TCR_Public/020219.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

            Tuesday, February 19, 2002, Vol. 6, No. 35     

                          Headlines

AES CORP: Fitch Ratchets Low-B Ratings Down a Notch
ANC RENTAL: Hearing on Removal Period Extension Set for Tomorrow
ATG INC: Robert I. Hanfling Appointed as Chapter 11 Trustee
AMES DEPT: Gets Approval to Assign 5 Store Leases to Goldblatt's
ARMSTRONG HOLDINGS: Removal Period Hearing Set for March 1, 2002

CEDARA SOFTWARE: Q2 Balance Sheet Upside-Down by C$99.7 Million
CHIQUITA BRANDS: Plan Confirmation Hearing Set for March 8, 2002
CLASSIC VACATION: Tender Offer Extended to Allow Expedia Deal
DIGITAL FUSION: EBITDA Loss Narrows to $700,000 in FY 2001
EAGLE-PICHER: Fiscal 2001 Results Show $54 Million Net Loss

ENRON CORP: Seeks Okay to Let AEGIS to Pay D&O Defense Costs
EXODUS COMMS: Citicapital Demands $2.6MM+ Payment of Rent
FACTORY CARD: Delaware Court Approves Disclosure Statement
FALCON PRODUCTS: S&P Lowers Ratings After Weak Operating Results
FEDERAL-MOGUL: Court Approves Ashurst as Committee's UK Counsel

FISHER COMMS: Executes Pacts to Refinance Credit Facilities
FOURTHSTAGE TECHNOLOGIES: Violates Nasdaq Listing Requirements
FRONTSTEP: Foothill Waives Financial Covenants under Credit Pact
GC COMPANIES: Court Sets Plan Confirmation Hearing for March 12
GLOBAL CROSSING: Seeks Approval of Agreement with Hutchison/STT

GOLDMAN INDUSTRIAL: Case Summary & 20 Largest Unsec. Creditors
HAYES LEMMERZ: Court Extends Lease Decision Period to June 3
HOMESTORE.COM: Nasdaq Halts Trading, Requesting Additional Info.
HUDSON RESPIRATORY: Taps Deloitte & Touche to Replace Andersen
IGI: Inks Definite Deal to Sell Assets to Vetoquinol for $16.7MM

IT GROUP: Seeks Okay of Proposed Interim Compensation Procedures
INSILCO: Will Use Bond Indenture Grace Period to Review Options
INSPIRE INSURANCE: Nasdaq Halts Trading, Requesting More Info.
INTEGRATED HEALTH: Rotech Presents a 2nd Amended Joint Plan
KMART CORP: Seeks Approval to Hire Ordinary Course Professionals

LASERSIGHT INC: Falls Below Nasdaq Continued Listing Standards
LEAR CORP: S&P Assigns BB+ Rating to $200MM Conv. Senior Notes
LEINER HEALTH: Eyeing Prepack Chapter 11 to Restructure Finances
MCLEODUSA: Court Allows Payment of Prepetition Tax Obligations
MEDMIRA INC: Appoints Dr. Shou-Ching Tang as New Director

MESABA AIRLINES: Reaches Deal with Flight Attendants on Contract
MOHEGAN TRIBAL: S&P Rates 8% Senior Subordinated Notes at BB-
NII HOLDINGS: Taps Houlihan to Explore Restructuring Options
NQL INC: Files for Chapter 11 Protection in New Jersey
NATIONSRENT: Committee Taps Berenson Minella as Fin'l Advisors

NEXTERA ENTERPRISES: Fails to Meet Nasdaq Listing Requirements
PACIFIC AEROSPACE: Amends Proposed Debt Workout Agreement
PACIFIC GAS: Parent Wrestles with CA A.G. over Fraud Suit Venue
PACIFIC GAS: Parent Moves to Dismiss Attorney General's Lawsuit
PHOENIX GOLD: Faces Delisting for Nasdaq Requirement Violation

PILLOWTEX CORP: Seeks Approval of Proposed Solicitation Protocol
PRINTPACK HOLDINGS: S&P Rates $400 Million Bank Facility at BB
PSINET INC: UST Appoints Consulting Unit's Creditors Committee
RHI REFRACTORIES: Three Subsidiaries File Chapter 11 Petitions
SERVICE MERCHANDISE: Gets OK to Amend DIP Facility for Wind-Down

SOUTHWEST AIRLINES: State Street Discloses 11.8% Equity Stake
SUN HEALTHCARE: Names K. Pendergest as Chief Financial Officer
SUNSHINE PCS: Says Bankruptcy Filing or Wind-Down Likely
TALK AMERICA: Falls Short of Nasdaq Listing Requirements
TELESPECTRUM WORLDWIDE: Bank Lenders Agree to Recapitalization

UCAR INTERNATIONAL: Completes $400 Million Senior Note Offering
VERADO HOLDINGS: Prepares to File Liquidating Chapter 11 Prepack
VERADO HOLDINGS: Case Summary & 20 Largest Unsecured Creditors
ZIFF DAVIS: Appoints Peter Mayer as Corporate Sales Director

                          *********

AES CORP: Fitch Ratchets Low-B Ratings Down a Notch
---------------------------------------------------
Fitch Ratings has downgraded The AES Corp.'s (AES) senior
unsecured debt to 'BB' from 'BB+' and has removed AES' ratings
from Rating Watch Negative. Fitch has also downgraded AES'
corporate revolver and ROARS to 'BB' from 'BB+', senior
subordinated debt to 'B+' from 'BB', convertible junior
debentures and trust convertible preferred securities to 'B'
from 'B+'.

The rating action concludes a review of AES' credit that Fitch
began in December of last year. The Rating Outlook for all of
the issues listed above is Negative, reflecting the company's
tight liquidity situation in the next 12-18 months and AES
Corp.'s exposure to the Venezuela Bolivar, which started
floating freely against the US dollar Wednesday Feb. 13. Due to
Fitch's policy regarding the linkage of ratings of subsidiaries
with those of a lower-rated parent, Fitch has also downgraded
the ratings of AES' subsidiaries IPALCO Enterprises,
Indianapolis Power and Light (IP&L), CILCORP and Central
Illinois Light Company (CILCO). These ratings are removed from
Rating Watch Negative. While IPALCO and IP&L's new Rating
Outlook is Stable, CILCORP and CILCO are placed under Rating
Watch Evolving to reflect the pending sale by AES.

AES' ratings were placed on Rating Watch Negative in late
December 2001 due to concern over the company's lack of short-
term liquidity and the pending refinancing of two debt
facilities associated with two subsidiaries. In early 2002 the
company successfully refinanced or extended maturities of these
two financings. The new ratings reflect the high consolidated
leverage and high parent company leverage, the challenge of
lower profitability from merchant power exposures in the US and
UK, the parent company's investment concentrations in various
emerging markets, as well as the benefits of significant
portfolio diversification. Fitch's ratings also take into
consideration recent actions by AES management to tighten
controls, conserve cash, and reduce strains on corporate
liquidity.

AES still faces refinancing risk at the parent level as it has a
$300 million senior note maturing in December 2002, a $850
million bank revolving facility in March 2003 and a $425 million
bank loan in August 2003. At the same time, AES' liquidity
situation could be improved if it succeeds in plans to monetize
certain assets in 2002. The effective devaluation of the
Venezuelan Bolivar could have significant impact on AES' parent
cash flow as its Venezuela subsidiary, C.A. La Electricidad de
Caracas (EDC, Fitch Foreign Currency Rating 'BB-'), had been
projected to contribute over 10% of total parent cash flow in
2002. Currently EDC has a semi-annual tariff adjustment
mechanism based on changes in inflation, foreign exchange rates
and fuel costs. Parent cash flow from EDC could be affected by
the timing under which EDC would recover the full amount of
devaluation. AES' exposure to any one market or currency is
mitigated by the diversified portfolio of investments in
different countries and currencies.

