TCR_Public/020207.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

            Thursday, February 7, 2002, Vol. 6, No. 27     

                          Headlines

360NETWORKS INC: Taps DoveBid to Auction Certain Excess Assets
ACORN PRODUCTS: Major Shareholders Back Financial Restructuring
ADVANCED SWITCHING: Board Adopts Plan of Complete Liquidation
AMERICAN SKIING: Sells Steamboat Resort to Triple Peaks for $91M
BRIDGE INFORMATION: Secures Court Approval of Sharing Agreement

BURLINGTON INDUSTRIES: Lease Decision Deadline Almost Open-Ended
CFI MORTGAGE: Inventek Unit Files Chapter 11 Petition in Florida
CKE RESTAURANTS: S&P Ratchets Low-B and Junk Ratings Up a Notch
CSG SYSTEMS: S&P Concerned About Vulnerability to Competitors
CAPITOL COMMUNITIES: Completes $4MM Land Sale to Maumelle Valley

CARMIKE CINEMAS: Chapter 11 Plan is Declared Effective
CHIPPAC INC: Q4 2001 Net Loss Tops $15MM on $76.8MM Revenues
CHIQUITA BRANDS: Proposes to Issue $250M Notes Under Reorg. Plan
CIGNA: Fitch Hatchets $21MM Class B Notes Down to Junk Level
CLASSIC COMMS: Wants Lease Decision Period Extended to April 11

COHO ENERGY: Files for Chapter 11 Protection in Dallas
COMDISCO: Gets Interim OK to Establish Joint Fee Review Panel
COMDISCO: Completes Court-Supervised Sales Evaluation Process
CORAM HEALTHCARE: Court Extends Lease Decision Period to May 2
E.SPIRE COMMS: Pushing for Extension of Exclusive Periods

ELIZABETH ARDEN: Weak Financial Performance Spurs S&P Downgrade
ENRON CORPORATION: Signs-Up Vinson & Elkins as Special Counsel
ETHYL CORP: Negotiating Loan Maturity Extension with Banks
EXODUS: Asks Court to Fix April 12 Bar Date for Proofs of Claim
FACTORY CARD: Delaware Court Approves Disclosure Statement

FEDERAL-MOGUL: Selling Signal-Stat Lighting Assets to Truck-Lite
FRUIT OF THE LOOM: Wants Solicitation Period Extended to Apr. 30
GLOBAL CROSSING: Wins Nod to Maintain Cash Management System
HAYES LEMMERZ: US Trustee Balks At Lazard's Compensation Scheme
HEAFNER TIRE: Commences Tender Offer for All of $150M 10% Notes

I.C.H. CORPORATION: Chapter 11 Case Summary
IGI INC: Frank Gerardi Discloses 7.39% Equity Stake
IT GROUP: Court Allows Use of Secured Lenders' Cash Collateral
INNOVATIVE GAMING: Enters Agreement to Acquire GET USA Assets
INTEGRATED HEALTH: Premiere Panel to Sue Directors & Officers

INTERLIANT: Closes Sale of Telephonetics Unit to L&D Messaging  
KMART CORP: Has Until March 25 to File Schedules & Statements
KMART CORP: DebtTraders Issues BUY Recommendation on Notes
KASPER A.S.L.: Case Summary & 30 Largest Unsecured Creditors
LTV CORP: Intends to Implement $9MM Key Employee Retention Plan

LOEWS CINEPLEX: Court Sets Confirmation Hearing for February 28
MARINER POST-ACUTE: Wants Until May 5 to Make Lease Decisions
MCCRORY CORP: Buxbaum/Century Resets Auction for March 12, 2002
MCLEODUSA: Gets Approval to Maintain Cash Management System
MCLEODUSA INC: Receives Court Approval of All First-Day Motions

METALS USA: Court OKs Extension of DIP Facility to Dec. 31, 2003
NATIONSRENT INC: Deere Credit Seeks Adequate Protection
ORIUS CORP: S&P Cuts Ratings to D Level Following Missed Payment
PACIFIC GAS: Taps Vantage Consulting to Make Independent Audit
PARTYCO CITY: Court Appoints Canadian Receiver at Bank's Request

PENTASTAR: Expects $5.5MM Savings from Downsizing Initiatives
POLAROID CORP: Court Okays Arthur Andersen as Tax Advisors
PRIME RETAIL: Amends Terms of $49.4 Million Mezzanine Loan
PRIMIX SOLUTIONS: Special Shareholders' Meeting Set for Tomorrow
SAFETY-KLEEN CORP: Exclusive Period Extension Hearing on Monday

SIX FLAGS: S&P Rates New $480 Million Senior Notes due 2010 at B
SUN HEALTHCARE: Selling 2 NM Buildings to Goodman Inv. for $15MM
TELIGENT INC: Court Extends Exclusivity and Removal Periods
TRI-LINE: TransForce Acquires Assets of Logistics Division
UCAR INT'L: Certain Shareholders Offer to Sell 2.8MM Shares

W.R. GRACE: PD Committee Taps W.D. Hilton for Claims Analysis
WELLMAN: S&P Ratchets Credit & Unsec. Debt Ratings Down a Notch
WINSTAR COMMS: Perot Systems Demands Prompt Decision on Contract

* DebtTraders Real-Time Bond Pricing

                          *********

360NETWORKS INC: Taps DoveBid to Auction Certain Excess Assets
--------------------------------------------------------------
360networks inc., and its debtor-affiliates seek the Court's
authority to employ DoveBid Inc. as auctioneer for the sale of
certain excess assets.

Shelley C. Chapman, Esq., at Willkie Farr & Gallagher, in New
York, New York, relates that the Debtors own fiber optic cable,
conduit, manholes, electrical and optical gear, DC power
equipment, construction equipment and materials, office
equipment, generators, switches and other materials and
equipment related to the construction, operation and maintenance
of its fiber optic network.  Due to its recent elimination of
telecommunications routes, the Debtors no longer need these
equipment and materials.  "The Debtors believe that their
recoveries on the equipment can be maximized by employing the
services of an experienced auctioneer to handle the sales of the
equipment," Ms. Chapman explains.

Ms. Chapman tells the Court that the Debtors have previously
used DoveBid's services and have been satisfied with DoveBid's
efforts.  Furthermore, Ms. Chapman states that DoveBid has over
60 years experience in its industry and its sales methods are
state-of-the-art.

From time to time, Ms. Chapman says, the Debtors will notify
DoveBid whenever it wishes to dispose of any used or surplus
assets upon which, the Debtors and DoveBid will agree on a plan
of sale.  The Debtors expect DoveBid to:

  (i) conduct sales of assets on an exclusive basis;

(ii) in its discretion, offer assets for sale by the piece or
      by the lot;

(iii) sell assets to the highest bidder;

(iv) agree with the Debtors on whether the assets shall be sold
      by public auction, private treaty sale or otherwise; and,

  (v) promote the auction on its Web site at
      http://www.dovebid.comor otherwise broadcast it live over
      the Internet as a Webcast auction.

According to Ms. Chapman, the Debtors intend to compensate
DoveBid in accordance to the terms of the Agreement for the
Provision of Asset Disposition Services which, states that:

  (i) DoveBid shall receive a commission of 0% [sic.] of the
      gross proceeds of each sale.  A buyer's premium, payable
      to DoveBid, will range from 10% to 13% associated with any
      sale conducted under the Auction Agreement;

(ii) in connection with each sale, the Debtors shall provide
      DoveBid an allowance toward advertising expenses such as
      digital photography of the assets, print and electronic
      media production, creative services, ad placement fees,
      brochure and catalog production, telemarketing, data list
      purchases and fax and email advertising;

(iii) Debtors agree to reimburse DoveBid for labor expenses
      related to each sale at $30 per hour per person;

(iv) Debtors agree to reimburse DoveBid for actual travel
      expenses related to each sale;

  (v) if a sale will be conducted by public auction, Debtors
      agree to reimburse DoveBid for actual expenses related to
      preparing for and conducting broadcasts live over the
      website;

(vi) Debtors agree to reimburse Dove Bid for miscellaneous
      expenses related to each Sale, including accounting,
      equipment rental, insurance, permits, UCC searches, lien
      releases, and armored cars;

(vii) All these amounts will be deducted from the gross proceeds
      and paid to DoveBid after each Sale; and

(viii) Debtors agree to reimburse DoveBid for all costs incurred
      in obtaining an auctioneer bond from the Auction
      Allowance, regardless of the amount of proceeds realized
      from the sale of the Assets.

Because of the fixed, transactional nature of DoveBid's
services, the Debtors request that they be permitted to pay
DoveBid without further order from the Court.

James Sklar, an Associate General Counsel of DoveBid, Inc.,
asserts that to the best of his knowledge, DoveBid does not have
any connection with the Debtors, their creditors, or any other
party in interest, or their respective attorneys.  "DoveBid does
not represent any interest adverse to the Debtors' estates," Mr.
Sklar adds.  Accordingly, Mr. Sklar believes that DoveBid is a
"disinterested person" as defined by section 101(14) of the
Bankruptcy Code. (360 Bankruptcy News, Issue No. 18; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


ACORN PRODUCTS: Major Shareholders Back Financial Restructuring
---------------------------------------------------------------
Acorn Products, Inc., (Nasdaq:ACRN) says it has entered into a
Letter of Intent with entities representing a majority of the
Company's shareholders that would lead to a financial
restructuring and a strengthening of its balance sheet.

Investment funds managed by TCW Special Credits and Oaktree
Capital Management, LLC, which together own approximately 71% of
the outstanding shares of the Company, have agreed under certain
conditions to purchase $15 million of newly-issued common stock
of the Company for the purpose of repaying outstanding
indebtedness. It is expected that subsequent to completion of
these transactions, the Company will make a rights offering to
unaffiliated shareholders wherein such holders will be entitled
to purchase approximately $6 million of newly-issued common
shares of the Company on the same terms and conditions as the
Principal Holders. The Principal Holders have agreed to act as
Standby Purchaser to ensure that not less than $3 million of
additional equity is raised pursuant to such an offering.

The potential transaction is subject to significant conditions,
including the approval of unaffiliated directors, obtaining a
satisfactory financing commitment, as well as negotiation and
execution of definitive documentation.

While the Company expects that the combined ownership stake of
its existing shareholders would be substantially diluted as a
result of the initial investment of the Principal Holders, the
Rights Offering, if fully subscribed, would afford shareholders
other than the Principal Holders an opportunity to maintain
their existing ownership stake in the Company. The precise terms
under which the initial investment of the Principal Holders will
be made, together with the terms of the Rights Offering, are
subject to further review and negotiation by the Board of
Directors. The Company believes the signing and execution of
this Letter of Intent has and will fully satisfy all covenants
under its Amended and Restated Credit Agreement. It is expected
that the initial investment of the Principal Holders could be
completed by April 30, 2002, which is the expiration date of the
Company's existing bank credit facility. The Rights Offering
would commence sometime thereafter subject to receipt of
approvals from the Securities and Exchange Commission and other
entities and would likely be completed during the quarter ending
September 29, 2002. If the proposed transaction is not completed
by April 30, 2002, there is no agreement with the lenders that
are party to the existing bank credit facility as to the terms
on which they would extend the expiry of such facility.

A. Corydon Meyer, President and CEO of Acorn Products, commented
"We have had strong, unwavering support from both our Board of
Directors and majority owners during a very difficult last two
and one half years. We are pleased by their ongoing support and
participation in the Company as we finish our turnaround and
will now have the resources to strengthen and grow the
business."

Acorn Products, Inc., through its operating subsidiary
UnionTools, Inc., is a leading manufacturer and marketer of non-
powered lawn and garden tools in the United States. Acorn's
principal products include long handle tools (such as forks,
hoes, rakes and shovels), snow tools, posthole diggers,
wheelbarrows, striking tools, cutting tools and watering
products. Acorn sells its products under a variety of well-known
brand names, including Razor-Back?, Union?, Yard 'n Garden,
Perfect Cut and, pursuant to a license agreement, Scotts. In
addition, Acorn manufactures private label products for a
variety of retailers. Acorn's customers include mass merchants,
home centers, buying groups and farm and industrial suppliers.


ADVANCED SWITCHING: Board Adopts Plan of Complete Liquidation
-------------------------------------------------------------
Advanced Switching Communications, Inc., (Nasdaq: ASCX) says
that its Board of Directors has adopted a plan of complete
liquidation and dissolution, which will be submitted to the
Company's stockholders for approval.  Subject to approval of the
plan by holders of a majority of the Company's outstanding
shares, the Company plans to sell its assets, including
inventory, property and equipment and intellectual property,
discharge its liabilities, and distribute the net proceeds to
its stockholders.

Pending final stockholder action, the Company has begun making
preparations for the orderly wind down of its operations,
including headcount reductions, securing continuing support for
its existing customers, seeking purchasers for the sale of its
intellectual property and other tangible and intangible assets,
considering pursuit of potential third-party claims and
providing for its outstanding and potential liabilities.

The Company intends to hold a special meeting of stockholders as
soon as practicable to approve the plan of liquidation and
dissolution.  A proxy statement describing the plan will be
mailed to stockholders prior to the meeting.  Stockholders are
strongly advised to read the proxy statement when it becomes
available, because it will contain important information.  The
proxy statement will be filed by the Company with the Securities
and Exchange Commission (SEC).  Investors may obtain a free copy
of the proxy statement (when available) and other documents
filed by Advanced Switching Communications, Inc. at the SEC's
web site at http://www.sec.gov The proxy statement and related  
materials may also be obtained for free by directing such
requests to Advanced Switching Communications, Inc., 8330 Boone
Boulevard, Vienna, 22182, Attention:  Investor Relations.

In reaching its decision that the liquidation and dissolution of
the Company would be in the best interests of the stockholders,
the Board of Directors considered a number of factors, including
the Company's recent financial performance, prevailing economic
and industry conditions and unsuccessful efforts to sell or
merge the Company.


AMERICAN SKIING: Sells Steamboat Resort to Triple Peaks for $91M
----------------------------------------------------------------
American Skiing Company (NYSE: SKI) announced that it has
entered into a definitive agreement to sell its Steamboat ski
resort in Steamboat Springs, Colorado, to Triple Peaks, LLC, a
consortium of investors led by Tim and Diane Mueller, the owners
of Vermont's Okemo Mountain Resort and operators of Mount
Sunapee Resort in New Hampshire.

Triple Peaks, LLC will pay approximately $91.4 million for the
resort and associated real estate.  American Skiing Company's
Steamboat Grand Resort Hotel and Conference Center will not be
included in the sale, which is targeted to close in March.

Located in the heart of the Rocky Mountains in Steamboat
Springs, Colorado, Steamboat is recognized as one of the premier
ski resort destinations in the world.  The resort and town are
famous for their authentic western atmosphere, champagne powder
and world-class terrain.  With 25 lifts and 142 trails spread
over 2,939 acres, Steamboat is one of the country's most popular
resorts, recording more than 1 million skier/rider visits
annually.

"The sale of Steamboat is a fundamental component of the
restructuring plan for the Company," said BJ Fair, president and
CEO of American Skiing Company.  "The closing of this sale will
be a major milestone, will significantly reduce our debt and
allow us to focus on our core business going forward."

Fair said that although the timeline for completion of the sale
shifted from the Company's original goal due to tightened
financial markets after September 11, the Company and Triple
Peaks remained focused on its completion.

The Muellers have personal ties to Colorado.  Tim Meuller spent
part of his childhood in Littleton and, since 1996, the Muellers
have participated in real estate and golf development at the
Catamount Ranch and Club near Steamboat Springs.

"It is with great excitement that we look forward to our
involvement at Steamboat and in the community of Steamboat
Springs," said Tim Mueller.  "We see Triple Peaks, LLC, as a
unique opportunity to offer three of the country's finest
resorts to our family of skiers and riders, while building on
our values of tradition, heritage and community."

Diane Mueller added, "providing guests with the highest quality
resorts is our number one priority.  We feel that Okemo, Mount
Sunapee and Steamboat complement each other.  They are the best
in their individual markets and each resort will build upon the
attributes of the mountain and community."

Steamboat will continue to honor American Skiing Company multi-
resort ticket products through the remainder of the 2001-2002
ski season.

Since May, American Skiing Company has closed and funded a
financial restructuring that raised additional capital and
restructured some of its debts and aggressively reduced its real
estate inventory.

Tim and Diane Mueller are the owners of Okemo Mountain Resort in
Ludlow, Vermont, one of the largest and most successful ski and
golf resorts in the East; and operators of Mount Sunapee Resort
in Newbury, New Hampshire, known for its pristine location,
friendly environment, diverse trail system and family appeal.   
By reinvesting in the infrastructure of the mountain and by
recognizing the potential of the staff, both Okemo and Mount
Sunapee have received national acclaim in both the snow sports
and golf industries.

Headquartered in Newry, Maine, American Skiing Company is the
largest operator of alpine ski, snowboard and golf resorts in
the United States.  Its resorts include Killington and Mount
Snow in Vermont; Sunday River and Sugarloaf/USA in Maine;
Attitash Bear Peak in New Hampshire; Steamboat in Colorado; The
Canyons in Utah; and Heavenly in California/Nevada. More
information is available on the Company's Web site,
http://www.peaks.com


BRIDGE INFORMATION: Secures Court Approval of Sharing Agreement
---------------------------------------------------------------
Bridge Information Systems, Inc., and its debtor-affiliates seek
the Court's approval of the Sharing Agreement and Mutual Release
among the Lenders, the Debtors, SAVVIS and the Lessor group.

Deborah M. Buell, Esq., at Cleary Gottlieb Steen & Hamilton, in
New York, relates that during the Reuters Sale Hearing the
compromising parties agreed to withdraw its objection to the
proposed sale upon certain terms and conditions.  The
compromising parties agreed to enter a stipulation -- known as
the Sharing Agreement.

Ms. Buell informs the Court that this Sharing Agreement is
settled by and among Harris Trust and Savings Bank as
administrative agent for the Lenders, Goldman Sachs Credit
Partners as syndication agent and lead arranger to the Credit
Agreement, Lenders who have executed an acknowledgment and
consent, the Debtors and its subsidiaries as signatories, SAVVIS
Communications Corporation, General Electric Capital
Corporation, First Bank, Heller Financial Leasing, Transamerica
Equipment Financial Services Corporation, Pilgrim Prime Rate
Trust and Pamco Cayman Ltd.

Prior to the Petition Date, Ms. Buell recalls, the Debtors
entered into a Master Lease Agreement with General Electric
Capital Corporation.  The Debtors' obligations under the Master
Lease are secured by first priority security interests and liens
on all equipment financed by a Sublease Agreement with SAVVIS.
Under the Master Lease, Ms. Buell reports, the Debtors owed the
Lessor group approximately $42,389,186 in remaining rents and
other lease obligations.  Although SAVVIS made certain payments
to the Debtors, SAVVIS failed to remit all the payments due.  Ms
Buell lists down the required amount of the SAVVIS Sublease
payments and the amount paid by SAVVIS as:

           Payment Due Date                    Amount
           ----------------                    ------
           03/1/01                            $600,491
           04/1/01                             592,887
           05/1/01                             597,167
           06/1/01                             594,038
           07/1/01                             594,443
           08/1/01                             591,771
           09/1/01                             591,699
           10/1/01                             593,332
           11/1/01                             591,317
           12/1/01                             593,034
           01/1/02                             590,762
                                             ----------
           Total                            $6,530,941

           Less SAVVIS Sublease
           Payments held by Debtors         $3,831,418
                                            ----------
           Escrow Shortfall Amount          $2,699,523

Additionally, Ms. Buell states that the aggregate amount of all
scheduled rental payments due by SAVVIS to the Debtors over the
term of the Sublease is $11,166,649, which SAVVIS disputes.

This amount is the sum of $6,530,941 plus $864,000 -- the amount
the lenders say is in excess of the total scheduled payments,
plus the forthcoming rental payments:

           2/1/02      $590,016
           3/1/02       592,440
           4/1/02       587,908
           5/1/02       505,197
           6/1/02       503,470
           7/1/02       465,649
           8/1/02       527,028
                     ----------
                     $3,771,708

Ms. Buell explains that due to the complexities of the disputes,
the Debtors, the Lenders, the Lessor group and SAVVIS
compromised to settle all controversies by entering into a
stipulation memorializing their agreement.  The salient terms of
the Sharing Agreement provides that:

  (i) on the effective date, General Electric Capital
      Corporation shall receive from the Debtors payment in the
      amount of $13,500,000 from the Reuters Sale Proceeds and
      the sum of $1,000,000;

(ii) as of the effective date, the Debtors shall
      abandon and assign all of their rights, titles and
      interests in the SAVVIS Sublease, the SAVVIS Subleased
      equipment, the SAVVIS Sublease payments and all other
      payments due from time to time;

(iii) within 2 business days after the execution date, the
      Debtors shall deposit the initial deposit into an account
      created for the Escrow Agreement together with any
      additional SAVVIS Sublease payments falling due before the
      Deposit Date that the Debtors may have received from
      SAVVIS.  On the effective date, the Debtors shall deposit
      in the Escrow Account the sum of $2,100,082 or to General
      Electric Capital Corporation. SAVVIS will reimburse the
      Debtors the amount of $899,841 upon:

      (a) 12 months from the date on which the Debtors will
          deposit $1,799,682 of the Escrow Shortfall Amount;

      (b) the closing by SAVVIS of its new financing; or,

      (c) any asset sale by SAVVIS in excess of $5,000,000
          including the sale or capital lease of the Hazelwood
          facility.

(iv) on or before the Deposit Date, SAVVIS shall deposit the
      sum of $899,841 into the Escrow Account and will deposit
      all future SAVVIS Sublease payments on the due date to the
      said account.

                       *        *         *

The Court concludes that approval of the Sharing Agreement is
fair and equitable, and in the best interests of the Debtors and
their estates.  Thus, Judge McDonald puts his stamp of approval
on the stipulation.  The Court directs the Debtors to take all
actions required in order to implement the terms of the Sharing
Agreement and the Escrow Agreement. (Bridge Bankruptcy News,
Issue No. 25; Bankruptcy Creditors' Service, Inc., 609/392-0900)   


BURLINGTON INDUSTRIES: Lease Decision Deadline Almost Open-Ended
----------------------------------------------------------------
Judge Newsome grants Burlington Industries and its debtor-
affiliates to decide whether to assume, assume and assign or
reject each of the leases through the Confirmation Date,
provided, however, that the Confirmation Date occurs on or
before May 15, 2003. (Burlington Bankruptcy News, Issue No. 7;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   


CFI MORTGAGE: Inventek Unit Files Chapter 11 Petition in Florida
----------------------------------------------------------------
On January 17, 2002, CFI Mortgage, Inc.'s wholly owned
subsidiary; Inventek, d/b/a Surfside Software Systems, Inc.,
filed for reorganization under Chapter 11 of the U.S. Bankruptcy
Code in the Bankruptcy Court for the Middle District of Florida,
Tampa Division, case no. 02-00977-8B1.


CKE RESTAURANTS: S&P Ratchets Low-B and Junk Ratings Up a Notch
---------------------------------------------------------------
Standard & Poor's raised its corporate credit and senior secured
bank loan ratings on CKE Restaurants Inc. to single-'B' from
single-'B'-minus and raised its subordinated debt rating to
triple-'C'-plus from triple-'C'. The outlook is stable.

The upgrade is based on the company's restored financial
flexibility after closing on its amended $100 million senior
secured revolving credit facility. This facility replaces the
$120 million revolving facility, which matured on February 1,
2002. The term of the amended facility is two years, and could
be extended to five years under certain circumstances.

The ratings on CKE reflect the company's participation in the
highly competitive quick-service sector of the restaurant
industry, its highly leveraged capital structure, and weak
credit protection measures. The ratings also take into account
the poor operating performance at its Hardee's restaurant
concept, despite major efforts to revitalize the brand. These
risks are mitigated, somewhat, by the strength of the company's
established Carl's Jr. concept.

