Cape Cod, MA
            Contact: 1-703-739-0800 or

July 17-19, 2002
   Association of Insolvency and Restructuring Advisors
      Bankruptcy Taxation Conference
         Snow King Resort, Jackson Hole, WY
            Contact: (541) 858-1665 Fax (541) 858-9187 or

August 7-10, 2002
   American Bankruptcy Institute
      Southeast Bankruptcy Conference
         Kiawah Island Resort, Kiawaha Island, SC
            Contact: 1-703-739-0800 or

October 9-11, 2002
   INSOL International
      Annual Regional Conference
         Beijing, China
            Contact: or

October 24-28, 2002
      Annual Conference
         The Broadmoor, Colorado Springs, Colorado
            Contact: 312-822-9700 or

December 5-8, 2002
   American Bankruptcy Institute
      Winter Leadership Conference
         The Westin, La Paloma, Tucson, Arizona
            Contact: 1-703-739-0800 or

April 10-13, 2003
   American Bankruptcy Institute
      Annual Spring Meeting
         Grand Hyatt, Washington, D.C.
            Contact: 1-703-739-0800 or

December 3-7, 2003
   American Bankruptcy Institute
      Winter Leadership Conference
         La Quinta, La Quinta, California
            Contact: 1-703-739-0800 or

April 15-18, 2004
   American Bankruptcy Institute
      Annual Spring Meeting
         J.W. Marriott, Washington, D.C.
            Contact: 1-703-739-0800 or

December 2-4, 2004
   American Bankruptcy Institute
      Winter Leadership Conference
         Marriott's Camelback Inn, Scottsdale, AZ
            Contact: 1-703-739-0800 or

The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday.  Submissions via
e-mail to are encouraged.


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

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

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

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

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


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

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

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

This material is copyrighted and any commercial use, resale or
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 ***