The AES Corp., founded in 1981, is among the world's largest
power developers. It generates and distributes electricity and
is also a retail marketer of heat and electricity. AES owns or
has an interest in 182 plants, with more than 63,000 megawatts,
in 31 countries and also distributes electricity in 11 countries
through 21 distribution companies.

The ratings of IPALCO, IP&L, CILCORP and CILCO are:

    Indianapolis Power & Light Co. (IP&L)

    --First mortgage bonds and secured pollution control revenue
bonds downgraded to 'BBB' from 'BBB+'; --Senior unsecured debt
downgraded to 'BBB-' from 'BBB'; --Preferred stock downgraded to
'BBB-' from 'BBB'; --Commercial paper remains unchanged at 'F2';
--Rating Outlook Stable, formerly on Rating Watch Negative.

    IPALCO

    --Senior unsecured debt downgraded to 'BBB-' from 'BBB'; --
Commercial Paper remains unchanged at 'F2'; --Rating Outlook
Stable, formerly on Rating Watch Negative.

    Central Illinois Light Co.

    --First mortgage bonds and secured pollution control revenue
bonds downgraded to 'BBB' from 'BBB+'; --Senior unsecured debt
to 'BBB-' from 'BBB'; --Preferred stock downgraded to 'BBB-'
from 'BBB'; --Commercial paper remains unchanged at 'F2'; --
Rating Watch Evolving to reflect pending sale by AES, formerly
on Rating Watch Negative;

    CILCORP

    --Senior unsecured debt downgraded to 'BBB-' from 'BBB'; --
Rating Watch Evolving to reflect pending sale by AES, formerly
on Rating Watch Negative.

DebtTraders reports that AES Corporation's 9.5% bonds due 2009
(AESCP2) are trading between 74 and 76. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AESCP2for  
real-time bond pricing.


ANC RENTAL: Hearing on Removal Period Extension Set for Tomorrow
----------------------------------------------------------------
Bonnie Glantz Fatell, Esq., at Blank Rome Comisky & McCauley LLP
in Wilmington, Delaware, tells the Court that ANC Rental
Corporation, and its debtor-affiliates are parties to numerous
judicial and administrative proceedings that are currently
pending in various courts and administrative agencies throughout
the United States.  Since the Debtors have been focused
primarily on stabilizing and maximizing the value of their  
businesses, not all the actions have been reviewed by the
Debtors to determine whether any actions should be removed from
those foreign courts to the District of Delaware for continued
litigation.

The Debtors ask the Court to extend the time within which they
may remove lawsuits from remote courts to their home court
through June 17, 2002.

Ms. Fatell submits that this extension will afford the Debtors a
sufficient opportunity to assess whether some of the actions can
and should be removed, protecting the Debtors' valuable right to
adjudicate lawsuits. In addition, the Debtors' adversaries will
not be prejudiced by such an extension because the automatic
stay, without the requisite relief, prevents such parties from
prosecuting the actions. She assures the Court that nothing in
the motion will prejudice any party to a proceeding, that the
Debtors seek to remove, from pursuing remand and thus, the
requested extension will not prejudice the rights of other
entities that are parties to the actions.

A hearing on the motion is scheduled on February 20, 2002, and
pursuant to Local Rule 9006-2, the Debtors' time to make lease-
related decisions is automatically extended through the
conclusion of that hearing. (ANC Rental Bankruptcy News, Issue
No. 8; Bankruptcy Creditors' Service, Inc., 609/392-0900)


ATG INC: Robert I. Hanfling Appointed as Chapter 11 Trustee
-----------------------------------------------------------
ATG, Inc. (Nasdaq:ATGC), a leading provider of low-level
radioactive and low-level mixed waste treatment services, said
the appointment of Robert I. Hanfling as Chapter 11 Trustee for
ATG, Inc., the resignation of ATG's current management and
termination of ATG's board of directors.

On February 11, 2002, the Bankruptcy Court for the Northern
District of California approved the appointment of Robert I.
Hanfling as the Chapter 11 Trustee for ATG, which filed for
protection and reorganization under Chapter 11 of Title 11 of
the United States Code on December 3, 2001. Hanfling, who has
approximately 40 years experience in the energy industry,
previously served as Chapter 11 Trustee of Colorado-Ute Electric
Association. Hanfling has held a variety of positions with the
Department of Energy/Federal Energy Administration under
Presidents Carter and Ford, including Deputy Undersecretary and
Executive Assistant to Deputy Secretary. "Mr. Hanfling was
selected as trustee because of his expansive knowledge and
experience in dealing with matters of this nature. Mr.
Hanfling's control over ATG's operations will assure the
continued health and safety of the public and workers at ATG's
waste processing facilities located in Richland, Washington and
Oakland, Tennessee," said Mark R. Jacobs, managing partner of
Jacobs Partners LLC, bankruptcy counsel for Mr. Hanfling. "The
waste processing facilities that the company operated are safely
secured. The facilities are under a strict stabilization program
and the waste is safeguarded," said Hanfling.

In connection with Hanfling's appointment as trustee, the
current management of ATG, including Doreen Chui, President and
CEO, and Frank Chui, CFO, has resigned effective February 13,
2002.

ATG Inc. is a radioactive and hazardous waste management company
that offers comprehensive thermal and non-thermal treatment
solutions for low-level radioactive and low-level mixed waste
generated by commercial, institutional and government clients
such as nuclear power plants, medical facilities, research
institutions and the U.S. Departments of Defense and Energy.


AMES DEPT: Gets Approval to Assign 5 Store Leases to Goldblatt's
----------------------------------------------------------------
Ames Department Stores, Inc., and its debtor-affiliates sought
and obtained authorization to assume and assign five unexpired
leases of nonresidential real property, and sell certain
fixtures to Goldblatt's Bargain Stores, Inc., all free and clear
of liens, claims, encumbrances, and other interests to
Goldblatt's, in connection with going out of business sales at
four of the Debtors' store locations.

Prior and subsequent to commencing their chapter 11 cases,
Martin J. Bienenstock, Esq., at Weil Gotshal & Manges LLP in New
York, relates, the Debtors determined to conduct going out of
business sales at certain store locations that did not figure
into the Debtors' future business plans. Included among the
stores to be closed, the Debtors identified a set of 16 stores
to be closed, the majority of which are located in the Chicago,
Illinois area. The GOB Sales were completed by January 15, 2002.

In connection with conducting the GOB Sales, Mr. Bienenstock
states that the Debtors began marketing the leases and fixtures
associated with the 16 Stores in an attempt to maximize value to
the Debtors' estates. Specifically, the Debtors disseminated
information regarding the proposed sale of such leases to no
less than 57 retail establishments which Ames determined were
potential users of the space at the 16 Stores, the lessors of
each the leases, and several brokers in the area in which the
Sixteen Stores are located. As a result of these extensive
marketing efforts, the Debtors received an offer from
Goldblatt's for 4 of the leases and toward the end of December
2001, the Debtors and Goldblatt's agreed on terms for the sale
of the leases and fixtures.

After substantial negotiations, the Debtors reached an agreement
with Goldblatt's to:

A. assume and assign four unexpired leases of nonresidential
   real property which cover:

       a. Store No. 755, located at 5630 West Belmont Ave.,
            Chicago, Illinois,

       b. Store No. 756, located at 125 West 87th & Dan Ryan
            Expressway, Chicago, Illinois,

       c. Store No. 757, located at 7538 Stony Island Ave.,
            Chicago, Illinois, and

       d. Store No. 765, located at Scottsdale Shopping Center,
            7975 South Cicero Ave., Chicago, Illinois;

B. assume and assign an unexpired sublease, between the Debtors,
   as sublessor, and Rainbow Apparel Companies, as sublessee,
   at Store No. 756, located at 125 West 87th & Dan Ryan
   Expressway, Chicago, Illinois, and

C. sell certain trade fixtures and other personal property used
   to facilitate operations, including shelving and display
   fixtures situated in the Stores.