CKE is an operator and franchisor of quick-service restaurants,
operating primarily under the Carl's Jr. and Hardee's brand
names. As of November 5, 2001, the Carl's Jr. system consisted
of 441 company-operated restaurants, 490 franchised restaurants,
and 40 international restaurants, and the Hardee's system
consisted of 751 company-operated restaurants, 1,564 franchised
restaurants, and 142 international restaurants. In addition, in
November 2001 the company agreed to purchase Santa Barbara
Restaurants Group Inc., operator of the La Salsa, Timber Lodge
Steakhouse, and Green Burrito restaurant chains.

CKE has been experiencing weak operating performance since the
Hardee's acquisition in 1997. The company's operating margin
dropped to 11.8% in 2000 from 16.9% in 1996. Still, some
positive trends are emerging. Same-store sales at its Hardee's
units were positive in the second and third quarters of 2001
after many years of declining sales, and CKE's consolidated
operating margin increased to 13.6% in the first nine months of
2001 from 12.3% in the same period of 2000. The margin
improvement is largely due to a 30% increase in franchise
revenue and the closing of underperforming units in both
concepts. The company's credit protection measures are weak,
with 12 months' EBITDA coverage of interest expense at only 1.7
times, and leverage is high, with total debt to EBITDA at 5.0x.

                        Outlook: Stable

CKE has reduced debt and improved financial flexibility through
the sale of its Taco Bueno concept, its refranchising
initiative, and the closing of underperforming stores. In
addition, performance at Hardee's has begun to show improvement,
as the chain experienced positive same-store-sales for the
first time in many years. Still, the company's highly leveraged
balance sheet and the challenge of improving operations in the
competitive restaurant industry could hinder progress.

DebtTraders reports that CKE Restaurants Inc.'s 9.125% bonds due
2009 (CKER) are trading between 90 and 92. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CKERfor  
real-time bond pricing.


CSG SYSTEMS: S&P Concerned About Vulnerability to Competitors
-------------------------------------------------------------
Standard & Poor's assigned its double-'B' corporate credit
rating on CSG Systems Inc. (CSG) and to the company's $400
million senior secured credit facilities. The outlook is stable.

The ratings on CSG reflect the company's growing installed base,
recurring revenues, and prospects for moderate-size, but
predictable, earnings and cash flow. Offsetting these factors
are the company's vulnerability to competitors, which are
substantially larger, and its concentrated client base, with one
customer that represented more than one-half of revenues in
2001. Additionally, its recent purchase of the billing and
customer care assets of Lucent Technologies Inc. for about $300
million in cash adds the challenge of integrating acquired
operations and restoring profitability in this under-performing
unit.

Englewood, Colorado-based CSG provides billing solutions and
customer care for the converging communications markets that
include cable television, direct broadcast satellite, telephony,
and online services. The company's market positions are
defensible due to contractual customer relationships with high
switching costs. Growth opportunities will come from increased
penetration into existing and overseas markets, primarily in
Europe, which could require moderate start-up costs.

Working capital requirements are moderate and annual pro forma
capital expenditures are in the $40 million area. Pro forma
EBITDA margins should remain solid at more than 30% and the
company generates moderate free cash flow. Pro forma total debt
to EBITDA is less than 2 times, EBITDA interest coverage exceeds
8x, and debt amortization requirements are manageable.
Acquisition activity is expected to continue, and financial
flexibility is provided by a $100 million revolving credit
facility.

                        Outlook: Stable

Favorable market conditions and contractual relationships should
sustain positive operating results over the near to intermediate
term. Standard & Poor's expects acquired operations to be
integrated successfully, and that the company will maintain a
capital structure that is consistent with the rating. A fairly
stable cash flow base limits downside credit risk.


CAPITOL COMMUNITIES: Completes $4MM Land Sale to Maumelle Valley
----------------------------------------------------------------
Capitol Communities Corporation (OTC Bulletin Board: CPCY)
announced Capitol's wholly owned subsidiary, Capitol Development
of Arkansas, Inc., has completed the sale of approximately 451
acres of residential land in Maumelle, Arkansas to Maumelle
Valley, LLC, a Maumelle-based developer of single family
housing, for a sale price of $4,000,000.  The all cash sale
generated approximately $3,863,200 in net proceeds after closing
costs, from which $3,850,000 was paid to Nathaniel S. Shapo,
Director of Insurance of the State of Illinois, as Liquidator of
Resure Inc., in full satisfaction of all Resure claims against
Capitol Development.  Capitol Development operates as a debtor-
in-possession pursuant to a voluntary petition for relief under
Chapter 11 of the United States Bankruptcy Code.  The petition
was filed in the United States Bankruptcy Court for the Eastern
District of Arkansas, Little Rock Division on July 21, 2000.

Capitol reported that it expects to record $1,534,069 in gross
profit before taxes on the sale of the land in the fiscal
quarter ending March 31, 2002.  Additionally, Capitol expects to
record an extraordinary gain of $1,226,811 from the settlement
with Resure in that same fiscal quarter. Recorded liabilities
associated with the Resure claims will be reduced by $5,076,811.

"This sale is key to completing the first phase of our business
strategy designed to resolve outstanding debt issues and
maximize shareholder value. Now that Capitol Development has
satisfied all terms and conditions of the Resure Settlement
Agreement, we will proceed to modify our Plan and seek its
confirmation at the earliest possible date, or seek to
voluntarily dismiss the Chapter 11 proceedings entirely," said
Michael G. Todd, President of Capitol Communities Corporation.  
"This sale leaves Capitol with substantial unencumbered assets
which will be important as we proceed with the next two phases
of our business strategy," he added.  

Capitol had announced in November 2001 its Board of Directors
has adopted a new three-part business strategy. The first part
is to try to bring resolution to the Chapter 11 filing of
Capitol Development.  The second part is to try to bring
resolution to Capitol's outstanding obligation to the holders of
its promissory notes.  The third part of the strategy is to
redirect the business activity of Capitol Communities
Corporation, focusing on opportunities that would produce stable
streams of cash flow.

Capitol Communities Corporation, through its subsidiary, owns
approximately 550 acres of residential property in the master
planned community of Maumelle, Arkansas.  Maumelle is a planned
city with about 12,000 residents.  It is located directly across
the Arkansas River from Little Rock.  Maumelle contains a full
complement of industrial and commercial development, parks,
lakes, green belts, jogging trails, and other lifestyle
amenities.


CARMIKE CINEMAS: Chapter 11 Plan is Declared Effective
------------------------------------------------------
Carmike Cinemas, Inc., (OTC Bulletin Board: CMKC) announced that
its Amended Plan of Reorganization under Chapter 11 of the
Bankruptcy Code, which was confirmed by the United States
Bankruptcy Court for the District of Delaware by order entered
on January 4, 2002, became effective on January 31, 2002.  The
Company commenced its Chapter 11 case in August 2000.

Pursuant to the Plan, on January 31, 2002, all of the
outstanding stock of the Company, including the old Class A
Common Stock that had been trading on the NASD's over-the-
counter Bulletin Board (OTCBB) under the ticker symbol "CKECQ,"
was cancelled in exchange for new common stock of the Company
which is now trading on the OTCBB under the new ticker symbol
"CMKC."  As a result of the exchange, 9 million shares of new
common stock of the Company are currently outstanding and 1
million shares of new common stock of the Company are reserved
for issuance under a management incentive plan.

Assuming the issuance of the management incentive shares, the 10
million shares of new common stock of the reorganized Company
outstanding under the Plan are as follows:

     (A) the previous holders of the $55 million old preferred
stock issue of the Company have been issued 4,121,076, or 41.2%,
of the new common stock,

     (B) certain bondholders in exchange for the conversion of
approximately $46 million of their senior subordinated notes
have been issued 2,656,521, or 26.6%, of the new common stock,
and

     (C) the holders of the old common stock (which includes the
old Class A and Class B Common Stock) have been issued
2,222,403, or 22.2%, of the new common stock of the reorganized
Company on a fully diluted basis.  

Under the Plan, one share of old common stock is now equal to
0.22 of one share of new common stock of the reorganized
Company.

Additionally, in satisfaction of bank and remaining subordinated
debt claims in the Chapter 11 case, on the Effective Date the
Company issued new bank debt and new senior subordinated notes.  
The new bank debt under a new Credit Agreement consists of
approximately $231 million and bears interest, at the greater
of: (a) at the option of the Company, (i) the Base Rate plus
3.5% or (ii) LIBOR plus 4.5%; and (b) 7.75% per annum.  The
Company issued $154,315,000 in principal amount of new 10-3/8%
Senior Subordinated Notes due 2009 in exchange for subordinated
note claims in the Chapter 11 case relating to the Company's old
9-3/8% Senior Subordinated Notes.


CHIPPAC INC: Q4 2001 Net Loss Tops $15MM on $76.8MM Revenues
------------------------------------------------------------
ChipPAC, Inc. (Nasdaq: CHPC), one of the world's largest and
most diversified providers of semiconductor packaging, test and
distribution services, announced the results for the fourth
quarter and year ended December 31, 2001.

Revenues for the three months ended December 31, 2001 were $76.8
million, a 3% increase from the prior quarter, with a pro forma
net loss of $15.3 million.  Pro forma EPS excludes a previously
announced one-time charge of $3.3 million for restructuring and
other one-time charges, and a charge for impairment of assets of
$41.6 million in the fourth quarter.  The asset impairment
charge was comprised of a $34.7 million asset write-down of
production related equipment and a $6.9 million valuation
allowance on deferred tax assets in various geographies.  These
restructuring actions are part of ChipPAC's program to return
the company to profitability in the second half of 2002 based on
improving industry volumes, and the Company's lower cost
structure.  The company reported revenues of $328.7 million for
the year ended December 31, 2001, with a pro forma net loss of
$45.9 million. Net loss before extraordinary items and net loss
per share in accordance with generally accepted accounting
principles were $60.1 million, and $93.7 million for the quarter
and year ended December 31, 2001 respectively.

Dennis McKenna, Chairman and Chief Executive Officer of ChipPAC,
Inc. commented, "2001 was the worst year in the history of the
semiconductor industry.  Despite this environment, we introduced
eight new product families, added new customers and cut costs
aggressively, creating significant operating leverage as we
enter 2002.  The combination of a sequential improvement in
revenue, reduced operating expenses, and stability in average
selling prices enabled ChipPAC to beat its initial guidance for
the fourth quarter.  Results improved month over month in the
quarter with computing, wireless and home entertainment products
contributing most strongly to these improvements."

Robert Krakauer, Chief Financial Officer of ChipPAC, commented,
"Cash flow from operating activities has improved each quarter
during the past year, and we are pleased with the strong cash
flow from operations of $13.2 million for the three months ended
December 31, 2001.  Additionally, by raising a total of $125
million in two separate offerings in June 2001 and January 2002,
we have provided the company with the financial flexibility to
both service our debt and invest in new business opportunities
that support our growing customer base.  The recently completed
equity offering also successfully broadened the institutional
ownership of the company.  Our cost reduction efforts through
the year helped us generate positive gross margins every quarter
throughout 2001, and with increasing unit volumes in the fourth
quarter we achieved a gross margin of 7.7%, more than doubling
from the prior quarter."

                         Outlook

McKenna continued, "Overall, we believe 2002 will be
significantly better for the industry and ChipPAC in particular.  
Based on our strategic success in our targeted markets and
design win momentum with customers in 2001 we expect annual
revenue growth of approximately 11% for 2002 with our
profitability improving sequentially through the year."

Krakauer continued, "Despite the fact that we remain in a highly
competitive market environment we expect continued improvement
in earnings based on our operating leverage, and our forecast
for increasing unit volumes and higher asset utilization levels.  
We expect a return to profitability by the end of 2002."

The company believes revenues for the first quarter ending March
31, 2002 will reflect some seasonality balanced by strong demand
in mobile computing, game machines, and other consumer
applications. Revenues in the first quarter are expected to be
in the range of $77 million to $74 million.

ChipPAC is a full-portfolio provider of semiconductor packaging
design, assembly, test and distribution services.  The company
combines a history of innovation and service with more than a
decade of experience satisfying some of the largest -- and most
demanding -- customers in the industry.  With advanced process
technology capabilities and a global manufacturing presence
spanning Korea, China, Malaysia and the United States, ChipPAC
has a reputation for providing dependable, high quality
packaging solutions. As of September 30, 2001, the company
sustained strained liquidity, with current liabilities exceeding
current assets by about $6million. For more information, visit
the company's Web site at http://www.chippac.com  


CHIQUITA BRANDS: Proposes to Issue $250M Notes Under Reorg. Plan
----------------------------------------------------------------
Chiquita Brands International Inc., proposes to issue, as part
of the Plan of Reorganization of the Company $250 million in
Notes. The Notes will be issued as a series of senior debt
securities under an indenture to be entered into between the
Company and the Trustee. The terms of the Notes will be set
forth in a Certificate of Terms to be approved by or pursuant to
delegated authority of the Company's Board of Directors. The
Notes will be general unsecured obligations of Chiquita Brands
and will rank equally with the Company's current or future
senior unsecured indebtedness.

The Notes will mature on March 15, 2009 and will bear interest
at the Senior Note Interest Rate. The "Senior Note Interest
Rate" will be fixed on the effective date of the Plan at a rate
equal to the sum of:

     (i) the yield for actively traded U.S. Treasury securities
having a maturity closest to seven years as of the day prior to
the Effective Date,

     (ii) the Bear Stearns BB Index Spread and

     (iii) 100 basis points (i.e., .0%).

The "Bear Stearns BB Index Spread" is the spread over comparable
maturity U.S. Treasury securities of BB rated high yield debt
securities as measured in the Bear Stearns Relative Value
Analysis (Global High Yield Research) as of the most recent
report prior to the Effective Date. However, to the extent that
the Bear Stearns BB Index Spread has increased or decreased by
more than 100 basis points (i.e., 1.0%) from the immediately
prior weekly report, the spread used in clause (b) above will be
the average of the Bear Stearns BB Index Spread for the four-
week period prior to the Effective Date. By way of example only,
the Notes would bear interest at 10.4% if they had been issued
on January 11, 2002.

Pursuant to the Plan, on or as soon as practicable after the
Effective Date, the Notes will be issued to the holders of
allowed Old Senior Note Claims, subject to adjustment as a
result of the Subclass 4B Note Election. "Old Senior Note
Claims" consist of claims for principal or interest through the
Petition Date under the Company's existing 9-5/8% Senior Notes
due 2004, 9-1/8% Senior Notes due 2004, 10-1/4% Senior Notes due
2006 and 10% Senior Notes due 2009. Each holder of an allowed
Old Subordinated Note Claim shall have the right to receive its
pro rata share of up to $10 million of the Notes, which Notes
would otherwise be distributed to the holders of Old Senior Note
Claims in lieu of receiving common stock which they would
otherwise receive under the Plan. "Old Subordinated Note Claims"
consist of claims for principal or interest through the Petition
Date under the Company's outstanding 7% Convertible Subordinated
Debentures due 2001. If holders of Old Subordinated Note Claims
elect to receive any Notes pursuant the Subclass 4B Note
Election, the principal amount of Notes to be received by
holders of Old Senior Note Claims will be reduced on a pro rata
basis by such amount and the holders of Old Senior Note Claims
will receive common stock of the Company equal to the amount of
common stock forsaken by the holders of Old Subordinated Note
Claims in place of Notes.

On November 28, 2001 Chiquita Brands International, Inc., filed
a petition for reorganization under Chapter 11 of Title 11 of
the United States Bankruptcy Code in the United States
Bankruptcy Court for the Southern District of Ohio, Western
Division.

DebtTraders reports that Chiquita Brands's 10.250% bonds due
2006 (CQB4) currently trade in the high 80s. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CQB4for  
real-time bond pricing.


CIGNA: Fitch Hatchets $21MM Class B Notes Down to Junk Level
------------------------------------------------------------
Fitch Ratings downgrades the class B notes issued by Cigna CBO
1996-1 Ltd., and removes the notes from Rating Watch Negative.
The following rating action is effective immediately:

     --$21,000,000 class B notes to 'CC' from 'BBB-'

Cigna CBO 1996-1 Ltd., a collateralized bond obligation (CBO)
managed by Cigna Investments, Inc. was established in October
1996 and currently maintains approximately 69% of its invested
note proceeds in senior unsecured debt, 25% in subordinated
debt, and 6% in emerging market debt.

After reviewing the portfolio performance, meeting with the
portfolio manager, and conducting different cash flow scenarios
amidst increasing levels of defaults and deteriorating credit
quality of the underlying assets, Fitch has determined that the
original rating assigned to the notes no longer reflects the
current risk to noteholders.

The Cigna CBO 1996-1 class B notes continues to fail its
over-collateralization test, its weighted average rating test,
and maintains approximately 45% of its portfolio in assets rated
'CCC' or worse.


CLASSIC COMMS: Wants Lease Decision Period Extended to April 11
---------------------------------------------------------------
Classic Communications, Inc., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the District of Delaware for more time
to decide whether to assume, assume and assign, or reject
unexpired leases of nonresidential real property. The Debtors
wish to enlarge their lease decision period through April 11,
2002.

The overall size of the Debtors' businesses and the large number
of unexpired leases to which the Debtors are lessees make their
cases complex.  The Debtors expect that any reorganization plan
will be partly premised upon the assumption and possible
assignment of certain unexpired leases.  The Debtors need to
fully complete their evaluation of the unexpired leases to avoid
premature and adverse effect on the Debtors' success to
reorganize.

Classic Communications, Inc., a cable operator focused on non-
metropolitan markets in the United States, filed for Chapter 11
petition on November 13, 2001 along with its subsidiaries.
Brendan Linehan Shannon, Esq., at Young, Conaway, Stargatt &
Taylor, represents the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed $711,346,000 in total assets and $641,869,000 in total
debts.


COHO ENERGY: Files for Chapter 11 Protection in Dallas
------------------------------------------------------
Coho Energy, Inc., (OTCBB:CHOH) announced that it, and two of
its subsidiaries, Coho Resources, Inc., and Coho Oil & Gas,
Inc., filed voluntary petitions seeking protection under Chapter
11 of Title 11 of the United States Code. The filing was made
with United States Bankruptcy Court, Northern District of Texas,
Dallas Division. The filing under Chapter 11 permits the Company
to continue business operations while it develops a plan to
reorganize it financial affairs.

Timing of the filing was dictated by several factors, including
the notice of default served on the Company on February 1, 2002
by the holders of the Company's senior debt.

Coho Energy, Inc., is a Dallas based oil and gas producer
focusing on exploitation of underdeveloped oil properties in
Oklahoma and Mississippi.


COMDISCO: Gets Interim OK to Establish Joint Fee Review Panel
-------------------------------------------------------------
Comdisco, Inc., and its debtor-affiliates seek the Court's
approval to form a Joint Fee Review Committee.  George N.
Panagakis, Esq., at Skadden, Arps, Slate, Meagher & Flom, in
Chicago, Illinois, explains that the Joint Fee Review Committee
will be tasked to:

    (i) review compensation and expense reimbursement requests;
        and,

   (ii) establish a process that will assist the Debtors in
        budgeting for such anticipated fees.

The Debtors propose that this Joint Fee Review Committee consist
of:

    (i) a representative of the Office of the United States
        Trustee for this district;

   (ii) two representatives of the Debtors;

  (iii) one chairperson designated by the Official Committee of
        the Unsecured Creditors; and,

   (iv) one chairperson designated by the Official Equity
        Committee.

Furthermore, Mr. Panagakis adds, the Debtors propose that these
parties serve as ex oficio, without voting rights, on the Joint
Fee Review Committee:

    (i) one representative of lead counsel to the Debtors;

   (ii) one representative of lead counsel to the Official
        Committee of the Unsecured Creditors; and,

  (iii) one representative of lead counsel to the Official
        Equity Committee.

Mr. Panagakis suggests that the Joint Fee Review Committee must
meet as soon as possible after the entry of a Court order
granting the relief requested to begin work to establish
budgeting and monthly fee review protocol for their cases.  The
first report of the Joint Fee Review Committee will include a
summary description of the protocol agreed to by the committee.

Mr. Panagakis asserts that the establishment of a Joint Fee
Review Committee will assist greatly in facilitating the
compensation request and expense reimbursement process by
creating a framework within which to address issues.  "The
proposed Joint Fee Review Committee will reduce costs by
regulating the professional fees incurred in the Debtors' cases
and by streamlining the review of multitude of fee
applications," Mr. Panagakis adds.

In addition, Mr. Panagakis says, the Joint Fee Review Committee
will help the Debtors anticipate the professionals' fees to be
incurred during the remainder of their cases, which will greatly
assist them in budgeting for such compensation and expense
requests.

Mr. Panagakis informs Judge Barliant that they have already
consulted the United States Trustee, the Official Committee of
Unsecured Creditors, and the Official Equity Committee regarding
the formation of a Joint Fee Review Committee.

                     *          *          *

After considering the Debtors' assertions, Judge Barliant grants
the relief requested on an interim basis. (Comdisco Bankruptcy
News, Issue No. 20; Bankruptcy Creditors' Service, Inc.,
609/392-0900)   


COMDISCO: Completes Court-Supervised Sales Evaluation Process
-------------------------------------------------------------
Comdisco, Inc., (NYSE: CDO) announced that it has completed the
U.S. Bankruptcy Court-supervised sales evaluation process for
its remaining leasing businesses - North American Information
Technology (IT) Leasing, Telecommunications and Healthcare--
without completing a transaction and intends to retain those
businesses. The company said it now will focus on filing its
plan of reorganization by March 15, 2002.

During the Court-supervised bidding process that concluded in
early January 2002, the company received bids for all of its
leasing business units. On January 24, 2002, the U.S. Bankruptcy
Court approved the sale of Comdisco's Electronics and Laboratory
& Scientific equipment leasing businesses to GE Capital's
Commercial Equipment Financing unit. That sale is expected to
close no later than March 31, 2002. Although Comdisco's board of
directors had determined that an offer from Tyco Capital, a unit
of Tyco International (NYSE:TYC), was the highest or otherwise
best bid for its North American IT Leasing business, Tyco
terminated discussions with Comdisco during the course of
documentation on the evening of January 31, 2002. The board
determined that no other bids for its North American IT Leasing,
Telecommunications and Healthcare businesses were acceptable.
According to the Court-approved bidding process, all bids
expired at midnight on January 31, 2002.

"Over the past several months, Comdisco's board explored a wide
range of alternatives with the objective of determining which
would provide greater value for our stakeholders," said Norm
Blake, Comdisco chairman and chief executive officer. "The
company has now completed that process and intends to proceed
with its reorganization plan towards emergence from Chapter 11."
As previously announced, the company's reorganization plan also
includes European IT Leasing and Comdisco Ventures.

The company currently has the exclusive right to develop a plan
of reorganization through March 15, 2002, and until May 15, 2002
to solicit acceptances of the plan. While it is still targeting
completion of the plan by March 15, 2002, as a precaution,
Comdisco is filing a motion for a 30-day extension of those
dates to be heard at its next scheduled Bankruptcy Court hearing
on February 14, 2002.

Comdisco also announced that is has executed an agreement for
the sale of substantially all of its North American IT CAP
Services contracts to T-Systems Inc. for approximately $6.8
million, plus consideration for future business with those
accounts. The sale is subject to approval by the Bankruptcy
Court at the February 14, 2002 hearing, and, if approved, is
expected to close no later than February 28, 2002.

Comdisco, Inc., and 50 domestic U.S. subsidiaries filed
voluntary petitions for relief under Chapter 11 of the U.S.
Bankruptcy Code in the U.S. Bankruptcy Court for the Northern
District of Illinois on July 16, 2001. The filing allows the
company to provide for an orderly sale of some of its
businesses, while resolving short-term liquidity issues and
enabling the company to reorganize on a sound financial basis to
support its continuing businesses.

Comdisco's operations located outside of the United States were
not included in the Chapter 11 reorganization cases. All of
Comdisco's businesses, including those that filed for Chapter
11, are conducting normal operations. The company has targeted
emergence from Chapter 11 during the first half of 2002.

Comdisco -- http://www.comdisco.com-- provides technology  
services worldwide to help its customers maximize technology
functionality and predictability, while freeing them from the
complexity of managing their technology. The Rosemont (IL)
company offers leasing to key vertical industries, including
semiconductor manufacturing and electronic assembly, healthcare,
telecommunications, pharmaceutical, and biotechnology. Through
its Ventures division, Comdisco provides equipment leasing and
other financing and services to venture capital backed
companies.


CORAM HEALTHCARE: Court Extends Lease Decision Period to May 2
--------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, the Coram Healthcare Corp.'s Lease Decision Period is
extended.  The Court extends the Debtors' time period within
which to make a determination about whether to assume, assume
and assign or reject unexpired leases of nonresidential real
property through May 2, 2002.

Coram Healthcare, a provider of home infusion-therapy services
filed for Chapter 11 bankruptcy protection on August 8, 2000.
Under the terms of its bankruptcy it still operates its more
than 70 branches in 40 states and Canada while it restructures
its debt.  Goldman Sachs and Cerberus Partners each own about
30% of the firm.  To date, Judge Walrath has denied confirmation
of two plans of reorganization.  Christopher James Lhuiler,
Esq., at Pachulski Stang Ziehl Young & Jones PC represents the
Debtors in their restructuring efforts.


E.SPIRE COMMS: Pushing for Extension of Exclusive Periods
---------------------------------------------------------
e.spire Communications, Inc., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the District of Delaware to extend
their exclusive periods.  The Debtors tell the Court that they
need until May 1, 2002 to propose and file a plan.  The Debtors
also ask the Court for an extension of their exclusive
solicitation period until July 1, 2002.

The Debtors are currently determining the validity of over 6,000
claims filed.  The Debtors need to sort-out which claims are
valid before they can propose a confirmable plan.  The Debtors
have made significant progress in this process, and have filed
numerous objections to some of the claims.

The Debtors remind the Court that they have substantially
stabilized their business operations and are working with other
interested parties in formulating a proposed plan of
reorganization. The Debtors do not wish to spoil their exclusive
right to file and ask the Court to prevent other parties from
filing a plan.

e.spire Communications, Inc., is a facilities-based integrated
communications provider, offering traditional local and long
distance dedicated internet access in 28 markets throughout the
United States. The Company filed for chapter 11 protection on
March 22, 2001. Domenic E. Pacitti, Esq., Maria Aprile Sawczuk,
Esq. and Mark Minuti at Saul Ewing LLP represents the Debtors in
their restructuring effort.


ELIZABETH ARDEN: Weak Financial Performance Spurs S&P Downgrade
---------------------------------------------------------------
Standard & Poor's lowered its ratings on Elizabeth Arden Inc.
and placed them on CreditWatch with negative implications. Total
debt at the company was about $336 million on January 31, 2002.

The downgrade and CreditWatch placement are based on Elizabeth
Arden's weakened operating and financial performance for fiscal
2002 (ended January 31), that is below Standard & Poor's
expectations. The company's performance has been impacted by the
challenging conditions in the retail cosmetics industry, which
was especially hard hit following the September 11, 2001,
terrorist attacks. Revenues and operating profits were affected
by the soft 2001 holiday selling season, intense competition,
destocking by retailers, and reduced store traffic, especially
at department stores and travel outlets.

Furthermore, the January 2001 acquisition of Unilever's
Elizabeth Arden business posed additional challenges for
management because of the need to integrate the business. The
acquisition added a significant amount of debt to the company's
balance sheet, which further contributed to Elizabeth Arden's
weak credit protection measures.

Additionally, Elizabeth Arden is in discussions with its bank
group to loosen certain financial covenants, as it does not
expect to be in compliance for the quarter ending January 31,
2002. Availability under the company's revolving credit facility
is considered good with about $90 million unused at January 31,
2002.

The ratings for Elizabeth Arden (previously French Fragrances
Inc.) reflect the company's below-average business and financial
profiles, integration risk resulting from the acquisition of
Unilever's Elizabeth Arden business, highly seasonal sales, and
industry concerns about the very competitive cosmetics business.
These factors are partially offset by Elizabeth Arden's niche
position in the distribution of prestige fragrances through the
mass-merchandising trade channel.

Elizabeth Arden needs to sustain credit measures above those
expected for its rating category to compensate for increased
business risks. Credit protection measures (adjusted for
operating leases) weakened in fiscal 2002 (ended January 31)
compared to fiscal 2001, as a result of the sizable increase in
debt and very soft retail environment. Standard & Poor's expects
that fiscal 2002 total debt to EBITDA will be above 6 times,
while EBITDA interest coverage is likely to be about 1x.

Standard & Poor's will continue to monitor developments,
including negotiations with senior lenders, and meet with
Elizabeth Arden's senior management to discuss its ongoing
business and financial strategies.

          Ratings Lowered and Placed on CreditWatch
                 with Negative Implications

                                               Ratings
                                             To        From
     Elizabeth Arden Inc.
       Corporate credit rating               B         B+
       Senior secured debt rating            B         B+
       Senior unsecured debt rating          B-        B


ENRON CORPORATION: Signs-Up Vinson & Elkins as Special Counsel
--------------------------------------------------------------
Enron Corporation and its debtor-affiliates seek the Court's
authority to employ Vinson & Elkins LLP as special counsel, nunc
pro tunc to the Petition Date.

According to Brian S. Rosen, Esq., at Weil, Gotshal & Manges
LLP, in New York, the Debtors chose Vinson as special counsel
because of the firm's extensive experience and knowledge with
respect to many of the Debtors' commercial transactions and
pending litigation matters.  Mr. Rosen relates that Vinson has
represented many of the Enron companies for over 10 years.
Vinson's representation dealt with various matters, both
domestic and international, including mergers, acquisitions and
dispositions, energy and facilities services transactions,
project financing transactions, financing transactions, labor,
regulatory matters, litigation and other general business and
corporate transactions.  Accordingly, Mr. Rosen adds, Vinson has
a high degree of background and experience to deal effectively
with many of the potential legal issues and problems that may
arise in the context of the matters upon which the firm is to be
retained.

Mr. Rosen assures Judge Gonzalez that Vinson will work closely
with the Debtors' general bankruptcy counsel -- Weil, Gotshal &
Manges -- to ensure there will be no duplication of services.

The Debtors propose to employ Vinson as special counsel to
perform these specific legal services:

1) Representation of the Debtor and non-Debtor affiliates in
   connection with the disposition of assets including:

     (i) the shares of Portland General Electric Company;

    (ii) international assets or interests in entities holding
         such assets including gas distribution systems,
         pipelines, power plants and electrical distribution
         systems and exploration and production properties in
         South America, Korea, India, the Caribbean and Turkey;
         and

   (iii) Enron Wind Corp. or projects and assets held by Enron
         Renewable Energy Corp. and its affiliates;

2) Representation of the Debtors and non-Debtor affiliates in
   various litigation matters where V&E was the counsel of
   record as of the Petition Date and providing assistance to
   the Debtors' bankruptcy counsel as necessary including
   securing appropriate stays and removals of such litigation
   matters;

3) Representation of the Debtors and non-Debtor affiliates and
   assisting the Debtors' general bankruptcy counsel in
   analyzing, restructuring and/or renegotiating energy service
   and facility management arrangements, financing arrangements
   and other significant contracts with respect to which Vinson
   had represented the Debtors and non-Debtor affiliates prior
   to the Petition Date;

4) Representation of the Debtors and non-Debtor affiliates or
   providing assistance to Debtors' general bankruptcy counsel
   with respect to specific tax, environmental, antitrust,
   trademark, copyright and intellectual property matters and
   regulatory and similar matters with respect to which V&E had
   represented the Debtors and non-Debtor affiliates prior to
   the Petition Date;

5) Represent the Debtors and non-Debtor affiliates or providing
   assistance to Debtors' general bankruptcy counsel with
   respect to such other matters as the Debtors, non-Debtor
   affiliates or Weil Gotshal & Manges may request and as to
   which V&E may agree; and

6) Monitoring these chapter 11 bankruptcy cases and keeping
   itself sufficiently abreast of the developments, and making
   such appearances as the Debtors, the Debtors' bankruptcy
   counsel and Vinson agree are necessary for the efficient and
   effective representation of the Debtors in these matters.

The Debtors intend the compensate Vinson based on the firm's
hourly rates, which currently range from:

           Partners            $310 - $665
           Counsel             $245 - $575
           Associates          $190 - $440
           Paraprofessionals    $85 - $165

Mr. Rosen advises the Court that the firm adjusts its rates from
time to time on an annual basis.  Vinson also charges for
reimbursement of out-of-pocket expenses, including: secretarial
overtime, travel, copying, outgoing facsimile, document
processing, court fees, transcript fees, long distance phone
calls, postage, messengers, overtime meals and transportation.

Joseph C. Dilg, Esq., a partner at Vinson & Elkins LLP, tells
Judge Gonzalez that the firm does not represent any party in
interest other than the Debtors or affiliated non-Debtor
entities, in connection with these Chapter 11 cases.  Mr. Dilg
admits that Vinson has in the past represented, currently
represents, and may in the future represent entities that are
claimants or interest holders of the Debtors, "but only in
matters unrelated to the Debtors' chapter 11 cases," Mr. Dilg
emphasizes.

As of December 1, 2001, Mr. Dilg tells the Court that Vinson was
owed various amounts for accrued and unbilled fees and expenses
by the Debtors and certain non-Debtor affiliates.  "This amount
is approximately $8,600,000," Mr. Dilg says.  According to Mr.
Dilg, Vinson anticipates that a portion of these fees and
expenses will be paid by non-Debtor affiliates in the ordinary
course.  Since December 1, 2001, Mr. Dilg reports that Vinson
has received checks or wire transfers for approximately $840,000
in payment of pre-petition invoices to non-Debtor affiliates and
the Debtors. In addition, Mr. Dilg notes, Vinson received checks
for approximately $185,000, which were dishonored by the banks
on which they were drawn due to stop payment orders. "The source
of all of these payments is being evaluated and any payments
attributable to the Debtors will be held in the firm's trust
account pending further order of the Court, or if requested by
the Debtors, promptly returned to the Debtors' estates," Mr.
Dilg states. (Enron Bankruptcy News, Issue No. 11; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


ETHYL CORP: Negotiating Loan Maturity Extension with Banks
----------------------------------------------------------
Ethyl Corporation (NYSE:EY) President and Chief Executive
Officer Thomas E. (Teddy) Gottwald released the company's
earnings report for the fourth quarter and year 2001 as well as
an update on the Company's continuing efforts to improve
earnings, reduce debt, and control costs. Thus:

     "To Our Shareholders:

     "Earnings from operations, excluding nonrecurring items,
for both the fourth quarter and year 2001 improved compared to
the prior year. Results for the year's fourth quarter, excluding
nonrecurring items, generated income of $4 million or 4 cents
per share compared to a loss of $2 million or 2 cents per share
for the fourth quarter last year. For the year, operating
earnings on the same basis improved to $10 million or 12 cents
per share compared to year 2000 earnings of $9 million or 10
cents per share.

     "We are pleased with the progress in Petroleum Additives
(PAs), showing improved operating profits compared to the fourth
quarter of last year and as compared to the third quarter of
2001.

     "Operating profit from our Tetraethyl Lead (TEL) segment
was on target for the year. TEL profits for the fourth quarter
improved as expected over the previous quarter this year, but
were lower than last year's very strong fourth quarter results.
TEL operating profit for 2001 was also somewhat lower than last
year, which was anticipated, as the phase out of the use of TEL
continues.

     "During 2001, I communicated that we had established three
main goals for the year: profitable growth, debt reduction, and
ongoing cost management. I believe we have made solid progress
toward each of these objectives.

     "On profitable growth, we have grown our petroleum additive
business in essentially all of our major product lines when
comparing the second half of 2001 to the first. (This comparison
excludes the impact of the engine oil accounts that were lost
early in the year.) We have been able to achieve this growth by
continuing to offer high quality goods and services that lower
our customers' overall costs and help them to grow their market
share, by gaining a better understanding of their markets, and
by improving our technology to meet their needs.

     "On debt reduction, we reduced debt by approximately $107
million in 2001. While this is a significant reduction, our goal
was to have reduced debt by approximately $120 million by the
end of last year. The two major reasons for this difference
were: 1) higher working capital due to timing of sales, and 2)
an asset sale planned for 2001 did not occur. We expect to be
able to reduce debt by $40 million in 2002. This is less than
previously communicated because of two major factors: 1)
required funding associated with an amendment of our TEL
marketing alliances which will provide us improved TEL profits,
and 2) a decision to mortgage an asset as opposed to selling and
leasing it back. It remains a top priority to continue to reduce
debt with cash generated from operations and from the sale of
non-strategic assets when possible.

     "As we communicated in our last release, we are working
with our banks to extend the current maturity date of August
2002 on our loans and hope to complete those negotiations during
the first quarter of this year.

     "On cost improvements, we now have a cost structure where
we can effectively compete for the long run. The major
restructuring from early 2001 is behind us and our focus has
changed to implementing processes which focus on better
alignment of our capabilities to our customers' needs, resulting
higher customer satisfaction and a more cost effective
operation.

     "On December 20, 2001, we received notification from the
New York Stock Exchange that our share price had fallen below
the continued listing criteria of the NYSE requiring an average
closing price of not less than $1.00 over a consecutive 30
trading-day period. In accordance with NYSE procedure, we are
required to bring our share price and average share price above
$1.00 by the later of six months following receipt of the
notification or our next annual meeting if shareholder approval
is deemed necessary. As a result, the Board of Directors will
continue to review this situation and evaluate its options to
address this matter should it become necessary. Subsequent to
the receipt of the NYSE notice, our stock has traded above $1.00
since January 8, 2002.

     "The year 2001 was a difficult year for our Company. We are
entering 2002 in a better position than this time last year. The
cost restructuring is successfully behind us, our customer base
is stabilized and growing, the TEL outlook is more secure and
our debt has been reduced. This year will not be without its
challenges, however. Our markets remain highly competitive and
difficult.

     "I cannot close without acknowledging two groups who made
last year a success, despite all the difficulties we faced: our
customers and our employees. I want to thank our customers for
their continued vote of confidence in allowing us the
opportunity to provide the goods and services integral to their
business. I thank our employees for their energy, dedication,
excellent work ethic, and customer focus that are essential for
our long-term success."


EXODUS: Asks Court to Fix April 12 Bar Date for Proofs of Claim
---------------------------------------------------------------
Exodus Communications, Inc., and its debtor-affiliates seek
entry of an order fixing April 12, 2002 as the deadline by which
creditors must file proofs of claim in Exodus' chapter 11 cases.  
In addition, this Motion seeks approval of the Debtors' proposed
notice of the Bar Date.

David R. Hurst, Esq., at Skadden Arps Slate Meagher & Flom LLP
in Wilmington, Delaware, asks the Court that proof of claim be
filed by all creditors of any of the Debtors on account of any
claim arising before the Petition Date, with four exceptions:

A. claims that their holders do not dispute the claims amount or
     characterization as listed on the Schedules, and which
     claim is not listed in the Schedules as "contingent,"
     "unliquidated" or "disputed";

B. claims that previously have been allowed or paid by order of
     the Court;

C. claims or interests that belong to a Debtor; or

D. claims that are based solely on the holder's holding or
     ownership of 10-3/4% Dollar Denominated Senior Notes due
     2009; 10-3/4% Euro Denominated Senior Notes due 2009;
     11-1/4% Senior Notes Due 2008; 11-3/8% Euro Denominated
     Senior Notes due 2008; 11-5/8% Dollar Denominated Senior
     Notes due 2010; 4-3/4% Convertible Subordinated Notes due
     July 15, 2008; 5% Convertible Subordinated Notes due March
     15, 2006; or 5-1/4% Convertible Subordinated Notes due
     February 15, 2008.

In addition, the Debtors propose that holders of the Debtors'
equity securities not be required to file a proof of interest
solely on account of such holder's ownership interest in or
possession of such equity securities. Further, the Debtors
request that proofs of claim for any rejection damages claims
arising during these chapter 11 cases be filed by the later of
thirty days after the effective date of rejection of such
executory contract or unexpired lease as provided by an order of
this Court or pursuant to a notice under procedures approved by
this Court or the Bar Date. Proofs of claim for any other claims
that arise prior to the Petition Date with respect to a lease or
contract must be filed by the Bar Date.

For administrative convenience and cost savings, Mr. Hurst notes
that the Bar Date Notice contains notice of the Bar Date for all
of the Debtors' nine cases. Nevertheless, because each proof of
claim must be filed against a particular Debtor, the Bar Date
Notice explains the requirement that all proofs of claim name
the specific Debtor against which a creditor asserts a claim.
This requirement will make the Debtors' claim analysis more
efficient and less costly to their estates.

To provide ample time for mailing thousands of Bar Date notices
and allowing the Debtors' creditors a reasonable opportunity to
prepare and file proofs of claim, the Debtors are requesting
that this Court fix April 12, 2002, as the Bar Date, with
notices to be mailed no later than February 11, 2002. Mr. Hurst
explains that an April 12, 2002 Bar Date and a February 11, 2002
mailing date will allow a period of sixty days for creditors to
file proofs of claims, which is more than sufficient notice of
the Bar Date.

Mr. Hurst submits that the Debtors intend to mail the Bar Date
Notice to all known creditors by February 11, 2002, and to
publish a notice in a form substantially similar to the Bar Date
Notice in the national edition of The New York Times and the
Wall Street Journal no later than February 15, 2002. As a
result, creditors of the Debtors will have well in excess of the
twenty-day period prescribed by Bankruptcy Rule 2002(a)(7) for
notice of the Bar Date. (Exodus Bankruptcy News, Issue No. 13;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


FACTORY CARD: Delaware Court Approves Disclosure Statement
----------------------------------------------------------
The United States Bankruptcy Court for the District of Delaware
has approved the disclosure statement relating to Factory Card
Outlet Corp.'s amended plan of reorganization filed on February
5, 2002.  The Company indicates that it will commence soliciting
creditor and shareholder acceptance of the amended plan on or
about February 11, 2002.

The amended plan is supported by the Creditors' Committee and
Equity Committee appointed in the Company's Chapter 11 Cases.  
Under the terms of the amended plan, upon its emergence from
Chapter 11, most general unsecured creditors would share receipt
of approximately 90 percent of the common stock of the
Reorganized Company and cash distributions of $1.0 million.  In
addition, creditors would receive $2.6 million three years from
emergence, subject to certain prepayment provisions.  Holders of
the Company's outstanding common stock would receive 5 percent
of the common stock of the Reorganized Company and warrants to
purchase an additional 10 percent of the common stock of the
Reorganized Company at various premiums to reorganization equity
value.

Under the terms of the amended plan, certain trade vendors will
convert a portion of their post-petition trade receivables
aggregating $3.13 million to a convertible note and provide
favorable trade terms.

"Our associates have worked hard in a difficult retail climate
to continue a dramatic turnaround and we are pleased to have the
support of our loyal vendor community," said Chairman, Chief
Executive Officer and President, William E. Freeman.  "The
approval by the court to initiate solicitation of acceptance of
the amended plan by creditors and stockholders is a key step to
the Company's successful emergence from bankruptcy," he added.

The disclosure statement should be reviewed with respect to the
specific items of the distributions proposed to be made to
creditors and current stockholders as well as other information
relevant to the amended plan of reorganization.

According to the disclosure statement, the Company estimated a
net loss of $4.8 million for fiscal year ended February 2, 2002
compared with a loss of $8.7 million a year ago.  Estimated
earnings before interest, depreciation and charges related to
the reorganization for the fiscal year 2001 are $10.5 million
compared with $9.8 million a year ago.

The Company also stated that Wells Fargo Retail Finance, the
Company's existing lender, has extended the Company's debtor-in-
possession financing agreement to May 31, 2002.  The Company
anticipates emerging from Chapter 11 by early spring if the
requisite majority of creditors and common stockholders accept
the amended plan, and the court confirms the amended plan. A
confirmation hearing is currently scheduled to be held on March
20, 2002.

Factory Card Outlet operates 172 company-owned retail stores, in
20 states, offering a vast assortment of party supplies,
greeting cards, gift-wrap and other special occasion merchandise
at everyday value prices. On March 23, 1999, the company filed a
petition for reorganization under Chapter 11 of Title 11 of the
United States Code and is currently operating as a debtor in
possession.


FEDERAL-MOGUL: Selling Signal-Stat Lighting Assets to Truck-Lite
----------------------------------------------------------------
Federal-Mogul Corporation (NYSE: FMO) announced it has signed an
agreement to sell the business, defined assets and inventory of
its Signal-Stat(R) Lighting Products division to Truck-Lite Co.,
Inc., a subsidiary of Penske Company LLC, for $23 million
subject to customary closing adjustments. The purchase agreement
is subject to approval by the U.S. Bankruptcy Court in
Wilmington, Delaware after compliance with approved bidding
procedures.  A hearing is scheduled for February 26, 2002.  
Federal-Mogul's letter of intent with Truck-Lite was approved by
the court on January 14, 2002.

Signal-Stat Lighting Products produces exterior lighting and
power distribution products principally for heavy duty and
commercial vehicle markets serving both original equipment and
aftermarket customers.  Signal-Stat sales were approximately $54
million in 2001.

Signal-Stat's exterior product lines, which include clearance
and marker lamps, signal lamps, back-up lamps and alarms and
emergency lighting, accounted for approximately 70% of annual
sales.  Power distribution products include such items as turn
signal switches, daytime running lamps, lamp plugs and flashers.

No Federal-Mogul manufacturing facilities are included in the
sale as the business occupies portions of five different
locations.  Those locations are: Logansport, Indiana; El Paso
and Brownsville, Texas; and Juarez and Matamoros, Mexico.  
Federal-Mogul locations in Sparta, Tennessee and Boyertown,
Pennsylvania will continue to supply certain products to Signal-
Stat under a supply agreement with Truck-Lite.

Headquartered in Southfield, Michigan, Federal-Mogul is an
automotive parts manufacturer providing innovative solutions and
systems to global customers in the automotive, small engine,
heavy-duty and industrial markets. The company was founded in
1899.  Visit the company's web site at
http://www.federal-mogul.comfor more information.


FRUIT OF THE LOOM: Wants Solicitation Period Extended to Apr. 30
----------------------------------------------------------------
Risa M. Rosenberg, Esq., of Milbank, Tweed, Hadley & McCloy told
Judge Walsh that Fruit of the Loom's Solicitation Period expired
on January 31, 2002. Fruit of the Loom requested an extension of
the Solicitation Period, until the later of April 30, 2002, and
the date of entry of an order confirming or denying confirmation
of the Plan.  This will permit adequate time to complete the
necessary procedures to gain approval of the Disclosure
Statement and solicit acceptances of the Plan.

Ms. Rosenberg explains that Fruit of the Loom filed its Plan and
Disclosure Statement on December 28, 2001. A hearing to consider
the adequacy of the Disclosure Statement is scheduled for
February 1, 2002. Depending on the outcome of that hearing,
Fruit of the Loom expects that it will be soliciting the votes
of creditors on the Plan through mid-March 2002, with the goal
of having a confirmation hearing with respect to the Plan at the
end of March 2002.

This motion is set for hearing on February 26, 2002.  By
application of Del. Bankr. L.R. 9006-2, the Debtors'
solicitation period is automatically extended through the
conclusion of that hearing. (Fruit of the Loom Bankruptcy News,
Issue No. 47; Bankruptcy Creditors' Service, Inc., 609/392-0900)   


GLOBAL CROSSING: Wins Nod to Maintain Cash Management System
------------------------------------------------------------
Michael F. Walsh, Esq., at Weil Gotshal & Manges LLP, explains
that, like most billion-dollar companies, Global Crossing Ltd.,
and its debtor-affiliates maintain a cash management system.  
That system collects and disburses funds throughout their
worldwide subsidiaries and affiliates.  By this Motion, the
Debtors request authorization to continue their pre-petition
practices by operating their centralized Cash Management System,
including funding the operations of their non-debtor foreign
affiliates and subsidiaries, and maintaining their existing bank
accounts and business forms. Without the requested relief, the
Debtors would be unable to maintain their global operations
which would cause significant harm to the Debtors, their estates
and creditors.