The Debtors' records reflect the Debtors owe the Lessors an
estimated amount of $793,355 in the aggregate for prepetition
rent, other prepetition obligations, and current postpetition
obligations under the Leases. Because the Debtors have
determined that Goldblatt's offer is the highest and best offer
for the Leases and Fixtures and the equivalent of an auction has
already been held, the Debtors submit a public auction is
unnecessary, and a private sale should be approved.

Mr. Bienestock submits that the Debtors entered into that
certain Assumption and Assignment Agreement, with Goldblatt's,
as assignee, dated February 1, 2002, which provides the Debtors
will:

A. assume the Leases,

B. assign the Leases to Goldblatt's in consideration of a
   purchase price aggregating $1,180,000, and

C. sell the Fixtures to Goldblatt's, free and clear of liens,
   claims, encumbrances, and other interests, in consideration
   of a purchase price aggregating $120,000.

The Assignment Agreement has the following major provisions:

A. Payment Terms: $1,300,000 payable in cash at closing, subject
   to Closing Adjustments;

B. Payment Date: on the closing date, which is no later than 3
   business days following the date on which the Court enters
   an order approving the transaction contemplated by the
   Assignment Agreement;

C. Time of Essence Date: Goldblatt's shall have the right to
   terminate the Assignment Agreement if the closing does not
   occur on or before February 15, 2002;

D. Cure Amount: $793,355;

E. Brokers' Commission: none;

F. Breakup Fee: in the event the Debtors terminate the
   Assignment Agreement as a result of the sale of the Leases to
   a third party, the Debtors shall pay Goldblatt's $25,000;

G. Description of Fixtures Sold: personal property, fixtures,
   trade fixtures, and other furnishings or equipment located
   in the Stores, including but not limited to all the
   leasehold improvements, shelving, cases, display apparatus
   and other trade fixtures, office furniture and equipment,
   warehouse and storage fixtures, and equipment, sign
   apparatus and other personal property, excluding leased
   equipment, point-of-sale equipment, security cameras and
   devices, inventory and labeled supplies, used, useable or
   otherwise located in the Stores; and

H. Closing Adjustments: usual and customary such as utilities,
   taxes, etc.;

Mr. Bienenstock assures the Court that the Cure Amount of
$793,355 will be paid promptly by the Debtors on the closing
date of the sales of the Leases and Fixtures while postpetition
amounts owing under the Leases will continue to be paid by the
Debtors until the closing date of the sale of the Leases and
Fixtures.

Mr. Bienestock claims that Goldblatt's financial condition
provides evidence of its ability to perform all the tenant's
duties and obligations under the Leases. LaSalle Bank National
Association has provided Goldblatt's with a commitment to
provide financing for the purchase of the Leases and to finance
its working capital needs in operating the Stores. With respect
to the Leases for stores located in shopping centers,
Goldblatt's has satisfied the higher standards required to show
adequate assurance of future performance. Further, Mr.
Bienenstock notes that Goldblatt's intends to use the Stores as
they are currently operated, and thus in compliance with the use
clauses in the respective Leases and which will not disrupt
tenant-mix in any of the shopping centers.

The Debtors believe their secured creditors will consent to the
proposed sale of the Leases and Fixtures, the value to be
received by the Debtors in consideration of the sale of the
Leases and Fixtures is equal to or exceeds the value of the
liens upon such collateral, or creditors with interests in the
Leases and Fixtures can be compelled to accept a monetary
satisfaction of their claims. Thus, the Debtors submit the sale
of the Leases and Fixtures free and clear of liens, claims, and
encumbrances satisfies the statutory prerequisites of section
363(f) of the Bankruptcy Code.

Mr. Bienenstock believes that the Break-Up Fee should be
approved because:

A. it is reasonable in relation to the size of the proposed
   sales,

B. it does not hamper any other party from offering a higher and
   better bid, and

C. extensive work was undertaken by Goldblatt's and their
   professionals in investigating, negotiating, and drafting
   the necessary agreements. (AMES Bankruptcy News, Issue No.
   13; Bankruptcy Creditors' Service, Inc., 609/392-0900)


ARMSTRONG HOLDINGS: Removal Period Hearing Set for March 1, 2002
----------------------------------------------------------------
The Court will convene a hearing on Armstrong Holdings, Inc.,
and its debtor-affiliates' Motion on March 1, 2002.  Local
Bankruptcy Rule 9006-2 automatically extends the Debtors'
Removal Period, within which to remove all pending lawsuits,
through the conclusion of that hearing.

This is the third time that the Debtors ask the court to again
extend the time period during which the Debtors may file notices
of removal of litigative and administrative matters which were
pending on the Petition Date.  Specifically, the Debtors propose
that the time by which they must file notices of removal with
respect to any actions pending on the Petition Date be extended
through and including the later of (i) July 29, 2002, or (ii) 30
days after entry of an order terminating the automatic stay with
respect to any particular action sought to be removed.

The requested extension is necessary to afford the Debtors with
additional time to assess whether the proceedings can and should
be removed, thereby protecting the Debtors' valuable right to
economically adjudicate lawsuits if the circumstances warrant
removal.  Accordingly, the Debtors submit that the requested
extension is in the best interests of the creditors and their
estates. (Armstrong Bankruptcy News, Issue No. 17; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


CEDARA SOFTWARE: Q2 Balance Sheet Upside-Down by C$99.7 Million
---------------------------------------------------------------
Cedara Software Corp., (TSE:CDE/NASDAQ:CDSW) announced results
for its second quarter ended December 31, 2001.

Revenue for the quarter was up slightly at $11.5 million as
compared with $11.3 million recorded from continuing operations
a year earlier. Gross margins increased, both over the same
quarter last year and over the proceeding quarter ended
September 30, 2001, and have recovered to historical levels.

The company posted a net profit of $1.6 million for the quarter,
compared with a net loss of $6.3 million in the same quarter
last year. This net profit included a gain of $2.3 million from
discontinued operations. Earnings before interest, taxes,
depreciation and amortization (EBITDA) from continuing
operations was $0.7 million in Q2, compared to a negative EBITDA
of $2.4 million in the same period last year.

Compared to the same quarter last year, operating expenses were
lower by $2.2 million or 20%. At quarter end, overall payroll
costs have been reduced by 37% compared to June 30, 2001.

In the first half of fiscal 2002, cash provided by operating
activities was $4.2 million, a swing of $6.2 million from the
negative cash flow of $2.0-million reported in the same period
last year. Additionally, the Company reduced its notes payable
by $6.9 million in the first half of fiscal 2002. Subsequent to
quarter end, the Company reduced its current notes payable a
further $4.0 million.

In the second quarter, Cedara had announced a settlement
agreement with Carl Zeiss to settle contractual obligations, and
also announced a cooperation and support agreement with
Medtronic Surgical Navigation Technologies to assure support for
the SNS installed base. The agreement with Zeiss, together
with the conversion of note holders into equity has resulted in
an $8.6-million reduction, to date, of current net cash
liabilities since the start of the second quarter.

Also in the second quarter, Cedara had announced: its new 3D
volume rendering technology for the Pentium(R) 4 processor,
which Intel(R) featured at the processor's 2 GHz launch; its new
I(TM) family of workflow applications and productivity tools;
and its new OpenEyes(TM) software platform.

"As we said in last quarter's press release, our goal is to grow
our business on a profitable foundation. We are focused on
completing the financial turnaround, which means sustained net
profits and a healthy balance sheet; and setting up for
subsequent growth, which means innovation. We have made good
progress. There is certainly more to be made. We are committed
to our goal," stated Michael M. Greenberg, Chairman and Chief
Executive Officer.