In the ordinary course of business prior to the Commencement
Date, Mr. Walsh tells the Court that the Debtors used their Cash
Management System to efficiently collect, transfer, and disburse
funds generated through the Debtors' operations, which span
North America, Europe and Latin America, and to accurately
record such collections, transfers, and disbursements as they
were made.

The principal components of the Cash Management System are
divided into two broad categories:

A. Cash Collection and Concentration: The Debtors maintain a
     centralized sales and distribution system. In each of the
     principal countries in which the Debtors' and their
     subsidiaries and affiliates operate, a designated entity
     organized under the laws of the country and holding a
     license in that country, generates and owns the Debtors'
     assets, including telecommunications equipment and lines.
     The Debtors sell and lease their services through
     centralized "warehouses" which consolidate the Debtors'
     assets and services worldwide. Regional and local affiliate
     companies market the Debtors' services to large corporate
     clients and purchase such services from the Bundler.
     Revenues generated by the Buy/Sell Companies are deposited
     in collection accounts and then filtered, through the Asset
     Companies, to the Debtors' main concentration account in
     the name of Global Crossing Holdings Ltd. at Mellon Bank in
     the United States. The Debtors tailor this coordinated
     sales and distribution system to maximize revenues in each
     country in which the Debtors' operate.

B. Disbursements: To the extent funding is required, the Debtors
     fund essentially all of their global operations, including
     both Debtor and non-Debtor entities, through the
     Concentration Account. Funds flow from the Concentration
     Account to the Debtors' subsidiaries and affiliates only if
     necessary to pay outstanding obligations and fund working
     capital. When an affiliate or subsidiary lacks sufficient
     funds to pay an invoice, GCHL will advance funds to pay
     such invoice or other operating expense and then internally
     charges the advance, in accordance with applicable
     telecommunications, tax and capital markets regulations, as
     an intercompany loan to the appropriate entity.
     Disbursements are coordinated in each region to maximize
     efficiency and minimize expenses.

Mr. Walsh assures the Court that the Debtors will maintain
accurate records with respect to all postpetition intercompany
loans. In addition, Debtor entities that make such loans will
receive an administrative priority with respect to such loans,
subordinate to the administrative claim to be granted to the
bank group under the proposed adequate protection stipulation.
Mr. Walsh claims that the Debtors and their affiliates presently
have approximately $900,000,000 in total cash in the United
States and in accounts located throughout the world. The Debtors
anticipate that after taking into account the non-payment of the
Debtors' prepetition debts, the projected payments to be made to
foreign creditors of the Debtors and their non-Debtor
affiliates, anticipated new financing and asset sales, they have
sufficient cash to fund their chapter 11 cases.

Mr. Walsh submits that the Debtors' Cash Management System
constitutes an ordinary course and essential business practice
and provides significant benefits to the Debtors including,
among other things, the ability to control corporate funds;
ensure the maximum availability of funds when necessary; and
reduce borrowing costs and administrative expenses by
facilitating the movement of funds and the development of more
timely and accurate account balance information. Furthermore,
the use of a centralized Cash Management System has historically
reduced interest expense by enabling the Debtors to utilize all
funds within the system.

Mr. Walsh contends that the Debtors' core asset is its global
Network which connects businesses around the world. In order to
maintain its worldwide presence, the Debtors' operations require
the existing Cash Management System continue during the pendency
of these chapter 11 cases, as any disruption could have a severe
and adverse impact upon the reorganization efforts of the
Debtors. As a practical matter, because of the Debtors'
corporate and financial structure, which includes over 170
entities, Mr. Walsh believes that it would be extremely
difficult and expensive to establish and maintain a separate
cash management system for each Debtor and non-Debtor entity.
Nevertheless, the Debtors will maintain records of all transfers
within the Cash Management System to ensure that all transfers
and transactions will be documented in their books and records
to the same extent such information was maintained by the
Debtors prior to the Commencement Date.

"Motion granted," Judge Gerber rules on an interim basis, with
objections due by March 21, 2002 and a hearing on March 26,
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)


HAYES LEMMERZ: US Trustee Balks At Lazard's Compensation Scheme
---------------------------------------------------------------
Frank J. Perch, III, Esq., in Philadelphia, Pennsylvania, tells
the Court that the U.S. Trustee objects to Hayes Lemmerz
International, Inc.'s bid to hire Lazard Freres & Co. LLC
because:

A. The Application defines "Restructuring Transaction," for
     purposes of Lazard's success fee, so broadly that it could
     include events that would constitute a failure rather than
     a success, such as the conversion of the case to Chapter 7.
     The U.S. Trustee objects to approval of a compensation
     scheme that would reward Lazard in the event of conversion.

B. Lazard states in the Application that it represented the
     Debtor's major shareholder Joseph Littlejohn & Levy within
     the past year regarding selling or merging "one of its
     portfolio companies." Lazard does not indicate whether the
     company in question was any of the Debtors or any affiliate
     of the Debtors. To the extent it was, Lazard is not
     disinterested.

C. The U.S. Trustee objects to the payment of all of Lazard's
     counsel fees relating to the retention including,
     apparently, counsel fees relating to the prosecution of the
     retention application itself.

D. The UST objects to the indemnification and liability cap
     provisions of the engagement letter as being contrary to
     appropriate principles of bankruptcy professionalism and as
     unreasonably foregoing any ability to obtain redress
     against Lazard in the event its negligence causes harm to
     creditors or the estate. (Hayes Lemmerz Bankruptcy News,
     Issue No. 5; Bankruptcy Creditors' Service, Inc., 609/392-
     0900)


HEAFNER TIRE: Commences Tender Offer for All of $150M 10% Notes
---------------------------------------------------------------
Heafner Tire Group, Inc., announced that it will commence a
tender offer for any and all of its $150 million in principal
amount of 10% Senior Notes Due 2008, Series D.

Concurrently with the Offer, Heafner is soliciting consents to
the adoption of certain proposed amendments to the Indenture
governing the Notes.

Heafner also announced that it estimates net sales for the
quarter ended December 31, 2001 to be in the range of $243
million to $248 million and that it estimates its earnings
before interest, depreciation and amortization (EBITDA) for the
same period to be in the range of $5 million to $7 million.

In the Offer, Heafner is offering to purchase any and all of the
Notes for cash at a price of $375 per $1,000 principal amount,
plus accrued but unpaid interest. There will be no separate
payment for consents to the proposed amendments to the Indenture
governing the Notes pursuant to the Solicitation.

If approved, the proposed amendments to the Indenture would
eliminate most of the restrictive covenants (and related Events
of Default) contained in the Indenture and modify certain other
provisions of the Indenture. A holder of the Notes may not
deliver a consent without concurrently tendering its Notes. If a
holder of the Notes tenders its Notes in the Offer, it will be
deemed to have given its consent to the proposed amendments.

The Offer is conditioned, among other things, upon Heafner's
receipt of funds upon completion of certain transactions that
are part of an overall recapitalization plan for Heafner.

The Offer is anticipated to expire at 5:00 p.m., New York City
time, on Wednesday, March 6, 2002, unless the Offer is extended.
Tendered Notes may be withdrawn, and consents may be revoked, at
any time prior to the Offer Expiration Date. Subject to
applicable law, Heafner reserves the right to abandon the Offer
and the Solicitation and amend the Offer and the Solicitation at
any time prior to the Offer Expiration Date.

Notwithstanding any other provision of the Offer and the
Solicitation, Heafner's obligation to accept for purchase and to
pay for Notes validly tendered pursuant to the Offer and the
Solicitation is conditioned upon, among other things: holders
having validly tendered prior to the Offer Expiration Date not
less than a majority in aggregate principal amount of the Notes
outstanding on the Offer Expiration Date (excluding any Notes
held by Heafner or its affiliates); the receipt of the requisite
number of duly executed (and not revoked) consents to the
proposed amendments to the Indenture from holders representing
not less than a majority of the aggregate principal amount of
Notes outstanding not held by Heafner or its affiliates and
execution of a supplemental indenture to the Indenture providing
for the proposed amendments; the closing of each of the other
transactions contemplated by Heafner's recapitalization plan and
the receipt by Heafner of the net proceeds therefrom; and the
satisfaction of certain other conditions described in the Offer
to Purchase and Consent Solicitation Statement.

The terms and conditions of the Offer are set forth in Heafner's
Offer to Purchase and Consent Solicitation Statement, dated
February 5, 2002. Heafner will not be required to accept or pay
for any Notes tendered pursuant to the Offer, may terminate,
extend or amend the Offer and the Solicitation and may, subject
to applicable law, postpone the acceptance of Notes so tendered,
if any condition to the Offer is not satisfied.

Credit Suisse First Boston Corporation is acting as dealer
manager, and MacKenzie Partners, Inc., is the information agent
in connection with the Offer and the Solicitation.

Heafner Tire Group, Inc. (formerly The J.H. Heafner Company,
Inc.), is one of largest independent suppliers of tires to the
replacement tire market in the United States. Heafner operates
65 distribution centers servicing all or parts of 35 states.
Heafner sells a broad selection of tires, custom wheels,
automotive service equipment and related products manufactured
by the leading manufacturers of those products. As at September
30, 2001, the company's balance sheet showed that its total
liabilities exceeded its total assets by about $51 million.


I.C.H. CORPORATION: Chapter 11 Case Summary
-------------------------------------------
Lead Debtor: I.C.H. Corporation
             780 Third Avenue
             43rd Floor
             New York, NY

Bankruptcy Case No.: 02-10485-pcb

Debtor affiliates filing separate chapter 11 petitions:

             Entity                        Case No.
             ------                        --------
             Sybra, Inc.                   02-10486-pcb
             Sybra of Connecticut, Inc.    02-10488-pcb

Chapter 11 Petition Date: February 05, 2002

Court: Southern District of New York (Manhattan)

Judge: Prudence Carter Beatty

Debtors' Counsel: Peter D. Wolfson, Esq.
                  Sonnenschein Nath & Rosenthal
                  1221 Avenue of the Americas
                  New York, NY 10020-1089
                  Tel: (212) 768-6700
                  Fax: (212) 768-6800
                  Email: pwolfson@sonnenschein.com

Estimated Assets: $50 million to $100 million

Estimated Debts: $50 million to $100 million


IGI INC: Frank Gerardi Discloses 7.39% Equity Stake
---------------------------------------------------
Investment advisor Frank Gerardi beneficially owns 831,300
shares of the common stock of IGI, Inc. representing 7.39% of
the outstanding common stock of that Company.  Mr. Gerardi has
the sole power to vote or to direct the vote, and the sole power
to dispose or to direct the disposition of, the 831,300 shares.

IGI makes health and beauty products for pets and people. Pet
Products are sold to the veterinarian market under the EVSCO
Pharmaceuticals trade name and to the over-the-counter market
under the Tomlyn and Luv'Em labels. Products include
pharmaceuticals, nutritional supplements, and grooming aids. The
company's consumer products consist of cosmetics and skin care
products; its microencapsulation technology is also used in
several Estee Lauder products, such as Re-Nutriv and Virtual
Skin. IGI sells its products globally, with the US and Canada
accounting for almost 90% of the company's total sales. Stephen
Morris, a hotel, restaurant, and science publishing
entrepreneur, owns almost a quarter of the company. At September
30, 2001, the company reported a total shareholders' equity
deficit of $3.5 million.


IT GROUP: Court Allows Use of Secured Lenders' Cash Collateral
--------------------------------------------------------------
Judge Walrath finds that The IT Group, Inc., and its debtor-
affiliates have a continuing need to use the Lenders' Cash
Collateral to avoid immediate and irreparable harm to their
estates.  Judge Walrath grants the Debtors' permission to
continue using the Lenders' Cash Collateral to fund their day-
to-day post-petition operating expenses and the Debtors'
adequate protection proposal is approved.  The Bank Group is
granted a replacement lien to the extent that the Debtors use
any of the Prepetition Lender's cash collateral between the
Petition Date and a to-be-scheduled Final Cash Collateral
Hearing, subject to a $12,400,000 cap at this time. (IT Group
Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service,
Inc., 609/392-0900)  


INNOVATIVE GAMING: Enters Agreement to Acquire GET USA Assets
-------------------------------------------------------------
Innovative Gaming Corporation of America (Nasdaq: IGCA)
announced an agreement to acquire GET USA, Inc., a privately
held U.S. corporation which holds all of the assets of
Australian corporation Gaming & Entertainment Technology (GET)
and GET Holdings.  Upon receipt of required shareholder and
regulatory approvals, GET USA will be merged into a wholly owned
subsidiary of IGCA.  IGCA will issue common stock equivalent to
49% of IGCA's common stock outstanding at the time the merger is
consummated.  IGCA proposes to rename the merged entity GET,
Inc.

Commenting on the proposed acquisition, Tom Foley, Chairman and
CEO of IGCA said, "With access to the GET game library of 50
games, IGCA will substantially increase its product offerings in
the near term.  This will enhance our competitive position in
our traditional slot machine business.  We will begin joint
development of several exciting new product offerings
immediately under our interim consulting and development
agreement.  We are excited about the potential that this
combination will produce in moving the Company forward."

Merging GET's Internet gaming platform and game titles with
IGCA's Linux-based slot operating system creates a diverse
product range suitable for "bricks-and-mortar" casinos as well
as virtual casinos.  It enables Wide Area Progressive games
which will provide high entertainment value and exciting
jackpots.  Prior to consummating the proposed merger, GET and
IGCA will enter into a consulting and joint development
agreement through which the companies can begin to realize the
benefit of this strategic alliance while awaiting the approvals
necessary to consummate the transaction.  GET will continue with
its existing activities in the regulated Internet gaming and
lottery markets, and IGCA will continue to pursue its business
plan including the continued placement of gaming devices under
its participation model.

Formed in 1995 with the aim of producing a government accredited
online gaming system, Gaming & Entertainment Technology is a
leading-edge developer of state-of-the-art gaming systems for
regulated jurisdictions.  Australian state governments,
considered the most stringent Internet gaming jurisdictions in
the world, have approved GET's technology.  GET is a licensed
gaming manufacturer in Australia, having been reviewed for
suitability in an investigation similar to that conducted by
United States gaming regulators. Unlike many other providers of
Internet casino operating software, GET has never permitted its
licensees to accept wagers from the United States or any
jurisdiction in which Internet gaming is not legal.

GET has invested more than five years in developing a
comprehensive multi-player networked entertainment platform,
supporting a diverse range of gaming and entertainment
applications.  GET's 50 employees develop software from its
Sydney, Australia offices.  With a knowledge base covering all
aspects of game development, GET has experienced professionals
at all levels including Java programmers, graphic designers, 3D
modelers and web developers. GET has a strong creative services
department that specializes in full multimedia site production,
including 3D walk-through environments, video streaming and
sound production.  Further information on GET is available at
http://www.getsystems.com

Tibor Vertes, Chairman of GET stated, "In exploring our
previously announced joint venture with IGCA, we determined that
the formal merger of GET's existing server-based, regulated
gaming system with IGCA's traditional land-based gaming machines
presented unique opportunities to introduce new technology to
the traditional casino floor while further enhancing our
superior Internet casino operating platform."

Laus Abdo, IGCA's President and CFO stated, "This acquisition is
another positive step forward for IGCA as it emerges from its
recent restructuring. Although we are still addressing some
short term liquidity issues, we continue to make progress in our
negotiations.  Based on our analysis, we expect the acquisition
to be accretive to IGCA.  Combining the resources of IGCA and
the technology owned by GET is a natural.  Subject to obtaining
requisite gaming approval for new products, GET's system
functionality will give IGCA the immediate ability to exploit
system- and server-based gaming opportunities including lottery,
video lottery, and Wide Area Progressive systems."

Innovative Gaming Corporation of America, through its wholly-
owned operating subsidiary, Innovative Gaming, Inc., develops,
manufactures and distributes fast playing, high-entertainment
gaming machines.  The Company distributes its products both
directly to the gaming market and through licensed distributors.  
Further information on IGCA is available at http://www.igca.com  

                         *   *   *

As reported in the January 24, 2002 edition of Troubled Company
Reporter, Innovative Gaming has reached agreement with the
holders of its Series F and Series K Convertible Preferred Stock
to restructure those securities. Upon execution of definitive   
documentation, each Series of Convertible Preferred will be
exchanged for a combination of cash, common stock and a new
convertible preferred stock with a minimum $1.00 per share
conversion price.

Also, in the same report, the company announced that it and
Crown Bank have agreed to extend an existing $1 million loan for
six months.  Additionally, the Company has negotiated a one year
extension on $700,000 of its notes payable.


INTEGRATED HEALTH: Premiere Panel to Sue Directors & Officers
-------------------------------------------------------------
The Premiere Committee in the chapter 11 cases of Integrated
Health Services, Inc., and its debtor affiliates, seeks
authority from the Court to commence an adversary proceeding on
behalf of the Estates against certain current and/or former
directors and officers of the Premiere Debtors (the Directors
and Officers) for breaches of their fiduciary duties as a result
of acts and omissions related to the Guaranty by the Premier
Group of the $2.1 billion Senior Credit Facility of IHS.

The Premiere Committee tells the Court that documents and
testimony elicited from the Debtors during discovery show that
the Directors and Officers breached their fiduciary duties by
allowing the Premiere Group to become a party to the Guaranty.
Pursuant to section 108(c), the Premiere Committee must be in a
position to file an adversary proceeding complaint on or before
February 1, 2002 or the possibility of bringing the Action on
behalf of the Estates may be lost. However, it is clear to the
Premiere Committee that the Premiere Debtors are not going to
bring the Action, even though it would benefit the Estates.

Thus, the Premiere Committee seeks authority to file on
behalf of the Estates an adversary proceeding against the
Directors and Officers for breach of their fiduciary duties,
including but not limited to (1) breach of the duty of loyalty;
(2) breach of the duty of care; and (3) waste. (Integrated
Health Bankruptcy News, Issue No. 28; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   


INTERLIANT: Closes Sale of Telephonetics Unit to L&D Messaging  
--------------------------------------------------------------
Interliant, Inc. (Nasdaq:INIT), a leading application service
provider (ASP), announced the successful completion of the sale
of its Miami, Florida-based Telephonetics business unit, a
music-on-hold provider, to L&D Messaging Inc.  The transaction
was effective January 31, 2002, and was completed for an
undisclosed amount of cash and other consideration. As part of
the transaction, L&D Messaging has agreed to retain all the
Telephonetics employees and to continue to operate the business
in the Miami area.

"The sale of Telephonetics brings Interliant closer to the
successful divestiture of all of our non-core businesses, which
began nine months ago concurrent with the implementation of our
revised business strategy," said Bruce Graham, Interliant's
chief executive officer. "As with our previous asset sales, this
transaction both provides us with additional funding and enables
us to devote our full attention and resources to the business
strategy we began implementing in 2001."

L&D Messaging Inc. is a company owned by Stephen W. Maggs, a co-
founder of Interliant and a former member of the Interliant
Board of Directors. Maggs resigned from the Interliant Board
effective January 31, 2002.

Since its April 2001 restructuring announcement, Interliant has
focused on a set of four core offerings, including INIT Managed
Messaging (on both the Lotus Domino and Microsoft Exchange
platforms), INIT Managed Hosting, INIT Web Hosting (branded
solutions/private label), and INIT Security, plus associated
professional services.

Interliant, Inc., (Nasdaq:INIT) is a leading global application
service provider (ASP) and pioneer in the ASP market.
Interliant's INIT Solutions Suite includes managed messaging,
managed hosting, security, Web Hosting (branded
solutions/private label), and professional services. Interliant,
headquartered in Purchase, NY, has forged strategic alliances
with the world's leading software, networking and hardware
manufacturers including Microsoft (Nasdaq:MSFT), Dell Computer
Corporation (Nasdaq:DELL), Oracle Corporation (Nasdaq:ORCL),
Verisign/Network Solutions (Nasdaq:VRSN), IBM (NYSE:IBM), Sun
Microsystems Inc. (Nasdaq:SUNW), and Lotus Development Corp. At
June 30, 2001, the company reported a total stockholders' equity
deficit of $35 million. For more information about Interliant,
visit http://www.interliant.com   


KMART CORP: Has Until March 25 to File Schedules & Statements
-------------------------------------------------------------
Kmart Corporation and its 37 of its debtor-affiliates sought and
obtained an extension, until March 25, 2002, of the deadline by
which they must file comprehensive:

    (a) schedules of assets and liabilities,

    (b) statements of financial affairs,

    (c) schedules of current income and expenditures,

    (d) statements of executory contracts and unexpired leases,
        and

    (e) lists of their equity security holders.

John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, in Chicago, Illinois, tells the Court that the
Debtors have several hundred thousand creditors and parties-in-
interest.  The Debtors also operate their business from over
2,000 locations, Mr. Butler adds.

Given the size and complexity of their businesses and the fact
that certain pre-petition invoices have not yet been received
and entered into the Debtors' financial systems, Mr. Butler
explains that the Debtors have not had the opportunity to gather
the necessary information to prepare and file their respective
Schedules and Statements.

The Debtors assure Judge Sonderby that they have already started
gathering the necessary information to prepare and finalize what
will be voluminous Schedules and Statements.  Mr. Butler
anticipates that the Debtors will be able to complete this task
by March 25, 2002. (Kmart Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   


KMART CORP: DebtTraders Issues BUY Recommendation on Notes
----------------------------------------------------------
DebtTraders initiates coverage of Kmart Corporation with a BUY
recommendation on Kmart notes, priced at 48.00.

DebtTraders analyst Daniel Fan, CFA, (1 212-247-5300) explains,
"Our BUY recommendation is based upon a combination of a high
recovery rate and a SAFETY rating of 75% on the Notes. These
factors together result in an ATTRACTIVENESS rating of 86%. The
SAFETY rating reflects the high level of uncertainty associated
with the completion of the restructuring in Chapter 11 as well
as the substantial challenges confronting Kmart's business
model."

DebtTraders sees a "reasonable assurance" for bond investors to
buy Kmart's senior debt at 4.4 times the estimated Worst Case
2002 EBITDA. Moreover, Kmart's enterprise value of 6.0 times a
realistic EBITDA will afford a "substantial value for the [bond
investors'] investment."

"We also believe that the recent agreement on a $2 billion DIP
financing facility will substantially alleviate any liquidity
concerns, and upon the implementation of a plan of
reorganization, will allow bondholders to emerge with the high
recovery rate," says Mr. Fan, adding that DebtTraders is pushing
for the notes with principal amounts of $200 million or greater.
"We believe that these notes will have the greatest liquidity."

According to DebtTraders, KMart Corp.'s 7.770% bonds due 2002
(KMART15) are trading between 44 and 47.5. See
http://www.debttraders.com/price.cfm?DT_SEC_TICKER=kmart15for  
real-time bond pricing.


KASPER A.S.L.: Case Summary & 30 Largest Unsecured Creditors
------------------------------------------------------------
Lead Debtor: Kasper A.S.L., Ltd.
             fka Sassco Fashions, Ltd.
             11 West 42nd Street
             New York, NY 10036

Bankruptcy Case No.: 02-10497-alg

Debtor affiliates filing separate chapter 11 petitions:

Entity                                     Case No.
------                                     --------
Kasper A.S.L., Ltd.                        02-10497-alg
A.S.L. Retail Outlets, Inc.                02-10500-alg
ASL/K Licensing Corp.                      02-10502-alg
AKC Acquisition, Ltd.                      02-10503-alg
Lion Licensing, Ltd.                       02-10504-alg
Kasper Holdings, Inc.                      02-10505-alg

Type of Business: The Debtors are one of the leading women's
                  branded apparel companies in the United
                  States. They design, market, source,
                  manufacture and distribute women's career and
                  special-occasion suits, sportswear and
                  dresses. In addition, they license various
                  products under many of the Brands including,
                  but not limited to, women's watches, jewelry,
                  handbags, small leather goods, footwear,
                  coats, eyewear and swimwear, as well as men's
                  suits and dress furnishings.