Cedara Software Corp., based in the greater Toronto area, is a
leading healthcare imaging software developer. Cedara serves
leading healthcare original equipment manufacturers (OEMs) and
value-added resellers (VARs) and has long-term relationships
with companies such as Cerner, GE, Hitachi, Philips, Siemens,
and Toshiba. Cedara offers its OEM customers a rich array of
end-to-end imaging solutions. The Cedara Imaging Application
Platform (IAP(TM)) is a development environment supporting
Windows and Unix. This continuously enhanced imaging software is
embedded in 30% of MRIs sold today. Cedara offers components and
applications that address all modalities and aspects of clinical
workflow, including 3D imaging and advanced post-processing;
volumetric rendering; disease-centric imaging solutions for
cardiology; and streaming DICOM for web-enabled imaging. Through
its Dicomit Dicom Information Technologies Inc. subsidiary,
Cedara provides ultrasound and DICOM connectivity solutions to
OEM customers.

At December 31, 2001, Cedara Software reported a working capital
deficit of close to CDN$10 million, and a total shareholders'
equity deficit of CDN$99.8 million.  

                         *   *   *

In deference to the Presidents' Day holiday in the U.S. on
Monday February 18th, and to requests made by U.S. shareholders,
Cedara is pleased to reschedule its investor conference call to
discuss Fiscal Year 2002 2nd Quarter Financial Results.

                   The new time will be:
     Wednesday, February 20th, 2002 at 4:00 pm (Eastern Time)
     --------------------------------------------------------
                    Cedara Software Corp.
                   (TSE:CDE / NASDAQ:CDSW)

      Dial-in  No.s are: 416-695-5806 or 1-800-273-9672
                          Hosts are:

            Michael M. Greenberg, M.D., Chairman, CEO
                   (Conference Moderator)

               Arun Menawat, President and COO,
        and Fraser Sinclair, CFO and Corporate Secretary

The teleconference will be broadcast live on the world wide web
at http://www.cedara.com/investors/index.htmlor go to  
http://www.cedara.comand click on "Investors"

Please dial 416-695-5806 or 1-800-273-9672, five to ten minutes
prior to the February 20th, 2002, 4:00 pm start of the
teleconference to participate in the call. This conference call
will be recorded, and will be available on instant replay at the
end of the call the same day, until midnight March 20th, 2002.  
To listen to the replay, please dial 416-695-5800 or 1-800-408-
3053, and enter pass code 108 1661. Please address requests for
written transcripts via email to Lara.Gunter@Cedara.com or call
Lara at 905-672-2101 ext. 2377 and request a transcript by mail.


CHIQUITA BRANDS: Plan Confirmation Hearing Set for March 8, 2002
----------------------------------------------------------------
As previously reported, Chiquita Brands International sought and
obtained Judge Aug's stamp of approval on the disclosure
statement filed in support of a First Amended Joint Plan of
Reorganization.  Further, that Plan, as previously reported, is
endorsed by the Unofficial Committee of Holders of Senior Notes
and the Ad Hoc Committee of Holders of Subordinated Notes.

The salient provisions of the Amended Plan are:

  * payment in cash of all Allowed Administrative Claims;

  * payment in cash of Priority Tax Claims either immediately or
    over a six-year period from the date of assessment with
    interest of 8-1/4% per annum, at the option of the Debtor;

  * classification of claims into 7 classes and treatment of the
    classified claims and equity interests;

  * the continued corporate existence and vesting of assets of
    the Debtor;

  * the cancellation of Old Notes, Old Preferred Stock, Old
    Common Stock and Stock Options;

  * the issuance of New Securities;

  * the adoption and filing of the Third Restated Certificate of
    Incorporation and By-laws, the appointment of new officers
    and directors and the adoption of the 2002 Stock Option
    Plan;

  * the assumption of executory contracts and unexpired leases;

  * the procedures on how to resolve the disputed, contingent
    and unliquidated claims or equity interests; and

  * the release of claims between the Debtor and the holders of
    Claims or Equity Interests.

Chiquita Brands International Senior Vice-President, General
Counsel and Secretary Robert W. Olson contends that the Plan
should be confirmed because it has satisfied the requirements of
section 1129 of the Bankruptcy Code and other requirements of
the Court. More so, Mr. Olson continues:

  * the Plan is proposed in good faith and not by any means
    forbidden by law;

  * the Debtor has disclosed to the Bankruptcy Court any
    payment made or promised under the Plan for services or for
    costs and expenses in connection with, this Bankruptcy Case,
    or in connection with the Plan and incident to the case, and
    any such payment made before the confirmation of the Plan is
    reasonable, or if such payment is to be fixed after the
    confirmation of the Plan, such payment is subject to the
    approval of the Bankruptcy Court as reasonable;

  * with respect to each Class of Impaired Claims or Equity
    Interests, either each Holder of a Claim or Equity Interest
    of such Class has accepted the Plan, or will receive or
    retain under the Plan on account of such Claim or Equity
    Interest, property of a value, as of the Effective Date of
    the Plan, that is not less than the amount that such Holder
    would receive or retain if Debtor was liquidated on such
    date under Chapter 7 of the Bankruptcy Code;

  * each Class of Claims or Equity Interests that is entitled to
    vote on the Plan has either accepted the Plan or is not
    impaired under the Plan, or the Plan can be confirmed
    without the approval of each voting Class pursuant to
    section 1129(b) of the Bankruptcy Code;

  * the Plan provides that Allowed Administrative, Allowed
    Priority Tax Claims and Allowed Other Priority Claims will
    be paid in full on the Effective Date, or as soon thereafter
    as practicable;

  * at least one Class of Impaired Claims or Equity Interests
    will accept the Plan, determined without including any
    acceptance of the Plan by any insider holding a Claim of
    such Class;

  * confirmation of the Plan is not likely to be followed by the
    liquidation, or the need for further financial
    reorganization, of Debtor or any successor to Debtor under
    the Plan, unless such liquidation or reorganization is
    proposed in the Plan; and

  * all fees, including the fees of the United States Trustee,
    will be paid as of the Effective Date.

If the Plan will not be confirmed, Mr. Olson anticipates that
the very likely scenario would be:

  * an adverse effect of the Debtor's relationship with its
    customers, employers and suppliers, resulting in increased
    cost for professional fees;

  * the Debtor's difficulty in retaining and attracting
    management and other key personnel;

  * the shift of management focus from the operation of its
    business to the resolution of the Debtor's financial
    problems;

  * the Holders of Equity Interests would receive substantially
    less favorable treatment than they would receive under the
    Plan if the Debtor opts for Chapter 7 cases.

Thus, the Debtor recommends that holders of claims and equity
interests should vote to accept the plan.

Parties-in-interest have until February 21, 2002 to file any
objections to confirmation of the Plan and all creditors'
ballots must be received before the end of the day on February
28, 2002.

The Court will convene a hearing to consider confirmation of
Chiquita's Plan on March 8, 2002. (Chiquita Bankruptcy News,
Issue No. 6; Bankruptcy Creditors' Service, Inc., 609/392-0900)   


CLASSIC VACATION: Tender Offer Extended to Allow Expedia Deal
-------------------------------------------------------------
Three Cities Research, Inc., announced that the pending tender
offer by CVG Acquisition Corporation for shares of Classic
Vacation Group, Inc. (Amex: CLV) has been further extended until
5:00 p.m., New York City time, on Thursday, February 28, 2002,
in order to permit completion of a purchase by Expedia, Inc., of
Classic Vacation Group notes held by two entities principally
owned by a Three Cities fund.  The tender offer will be
withdrawn when the note purchase takes place.

CVG Acquisition Corporation is wholly owned by CVG Investment
LLC, which in turn is 80% owned by Three Cities Fund III, L.P.
and 20% owned by Thayer Equity Investors III, L.P.  In its
tender offer, CVG Acquisition Corporation offered to purchase
all the Classic Vacation Group shares which Three Cities or
Thayer did not already own for $0.15 per share.  The tender
offer, as previously extended, was scheduled to expire at 5:00
p.m., New York City time, on February 15.

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

A registration statement relating to the Expedia shares which
will be issued to CVG Investment LLC and to the entity owned by
Three Cities has been filed with the Securities and Exchange
Commission, but has not yet become effective.  Expedia's
acquisition of the Classic Vacation Group notes will not take
place until the registration statement becomes effective (or
Expedia elects to pay cash).  The tender offer is being extended
to provide more time for that to occur.

At the close of business on February 14, 2002, 1,160,659 shares
had been tendered in response to the tender offer and not
withdrawn.

Classic Vacation Group (formerly Global Vacation Group) has been
selling off its assets to pay down debt, including budget travel
operator Allied Tours (to Swiss-based Kuoni), Classic Custom
Vacations (to online travel operator Expedia), and Amtrak
vacation operator Globetrotters (to a group that includes
Globetrotters' senior managers). Through its remaining
subsidiary, Island Resort Tours, the company offers customized
vacations mainly to the Caribbean. The company sells vacations
through travel agencies, other distribution channels, and
affinity groups, as well as online. At September 30, 2001, the
company reported an upside-down balance sheet, showing total
liabilities exceeding total assets by about $4.3 million.


DIGITAL FUSION: EBITDA Loss Narrows to $700,000 in FY 2001
----------------------------------------------------------
Digital Fusion, Inc. (Nasdaq:DIGF), an information technology
(IT) and e-business services provider, announced financial
results for the fourth quarter and year ended Dec. 31, 2001.

Fourth Quarter Highlights

     --  Revenues of $3.1 million
     --  Gross profit margin of 30%
     --  Adjusted EBITDA earnings of $60,000
     --  Cash flow positive from operations
     --  Impairment of goodwill charge of $6.5 million
     --  Cash and cash equivalents of $1.35 million
     --  Current liabilities reduced by $3.4 million
     --  Forgiveness of debt gain of $0.9 million

                    Year End Comparisons

For the year ended December 31, 2001, revenues were $16.7
million verses $23.4 million for the previous year. Net loss for
the year ended December 31, 2001 was $11.4 million, including a
$6.5 million impairment of goodwill charge, verses 18.1 million
for the previous year. Adjusted EBITDA loss (earnings before
interest, taxes, depreciation and amortization adjusted for the
sale of assets, restructuring costs and forgiveness of debt) for
the year ended December 31, 2001 was $0.7 million versus $6.2
million for the previous year.

                    Business Discussion

During fiscal year 2001, the Company restructured its operations
by selling or shutting down 5 business units and closing 5
offices. The remaining operations are comprised of 3
complimentary and profitable business units across 6 offices.
The business units the Company currently derives its revenue
from are IT support services, project based application
development services and IT staff augmentation services. As of
December 31, 2001 the Company had 110 billable consultants and
12 billable subcontractors. The Company has been operating under
this model of 3 focused business units the past 2 quarters.

                    Legacy Liabilities

As a result of significant restructuring, closing of
unprofitable offices and selling certain business divisions
during 2000 and the first half of fiscal year 2001, the Company
accumulated unpaid liabilities not associated with current
operations in excess of $4.5 million. These creditor liabilities
include terminated equipment leases, property leases and
telecommunication contracts as well as certain professional
fees. Through productive negotiations with the majority of the
creditors, $3.7 million of these liabilities have been settled
and paid or settled and reasonable payment terms agreed to. The
remaining $2.4 million of legacy liabilities have been fully
accrued for at December 31, 2001. Subsequent to December 31,
2001, approximately $1.4 million have been settled. The
remaining $0.8 million of legacy liabilities are under
negotiation or the claim is being vigorously defended by the
Company.

                    Capital Requirements

The Company is currently evaluating its capital needs for 2002
and at this time is seriously considering available alternatives
to get an infusion of up to $750,000 of liquidity into the
Company. The Company is considering a line of credit secured by
receivables, an equity raise or a combination of both.

                    Goodwill Impairment

In the quarter ended December 31, 2001, the Company recorded an
impairment of goodwill associated with prior years acquisitions
of $6.5 million. The value of the remaining $4.5 million of
goodwill on the Company's balance sheet as of December 31, 2001
was determined by the projected discounted cash flow method.
Beginning first quarter 2002, the Company will adopt SFAS No.
141, "Business Combinations," and SFAS No. 142, "Goodwill and
Other Intangible Assets." Under these new standards, goodwill
will be subject to a periodic impairment test of fair value and
will no longer be amortized over its useful life. The Company
does not expect to make any goodwill adjustments during fiscal
year 2002.

                       Audit Opinion

In the Company's December 31, 2000 10-KSB Annual Report, the
Company received an exception for a going concern in the audit
opinion from its auditors because of its previous losses and
significant liabilities related to restructuring, closing and
selling business units and the termination of a potential 2000
merger. During the year ended December 31, 2001 and through
today, the Company has significantly reduced its losses and
successfully restructured its liabilities. As such, the Company
anticipates it will receive an unqualified audit opinion from
its auditors when the Company files its December 31, 2001 10-KSB
Annual Report. The Company expects to file its 10-KSB Annual
Report within 30 days.

                    Management Comments

"We had another solid quarter, our third in a row with positive
cash flows from operations," said Roy Crippen, president and
chief executive officer. "Although we see revenues somewhat flat
in the first quarter, there are indications that IT spending by
our clients and prospects is beginning to pick up. Our pipeline
of new business continues to grow and I feel we are well
positioned to increase revenues as the US economy improves."

"I am very pleased with the significant improvements we have
made on our balance sheet, particularly the reductions in our
legacy liabilities," said Karen Surplus, chief financial
officer. "Through strong collection efforts, we were able to
increase our cash balance at the end of the quarter to $1.35
million. This cash helps give us the ability to meet our payment
obligations associated with our restructured debt."

                    Management Guidance

Management expects revenues for the first quarter of 2002 to be
$2.8 million to $3.2 million and loss per share, excluding
earnings associated with forgiveness of debt, to be $(0.04) to
$(0.01).

Digital Fusion provides comprehensive e-business and information
technology solutions to businesses, organizations and public
sector institutions in the Eastern U.S. We have over 10 years
experience designing, developing, and integrating complex
business systems, providing a range of services, including
strategy, development, desktop support and education services.
For additional information regarding Digital Fusion's services,
visit http://www.digitalfusion.com


EAGLE-PICHER: Fiscal 2001 Results Show $54 Million Net Loss
-----------------------------------------------------------
Eagle-Picher Holdings, Inc., the parent company of Eagle-Picher
Industries, Inc., announced that net sales for its fiscal year
ended November 30, 2001 were $692.5 million, down 8.3% from
fiscal year 2000 net sales of $755.0 million, and down 2.8% from
fiscal year 2000 net sales of $712.2 million excluding several
divisions that were divested in fiscal year 2000.  The Company
also reported operating income of $4.3 million compared to
fiscal year 2000 operating income of $62.3 million, or $64.2
million excluding the Divested Divisions, and a net loss of
$54.0 million compared to fiscal year 2000 net income of $5.6
million, or $13.5 million excluding the Divested Divisions.  Net
loss to common shareholders was $67.3 million after accretion of
preferred stock dividends, compared to a net loss of $6.2
million, or net income of $1.6 million excluding the Divested
Divisions, in fiscal year 2000.  All figures for fiscal years
2000 and 2001 have been restated for the Company's Construction
Equipment Division, which was accounted for as a discontinued
operation throughout fiscal year 2001 and was sold as of
December 14, 2001. These results are consistent with the
preliminary fiscal year 2001 results announced by the Company on
December 14, 2001.

The Company also reported earnings before interest, taxes,
depreciation and amortization and certain items determined by
management to be nonrecurring (EBITDA) for fiscal year 2001 of
$85.7 million.  This compares to EBITDA of $103.8 million in
fiscal year 2000, or $102.6 million excluding the Divested
Divisions.  The disproportionate decrease in EBITDA was
due primarily to raw materials price increases, price
concessions to customers and operating inefficiencies,
particularly in the Company's automotive businesses.  Fiscal
year 2001 EBITDA excludes the following items determined by
management to be nonrecurring:

    * A $30.8 million pre-tax charge due to the sale of the
Company's Construction Equipment Division for less than its
carrying value.