Chapter 11 Petition Date: February 05, 2002

Court: Southern District of New York (Manhattan)

Judge: Allan L. Gropper

Debtors' Counsel: Alan B. Miller, Esq.
                  Weil, Gotshal & Manges, LLP
                  767 Fifth Avenue
                  New York, NY 10153
                  Tel: (212) 310-8272

Total Assets: $308,761,000

Total Debts: $255,157,000

Debtor's 30 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Whippoorwill                13% Senior Notes      $20,973,815
David Strumwasser
Managing Partner
11 Martine Avenue
11th Floor
White Plains, NY 10606
Tel. 914-683-1002

The Dreyfus Corporation     13% Senior Notes      $19,317,519
Greg Jordan
200 Park Avenue
55th Floor
New York, NY 10166
Tel. 212-922-6101

Putnam Investments          13% Senior Notes      $11,245,000
Judi Swirbalus
One Post Office Square
Boston, MA 02109
Tel. 617-760-7141

Bay Harbour                 13% Senior Notes      $11,082,905
Jeffrey Wertheim
Vice President
885 Third Avenue
34th Floor
New York, NY 10022
Tel. 212-371-2211

Prudential Investments      13% Senior Notes       $7,171,000
George Edwards III
Managing Director
Gateway Center 2
Third Floor
Newark, NJ 07102
Tel. 973-802-9312

UBS Warburg                 13% Senior Notes       $7,050,000
Kevin O'Brien
677 Washington Boulevard
Stamford, CT 06901
Tel. 203-719-8975

Conseco Capital Management  13% Senior Notes       $6,891,500
Eric Johnson, VP
11825 N. Pennsylvania St.
Carmel, IN 46032
Tel. 800-888-4918 x6806

Blackrock, Inc.             13% Senior Notes       $5,000,000
Peter Schwartzman
345 Park Avenue, 29th Fl.
New York, NY 10154
Tel. 212-754-5328

Alpine Associates           13% Senior Notes       $3,441,000
Kenneth Grossman
100 Union Avenue
Cresskill, NJ 07626
201-871-2200

Newtimes Far East Dev. (HK) Trade                    $196,246

Mitsui O.S.K. Lines         Trade                    $172,256

STS Informatique            Trade                     $81,083

Newtimes Ltd.               Trade                     $65,164

Star Airfreight Co. Ltd.    Trade                     $58,077

Elastiss                    Trade                     $57,828

Hyundai America             Trade                     $44,539
   Shipping Agency

Herbert Kasper              Trade                     $43,860

National Retail             Trade                     $39,102
   Transportation

Lectra Systems Inc.         Trade                     $37,436

NetworkMCI Conferencing     Trade                     $36,468

PSE&G                       Trade                     $35,950

United Parcel Service       Trade                     $33,650

The Sirena Apparel          Trade                     $24,000
   Group Inc.

American Button Mfg. Inc.   Trade                     $23,669

Dell Marketing LP           Trade                     $21,904

Cool Wear Inc.              Trade                     $19,073

Anderson Kill & Olick PC    Trade                     $17,817

Federal Express Corp.       Trade                     $17,526

Sampietro Fashion           Trade                     $17,177
   Tessile SP

Manhattan Associates        Trade                     $16,971


LTV CORP: Intends to Implement $9MM Key Employee Retention Plan
---------------------------------------------------------------
The LTV Corporation, and its debtor-affiliates ask Judge William
Bodoh to authorize them to (i) initiate and implement a "key
employee retention incentive plan" in connection with the
Debtors' APP, and (ii) enter into an employment agreement with
Glenn J. Moran, the current Chairman, President and CEO of The
LTV Corporation.

In the previous Motion for approval of the Asset Protection
Plan, the Debtors sought approval for a key employee retention
program for the APP Period.  "Due to the overwhelming activity
that ensued from the filing of the APP Motion, the Debtors were
unable to finalize a retention plan prior to the hearing on the
APP Motion", Heather Lennox, Esq., at Jones Day Reavis & Pogue,
tells Judge Bodoh.  The Debtors advise that the postpetition
lenders have agreed to include under the APP budget $13 million
to fund this program.  Accordingly, because the Debtors say it
is "imperative" that they retain employees identified as
critical to achieving the goals of the APP, the Debtors again
seek approval of the retention program.

                   The Debtors' Justifications:
                        The Need for Speed

Even more than in a traditional reorganization scenario, it is
necessary -- urgently so -- that the Debtors be authorized to
implement the retention program for the nine-month APP Period
(through September 7, 2002), Ms. Lennox says.  The Debtors'
critical employees "currently have no incentive to remain with
the Debtors".  These employees realize that their continued
employment is severely limited in time, and that they will not
receive severance, paid healthcare or other post-termination
benefits to provide a safety net in their employment transition
period when they are terminated.  These employees have every
incentive to seek other employment and accept new jobs as
quickly as possible.

Evidencing this reality, since December 7, 2001, the Debtors
have lost 25 employees, and this attrition trend shows no sign
of slowing. Rather, because most employers accelerate their
hiring at the beginning of a new year and because the Debtors'
employees have already expressed anxiety over the tenuous nature
of their employment, the Debtors actually expect that departures
of critical employees will accelerate in the near term absent
the implementation of the Retention Program. Indeed, most of the
critical employees are exploring other job opportunities, and
many are entertaining one or more alternative job offers. As a
result, if the Debtors do not act swiftly to implement the
Retention Program and provide an incentive for those employees
critical to the APP process to remain with the Debtors to
effectuate the APP, the Debtors' efforts to maximize value for
all creditors through the APP process will be derailed.

          The Debtors Want to Spend Only $9 Million

Recognizing this substantial risk to their ability to realize
the full value of their collateral, the Debtors' postpetition
lenders had negotiated with the Debtors and provided in the APP
budget $13 million with which the Debtors could design and
implement a retention program for the employees who are critical
to the APP's success. It was this Retention Budget that this
Court approved in the APP Order.  The DIP Lenders, whose
interest in the success of the APP process is primary, fully
support the proposed Retention Program. The Debtors have
recognized the need for fiscal restraint and have sought
approval of a Retention Program that is approximately $4 million
less than the budgeted amount.  Accordingly, the Debtors believe
(as do their compensation consultants, Resources Connection,
Inc., with which the Debtors developed the Retention Program)
that the Retention Program is not only necessary but reasonable
and tailored to provide incentives for maximization of value to
the estates and the creditors.

                      200 Key Employees

Of the approximately 700 salaried employees who are needed to
effectuate the APP (down from a pre-APP employment roll of
approximately 1,800 salaried employees), the Debtors have
identified approximately 200 of these employees as being
critical to the APP process. The Debtors' selection of a Key
Employee was based solely upon the Key Employee's job function
and ability to assist in achieving the APP's goals as
expeditiously and successfully as possible, rather than such
employee's job title or position with the Debtors. This approach
recognizes the importance of functionality over title in the
current environment.

                       Beyond Dispute That
                  Key Employees Are "Key" to APP

It is beyond dispute that the job functions performed by the Key
Employees are necessary to maximize and protect the value of the
Debtors' remaining integrated steel assets. For example, certain
of the Key Employees possess specialized knowledge and skills
crucial to the effective hot- or cold-idling or weatherproofing
of the Debtors' integrated steel facilities. The untimely
departure of these employees would paralyze efforts to engage in
such important - and literally asset-preserving - activities.
Moreover, as noted above, most of the Key Employees possess
skills and experience that are easily transportable to new jobs
outside the steel industry. Examples include key financial,
legal, human resources, benefits, information technology and
sales personnel. Because the Debtors currently are working with
a skeletal staff in less than ideal surroundings and
circumstances, the loss of even one Key Employee before his or
her projected termination date raises the burden placed on the
remaining employees exponentially. Perhaps more importantly, the
loss of even several more of the Key Employees could
substantially jeopardize the Debtors' ability to implement an
orderly disposition of the Integrated Steel Business assets and
would, therefore, eviscerate the Debtors' ability to achieve the
maximum value for their assets for the benefit of their
creditors.

Courts have approved retention incentive programs in other large
chapter 11 cases that began with an eye toward reorganization
but ultimately shifted to a liquidation strategy. Such relief is
particularly appropriate where, as here, the Debtors have worked
with their professionals to craft relief tailored to meet its
specific business needs. The Debtors believe that the Retention
Program is essential to maximizing creditors' recoveries in
these cases. Moreover, the Debtors recognize the need to
conserve resources and, thus, have narrowly tailored the
Retention Program to facilitate the success of the APP. Indeed,
the cost of the Retention Program is well within the ranges
incurred for similar programs by comparable debtors and is well
below the Retention Budget approved for employee retention
measures in the APP Order. Accordingly, the Retention Program
should be approved.

                  DIP Lenders Will Be Harmed If
                Retention Program Is Not Approved

In developing the Retention Program, the Debtors were sensitive
to the concerns of their employees whose jobs will be lost as
well as to the concerns of their unsecured creditors whose
postpetition claims are currently being held in abeyance unless
they are to be paid as part of the asset disposition process.
Indeed, the Debtors are doing everything that they can within
the financial constraints under which they are operating to
secure the maximum recovery for all creditors, and the DIP
Lenders, who are entitled to receive the first recovery on their
secured claims, will be seriously harmed unless a core group of
employees is retained to implement the APP.

              Description of the Retention Program

The various components of the Retention Program were developed
by the Debtors in consultation with Resources and their other
professionals. Resources has advised the Debtors that the
Retention Program offers reasonable and competitive incentives
comparable to arrangements that have been approved for employees
of chapter 11 debtors and liquidating debtors in comparable
situations.

                       Irrevocable Trusts

To further the goals of the Retention Program and solidify the
Key Employees' confidence that there will be sufficient funds to
satisfy the Debtors' obligations under the Retention Program,
the Debtors intend to fund the amount of the retention incentive
payment obligations under the Retention Program in accordance
with the APP budget that has been approved by the Court. In
particular, the Debtors will establish irrevocable trusts, or
similar vehicles, to hold the Retention Funds for the benefit of
the Key Employees whose retention incentive payments vest and
become payable under the Retention Program. The interest earned
on the Retention Funds, as well as any funds not vested by the
applicable last payment date under the Retention Program, will
revert to and constitute property of the Debtors' estates.

The Retention Program includes two separate components:

       (a) the Retention Incentive Plan, designed to provide
retention incentives and incentives to maximize creditor
recoveries to Key Employees; and

       (b) the Moran Agreement, designed to provide compensation
and retention incentives to LTV's recently-appointed CEO.

                   Retention Incentive Plan

Under the Retention Incentive Plan, a Key Employee will be
notified of his or her expected termination date. Due to the
uncertain nature of the APP process, the Debtors reserve the
right to extend a Key Employee's projected termination date by
up to 30 days and thereby require the Key Employee to work until
his or her Revised Termination Date to trigger one of the
applicable vesting events.

An eligible employee's right to receive payment under the
Retention Program will be contingent upon that employee's
execution of a release and waiver agreement in a form and
substance acceptable to the Debtors. Under the Release
Agreement, the employee will release and waive any and all
claims that he or she may have against any of the Debtors or
their respective estates, including claims relating to the
employee's employment with the Debtors, the termination of that
employment or any severance benefits that the employee may
otherwise be entitled to at law or under prepetition or
postpetition employment agreements or company programs. The
Debtors estimate that the value of severance pay alone that will
be foregone by the Key Employees approximates $15 million.

The Retention Incentive Plan is comprised of two separate
incentive plans:

      (a) the Fixed Rate Retention Plan; and

      (b) the Variable Rate Retention Plan.

                 Fixed Rate Retention Plan

Under the Fixed Rate Retention Plan, Key Employees are divided
into three tiers. Tier One consists of the integrated steel
Debtors' current leadership team and includes Mr. Moran and four
other executives.   Mr. Moran and the executives identified in
this Group "bear ultimate responsibility for achieving the goals
of the APP and completing the tasks" in it.

                        Tier One

Other than Mr. Moran, the positions of the executives in Tier
One and some of their primary responsibilities are:

                   (a)  Vice President, General Counsel and
Secretary: responsible for all legal matters associated with (i)
the sale of the integrated steel assets, LTV Steel's tubular
facilities and the Copperweld Debtors' assets; (ii)
environmental issues; (iii) pension and benefit issues and (iv)
the administration of these cases and the Debtors' estates;

                   (b)  Senior Vice President - Steel
Operations: responsible for (i) maintaining and preserving the
operating assets for sale (on hot- and cold-idle) and ensuring
safety in and around the plants and (ii) assisting in the plant
marketing and sale efforts and the sale of inventory, excess
materials and equipment;

                    (c)  Vice President - Engineering,
Procurement, Raw Materials and Environmental Control:
responsible for (i) maintaining and preserving the coke
batteries for sale (on hot- and cold-idle); (ii) selling MRO
supplies, raw materials and equipment; and (iii) ensuring
environmental compliance at the plants; and

                    (d)  General Manager - Human Resources:
responsible for (i) overseeing the communications and
administration of all pension and benefit matters for 10,000
former employees and 50,000 retirees; (ii) addressing the human
resource needs of the Debtors' remaining employees; and (iii)
coordinating the activities necessary to transition all pension
and benefit plans as appropriate.

Participants in Tier One are eligible for payment of 100% of
their annual base salary at the conclusion of the APP Period.

                         Tier Two

Tier Two consists of 19 Key Employees. Tier Two participants are
eligible for payments ranging from 55 % to 100% of their annual
base salary through the particular employee's projected
termination date.

                         Tier Three

Tier Three consists of 185 Key Employees.  Key Employees in Tier
Three are eligible for payments below 70% of their annual base
salary through the particular employee's projected termination
date. The majority of distributions to Tier Three participants
will fall within the range of 10% to 60% of annual base salary.

Under the Fixed Rate Retention Plan, these payments will vest
and become fully payable under any of the following
circumstances:

       (a)  the Key Employee remains employed through his or her
projected termination date (or Revised Termination Date, as
applicable), as determined by the Debtors based on need in light
of APP; or

       (b)  death;

       (c)  disability; or

       (d)  involuntary termination without cause prior to the
Key Employee's original projected termination date (or Revised
Termination Date, as applicable).

The term "involuntary termination" includes the Debtors' failure
to pay the employee in fall when due in the ordinary course of
business.

A Key Employee forfeits his or her entire payment under the
Fixed Rate Retention Plan if he or she resigns prior to one of
the Vesting Events. Such forfeited retention payments will be
available for redistribution as deemed necessary by the CEO.

                Payments Totaling $7.18 Million

The estimated costs for Tier One, Tier Two and Tier Three
payments under the Fixed Rate Retention Plan are $1.67 million,
$2.27 million and $3.24 million, respectively. Thus, the total
estimated cost of the Tier One, Tier Two and Tier Three payments
under the Fixed Rate Retention Plan is $7.18 million. In
addition, the Fixed Rate Retention Plan contemplates a separate
fund of $100,000 to be used at the discretion of the CEO to
reward any employee other than those in Tier One who make
outstanding contributions to the achievement of the APP's
goals.

                 Variable Rate Retention Plan

The Variable Rate Retention Plan is designed to motivate the
Tier One Key Employees to maximize the value available for
distribution to the creditors. The Variable Rate Retention Plan
contemplates a cash lump sum performance-based retention payment
to Tier One participants to be made on September 30, 2002 that
is based on Net Recoveries.

                     Cumulative Bonus Pool

The first component of the Variable Rate Retention Plan creates
a "Cumulative Bonus Pool," which is based on a percentage of Net
Recoveries, which, in turn, facilitates the reduction of the DIP
Lenders' postpetition debt (approximately $470 million as of
December 7, 2001. The Cumulative Bonus Pool will consist of 1%
of the Net Recoveries for the integrated steel assets (exclusive
of any purchase price received for the Cleveland Works and
Indiana Harbor Works) over $300 million.

The term "Net Recoveries" means: (a) cash receipts plus letter
of credit recoveries less cash disbursements other than Excluded
Disbursements during the period from December 7, 2001 through
and including September 30, 2002; plus (b) cash on hand at
December, 7, 2001.  The term "Excluded Disbursements" means: (a)
payments to the DIP Lenders on account of (i) outstanding
principal, (ii) interest expense and (iii) fees; plus (b) cash

                         Sale Bonus

The second component of the Variable Rate Retention Plan
involves the sales of the Cleveland Works and Indiana Harbor
Works. In the event that all or substantially all of the assets
of each of the Cleveland Works or Indiana Harbor Works are sold
in a package so that such facilities may return to operation as
going concerns and the buyer or another third party assumes
substantially all on-site environmental liabilities at each
facility, irrespective of the actual purchase price, $500,000
will be added to the Cumulative Bonus Pool for each sale.  These
amounts recognize that there may be little reduction in the DIP
Lender Balance by the sale of either the Cleveland Works or the
Indiana Harbor Works as "going concerns."

                  Only Tier One Participates
                       In $1.70 Million

The Cumulative Bonus Pool will be divided among Tier One Key
Employees according to predetermined percentages, and the
Vesting Events will apply, except that payments under the
Variable Rate Retention Program will not be accelerated, but
will only be made to each Tier One employee on or about
September 30, 2002. The Variable Rate Retention Plan will apply
to Net Recoveries that are generated even after the DIP Lender
Balance is eliminated.

                  The Total: $8.98 Million

The aggregate estimated cost of the Retention Program (exclusive
of FICA), reflecting the cost of the Variable Rate Retention
Program up to the time that the DIP Lender Balance is
eliminated, is:

      Fixed Rate Retention Plan              $7.18 million
      Variable Rate Retention Plan            1.70 million
      CEO Discretionary Fund                   .10 million
                                             -------------
               TOTAL ESTIMATE:               $8.98 million


                       The Moran Agreement

Mr. Moran was appointed CEO of LTV on December 13, 2001, which
followed the entry of the APP Order. Prior to the Appointment
Date, Mr. Moran served as Senior Vice President, General Counsel
and Secretary of LTV. The Moran Agreement reflects Mr. Moran's
increased responsibilities as a result of his new position and
his critical ongoing role in the Debtors' operations and the
implementation of the APP. The agreement will expire on December
31, 2002. Under the agreement, Mr. Moran will receive an annual
base salary of $600,000 (retroactive to the Appointment Date)
and will be eligible to participate in the Retention Incentive
Plan, including the receipt of a retention payment in September
2002.

The Moran Agreement also provides, among other things, that Mr.
Moran will be entitled to the reduced benefits provided to all
other Integrated Steel Business employees and a reduced vacation
period.

The terms of the Moran Agreement were developed in consultation
with Resources and by taking into account, among other things,
(a) the compensation arrangements and retention incentive
payments provided to chief executive officers of comparable
chapter 11 debtors, (b) the level of services being provided by
Mr. Moran and the value of his 22 years of LTV knowledge and
expertise to the Debtors' efforts under the APP and (c) the
compensation arrangements of chief executive officers of other
companies in the manufacturing industry with comparable annual
revenues. Resources has advised the Debtors that Mr. Moran's
compensation under the Moran Agreement is both reasonable and
competitive.

            Request for Approval of Retention Program

The components of the Retention Program are designed to meet the
unique needs of the Debtors under the APP. The Debtors believe
that in their present circumstances, approval of the Retention
Program is essential. The success of the APP and the
maximization of recoveries to creditors will be severely
threatened - and perhaps completely frustrated - if the Debtors
continue to lose Key Employees when, currently, there is
absolutely no incentive for these employees to stay. The DIP
Lenders agree with the Debtors' assessment of their present      
circumstances, and they have approved the Retention Program.

Accordingly, the Debtors seek authority to implement the
Retention Program. Bankruptcy Code Section 363(b) provides in
pertinent part that "[t]he trustee, after notice and a hearing,
may use, sell, or lease, other than in the ordinary course of
business, property of the estate." 11 U.S.C.  363(b). In
general, the debtor may use property of the estate outside of
the ordinary course of its business where the use of such
property represents an exercise of the debtor's sound business
judgment.

              The Debtors' Sound Business Judgment

The Debtors believe that the implementation of the Retention
Program will accomplish a "sound business purpose" and is
necessary to enable the Debtors to implement the APP. Based on
(a) their own experience and the experience of their advisors,
(b) their evaluation of available alternatives and (c) the
specific information and analyses provided by Resources, the
Debtors believe that the Retention Program will achieve the
intended purpose of retaining critical personnel during the
orderly shut down and liquidation of the Debtors' Integrated
Steel Business.

Moreover, Resources has advised the Debtors that the Retention
Program offers incentives that are reasonable, competitive and
comparable to (a) those provided to employees with similar
positions and experience at comparable-sized companies and (b)
arrangements that have been approved and successfully
implemented for employees of similarly-situated chapter 11
debtors.

                  The Original KERP Program

On March 20, 2001, the Debtors remind Judge Walsh that he
entered his Order Authorizing Debtors and Debtors in Possession
to Initiate and Implement a Key Employee Retention Program. The
benefits to be provided under the Retention Program are in
addition to any benefits to which any employee of the Debtors is
entitled under the first key employee retention. In accordance
with Judge Walsh's order approving the Original KERP Program,
each employee covered by the Original KERP Program executed an
individual agreement with the Debtors that, among other things,
memorialized such person's retention amount and the vesting
events. Accordingly, each covered employee possesses a
contractual right to receive benefits in accordance with the
terms of his or her agreement and the Original KERP Program
benefit plan.

Additionally, amounts to fund the Original KERP Program have
been transferred to a trust for the benefit of the covered
employees.

                    No Present Acceleration of
                      Original KERP Amounts
                       But Rights Reserved

Among other vesting events, the Original KERP Order provided
that periodic payments would be made to the covered employees,
if they remained in the Debtors' employ, on, among others,
December 31, 2001 and June 30, 2002. In accordance with the
Original KERP Order, the Debtors caused a distribution to be
made to the covered employees that remained in the employ of the
Debtors on or about December 31, 2001. Less than $1 million
remains in the trust to satisfy the remaining June 30, 2002
payment. The Debtors thus have not accelerated the Original
KERP Program payments but reserve all of their rights with
respect to this issue.

By Court order and by contract, the Original KERP Program is a
separate and distinct program from the one proposed in this
Motion. Moreover, due to the severely deleterious change in the
Debtors' environment in the past few months, it is proving, and
will continue to prove, extraordinarily difficult for the
Debtors to retain their critical personnel. Accordingly, the
Debtors believe that it is necessary under the circumstances to
provide incentives to the Key Employees to remain in the employ
of the Debtors, to maximize the value available to their
creditors and to counter such employees' natural inclination to
seek more permanent employment elsewhere.

Discussions on this Motion and the KERP issues with the
Creditors' Committee and the Noteholders' Committee have not
been concluded.

                      KERPs are "Routine"

Courts routinely grant large chapter 11 debtors authority to
adopt and implement key employee retention plans. Moreover,
courts have recognized the need for, and approved, key employee
retention plans in those situations where the debtor's focus is
preserving value through an orderly liquidation, as opposed to
reorganization, of the debtor's assets.  In light of these
proceedings, the Debtors believe that the incentives provided
under the Retention Incentive Plan and the Moran Agreement are
not only necessary, but reasonable and appropriate, and will
enhance the Debtors' ability to retain and incentivize those
employees who are most essential to the implementation of the
APP to achieve the maximum recoveries possible for the estates'
creditors. The Debtors, therefore, submit that the Retention
Program should be approved. (LTV Bankruptcy News, Issue No. 24;
Bankruptcy Creditors' Service, Inc., 609/392-00900)


LOEWS CINEPLEX: Court Sets Confirmation Hearing for February 28
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approves the adequacy of Loews Cineplex Entertainment
Corporation's Disclosure Statement and Solicitation Procedures
for acceptances of the Debtor's proposed Chapter 11 Plan.  The
Court also fixes February 28, 2002, as the date for a
Confirmation Hearing.