    * A $14.2 million charge in connection with the
restructuring of certain of the Company's operating divisions
and the Company's headquarters and its announced relocation from
Cincinnati, Ohio to Phoenix, Arizona.

    * A net increase of $2.1 million in reserves for obligations
related to divested operations.

    * $3.1 million of certain special management compensation
expenses.

EBITDA, as defined herein, may not be comparable to similarly
titled measures reported by other companies and should not be
construed as an alternative to operating income or to cash flows
from operating activities, as determined by accounting
principles generally accepted in the United States of America,
as a measure of the Company's operating performance or
liquidity, respectively.  Funds depicted by EBITDA are not
available for management's discretionary use to the extent they
are required for debt service and other commitments.

Eagle-Picher reported that net cash from operating activities in
fiscal year 2001 was $67.4 million, and that it used
approximately $36.8 million in investing activities and
approximately $17.8 million in financing activities in fiscal
year 2001.

Eagle-Picher also reported the following as of November 30,
2001:

    * Total indebtedness for borrowed money, including the
current portion of long term debt and the Company's receivables
loan facility, was $443.1 million.

    * Cash on hand of $24.6 million.

    * Availability of $74.3 million under its various credit
facilities.

    * Working capital of $83.4 million.

The Company was in compliance with all covenants under its
senior debt facility as of November 30, 2001.

The Company announced that it expects sales for fiscal year 2002
to be approximately $700 million.  The Company is projecting
fiscal year 2002 EBITDA to be approximately $93 million to $97
million.  Projected EBITDA improvement with roughly flat sales
reflects cost reduction initiatives across the Company.  On the
basis of these projections, the Company believes it will be in
compliance with all covenants under its senior debt facility in
fiscal year 2002.

Based on current estimates of first quarter results, the Company
is on track for expected fiscal year 2002 results, taking into
account expected sequential growth in quarterly earnings, and
the Company believes it will be in compliance with all of its
debt covenants at February 28, 2002.

Eagle-Picher, founded in 1843, is a diversified manufacturer of
industrial products for the automotive, defense, aerospace,
construction and other industrial markets worldwide.  Eagle-
Picher operates more than 40 plants and has 5,300 employees in
the United States, Canada, Mexico, the United Kingdom, Germany
and Japan.

Eagle-Picher emerged from chapter 11 in 1996, escaping from
billions of dollars of asbestos-related liability after five
contentious years before the U.S. Bankruptcy Court for the
Southern District of Ohio.  Stephen Karotkin, Esq., and Debra
Dandenau, Esq., at Weil, Gotshal & Manges LLP, represented
the company in that proceeding.  Judge Perlman ultimately
convened a protracted estimation hearing to judicially determine
Eagle-Picher's asbestos-related liabilities at a whopping $2.5
billion -- way, way more than a few-hundred-million-dollar
estimate commercial trade creditors and equity advocated and $1
billion less than the $3.5 billion estimate for which the Tort
Claimants' Committee pushed.  The Eagle-Picher Debtors plugged
that $2.5 billion number into a plan and prosecuted it to
confirmation in record speed.  The Plan created a Sec. 524(g)
Trust for the benefit of the Tort Claimants which owned
virtually all of Reorganized Eagle-Picher's stock.  The Trust
then sold its equity to a Dutch company for cash a few years
later.


ENRON CORP: Seeks Okay to Let AEGIS to Pay D&O Defense Costs
------------------------------------------------------------
According to Richard L. Levine, Esq., at Weil, Gotshal & Manges
LLP, in New York, Enron Corp. has a policy through AEGIS
providing $35,000,000 of insurance coverage for legal fees and
associated expenses incurred in defending covered director and
officer liability claims.  

"This coverage is provided directly to or on behalf of present
and former officers and directors of the Debtors and of certain
affiliates if such D&O Defense Costs are not reimbursed by Enron
Corporation through indemnification payments," Mr. Levine
explains.

The AEGIS D&O Policy also provides for reimbursement of the
Debtors for indemnification payments made to, or on behalf of,
present and former officers and directors under Insuring
Agreement and "entity" coverage for the Debtors, Mr. Levine
adds.

Mr. Levine informs Judge Gonzalez that this policy has been
renewed and its current expiration date is September 1, 2002.

"Enron Corporation further supplemented the coverage provided
under the AEGIS D&O Policy with a number of excess policies from
a number of different insurance carriers, such that the total
insurance coverage under all of the D&O Policies is
$350,000,000," Mr. Levine says.

According to Mr. Levine, Enron Corporation also purchased a
Fiduciary and Employee Benefit Liability Insurance Policy from
AEGIS.  Mr. Levine relates that the ERISA Fiduciary Policy
provides coverage to Enron Corp., its Employee Benefit Plans,
the Employee Benefit Plans of its debtor and non-debtor
affiliates, and their respective past, present or future
trustees, officers, directors and employees, and any other
natural person who was, is now, or shall be acting as a
fiduciary, or performing administration, of any Employee Benefit
Plan.

Mr. Levine states that the ERISA Fiduciary Policy provides
insurance, including for legal fees and related expenses
incurred in defending covered "Claims," for the covered
insureds.  The ERISA Fiduciary Policy provides $35,000,000 of
insurance coverage for covered loss, plus an additional
$10,000,000 of insurance coverage for ERISA Fiduciary Defense
Costs.

"The ERISA Fiduciary Policy applies to Covered Claims first
asserted during the period from May 5, 1999 to May 5, 2002," Mr.
Levine notes.

Enron Corporation supplemented the coverage provided to the
entities and persons covered by the ERISA Fiduciary Policy with
excess policy issued by Federal Insurance Company. This
supplemental insurance provides an additional $50,000,000 of
coverage, according to Mr. Levine.

Mr. Levine explains that the Policies generally provide that the
Insurers will pay the legal fees and related expenses of the
Debtors' covered directors, officers, plan committee members,
other fiduciaries and administrators, and other employees
incurred in the defense or appeal of a covered Claim. In
addition, Mr. Levine says, the Policies provide that, in case of
the bankruptcy or insolvency of Enron Corporation, the Insurers
shall not be relieved of any of their obligations and, in fact,
shall directly pay or advance the Defense Costs.

Mr. Levine informs Judge Gonzalez that numerous lawsuits against
the Debtors and/or against their present and former officers,
directors, Employee Benefit Plan committee members and other
fiduciaries and administrators, and other employees have been
commenced.  "Additional lawsuits may be commenced involving
similar claims," Mr. Levine anticipates.  Moreover, Mr. Levine
adds, numerous governmental investigations relating to
essentially the same factual matters are underway. For purposes
of this Motion, Mr. Levine notes that the Lawsuits can be
separated into two general categories:

    (i) class action lawsuits by Enron Corp. shareholders
        alleging, among other things, violations of the federal
        securities laws; and

   (ii) class action lawsuits by Enron Employee Benefit Plan
        participants alleging, among other things, violations of
        ERISA.

In addition, Mr. Levine tells the Court that numerous derivative
actions were filed but such actions have been stayed as a result
of the Debtors' filing of its chapter 11 petitions.

Prior to the Petition Date, Mr. Levine relates that the Debtors
requested AEGIS to provide interim payment of covered Defense
Costs incurred and to be incurred in connection with the
Lawsuits and the Investigations.  Since then, Mr. Levine reports
that Enron Corporation and the Individual Defendants -- against
whom certain actions have proceeded -- have incurred, and likely
will continue to incur, significant Defense Costs.  Thus, Mr.
Levine explains, the Individual Defendants are seeking interim
payment or advancement of Defense Costs by Enron Corporation,
pursuant to its advancement and indemnification obligations, or
by AEGIS pursuant to the Policies.