The Debtors are authorized to make non-material changes to the
Disclosure Statement and related documents concerning events
occurring on or after the Hearing provided that the Debtors
indicate the changes.

All Ballots accepting or rejecting the plan must be received by
Donlin Recano & Company, Inc. by 4:30 p.m., Eastern Time, on
February 22, 2002 at:

    Donlin, Recano & Company, Inc.
    Re: Loews Cineplex Entertainment Corporation, et al.
    P.O. Box 2052
    Murray Hill Station
    New York, New York 10156

or if sent by Hand Delivery or Overnight Courier to:

    Donlin, Recano & Company, Inc.
    Re: Loews Cineplex Entertainment Corporation, et al.
    419 Park Avenue South
    Suite 1206
    New York, New York 10016

A hearing to consider confirmation of the Plan will be held
before the Honorable Allan L. Gropper, United States Bankruptcy
Judge, in Room 617 of the Alexander Hamilton Custom House, One
Bowling Green, New York, New York on February 28, 2002 at 10:00
a.m., Eastern Time.

All objections to confirmation of the Plan, including any
supporting memoranda, must be in writing and shall be filed with
the Court, together with proof or service, and must be received
no later than 4:30 p.m., Eastern Time, on February 22, 2002 by:

(i) Fried, Frank, Harris, Shriver & Jacobson
     Counsel for Loews Cineplex Entertainment Corporation et al.
     Debtors and Debtors-in-Possession
     One New York Plaza
     New York, New York 10004
       Attn.: Brad Eric Scheler, Esq.
              Lawrence A. First, Esq.
              Bonnie Steingart, Esq.

(ii) Office of the Untied States Trustee
     33 Whitehall Street, 21st Floor
     New York, New York 10004
       Attn.: Wendy Rosenthal, Esq.,

(iii) Pachulski, Stang, Ziehl, Young & Jones P.C.
     Co-counsel for the Creditors' Committee
     10100 Santa Monica Blvd., Suite 1100
     Los Angeles, CA 90067
       Attn: Marc A. Beilinson, Esq.

(iv) Kronish, Lieb, Weiner & Hellman
     Co-counsel for the Creditors' Committee
     1114 Avenue of the Americas
     New York, New York 10036
       Attn: Charles Shaw, Esq.
             Jay Randall Indyke, Esq.

(v) O'Melveny & Meyers LLP
     Counsel to the Agent under the Debtor's
     prepetition and postpetition working capital facility
     1999 Avenue of the Stars
     Suite 900
     Los Angeles, CA 90067
       Attn: Robert J. White, Esq.

(vi) Paul, Weiss, Rifkind, Wharton & Garrison
     Counsel to Oaktree Capital Management and Onex Corporation
     1285 Avenue of the Americas
     New York, NY 10019-6064
       Attn: Robert D. Drain, Esq.

Loews Cineplex Entertainment Corporation is a major motion
picture theatre exhibition company with operations in North
America and Europe. The Company filed for chapter 11 protection
on February 15, 2001. Brad Eric Scheler, Esq., Janice MacAvoy,
Esq. at Fried, Frank, Harris, Shriver & Jacobson represents the
Debtors in their restructuring effort.


MARINER POST-ACUTE: Wants Until May 5 to Make Lease Decisions
-------------------------------------------------------------
Mariner Post-Acute Network, Inc., and Mariner Health Group seek
a further extension of the date by which they must decide
whether to assume or reject their unexpired leases of
nonresidential real property to and including the earlier of (a)
the effective date of the Plan and (b) May 15, 2002, except for
the LTC Leases and subleases for which the MPAN Debtors are
seeking an extension through and including the date that is 30
days after the Nevada Bankruptcy Court enters a final, non-
appealable order authorizing and directing the assumption or
rejection of the LTC Subleases by Quality Long Term Care
Management, Inc. and Quality Long Term Care, Inc.

The Debtors tell Judge Walrath that ample cause exists for
granting the requested extension. In particular, the Debtors
remind Judge Walrath that they are nearing the completion of
their chapter 11 cases and intend to make a final determination
with respect to each of the unexpired leases in connection with
the confirmation of the Plan which they intend to seek in late
March 2002. The requested extension if granted will enable them
to fully implement the procedures provided for under their Plan
with respect to the unexpired leases. The Debtors believe that
they should not be compelled to make a precipitous determination
of assuming or rejecting the unexpired Leases. Such precipitous
determination may result in an advertently rejection of a
valuable lease or prematurely assuming a lease thus incurring a
substantial administrative obligation.

With respect to the LTC Agreements, the MPAN Debtors intend to
make a final determination shortly after the Nevada Bankruptcy
Court orders the assumption or rejection of the LTC Subleases.
Until such time, the Debtors do not think they can properly
evaluate the advisability of assuming, assuming and assigning,
or rejecting the LTC Leases. For example, were the Debtors to
assume the LTC Leases, and the LTC Debtors were to subsequently
reject the LTC Subleases, the Debtors could be left having to
pay rent to the landlord under the LTC Leases, without any
income being generated by the LTC Subleases to cover such rent.
Conversely, if the Debtors prematurely reject the LTC Subleases,
the Debtors may be forced to forfeit their right to receive
significant rent under the LTC Subleases.

Judge Walrath will entertain the Debtors' Motion and any
objections at a hearing on February 27, 2002.  Pursuant to Local
Rule 9006-2, the Debtors' Lease Decision Period is automatically
extended through the conclusion of that hearing. (Mariner
Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service,
Inc., 609/392-0900)  


MCCRORY CORP: Buxbaum/Century Resets Auction for March 12, 2002
---------------------------------------------------------------
The Buxbaum/Century affiliate of Buxbaum Group announced that it
has rescheduled to mid-March the auction and preview of McCrory
Corporation's distribution center and office equipment, rolling
stock and other assets.

Originally set for February 12, the auction is now scheduled to
begin at 10:00 a.m. on March 12 at McCrory's distribution
center, located at 2955 East Market Street in York. Items will
be auctioned from two rings simultaneously. Bidders can preview
the items being offered on March 11, from 8:00 a.m. to 5:00 p.m.

Assets being offered include highway tractors, dry van trailers,
warehouse and materials handling equipment, shop tools and
equipment, reach-in coolers, office furniture, computers, truck
parts, shopping carts and other items. Buyers can pay by Visa,
MasterCard, certified check, bank draft or cash, with all
payments due by noon on February 13.

For a detailed list of items being offered and other
information, visit http://www.centuryservices.com  

McCrory continues to market and sell its real estate and leases,
as well as other remaining assets.

As previously announced, Encino, California-based Buxbaum Group
was retained by McCrory Corp., to assist in the bankruptcy sale
of the company's merchandise inventories, store fixtures and
equipment, and the assets being offered in the February auction.
The privately held discount store operator filed for protection
under Chapter 11 of the Federal Bankruptcy Code on September 11,
2001, in the U.S. Bankruptcy Court in Wilmington. The bankruptcy
filing covered the York-based corporation and nine subsidiaries.

Going-out-of-business sales began at McCrory's 200 remaining
stores in early December. More than 190 of the stores operate
under the Dollar Zone name, with all items priced at $1 or less.
Other locations operate under the McCrory, McCrory Dollar, TG&Y,
TG&Y Dollar, GC Murphy and JJ Newberry banners. The latter group
includes units that had been converted to the 'dollar store'
format, as well as several larger locations that also included
higher-priced merchandise.

McCrory traces its roots to a company founded by John Graham
McCrorey, who opened his first store in Pennsylvania's
Westmoreland County around 1880. That single store grew into a
national chain that, at its peak, exceeded 1,300 units.

Buxbaum Group provides inventory appraisals, turnaround and
crisis management and other consulting services for banks and
other financial institutions with retail, wholesale/distribution
and consumer-product manufacturing clients. The firm also
provides liquidation services on consumer-product inventories,
machinery and equipment, and buys and sells consumer-product
inventories.


MCLEODUSA: Gets Approval to Maintain Cash Management System
-----------------------------------------------------------
McLeodUSA Inc. directly or indirectly holds the capital stock of
its Non-Debtor Affiliates.  Substantially all of the Debtor's
value is represented by the stock it holds in the Non-Debtor
Affiliates.

Randall Rings, the McLeodUSA Group Vice President, Secretary and
General Counsel, says the Company's cash management system,
maintained at Firstar Bank, has the Debtor holding substantially
all of the cash of the Non-Debtor Affiliates.  Receivables from
third parties to the Non-Debtor Affiliates are collected each
day in several lockbox depository accounts that are swept to
fund a Main Concentration Account.

In addition, Mr. Rings says, the Debtor issues checks, in its
name, funded out of the Main Concentration Account to pay the
obligations of the Non-Debtor Affiliates.  The Debtor tracks
outstanding checks, drafts, wires or ACH transfers issued from
the Cash Management System and identifies whether the checks,
drafts, wires or ACH transfers were issued on account of the
Debtor's obligations or the obligations of the Non-Debtor
Affiliates.

Mr. Ring says there was approximately $100,000,000 in the Cash
Management System at the Petition Date.

As of the Petition Date, the Debtor believes that approximately
5,000 checks, totaling $9,600,000, were outstanding.  Of these,
73 checks for $200,000 relate to obligations of the Debtor and
more than 4,900 checks, comprising the $9,400,000 balance,
relate to Non-Debtor Affiliates' obligations.  The Debtor is
unaware of any outstanding drafts, wires or ACH transfers.

Observing that the Non-Debtor Affiliates are operating entities,
and that if Non-Debtor Payment items were to be dishonored
because the Debtor's Cash Management System is suspended due the
filing of the Chapter 11 case, the Non-Debtor Affiliates will
suffer irreparable harm to their business operations and
reputations, Judge Katz grants the Debtor's Motion. (McLeodUSA
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service,
Inc., 609/392-0900)  


MCLEODUSA INC: Receives Court Approval of All First-Day Motions
---------------------------------------------------------------
McLeodUSA Incorporated, one of the nation's largest independent
competitive local exchange carriers, said that the United States
Bankruptcy Court for the District of Delaware approved orders
for all of the Company's first day motions on January 31, 2002.
The action follows Thursday's announcement by McLeodUSA that it
had filed a pre-negotiated plan of reorganization under Chapter
11 of the U.S. Bankruptcy Code.

As previously announced, the Chapter 11 filing includes only the
parent company, McLeodUSA Incorporated, and does not extend to
any of the operating subsidiaries, including McLeodUSA
Telecommunications, McLeodUSA Publishing, Illinois Consolidated
Telephone Company and McLeodUSA Purchasing LLC.

The first day orders allow the parent company to also conduct
business as usual relative to all of its customers, employees
and suppliers and to maintain its existing cash management
systems. These orders authorize payment of pre-petition employee
wages, salaries, business expenses and employee benefits;
interim use of cash collateral to pay suppliers for goods and
services and otherwise operate its business; as well as
continued payment of all of the claims of its unsecured
creditors, except its bondholders, in the ordinary course of its
business.

The Court also set February 28, 2002 as the date for the hearing
to approve the parent company's disclosure statement and April
5, 2002 as the date for the confirmation hearing for the parent
company's Plan of Reorganization. It is expected that the plan,
if approved, could be implemented in April 2002.

McLeodUSA has been informed by the advisors to the ad hoc
committee of the bondholders, that holders representing a total
of approximately $1.2 billion of bonds, or 40% of the
outstanding bonds, have expressed support for the reorganization
plan that was negotiated with the ad hoc committee last week.
Included in the $1.2 billion are bondholders representing
approximately $690 million, or 23%, who have signed lock-up or
support agreements to vote in favor of the transaction. In
addition, McLeodUSA has signed lock-up or support agreements for
a favorable vote from 45% of its preferred stockholders.

In other news, the Company announced that it has received
notification of early termination of the waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 for the
previously announced sale of McLeodUSA Publishing Company to
Yell Group.

McLeodUSA provides integrated communications services, including
local services, in 25 Midwest, Southwest, Northwest and Rocky
Mountain states through a facilities-based telecommunications
network. As of January 24, 2002, the Company had 31 ATM
switches, 59 voice switches, 485 collocations, 525 DSLAMs, and
over 31,000 route miles of fiber optic network. Visit the
Company's Web site at http://www.mcleodusa.com

DebtTraders reports that McLeodusa Inc.'s 11.375% bonds due 2009
(MCLD2) are trading between 24.5 and 25.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=MCLD2for  
real-time bond pricing.


METALS USA: Court OKs Extension of DIP Facility to Dec. 31, 2003
----------------------------------------------------------------
By its own terms, the DIP Facility of Metals USA, Inc., and its
debtor-affiliates matures on June 30, 2003. Subject to strict
compliance with all of the loan covenants and delivery of
business plans and budgets acceptable to the DIP Lenders, the
Debtors may elect to extend the DIP Facility for two three-month
periods, providing for access to DIP Financing through December
31, 2003.

In the final draft of the loan documents, the Debtors agree to a
handful of financial covenants with the DIP Lenders:

(A) The Debtors agree to limit sale-leaseback transactions to
    $20,000,000 in the aggregate;

(B) The Debtors agree to limit Capital Expenditures to what they
    tell the DIP Lenders about, in advance, in their [non-
    public Budget;

(C) The Debtors will not enter into any operating leases of any
    kind that would cause their annual rental obligations to
    exceed $45,000,000 in the aggregate;

(D) The Debtors covenant that they will maintain a Fixed Charge
    Ratio (defined as (x) the ratio of EBITDA to (y) the sum of
    (1) a $500,000 per-month reduction to the Equipment Sublimit
    plus (2) the cash amount of any Interest Expense plus (3)
    Net Capital Expenditures) of no less than:

                                              Minimum
          Measurement Date               Fixed Charge Ratio
          ----------------               ------------------
          March 31, 2002                    0.50 to 1.00
          April 30, 2002                    0.50 to 1.00
          May 31, 2002                      0.75 to 1.00
          On and after June 30, 2002        1.00 to 1.00

(E) The Debtors will maintain minimum levels of Availability
    under the DIP Facility:

                                          Required Minimum
          Fiscal Period Ending            Average Availability
          --------------------            --------------------
          January 31, 2002 and each month     $5,000,000
          end through May 31, 2002

          June 30, 2002                      $10,000,000

          July 31, 2002 and each month
          end through February 28, 2003      $15,000,000

          March 31, 2002 and each month
          end through the Maturity Date      $20,000,000

Judge Greendyke approves the Debtors' DIP Financing Motion in
all respects.  Judge Greendyke makes it clear in the Final DIP
Financing Order that nothing in that order affects the rights of
Precision Tube Technology and Usinor Steel Corporation to their
property located in the Debtors' premises. (Metals USA
Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


NATIONSRENT INC: Deere Credit Seeks Adequate Protection
-------------------------------------------------------
Deere Credit Inc., asks the Court to grant secured creditor
adequate protection or, in the alternative, relief from
automatic stay; compel NationsRent Inc., and its debtor-
affiliates to assume or reject leases; and for allowance of an
administrative claim.

According to Joel A. Waite, Esq., at Young Conaway Stargatt &
Taylor LLP in Wilmington, Delaware, Deere is both a secured
creditor of Debtors and a creditor based on a series of sales
and leases of approximately 1,450 different items construction
equipment manufactured by Deere. The Debtors' quarterly
obligations under the leases is approximately $5,200,000 and
also owe Deere approximately $70,000,000 pursuant to sales
contracts.

Mr. Waite relates that since the Petition Date, the Debtors have
continued to use the leased equipment in the ordinary course of
business, which entails renting the subject leased equipment to
third parties who pay the Debtors a fair and market rental
amount for their commercial use of the leased and sold
equipment. While the Debtors are being paid for rental of the
equipment, whose value is declining in the ordinary course of
the Debtors' business, Deere has not received any post-petition
debt payments or lease payments from the Debtors.

Mr. Waite tells the Court that given the significance of the
obligations and Debtors' continued use of the leased equipment,
the Debtors should be compelled to assume or reject the leases.
Otherwise, the Debtors continue to use and benefit from the
equipment without payment to Deere for such use.

Mr. Waite contends that Deere is also entitled to administrative
expense claim pursuant to Section 503(b) of the Bankruptcy Code
equal to the lease payments that are due and owing after the
commencement of these cases. As the Debtors have been using and
renting the leased equipment to others in the operation of their
businesses to generate income, the rent and other obligations to
Deere under the lease constitute actual and necessary expenses
of preserving the estate. (NationsRent Bankruptcy News, Issue
No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900)


ORIUS CORP: S&P Cuts Ratings to D Level Following Missed Payment
----------------------------------------------------------------
Standard & Poor's lowered its ratings on Orius Corp. At the same
time, Standard & Poor's removed the ratings from CreditWatch,
where they had been placed January 22, 2002.

At September 30, 2001, the company had about $331 million in
rated secured bank debt and $150 million in rated subordinated
debt outstanding.

The rating action follows the company's failure to make its
February 2, 2002, interest payment on its $150 million 12.75%
subordinated notes. The 'SD' corporate credit rating and double-
'C' secured bank loan rating will both be lowered to 'D' on
February 28, 2002, when the fifth amendment to the firm's
secured bank credit agreement expires, which will likely lead to
a default under that financial obligation.

Orius competes in the large and highly fragmented
telecommunications infrastructure service industry. For the past
several quarters, the industry has rapidly deteriorated, due to
a weak U.S. economy and the inability of many customers in the
telecommunications and cable markets to access the capital
markets, which has further constrained their capital spending
plans. Relative to other rated telecommunications infrastructure
providers; Orius has historically generated a higher percentage
of sales from project-specific agreements, making the company
more vulnerable to softening market conditions than other rated
peers. As a result, the company's operations and financial
performance have been severely impacted by the rapid decline of
new construction activity in the telecommunications
infrastructure sector during the past few quarters. For the
first nine months of 2002, revenues declined 23%, and EBIT
dropped by 95%.

           Ratings Lowered, Removed from CreditWatch

     Orius Corp.                     TO      FROM
       Corporate credit rating       SD      CC
       Subordinated debt             D       C


PACIFIC GAS: Taps Vantage Consulting to Make Independent Audit
--------------------------------------------------------------
Pacific Gas and Electric Company requests authority from the
Court to employ Vantage Consulting, Inc. to conduct an
independent audit to verify PG&E's compliance with the Affiliate
Transaction Rules adopted by the California Public Utilities
Commission (CPUC) for the period covering January 1, 2001
through December 31, 2001.

PG&E is required to be in compliance with the Affiliate
Transaction Rules adopted by the CPUC, which govern transactions
between PG&E and the other companies owned by PG&E Corporation,
PG&E's parent corporation. The Rules require PG&E to obtain an
independent audit of its compliance with the Rules. The
completed written audit must be filed with the CPUC by May 1,
2002.

PG&E has entered into a contract with Vantage dated December 10,
2001. Vantage is a management consulting firm with particular
expertise in the area of utility operating functions. Subject to
the Court's approval, the Contract provides for Vantage to
conduct the independent audit to verify PG&E's compliance with
the Affiliate Transaction Rules, with a draft report to be
submitted to PG&E by March 5, 2002, and a final audit and
written report to be submitted to PG&E by April 12, 2002. The
maximum fee under the Contract (including reimbursable expenses)
is $297,826, with hourly billing rates ranging from $225 (Senior
Consultant and Senior Accountant) to $275 (Project Director).

PG&E and Vantage acknowledge that all fees incurred and expenses
to be reimbursed shall be subject to final approval by the
Court, in accordance with Bankruptcy Code Section 330, the
Court's Guidelines for Compensation and Expense Reimbursement of
Professionals and any other applicable rules or orders, upon
filing of an appropriate application, after notice and a
hearing.

Given the short duration of the Contract and maximum fee
provided, PG&E requests authorization to pay Vantage its fees
and expenses on a monthly basis based on invoices received,
provided such fees and expenses do not collectively exceed the
maximum fee set forth in the Contract, without necessity of any
prior notice or Court order and provided that Vantage shall mail
copies of its invoices to the United States Trustee concurrently
with its transmittal of such invoices to PG&E, and any fees and
expenses paid to Vantage shall remain subject to approval by a
Final Fee Order.

PG&E notes that Vantage may have performed services in the past
for creditors of PG&E, such as audits conducted for creditor
Sempra Energy in 1998 and 1999, but PG&E is informed and
believes, based on the statements set forth in the Declaration
by Drabinski, that Vantage is not currently performing any
services for any Interested Party. PG&E is informed and believes
that Vantage has no connection with PG&E, PG&E's creditors,
shareholders or any other parties in interest, or their
respective attorneys and accountants. In addition, to the best
of PG&E's knowledge, Vantage has no connection with the United
States Trustee or any person employed in the office of the
United States Trustee. PG&E believes that Vantage does not hold
or represent any interests adverse to the estate and is a
disinterested person under Section 101(14) of the Bankruptcy
Code.

Pursuant to Section 327(a) of the Bankruptcy Code and Rule
2014(a) of the Federal Rules of Bankruptcy Procedure, PG&E
requests that it be authorized to employ Vantage, effective as
of December 10, 2001. (Pacific Gas Bankruptcy News, Issue No.
21; Bankruptcy Creditors' Service, Inc., 609/392-0900)   


PARTYCO CITY: Court Appoints Canadian Receiver at Bank's Request
----------------------------------------------------------------
Partyco Holdings Ltd. (CDNX: PHL) announced that its wholly
owned subsidiary, Party City Ltd. was placed into the hands of a
court-appointed receiver and manager at the request of the
company's bank.

Party City Ltd. had been attempting to restructure while
operating under the protection of the Companies' Creditors
Arrangement Act (the CCAA). Each of the subsidiaries of Party
City Ltd. is also subject to the receivership order.

Partyco Holdings Ltd. was not part of the CCAA proceeding and is
not subject to the receivership.

Prior to the CCAA filing and subsequent to the CCAA filing, the
company received conditional offers from a third party to
purchase the company. Unfortunately, it was not possible to
complete the transaction during the CCAA period. That third
party has continued to express interest in purchasing the assets
of the company and in keeping all 28 stores open.


PENTASTAR: Expects $5.5MM Savings from Downsizing Initiatives
-------------------------------------------------------------
PentaStar Communications, Inc. (Nasdaq: PNTA), the nation's
largest communications services agent, said it has renewed its
significant carrier relationships for 2002.  As previously
announced, PentaStar will no longer sell Verizon services
beginning in March 2002.  Also, as of February 28, 2002,
PentaStar will no longer market the network services of Bell
South. Revenues from Bell South services represent less than 3%
of PentaStar's total revenues.

As an authorized distributor for many of the country's largest
carriers, PentaStar will continue to sell network services in
the areas of voice, data, video and Internet and continue to
provide its customers with integrated communications solutions
for their business.  PentaStar's ability to provide an
integrated solution for its customers on both a local and multi-
regional basis will help the Company continue to differentiate
itself in the marketplace.

As part of an overall market-wide assessment and company-wide
restructuring effort initiated last fall, PentaStar has closed
certain non-productive offices and reduced its employee base by
more than 100 people across the country.  PentaStar has worked
to reduce its overhead costs and has focused its resources on
core, value-added network services.  PentaStar expects to
realize annualized cost savings in excess $5.5 million, as a
result of this program.  The Company will continue to assess
productivity as it reviews revenue and expense forecasts for
2002 with a goal of positive cash flow for the year.

As part of the restructuring noted above, and PentaStar's on-
going effort to attract, retain and motivate key employees,
PentaStar has initiated a plan whereby employees who currently
participate in the Company's Incentive Stock Option Plan have
the opportunity to reset the strike price of their stock options
at $4.05 per share.  Employees electing to participate in the
re-pricing will start a new vesting period.

PentaStar has strategic agency relationships with Ameritech,
Qwest, SBC and Pac Bell, and other national telecommunications
service providers including AT&T, Cable & Wireless, WorldCom and
XO Communications.