Upon the Court's approval, Mr. Levine says, AEGIS has agreed to
pay and advance Defense Costs to the covered Individual
Defendants, subject to:

  (a) AEGIS reserving its rights and defenses with respect to
      its coverage obligations; and

  (b) other standard conditions, such as the execution by each
      covered Individual Defendant of a binding written
      undertaking to repay all monies advanced if it ultimately
      is determined that the individual is not entitled to
      insurance coverage -- such as if:

         (i) the officer or director "gained any personal
             profit" to which he or she was not entitled; or

        (ii) his or her liability is "brought about or
             contributed to by the dishonest, fraudulent,
             criminal or malicious act or omission of such
             director or officer if a final adjudication
             establishes that acts of active and deliberate
             dishonesty were committed or attempted with actual
             dishonest purpose and intent and were material to
             the cause of action so adjudicated".

By this Motion, the Debtors ask the Court for an order that:

  (i) authorizes AEGIS to pay and advance Defense Costs
      to or for the benefit of the covered Individual
      Defendants, up to an aggregate of $20,000,000 under the
      AEGIS D&O Policy and $10,000,000 under the ERISA Fiduciary
      Policy, for one lead law firm and any reasonably necessary
      local or other special counsel for each subset of such
      Individual Defendants who reasonably require separate
      counsel, which Defense Costs AEGIS determines are covered
      or owing under the AEGIS D&O Policy or the ERISA Fiduciary
      Policy, or which AEGIS determines to be potentially
      covered or owing under the respective Policies; and

(ii) declares that any such amounts paid or advanced will
      deplete the applicable limits of liability under the
      respective Policies (unless repaid or refunded). (Enron
      Bankruptcy News, Issue No. 12; Bankruptcy Creditors'
      Service, Inc., 609/392-0900)


EXODUS COMMS: Citicapital Demands $2.6MM+ Payment of Rent
---------------------------------------------------------
Richard M. Beck, Esq., at Klehr Harrison Harvey Branzburg &
Ellers LLP in Wilmington, Delaware, relates that on August 31,
2000, Exodus Communications, Inc., and its debtor-affiliates,
and EMC Corporation executed a Master Lease Agreement to lease
certain equipment in accordance with three lease supplements for
a total of monthly rent of $92,697.35. The lease was
subsequently assigned to Citicapital Commercial Corporation,
which is the real party-in-interest with respect to those
claims.

Mr. Beck contends that the Debtors have failed to remit regular
monthly payments to Citicapital on the master lease and is
indebted on an accelerated basis in excess of $2,600,000. From
the petition date to November 26, 2001, the Debtors owe
Citicapital $185,394.70, which is classified as administrative
claim, and from November 27, 2001 to the date of the motion
another $185,394.70. (Exodus Bankruptcy News, Issue No. 13;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


FACTORY CARD: Delaware Court Approves Disclosure Statement
----------------------------------------------------------
On February 5, 2001, Factory Card Outlet Corp. announced that
the United States Bankruptcy Court for the District of Delaware
had approved its disclosure statement relating to its amended
plan of reorganization that it filed with the Bankruptcy Court
on February 5, 2002. The Company currently intends to 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.


FALCON PRODUCTS: S&P Lowers Ratings After Weak Operating Results
----------------------------------------------------------------
Standard & Poor's said that it lowered its corporate credit
rating on furniture maker Falcon Products Inc. to single-'B'
from single-'B'-plus, due to continued weak operating results
exacerbated by the company's leveraged capital structure. The
outlook is negative. About $148.0 million in total debt was
outstanding on November 3, 2001.

St. Louis, Missouri-based Falcon suffered from further lowered
demand for its products in the contract furniture and
hospitality markets after the September 11 terrorist attacks due
to lower capital spending and the challenging environment in the
U.S. hotel industry

"Ratings could be lowered, if industry conditions result in
continued deterioration of Falcon's credit measures," commented
Standard & Poor's credit analyst Martin Kounitz.

Falcon's sales for the fiscal year ended November. 3, 2001
declined a modest 5.1%, as lower sales to hotels were somewhat
mitigated by better results from the contract furniture and food
service segments.

With the acquisition of Shelby-Williams in 1999, a significant
portion of Falcon's revenues were derived from furniture sold to
the hotel industry to refurbish existing hotels. Products
include sleeper sofas and upholstered chairs.


FEDERAL-MOGUL: Court Approves Ashurst as Committee's UK Counsel
---------------------------------------------------------------
The Unsecured Creditors' Committee of Federal-Mogul Corporation
and its debtor-affiliates, obtained Court approval to employ and
retain the law firm Ashurst Morris Crisp as its Special Counsel
to handle matters related to the English administration cases.

The Committee voted to retain Ashurst at a meeting held in
November 2, 2001.  Ashurst was selected by the Creditors
Committee because of its expertise in  complex insolvency and
corporate reconstruction matters in both  England and Europe.
Ms. Davis cites that the firm's reconstruction and insolvency
group, in particular, has experience and knowledge in debtors'
and creditors' rights and business reorganizations under English
Law and corresponding legislation in Germany, Belgium, Italy,
France and Spain. Additionally, Ashurst's extensive corporate,
insurance, finance, litigation, environmental, real estate and
tax practices may be tapped by the creditors.

The Committee has hired Ashurst on an hourly basis sans any
retention fee. Ashurst will be charging the Debtors on an hourly
basis in accordance with the firm's regular hourly rates plus
reimbursement of actual, necessary expenses incurred by the
Firm. The current hourly rates of Ashurst are:

    Partners           UKpound 425         (US$600)
    Senior Associates  UKpound 275 to 350  (US$400 to 500)
    Junior Associates  UKpound 200 to 275  (US$290 to 400)
    Trainees           UKpound 115 to 130  (US$165 to 190)
    Paralegals         UKpound 100         (US$140)

The services that Ashurst may be required to render to the
Creditors Committee include but are not limited to:

A. To give legal advice with respect to the Creditors
   Committee's powers and duties in the context of the English
   administration;

B. To assist, advise and represent the Creditors' Committee in
   its consultations with the Debtors regarding the
   administration in England of the cases;

C. To assist, advise and represent the Creditors' Committee in
   any investigation of the acts, conduct, assets, liabilities
   and financial condition of the English debtors and their
   European affiliates, operation of the English debtors'
   businesses and any other matter relevant to international
   matters in the Chapter 11 cases or to the resolution of the
   English administrations;

D. Prepare in behalf of the Creditors Committee necessary
   applications, motions, answers, orders, reports and other
   legal papers in connection with the English administration;

E. To review and respond in behalf of the Creditors' Committee
   to pleadings in the English administration; and

F. To perform any other legal services for the creditors
   committee in connection with these chapter 11 and English
   administration cases.

The Court received assurance from Nicholas J. Angel, a Partner
at the firm Ashurst Morris Crisp, that the firm is a
disinterested person in the Chapter 11 cases and that it has
conducted, and is continuing to conduct, a series of database
searches for the potential connections and relationships between
the firm and Debtors, Creditors and other parties-in-interests.
(Federal-Mogul Bankruptcy News, Issue No. 10; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


FISHER COMMS: Executes Pacts to Refinance Credit Facilities
-----------------------------------------------------------
Fisher Communications, Inc., (Nasdaq:FSCI) announced that
consolidated loss from continuing operations for the year ended
December 31, 2001 was $7,936,000 compared with income from
continuing operations of $31,857,000 reported for the year ended
December 31, 2000.

While year 2000 results included non-recurring gains totaling
$10,301,000 after income tax effects, the unfavorable comparison
between years is largely attributable to a 26% decline in
revenue from broadcasting operations.

Including a loss of $327,000 from discontinued operations (net
of income taxes), which was recorded in the second quarter,
consolidated net loss for the year ended December 31, 2001 was
$8,263,000.

Consolidated net loss for the fourth quarter was $1,762,000.
This result includes expenses incurred in connection with cost
reduction and restructuring initiatives, including a $2,049,000
after tax charge for severance.

"The past year was unprecedented in terms of change, challenges,
and the need to adapt quickly," said Fisher President & CEO,
William W. Krippaehne Jr. "Even before the tragic events of
September 11, we were responding to a declining economy through
restructuring of the company and by looking for new ways to add
value to our communications and media enterprise."