PentaStar designs, procures and facilitates the installation and
use of communications services solutions that best meet
customers' specific requirements and budgets.  PentaStar was
formed in March 1999 to become a national communications
services agent and specializes in being the single source
provider of total communications solutions for its business
customers. PentaStar's common stock is traded on the Nasdaq
National Market under the ticker symbol PNTA.  At September 30,
2001, the company reported a working capital deficiency of about
$2 million. For more complete information about PentaStar,
contact PentaStar Communications, Inc., 1660 Wynkoop St.,
Denver, Colorado 80202, (303) 825-4400, visit the Company's Web
site at http://www.pentastarcom.comor send an email to  
info@pentastarcom.com.


POLAROID CORP: Court Okays Arthur Andersen as Tax Advisors
----------------------------------------------------------
Judge Walsh grants the application of Polaroid Corporation
and its debtor-affiliates to employ Arthur Andersen as Tax
Advisor and the Court modifies the Agreement to eliminate all
indemnification provisions.

The Debtors expect Arthur Andersen to:

      (a) review the audit work papers and final audit
          determination report;

      (b) research statutes sections, regulations, and court
          cases relating to underpayment issues;

      (c) begin the examination of all transactions to identify
          erroneous payments;

      (d) prepare portions of the documentation to be presented
          to the Department of Revenue regarding the audit
          defense;

      (e) accomplish the research and documentation for the
          audit and defense;

      (f) file a brief with the Department of Revenue, and
          represent the Debtors at the administrative hearing
          and in settlement discussions with the Department of
          Revenue;

      (g) for tax recovery services, the Debtors require Arthur
          Andersen to complete their review of transactions that
          occurred between July 1991 and December 1996 to
          identify erroneous payments, and find documentation to
          substantiate overpayments.

As recalled in the Motion filed by the Debtors, Arthur Andersen
did a preliminary analysis, they came up with a reasonable
expectation that the Debtors will recover at least 50% of the
amount in dispute through a combination of reductions in the
audit assessment and refunds of amount determined to be
overpaid.

For Andersen's audit defense and tax recovery services, the firm
will be compensated a success fee of 25% of the total benefit
received by the Debtors - which includes refund of sales and use
taxes, audit adjustments made by taxing authorities, and any
related interest or penalty reductions.  Since the Debtors and
Arthur Andersen have a contingency fee agreement, Mr. Galardi
explains, the fee payments will be due and payable only once the
Debtors claim is accepted and paid out by an auditor or local
tax official.

According to Karl A. Frieden, a partner of the Arthur Andersen
firm, Andersen is not a creditor, equity security holder, or an
insider of the Debtor, and does not represent any interest
adverse to the Debtor or their estates, except for cases
wherein:

     (i) Andersen has provided tax advisory and preparation
         services to the Debtor prior to the filing of Debtor's
         bankruptcy cases;

    (ii) if Andersen is retained, they will continue to provide
         the Debtor with the audit defense and tax recovery
         services;

   (iii) Andersen has performed professional services for
         certain secured lenders including Fleet National Bank,
         Morgan Guarantee Trust Company of New York, ABN Amro
         Bank N.V., Transamerica Business Credit Corporation,
         Foothill Capital, Deutsche Bank AG, Mellon Bank,
         Wachovia Bank, N.A., The Sumitomo Bank, Limited,
         Textron Financial Corporation, PNC Bank, and Erste
         Bank.  However, its services to these parties were not
         for the purpose of assisting such parties in respect of
         the Debtors bankruptcy, thus, do not create a conflict
         of interest;

    (iv) Andersen has performed professional services for
         certain of the underwriters and premium finance
         providers, including ABN Amro incorporated, ABN Amro
         Chicago Corporation, Credit Lyonnais Securities, Ins.,
         Deutsche Bank Securities, Inc., First Chicago Capital
         Markets, Inc., J.P. Morgan Securities, Inc., and Lehman
         Brothers, Inc. Andersen's services to these parties
         were not for the purpose of assisting such parties in
         respect of the Debtors bankruptcy and do not create a
         conflict of interest;

     (v) Andersen has performed professional services for the
         Debtors' bond trustee, State Street Bank and Trust
         Company. Andersen's services to this party was not for
         the purpose of assisting such party in respect of the
         Debtors bankruptcy and does not create a conflict of
         interest;

    (vi) Andersen has performed professional services to certain
         professionals who may have (and in many cases have)
         provided services to the Debtor, including Merrill
         Lynch & Co., Dresdner Kleinwort Wasserstein, and KPMG
         Beat Marwick LLP.  Andersen's services to these parties
         were not for the purpose of assisting such parties in
         respect of the Debtors bankruptcy and do not create a
         conflict of interest;

   (vii) Andersen has performed professional services for
         certain of the top 50 unsecured creditors, including
         State Street Bank and Trust Company, Enron Energy
         Services, Dupont Teijin Films US LP, Leo Burnett
         Company, Inc., Rock-Tenn Co., Inc., Concord Camera HIC
         Limited, Xirlink Inc., Eastman Kodak Co., Fuji Photo
         Film Co. Ltd., McKinsey & Company, Inc., Siemens
         Business Services, Inc., 8F7t Entertainment,
         Information Resources, Inc., Porter/Novelli, Inc,
         Safety-Kleen, PPO Industries, Inc.,
         Sigma Systems, Inc., and Westvaco Corp. Andersen's
         services to these parties were not for the purpose of
         assisting these parties in respect of the Debtors
         bankruptcy and do not create a conflict of interest.

(viii) Andersen, and/or other practice entities of the Andersen
        Worldwide organization, are and may continue to be
        involved as a party or witness in court and
        administrative proceedings and other matters requiring
        the retention of legal counsel. Legal counsel retained
        by Andersen, or by the other practice entities of the
        Andersen Worldwide Organization, in respect of matters
        unrelated to the Debtor's bankruptcy, may also now or in
        the future represent parties in interest in the Debtors
        bankruptcy.   Mr. Frieden is not aware of any of the
        legal counsel identified to Andersen, including Skadden,
        Arps, Slate, Meagher & Flom LLP, Bingham Dana LLP, and
        Simpson Thacher & Bartlett have been retained by
        Andersen or by the other practice entities of the
        Andersen Worldwide Organization.

Thus, Mr. Frieden asserts that Arthur Andersen is a
"disinterested person" as defined in section 101(14) of the
Bankruptcy Code. (Polaroid Bankruptcy News, Issue No. 10;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


PRIME RETAIL: Amends Terms of $49.4 Million Mezzanine Loan
----------------------------------------------------------
Prime Retail, Inc., (OTC Bulletin Board: PMRE, PMREP, PMREO)
announced a modification to the original terms of a $90.0
million mezzanine loan previously obtained from Fortress
Investment Fund LLC and Greenwich Capital Financial Products,
Inc., in December 2000.  The outstanding principal balance of
the Mezzanine Loan at the time of the modification was $49.4
million.

The Mezzanine Loan amendment, among other things,

     (i) reduces required monthly principal amortization for the
period February 1, 2002 through January 1, 2003 from $1.7
million to $0.8 million, which may be further reduced to a
minimum of $0.5 million per month under certain limited
circumstances, provided no defaults exist under the Mezzanine
Loan and certain other conditions have been satisfied at the
Lender's sole discretion,

    (ii) requires certain mandatory principal prepayments from
net proceeds from asset dispositions or other capital
transactions pursuant to the schedule set forth below and

   (iii) reduces the threshold level at which excess cash flow
from operations must be applied to principal pay-downs,
primarily resulting from a reduction in the available working
capital reserves.

Additionally, the Amendment (x) increased the interest rate from
LIBOR plus 9.50% to LIBOR plus 9.75% (rounded up to nearest
0.125% with a minimum rate of 14.75%), (y) changed the Mezzanine
Loan maturity date from December 31, 2003 to September 30, 2003
and (z) required a 0.25% fee, which was paid at the time of the
modification, on the outstanding principal balance.

The Amendment also requires additional Year 2 monthly payments
of $250,000 into an escrow account controlled by the Lender.
Provided certain conditions are satisfied in the Lender's sole
discretion, the Escrowed Funds may be available to the Company
for certain limited purposes. The Escrowed Funds not used at the
end of each quarter, subject to certain exceptions, will be
applied by the Lender to amortize the Mezzanine Loan.  The
required monthly principal amortization of $2.3 million
commencing on February 1, 2003, through the new maturity date of
September 30, 2003, remains unchanged.

The Amendment also requires, in lieu of the original
requirements, additional mandatory principal prepayments with
net proceeds from asset dispositions or other capital
transactions of not less than (i) $8.9 million by May 1, 2002,
(ii) $24.4 million, inclusive of the $8.9 million, by July 1,
2002 (subject to extension to October 31, 2002 provided certain
conditions are met to the Lender's satisfaction) and (iii) $25.4
million, inclusive of the $24.4 million, by November 1, 2002.  
In addition to each principal prepayment, the Company must also
pay any interest, including deferred interest, accrued thereon
and the additional fees provided for in the Mezzanine Loan.  Any
failure to satisfy these mandatory principal prepayments or
other payments within the specified time periods indicated will
constitute a default under the Mezzanine Loan.

Prime Retail is a self-administered, self-managed real estate
investment trust engaged in the ownership, development,
construction, acquisition, leasing, marketing and management of
outlet centers throughout the United States and Puerto Rico.  
Prime Retail's outlet center portfolio currently consists of 44
outlet centers in 25 states and Puerto Rico totaling
approximately 12.4 million square feet of GLA.  The Company also
owns two community shopping centers totaling 227,000 square feet
of GLA and 154,000 square feet of office space.  Prime Retail
has been an owner, operator and a developer of outlet centers
since 1988.  

The Company's liquidity depends on cash provided by operations,
funds obtained through borrowings, particularly refinancings of
existing debt, and cash generated through asset sales.  The
Company believes that estimated cash flows from operations and
current financial resources may be insufficient to repay
scheduled principal obligations in 2002 and fund operating
activities. Accordingly, the Company is in the process of (i)
seeking to generate additional liquidity through new financings
and the sale of assets, (ii) negotiating with existing lenders
to defer a portion of the principal payments due during the next
year and (iii) reducing its cost of operations.  There can be no
assurance that the Company will be able to secure additional
sources of liquidity or reach satisfactory resolution with its
lenders.  Should the Company be unable to secure additional
sources of liquidity or reach satisfactory resolution with its
lenders, there would be substantial risk as to whether the
Company would be able to continue during 2002 as a going
concern.

For additional information, visit Prime Retail's Web site at
http://www.primeretail.com


PRIMIX SOLUTIONS: Special Shareholders' Meeting Set for Tomorrow
----------------------------------------------------------------
A special meeting of Stockholders of Primix Solutions Inc., will
be held on February 8, 2002, 9:00 a.m. eastern time, at the
offices of McDermott, Will & Emery 28 State Street, Boston, MA
02109 for the purpose of considering and voting upon:

    1.  Approval of the sale of the company's North American
consulting business to Burntsand (New England) Inc., a Delaware
corporation and indirect wholly-owned subsidiary of Burntsand
Inc., a Canadian corporation, pursuant to an asset purchase
agreement, dated November 14, 2001, between Primix and
Burntsand; and

    2.  Such other business as may properly come before the
special meeting and adjournments or postponements thereof.

The Board of Directors has fixed the close of business on
January 3, 2002 as the record date for the determination of
stockholders entitled to notice of, and to vote at, the special
meeting and any adjournments or postponements thereof. Only
holders of Primix common stock of record at the close of
business on January 3, 2002 will be entitled to notice of, and
to vote at, the special meeting and any adjournments or
postponements thereof.

In the event there are not sufficient shares to be voted in
favor of any of the foregoing proposals at the time of the
special meeting, the special meeting may be adjourned in order
to permit further solicitation of proxies.

Primix Solutions is primed to deliver a heady mix of electronic
business services. Formerly a software developer, Primix derives
all of its sales from Internet consulting, systems integration,
and Web development services. Its QuickStart Portal builds an e-
business storefront that links a client's sales, supply chain,
and customer service operations over the Web. Its e-Catalyst
consulting service targets Internet startups, delivering
consulting expertise and operations support (offices and
equipment). Primix is using acquisitions to elbow its way into
the competitive Internet consulting arena. Chairman and co-CEO
Lennart Mengwall owns 27% of the company; co-CEO Kevin Azzouz
owns 24%. At September 30, 2001, the company reported a working
capital deficiency of about $6 million.


SAFETY-KLEEN CORP: Exclusive Period Extension Hearing on Monday
---------------------------------------------------------------
Safety-Kleen Corp. and its subsidiaries and affiliates ask Judge
Peter Walsh to enter an order further extending their exclusive
periods during which they may file a plan of reorganization and
solicit acceptances of that plan.  The Debtors ask that their
Exclusive Plan Proposal Period be extended through and including
April 30, 2002, and that their Exclusive Solicitation Period run
through June 30, 2002.

The Exclusive Periods, Gregg M. Galardi, Esq., at Skadden, Arps,
Slate, Meagher & Flom LLP, argues, are intended to afford
chapter 11 debtors a full and fair opportunity to rehabilitate
their business and to negotiate and propose a reorganization
plan -- without the deterioration and disruption of their
business that might be caused by the filing of competing
reorganization plans by non-debtor parties.

Given the size and complexity of their cases, and in light of
certain recent developments, the Debtors need additional time to
determine the most effective way to maximize the value of their
estates for the benefit of all creditors; to formulate,
negotiate and file a plan that achieves this goal; and to
solicit acceptances of that plan.

Mr. Galardi reminds Judge Walsh that on or about July 9, 2001,
the Debtors filed with the Securities and Exchange Commission
their Form 10-K/A, Amendment No. 1 for the fiscal year ended
August 31, 2000. The 10-K/A included, among other things, the
Debtors' restated financial results for fiscal years 1997, 1998,
and 1999, as well as audited financial results for fiscal year
2000.

As the Court is aware, the Debtors' restatement and audit of
four years' financial results consumed hundreds of thousands of
man-hours and, despite the tireless efforts of all parties
involved, took many months longer to complete than the Debtors
or anyone else possibly could have anticipated. As a result, the
Debtors' preferred timetable for completion of their business
plan and formulation and negotiation of a reorganization plan
necessarily was similarly delayed.

In addition, on September 5, 2001, the Court entered an order
approving the employment of Mr. Ronald A. Rittenmeyer as
Chairman of the Board, Chief Executive Officer and President of
SKC. Since taking the helm at SKC, Mr. Rittenmeyer has worked
ceaselessly to address the many financial, operational and
strategic hurdles facing the Debtors as they seek to reorganize.
As a result of these efforts, the Debtors have developed and
implemented a variety of strategies that could not have been
formulated or finalized prior to completion of the restatement
effort and Mr. Rittenmeyer's appointment.

In short, a further extension of the Exclusive Periods will
afford the Debtors a chance to see these efforts to fruition and
to formulate and propose a plan that maximizes the value of the
estates for the benefit of all creditors.

                Restatement Of Financial Results

The most significant hurdle faced by the Debtors in seeking to
finalize their going forward business plan -- and formulate and
negotiate a reorganization plan -- was completion of the
restatement of the Debtors' financial results for fiscal years
1997, 1998, and 1999 and complete the audit of their results for
fiscal year 2000. that hurdle has been cleared.

                   Retention Of Mr. Rittenmeyer
                 And Efforts Under His Leadership

In September 2001, Mr. Rittenmeyer assumed his current duties as
Chairman of the Board, President, and Chief Executive Officer of
SKC. As would be the case with any change in senior management,
Mr. Rittenmeyer required a transition period to further
familiarize himself with the Debtors, their businesses, their
operations, and their personnel before tackling the daunting
task of formulating and negotiating the Debtors' reorganization
plan.

Notwithstanding the numerous complex financial and operational
issues they face, the Debtors, under Mr. Rittenmeyer's
stewardship, have been working to finalize the business plan
that will form the basis of a reorganization plan. The precise
scope and substance of any such reorganization plan, however,
will depend upon the ultimate outcome of several complex issues
that the Debtors are diligently working to resolve, including,
among others:

       (a) structuring and negotiating the potential divestiture
of certain of the Debtors' significant assets and businesses;

       (b) revamping the Debtors' operational structure -- in
accordance with the recommendations of certain of the Debtors'
consultants and advisors -- to maximize efficiencies on a going
forward basis;

       (c) resolving the multi-billion dollar claims that
Laidlaw, Inc., and its affiliates, on the one hand, and the
Debtors, on the other, have asserted against each another, and
with respect to which the Debtors and Laidlaw, and the
Bankruptcy Courts overseeing their respective chapter 11 cases,
have developed and implemented a mediation protocol pursuant to
which the parties anticipate a mediation of their disputes
during the month of April 2002;

       (d) pending litigations against PricewaterhouseCoopers
LLP, PricewaterhouseCoopers LLP (Canada), National Union Fire
Insurance Company of Pittsburgh, PA and American Home Assurance
Company; and

       (e) the disallowance, reduction, or other resolution of
various substantial prepetition and/or administrative claims
asserted against one or more of the Debtors, all of which could
impact the feasibility of any reorganization plan for the
Debtors.

The Debtors believe that the resolution of one or more of the
foregoing issues will clear the way for them to turn their full
attention to the formulation and confirmation of a
reorganization plan. The Debtors thus request that the Court
grant them a three-month extension of the Exclusive Periods to
facilitate such resolution.

             The Debtors' Cases are Large and Complex

The size and complexity of the Debtors' chapter 11 cases alone
constitutes sufficient cause to further extend the Exclusive
Periods. The Debtors collectively are the largest hazardous and
industrial waste services company in North America, employing
approximately 9,000 people and serving more than 400,000
customers through a network of almost 300 operating facilities.
Given the sheer size of the Debtors' cases and the "concomitant
difficulty" in finalizing their business plan and formulating a
reorganization plan, cause exists to further extend the
Exclusive Periods.

The Debtors' cases are not only large, but complex. As the Court
is aware, the Debtors are the product of numerous acquisitions
and other business combinations -- some of which were never
completely assimilated prior to the filing of these cases. The
success of the Debtors' reorganization thus involves, among
other things, completion of the assimilation of various diverse
entities and systems and/or divestiture of those operations that
do not, and will not, provide a strategic fit for the Debtors in
the future.

The Debtors' ability to finalize a business plan to implement
these goals necessarily was dependent upon completion of the
Debtor's restatement efforts. Although the restatement is
complete, the Debtors still require additional time to finalize
their business plan and formulate a plan of reorganization.

In light of the sheer size and complexity of these cases, the
Debtors' request for a further three-month extension of the
Exclusive Periods is extremely modest -- and is either similar
to or only a fraction of the extensions granted in other large
reorganization cases.

           The Debtors Have Made Significant Progress
            In Resolving Issues Facing Their Estates

Despite their size and complexity, the Debtors have made
tremendous progress in these cases. Indeed, the Debtors have
taken great strides toward resolving the many difficult, and at
times contentious, issues that necessarily must be addressed
during these chapter 11 cases.

(i) Postpetition Obligations

A primary example of the Debtors' success in stabilizing their
businesses is their continued ability to satisfy all
postpetition obligations without the need for cash borrowings
under their $100 million debtor-in-possession financing
facility.  To date, the Debtors' ongoing operations have
generated sufficient working capital for them to meet
postpetition obligations.

Indeed, the Debtors have been, and continue to be, able to pay
all postpetition obligations in the ordinary course as they
become due -- a fact that militates heavily in favor of a
further extension of the Exclusive Periods.

(ii) Providing Compliant Financial Assurances

As the owner/operators of hazardous waste facilities, the
Debtors are subject to various financial assurance requirements
established by federal and state environmental statutes and
regulations. As discussed below, one of the most difficult tasks
the Debtors have faced in these cases has been meeting their
continuing obligation, and ability, to provide Compliant
Financial Assurance.

Prior to the Petition Date, the Debtors maintained Compliant
Financial Assurance by purchasing insurance products and/or
surety bonds from, among others, Reliance Insurance Company of
Illinois and Frontier Insurance Company. As previously reported
to the Court, however, the financial setbacks suffered by
Reliance and Frontier severely jeopardized the Debtors' ability
to continue to provide Compliant Financial Assurance.

As a result of Reliance's and Frontier's financial difficulties,
the Debtors found themselves in the difficult position of having
to try to replace approximately $400 million in "troubled"
Compliant Financial Assurance (i.e., the Reliance and Frontier
financial assurances) with new coverage, while still operating
as debtors-in-possession. Nevertheless, by November 20, 2001,
the Debtors had replaced or had Court approval to replace their
financial assurance coverage -- at all but two active facilities
and approximately 18 inactive facilities -- with new coverage
provided by Indian Harbor Insurance Company, an A.M. Best A+
(Superior) rated underwriter, and/or its affiliates. The
Debtors' continued progress in this regard reinforces the
appropriateness of a further extension of the Exclusive Periods.

(iii) Streamlining Operations

The Debtors have never wavered during these cases from their
commitment to streamline operations and divest themselves of
non-core assets. Toward that end, the Debtors have continued to
close under-performing or non-core operations and have sold, or
are in the process of selling, numerous underutilized or
unprofitable real properties and  countless items of surplus
and/or obsolete machinery and equipment. Further, in recent
months, the Debtors have downsized -- to a very limited extent -
- their employee base to more precisely match current and future
operational needs. The Debtors also have continued to seek to
enhance profitability by shedding burdensome real and personal
property leases and executory contracts.

(iv) Claims Reconciliation And Resolution

On August 11, 2000, this Court established a bar date of October
31, 2000, for the filing of general prepetition claims and a bar
date of December 8, 2000, for governmental units to file
prepetition claims against the Debtors. To date, over 17,000
claims, aggregating in excess of $176 billion, have been filed
against the Debtors' estates.

Although certainly not complete, the Debtors' claims
reconciliation and resolution process is well underway. Indeed,
the Debtors have made great progress in analyzing the validity,
nature and amount of thousands and thousands of claims, and are
well into the claims objection process, having prepared and
filed seven omnibus claims objections to date.  The Debtors
currently are in the process of formulating additional claims
objection to be filed in the near future.

In addition, the Debtors have objected to requests for payment
of more than $100 million in administrative expense claims filed
by the South Carolina Department of Health and Environmental
Control and others.

The Debtors also have objected to the single largest claim
asserted against them (i.e., the claim of Laidlaw, Inc. and its
affiliates, which asserts claims of more than $6.5 billion) and
have commenced discovery of the facts alleged to underlie the
Laidlaw claim. Further, the Debtors and Laidlaw have entered
into a mediation protocol aimed at resolving this claim on an
relatively expedited basis.

Substantial progress in the claims analysis process, a necessary
predicate to determining the appropriate treatment of each class
of claims under a plan, has consumed -- and will continue to
consume -- significant time and energy. So, too, will preparing
the many claims objections that will need to be filed in these
cases. Accordingly, the requested extension of the Exclusive
Periods is both warranted and necessary.

(v) Commencement Of Actions Against Third Parties

On October 4, 2001, the Debtors, among others, filed an action
in the Circuit Court of South Carolina, Richland County, against
the Debtors' former auditors, PricewaterhouseCoopers LLP and
PricewaterhouseCoopers LLP (Canada), Civil No. 3:01-4247-17. The
PWC Action alleges, among other things, that the defendants were
negligent and reckless in failing to (a) comply with applicable
industry and professional standards in their review and audit of
the Debtors' financial statements and (b) detect and/or report
material misstatements in those financial statements. The
complaint further alleges causes of action for breach of
contract accompanied by a fraudulent act, professional
negligence, negligent misrepresentation, violations of the South
Carolina Unfair Trade Practices Act, and a declaratory judgment
for indemnification on behalf of certain plaintiff directors of
SKC, and seeks in excess of $1.0 billion from the defendants.
Any recovery in the PwC Action will inure to the benefit of the
Debtors' creditors.

In addition, on November 13, 2001, the Debtors, among others,
filed an action in the Circuit Court of South Carolina, Richland
County, against National Union Fire Insurance Company of
Pittsburgh, PA and American Home Assurance Company, Civil No.
01CP404813. The Insurance Action alleges causes of action for
declaratory judgment and breach of contract, in that the
defendants wrongfully denied coverage under various directors'
and officers' insurance policies for losses incurred in
connection with various securities actions in which certain of
SKC's current and former officers and directors are defendants.
The complaint seeks insurance coverage for the plaintiffs, both
for costs associated with defending the securities actions and
for any liability that the plaintiffs may ultimately incur.

The Debtors have achieved -- and continue to achieve -- great
successes in responding to and meeting the numerous and complex
demands of these cases and have worked tirelessly to advance the
reorganization process. Nevertheless, there remain financial,
operational, and administrative hurdles that the Debtors must
clear prior to proposing a plan.  For this reason, the Debtors'
request for a further extension of the Exclusive Periods should
be granted.

           A Further Extension of the Exclusive Periods
            Will Facilitate the Debtors' Reorganization
           And Will Not Prejudice Any Party In Interest

Most important perhaps, the Court should consider whether the
Debtors have had a reasonable opportunity to (a) negotiate an
acceptable plan with their creditor constituencies and other
interested parties and (b) prepare adequate financial and non-
financial information concerning the ramifications of that plan
for disclosure to creditors.

An additional three month extension of the Exclusive Periods is
entirely justified in the Debtors' cases because, among other
things:

       (a) Certain recent developments will have a significant
and positive impact on the plan formulation process; thus the
Debtors should be afforded the opportunity to reap the benefits
of those developments;

       (b) The Debtors' cases are large and complex;

       (c) The Debtors have made significant progress in
resolving the many complex issues facing their estates; and

       (d) Extension of the Exclusive Periods will facilitate
reorganization of the Debtors and not prejudice any party in
interest.

Since the Petition Date, the Debtors have labored endlessly to
work with and assure their vendors and customers, among others,
that the Debtors fully intend to meet their ongoing business
commitments during these cases. Similarly, the Debtors have gone
to great lengths to cooperate with their various creditor
constituencies to seek and implement various means to maximize
the value of the estates for the benefit of all creditors. A
further extension of the Exclusive Periods will facilitate these
efforts by affording the Debtors the time needed to formulate a
plan that fairly and efficiently treats the claims of the
estates' creditors and provides for the greatest possible
distributions of value on account of such claims. In contrast,
termination of the Exclusive Periods and the resulting
uncertainty undoubtedly would result in lesser values available
for distribution to creditors.

Finally, the requested extension of the Exclusive Periods will
not prejudice the interests of any creditor; the Debtors have
timely met, and continue to timely meet, their postpetition
obligations in these cases.  This fact alone militates in favor
of granting the Debtors' requested extension of the Exclusive
Periods.  The Debtors submit that the relief requested in this
Motion is in the best interests of the Debtors, their estates,
their creditors and other parties in interest.

Judge Walsh will convene a hearing on this Motion on February
11. Accordingly, by application of Local Rule 9006-2, the
Debtors' exclusive period is automatically extended through the
conclusion of that hearing. (Safety-Kleen Bankruptcy News, Issue
No. 26; Bankruptcy Creditors' Service, Inc., 609/392-0900)    


SIX FLAGS: S&P Rates New $480 Million Senior Notes due 2010 at B
----------------------------------------------------------------
Standard & Poor's assigned its single-'B' rating to Six Flags
Inc.'s $480 million senior notes due 2010. Proceeds from the
offering will be used to refinance its $280 million 9-1/4%
senior notes due 2006 and the $170 million 8% 7/8% senior notes
due 2006 of its Six Flags Operations Inc. subsidiary.

The ratings on Six Flags Inc. (BB-/Stable/--) reflect the
company's increasing geographic and cash flow diversity,
relatively stable operating performance, and Standard & Poor's
expectation that interest coverage will improve modestly despite
management's active acquisition orientation.

Six Flags operates a geographically diverse portfolio of 37
theme parks, primarily located in the U.S., but also in Europe.
Broad geographic diversity helps protect cash flow from
unfavorable weather, accidents, and other local factors that can
negatively affect the performance of a park. The parks are
generally the largest and most extensive in their regions, and
benefit from significant barriers to entry.

Management has successfully pursued a strategy of acquiring
underperforming parks and improving their profitability through
aggressive capital spending on new rides and attractions, as
well as enhanced marketing. EBITDA growth of the Six Flags theme
park chain (acquired in 1998) has been substantial due to new
marketing strategies and cost reductions. The use of the Six
Flags brand and the application of the Warner Bros. Looney Tunes
and D.C. Comics animated characters in the company's parks,
under a long-term, exclusive licensing agreement, has supported
rising attendance levels and increasing in-park spending through
2000. However, EBITDA for the full year 2001 is expected to
remain roughly flat due to the weak economy and reduced
off-peak season performance following September 11.

Financial risk is relatively high. Pro forma adjusted EBITDA
coverage of total interest and debt-like preferred dividends is
adequate for the rating at about 1.7 times for the last 12
months ended September 30, 2001. Discretionary cash flow was
negative from 1998 through 2000 because of an aggressive capital
expenditure program for re-branding ten of the acquired parks,
many which lacked sustained investment over the past several
years.

Nevertheless, discretionary cash flow was positive in 2001 as a
result of reduced capital spending requirements because nearly
all of the company's largest parks have already been re-branded.

                       Outlook: Stable

The outlook reflects the expectation that operating performance
will remain relatively stable in 2002 as a result of the shift
in consumer's preferences for close-to-home entertainment
alternatives.


SUN HEALTHCARE: Selling 2 NM Buildings to Goodman Inv. for $15MM
----------------------------------------------------------------
Sun Healthcare Group, Inc., and its debtor-affiliates sought and
obtained Judge Walrath's permission to assign and sell, free and
clear of liens, claims and encumbrances, all of the Debtors'
right, title and interest in and to:

  (i) a leasehold interest in two office buildings, a parking
      structure, and an adjoining expansion parking site on
      which a third building is located (the Property), leased
      by the Debtors from the City of Albuquerque, New Mexico in
      connection with the City's issuance of its Taxable
      Industrial Revenue Bond, Series 1997;

(ii) certain property financed in connection with the issuance
      of the City Industrial Revenue Bond; and

(iii) the Debtors' interest in Bond No. R-1 issued by the City
      under the City Industrial Revenue Bond to the Purchaser,
      Goodman Investment Co., Inc. and to the Transferee, which
      is a subsidiary of the Purchaser.

The Debtors entered into the Lease and Purchase Agreement with
the City of Albuquerque in conjunction with the issuance of the
City Industrial Revenue Bond. The proceeds of the Bond were used
to finance the acquisition, construction, and equipping of the
Property.

Under the Bond, the Debtors conveyed the title of the Property
to the City and the City leased back the Property to the
Debtors. This is to exempt the Property from New Mexico real and
personal property taxes and from New Mexico Gross Receipts and
Use taxes on certain property financed with the proceeds of the
Bond.

With the extensive marketing efforts of the Debtors' real estate
broker, Cushman & Wakefield of Texas, Inc., Debtors were able to
finalize the sale with its highest bidder, Goodman Investment
Co., Inc.  Both parties are due to execute:

    (a) a contract of sale; and

    (b) an assignment of rights and Bond Agreement;

In the Contract and Assignment Agreement, Debtors will:

    (a) assign all its rights, title and interest in and to the
        Property under the City Lease to the Purchaser and
        Transferee for a price of $15,250,000;

    (b) assign to the Purchaser and the Transferee the Debtors'
        interest in and to the City Lease, the Bond Purchase
        Agreement, the Bond and related security interests and
        rights; and

    (c) sublease the San Francisco Building and the Savage
        Building from the Purchaser, effective as of the closing
        of the transaction. (Sun Healthcare Bankruptcy News,
        Issue No. 31; Bankruptcy Creditors' Service, Inc.,
        609/392-0900)   


TELIGENT INC: Court Extends Exclusivity and Removal Periods
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
approves Teligent, Inc. and its Debtor-Affiliates' motion to
extend their exclusive period to file a plan and the Company's
time within which to file notices of removal of prepetition
lawsuits.  The Court orders that:

     * the Debtors' exclusive period to file a plan or plans of
       reorganization be extended through February 15, 2002;

     * the Debtors' exclusive period to solicit acceptances of
       that plan is extended through April 15, 2002; and

     * the Debtors' time period within which they must file
       notices of removal of prepetition lawsuits is also
       enlarged to run through April 15, 2002.

Teligent, Inc., a provider of broadband communication services
offering business customers local, long distance, high-speed
data and dedicated Internet services over its digital
SmartWave(TM) local networks in major markets throughout the
United States, filed for chapter 11 protection on May 21, 2001.
James H.M. Sprayregen, Esq., Matthew N. Kleiman, Esq. and Lena
Mandel, Esq. at Kirkland & Ellis represent the Debtors in their
restructuring effort. When the Company filed for protection from
its creditors, it listed $1,209,476,000 in assets and
$1,649,403,000 debts.


TRI-LINE: TransForce Acquires Assets of Logistics Division
----------------------------------------------------------
TransForce Inc. (TSE: TFI), a Canadian transport and logistics
industry leader, announced that it has reached an agreement in
principle to acquire selected assets of Tri-Line Logistics
Division (Freight Brokerage), a division of Tri-Line Expressways
Ltd., a subsidiary of TCT Logistics Inc.  The purchase is being
made from KPMG Inc., acting in its capacity as interim receiver
of Tri-Line Expressways Ltd., and is subject to Ontario court
approval to be submitted to the Ontario Superior Court.

"This acquisition will reinforce our presence in the market and
is consistent with our strategic growth objectives," stated
Alain Bedard, TransForce's President and Chief Executive  
Officer. It is expected that this transaction will result in
additional revenues of more than $25 million on an annual basis
for Transforce. This new division of TransForce will operate
under the name Trans4 Logistics. Mr. B,dard also noted that Ms.
Denise Cardy, as President, along with her team, will oversee
Trans4 Logistics' operations from its location in Mississauga,
Ontario.

TransForce Inc. -- http//:www.transforce.ca -- headquartered in
Montreal, Quebec, is one of Canada's foremost transport and
logistics companies.  Its wholly-owned subsidiaries operate in
one or more of the four industry sectors, that is, less than
truckload (L.T.L.), truckload (T.L.), specialized transport and
logistical and warehousing services. TransForce operates across
the continent and is thus well positioned to play a prominent
role in the North American transportation industry.


UCAR INT'L: Certain Shareholders Offer to Sell 2.8MM Shares
-----------------------------------------------------------
Certain selling stockholders of UCAR International, Inc. are
offering to sell up to 2,881,461 shares of UCAR's common stock.  
The shares may be offered and sold from time to time by one or
more of the selling stockholders. No selling stockholder is
required to offer or sell any of his shares. The selling
stockholders anticipate that, if and when offered and sold, the
shares will be offered and sold in transactions effected on the
New York Stock Exchange (NYSE) at then prevailing market prices.
The selling stockholders reserve the right, however, to offer
and sell the shares on any other national securities exchange on
which the common stock may become listed or in the over-the-
counter market, in each case at then prevailing market prices,
or in privately negotiated transactions at a price then to be
negotiated. All offers and sales made on the NYSE or any other
national securities exchange or in the over-the-counter market
will be made through or to licensed or registered brokers and
dealers.

All proceeds from the sale of the shares will be paid directly
to the selling stockholders and will not be deposited in an
escrow, trust or other similar arrangement. UCAR will not
receive any proceeds from the offer and sale of these shares of
common stock by the selling stockholders. UCAR will bear all of
the expenses in connection with the registration of these
shares, including legal and accounting fees. No discounts,
commissions or other compensation will be allowed or paid by the
selling stockholders or the Company in connection with the offer
and sale of these shares of common stock, except that usual and
customary brokers' commissions or dealers' discounts may be paid
or allowed by the selling stockholders.

UCAR's corporation was formed under the laws of the State of
Delaware on November 24, 1993. Corporate offices are located at
3102 West End Avenue, Suite 1100, Nashville, Tennessee 37203,
telephone number is (615) 760-8227.  The common sock is traded
on the NYSE under the symbol "UCR." At September 30, 2001, the
company recorded a total stockholders' equity deficit of around
$300 million.


W.R. GRACE: PD Committee Taps W.D. Hilton for Claims Analysis
-------------------------------------------------------------
The Official Committee of Asbestos Property Damage Claimants in
the chapter 11 cases of W. R. Grace & Co., and its debtor-
affiliates also seeks entry of an order authorizing the
retention and employment of W.D. Hilton, Jr., as a consultant to
the PD Committee and for approval of Mr. Hilton's proposed terms
of employment, nunc pro tunc to May 2, 2001.  Mr. Hilton is an
asbestos claims and settlement specialist, who has expertise in,
inter alia, the financial management, claims analysis, property
damage claims review, and operations management of trusts
established by federal and state courts. The Committee repeats
its explanation of why this Application to employ a consultant
is being filed now, and espouses the same reasons as in the HRE
Application for the nunc pro tunc request for employment
approval.

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

       (a) Reviewing and analyzing the claims facility proposed
by the Debtors in comparison to claims facilities which have
been established in other asbestos bankruptcies;

       (b) Analyzing and assessing of the various proof of
claims forms proposed by the Debtors;

       (c) Assessing the Debtors' treatment of "threshold
issues";

       (d) Analyzing and responding to issues relating to the
establishment of a bar date regarding the filing of property
damage claims;

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

       (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.

Mr. Hilton 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.  Mr. Hilton 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 applicable law. The
current hourly rates Mr. Hilton charges is $350 per hour;
provided, however, that depositions, arbitrations, hearings or
trial testimony is billed at time and one-half.

W. D. Hilton, Jr., of Greenville, Texas, says he is the
principal of a consulting firm that provides, among other
services, analytical services focused on the analysis and
resolution of claims and the development of claims facilities
with regard to payments and assets of claims resolution trusts.  
To the best of Mr. Hilton's knowledge, information and belief,
insofar as he has been able to ascertain after due inquiry, Mr.
Hilton does 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 it is possible that he may 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, there may be other unsecured creditors and
parties in interest that have been served by myself. While Mr.
Hilton 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.  Mr. Hilton promises he will file
supplementary affidavits regarding this retention if additional
relevant information is obtained. (W.R. Grace Bankruptcy News,
Issue No. 18; Bankruptcy Creditors' Service, Inc., 609/392-0900)


WELLMAN: S&P Ratchets Credit & Unsec. Debt Ratings Down a Notch
---------------------------------------------------------------
Standard & Poor's lowered its corporate credit and preliminary
senior unsecured debt ratings on Wellman Inc. to double-'B'-plus
from triple-'B'-minus. The outlook is stable.

The rating actions follow Wellman's recent announcement that it
will report a weaker-than-anticipated fourth quarter as a result
of unfavorable economic conditions, competitive pressures on
margins in the PET resins business, and lower production volumes
in both the fibers and resins businesses. These issues, and the
expectation that business conditions may prove more difficult
than previously anticipated, indicate that Wellman will be
challenged to improve its financial profile over the near term.
Wellman's financial profile has been stretched by significant
capital outlays during recent years that have elevated debt and
resulted in heightened pressure to extend credit arrangements
that terminate over the next couple years. Accordingly, given
near-term operating prospects, ratings anticipate that Wellman
will take steps soon to improve financial flexibility.

The ratings on Wellman reflect a below-average business risk
profile that recognizes its leading position in the PET segment
of the polyester market, tempered by inherent industry
cyclicality and an increasingly narrow product focus. Moderate
financial policies and adequate near-term availability under
committed bank lines are supportive of the ratings. Wellman,
with approximately $1.1 billion in annual revenues, is a mid-
tier, U.S.-based chemical company and a leading producer of
polyester staple fibers primarily for the apparel, fiberfill,
and home textile markets. The firm also is the third-largest
producer of polyethylene terephthalate (PET) resins used in
beverage bottles and food containers. The polyester family of
products has relatively attractive characteristics among
chemical products. Most of these products are characterized by
complex process technology, limiting competitive entry. Still,
the company lacks the diversity of some of its major competitors
and industry peers, which elevates its exposure to industry
downturns in both the fibers and PET segments.

While PET prospects could improve modestly over the intermediate
term, margins have been constrained by lower demand due to the
general economic slowdown, as well as delayed buying from
customers in anticipation of a raw material price decrease. In
addition, the company's large polyester fibers segment,
approximately half of the business, continues to suffer from
slowing apparel sales in the U.S., as well as higher fiber and
apparel imports from Asian markets. This trend is not expected
to reverse course in the near term although Wellman has
initiated a plan to reduce its exposure to this market.

Wellman is expected to prioritize the use of internal cash
generation for debt reduction and to approach capital
expenditures and share repurchases in a prudent fashion.
Accordingly, ratings anticipate that cash flow protection
measures will be restored so that funds from operations to total
debt will improve from the high teens percentage area and will
average near the mid-20% area during the business cycle.

                      Outlook: Stable

Current ratings anticipate that business conditions will
stabilize during the year ahead and that Wellman will take steps
necessary over the near term to improve financial flexibility.


WINSTAR COMMS: Perot Systems Demands Prompt Decision on Contract
----------------------------------------------------------------
Perot Systems Corporation asks the Court to enter an order
directing Winstar Communications, Inc., and its debtor-
affiliates to assume or reject a Master Services Agreement dated
March 11, 1996 and all work orders under it. In addition, that
the Debtors comply with the terms of a Court-approved
Stipulation and amounts owed for post-petition services or in
the alternative, permit the termination of the Agreement.

Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP in
Wilmington, Delaware, tells the Court that Perot Systems
previously filed a Motion for Relief from Stay, to setoff or
recoup the balance of a pre-payment of $1,507,076.46 against the
amount Debtors owed to the company for pre-petition services.  
The Court then approved a Stipulation between Perot Systems and
the Debtors which, among others, relieved Perot Systems from the
automatic stay and allowed the company to recoup or setoff its
pre-petition claims with that of the pre-payment. Under the
Stipulation, the Debtors agreed to pay Perot Systems for post-
petition services rendered within thirty days from receipt of
the invoice. On October 11, 2001, Perot Systems filed a Proof of
Claim for $567,620.31 for pre-petition amounts owed to them by
the Debtors.

Mr. Macauley states that pursuant to the stipulation, Perot
Systems continues to provide the Debtors with services pending
the assumption or rejection of the Master Service Agreement. The
Debtors, meanwhile, have paid the company for post-petition
services rendered from the Petition Date until August 2001 but
still have to pay for post-petition services rendered in
September, October, November and a portion of December.  The
Debtors on November 30, 2001 filed a Notice of Cure Amount with
Respect to Possible Assumption and Assignment of Executory
Contract or Unexpired Lease, which pegged the Cure Amount for
the contract at $400,000.

Mr. Macauley states that Perot Systems filed an objection to the
cure amount since the company's claim for $567,620.31and the
Debtors owe $847,670.73 to Perot Systems for post-petition
services provided from September to November 2001. The cure
amount also failed to account for fees for December services
totaling $275,196.40. Mr. Macauley submits that upon information
and belief, bills issued by Perot Systems account for
approximately $30,000,000 of the Debtor's monthly revenue, and
therefore the company's services are crucial to the Debtors'
operations.

As of December 18, 2001, the date when the Debtors substantially
sold all of its assets to IDT Winstar Acquisition Inc., Perot
Systems was owed $984,366.12. IDT on January 9, 2002 partially
paid Perot Systems $123,000 for services rendered from December
19, 2001 to December 31, 2001. A balance of $15,501.01 remains
for services rendered on the same period. The company will
provide services to IDT totaling $432,000 in January 2002,
comprising $260,000 in billing services, $150,000 in maintenance
for the CUBES billing system and $22,000 for professional
services.

Mr. Macauley contends the Court should approve the relief
requested since, as a result of the sale of the Debtors' assets
and the transfer of management authority over their operations
to IDT, none of the Debtors' interest will be harmed if the
Agreement with Perot Systems is immediately assumed or rejected.
Likewise, a Court order directing the Debtors to assume or
reject the Agreement will have no impact on their rehabilitation
efforts.

Mr. Macauley points out that the Management Agreement between
IDT and the Debtors, meanwhile, has no safeguards to Perot
Systems insuring payment for future services rendered. Further,
the Debtors are in default on its obligations and not in
compliance with the Stipulation requiring it to pay Perot
Systems for services rendered within thirty days upon receipt of
the invoice as a condition of the company's continued provision
of services.

Mr. Macauley submits that Perot Systems has been harmed and will
continue to be harmed by further delay on the Debtors' decision
to assume or reject the Agreement because monetary defaults
continue to accrue under the Stipulation.  In addition, since
Perot Systems is now providing services to IDT and not to the
Debtors, the bankruptcy stay would not apply to the termination
of the Agreement.

                       Debtors Objects

The Debtors object to Perot System's motion and asks the court
to deny it since the relief requested is contrary to the terms
of the Sale Order.

William K. Harrington, Esq., at Duane Morris LLP in Wilmington,
Delaware, tells the Court that the Debtors entered into the
transaction with IDT not only to maximize the return to the
creditors but also to preserve the going-concern value of the
Debtors' estates, preserve over 750 jobs and ensure that the
Debtors' nearly 30,000 plus customers, including numerous
significant government agencies, did not suffer an unanticipated
service interruption.

The Sale Order, Mr. Harrington continues, contained a number of
provisions designed to help the Debtors and IDT accomplish
these, including one granting the Debtors 120 days from the
effective date of the Sale Order to assume and assign to IDT
unexpired leases and executory contracts. During this period,
IDT is authorized to direct the Debtors to assume and assign any
such agreements to IDT.

Mr. Harrington submits that since IDT has not yet issued any
such direction, the relief requested by Perot Systems is
contrary to the explicit words of the Sale Order and thus should
be denied. Denial of Perot System's motion is necessary and
appropriate to implement the Sale Order since the company is a
service provider subject to the prohibitions in the Sale Order.

Pursuant to the Sale Order, IDT deposited $60,000,000 in an
account with the Debtors' post-petition lenders from which to
fulfill its obligations during the 120-day period. IDT has made
payments to Perot and will continue to pay for its services
rendered until the Agreement is accepted or rejected. Mr.
Harrington believes that on the hearing date of the motion,
January 24, 2002, Perot Systems would have been paid in full.

Mr. Harrington contends that Perot Systems will not suffer
increased damages in the delay in the acceptance or rejection of
the Agreement, nor will it suffer increased prejudice in the
delay of payment of its administrative claim since the Debtors
currently lack the financial ability to pay any outstanding
administrative expenses. Further, even if the Debtors had the
ability, they would likely not be permitted to pay any
administrative claim such as that of Perot System's unless all
claims senior in priority, including the secured, superpriority
claims of the Debtors' DIP lenders, are satisfied. (Winstar
Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service,
Inc., 609/392-0900)  


* DebtTraders Real-Time Bond Pricing
------------------------------------

Issuer               Coupon   Maturity   Bid - Ask Weekly change
------               ------   --------   --------- -------------
Crown Cork & Seal     7.125%  due 2002    79 - 81       -2
Federal-Mogul         7.5%    due 2004  16.5 - 18.5      0
Finova Group          7.5%    due 2009    37 - 38    -0.75
Freeport-McMoran      7.5%    due 2006    78 - 81       +3
Global Crossing Hldgs 9.5%    due 2009     4 - 5     -1.75
Globalstar            11.375% due 2004     6 - 8        -2
Lucent Technologies   6.45%   due 2029    67 - 69     -0.5
Polaroid Corporation  6.75%   due 2002     6 - 8        -1
Terra Industries      10.5%   due 2005    83 - 86       -2
Westpoint Stevens     7.875%  due 2005    29 - 32        0
Xerox Corporation     8.0%    due 2027    58 - 60       -1

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

                          *********

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

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

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

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

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

                          *********

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

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

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

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

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

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