At its meeting on February 13, Fisher's board of directors
declared a dividend of $.26 per share, payable on March 1 to
shareholders of record on February 15. The company, through its
subsidiary Fisher Properties Inc., recently completed a bid
process relating to the potential sale of its real estate
portfolio. Due to current market conditions, the company
presently is not seeking to sell its entire portfolio of real
estate assets, but will continue to explore opportunistically
the sale of individual properties.

In other business, Fisher has executed commitment letters to
refinance its eight-year senior secured credit facility used to
finance the acquisition of television stations, and its
unsecured revolving line of credit used to finance construction
of Fisher Plaza and for other corporate purposes. As part of its
refinancing, the company intends to repay its unsecured bank
lines of credit available for working capital purposes. Upon
completion of the refinancing, current defaults of financial
covenants under the company's credit facilities will be
eliminated. Also, with completion of the refinancing, the
company expects to write off approximately $3.5 million of
unamortized fees incurred in connection with the eight-year
senior secured credit facility. The company expects to finalize
agreements for these transactions during the first quarter of
2002.

Fisher Communications, Inc. is a Seattle-based communications
and media company focused on creating, aggregating, and
distributing information and entertainment to a broad range of
audiences. Its 12 network-affiliated television stations are
located in the Northwest and Southeast, and its 28 radio
stations broadcast in Washington, Oregon, and Montana. Other
media operations include Fisher Entertainment, a program
production and distribution business, as well as Fisher
Pathways, a satellite and fiber transmission provider. Fisher
also specializes in the design and operation of innovative
commercial properties, of which Fisher Plaza is the prime
example.

                         *   *   *

As previously reported in the Troubled Company Reporter, Fisher
Communication obtained a waiver from its lenders for its
noncompliance of certain financial covenants under its credit
agreements. As a result of the waiver, $205,284,000 of such
amount is no longer classified in current liabilities.


FOURTHSTAGE TECHNOLOGIES: Violates Nasdaq Listing Requirements
--------------------------------------------------------------
On December 31st, 2001, Fourthstage Technologies, Inc., filed
for Chapter 11 protection under the Bankruptcy Code of the
United States, in the United States Bankruptcy Court for the
District of Arizona, Phoenix, Arizona, case #01-17604-ECF-EWH.

On January 23rd, 2002, NASDAQ, by letter dated January 23rd,
2002, notified the Company of its  determination that "The
continued listing of the Company's securities on the NASDAQ
Stock Market is no longer warranted," and that "Staff has
determined to delist the Company's securities from the NASDAQ
Stock Market at the opening of business on January 31st, 2002."
The decision of Nasdaq is based upon the following Marketplace
Rules: 4330(a)(1), 4330(a)(3), 4330(C), 4450(f), 4450(a)(2),
4450(a)(5), 4310(c)(13).

The Staff determination was based upon the following factors:

     * The Filing and associated public interest concerns raised
       by it

     * Concerns regarding the residual equity interest of the
       existing listed security holders

     * The Company's failure to demonstrate its ability to
       sustain compliance with all requirements for continued
       listing with The Nasdaq Stock Market.  In that regard,
       Staff notes that the Company has been below the minimum
       $5,000,000.00  market value of public float and $1.00
       minimum bid price requirements for continued listing
       under Maintenance Standard 1, as set forth in Marketplace
       Rules 4450(1)(2) and 4450(a)(5), since November 19, 2001
       and September 17, 2001, respectively; and

     * In  addition our records indicate that the Company has
       not paid its Listing of Additional shares (LAS) fees for
       the first and second quarters of 2001, in the amount of
       $2,000.00 and $22,500.00. Consequently, the Company does
       not comply with Marketplace Rule 4310(c)(13).


FRONTSTEP: Foothill Waives Financial Covenants under Credit Pact
----------------------------------------------------------------
Frontstep, Inc. (Nasdaq: FSTP), a leading global provider of
business software and services for midsize manufacturers and
distributors, reported its financial results for the second
quarter ended December 31, 2001.

Total revenues for the second quarter were $23.5 million and the
reported operating loss was $2.3 million.  These results were
within the range of preliminary results announced by the Company
on January 9, 2002.  The net loss for the second quarter 2002
was $2.7 million.

The Company also reported that it has executed an amendment to
the loan agreement with its lender, Foothill Capital
Corporation, under which the conditions of non-compliance with
financial covenants have been waived effective as of December
31, 2001 and its financial covenants for the coming twelve
months have been reset.  In addition, the lender has agreed to
defer principal payments due under the Company's current term
note and to provide $2.5 million in additional borrowing
availability to support the Company's operations over the next
six months.

Furthermore, the Company announced that its Board of Directors
has approved in principle an agreement pursuant to which holders
of its outstanding Series A Convertible Participating Preferred
Shares and certain members of its Board of Directors, including
the Chairman, would provide $4.5 to $5.0 million for working
capital needs.  In exchange, the Company would issue unsecured
convertible notes that would be subordinated to the Company's
principal lender and warrants for up to 600,000 common shares
priced at $0.01 per share.  The Notes would be due in May 2004.  
The Notes would be convertible into common stock of the Company
at a price equal to 80% of the market price at the time of
closing of the transaction.  The Company expects approximately
$1.5 million of the proposed funding to be available within the
next 30 days and the remainder to be provided upon obtaining
shareholder approval of the proposed transaction.  Under the
terms of the agreement, the conversion price for the Company's
Series A Convertible Participating Preferred Shares would be
reset from $12.00 per share to $6.00 per share and all other
anti-dilution rights with respect to the agreement would be
waived. The Company expects to finalize a definitive agreement
for the proposed transaction in the next few weeks.

"We have worked hard over the last 45 days to arrange and
complete these important financing plans," stated Stephen A.
Sasser, president and chief executive officer.  "We now look
forward to advancing our business and executing our strategic
plans."

                       Outlook for 2002

The Company stated that most of its previously announced cost
reduction actions and expense saving measures have been
implemented and are now expected to reduce the Company's ongoing
operating costs by more than $8.0 million annually, which is
greater than the $5.0 - $7.0 million announced in January, 2002.  
The Company anticipates that its operating results for the
current quarter ending March 31, 2002 will reflect a small loss
on revenue levels comparable to those reported today.  The
Company expects profitable results from its operations and
positive cash flows during the quarter ended June 30, 2002.  The
Company expects consistent profitability for the second half of
the calendar year.

Frontstep (formerly Symix) is a leading provider of software and
services for growing, midsize manufacturers, distributors and
subsidiaries of Fortune 500 companies.  Frontstep helps
companies advance customer service, reduce costs, drive sales
revenue, outmaneuver the competition and grow market share.
Founded in 1979, Frontstep is headquartered in Columbus, Ohio
and has over 4,400 customer sites and a worldwide network of 28
offices in 16 countries.

Frontstep's ERP, CRM and supply chain solutions are quickly
deployed to integrate and manage order processing and
fulfillment from the Internet to the front, back and corner
offices.  These CustomerSynchronized? Collaborative Solutions
provide visibility across multiple plants, distribution centers,
suppliers and buyers.  Today's "movers and makers" can align
with customer expectations in real time to deliver products on
time, every time.  More information about Frontstep is available
at http://www.frontstep.com


GC COMPANIES: Court Sets Plan Confirmation Hearing for March 12
---------------------------------------------------------------
                 UNITED STATES BANKRUPTCY COURT
                  FOR THE DISTRICT OF DELAWARE

In re:                     )     Chapter 11
GC COMPANIES, INC. et al., )     Case Nos. 00-3897
                           )     Through 00-3927 (EIK)
          Debtors.         )     (Jointly Administered)

   NOTICE OF (I) HEARING TO CONSIDER CONFIRMATION OF THE DEBTORS
      PLAN OF REORGANIZATION, (II) TIME FIXED FOR FILING
     ACCEPTANCES OR REJECTIONS THEREOF, AND (III) DEADLINE
                 FOR FILING OBJECTIONS THERETO
                 -----------------------------

   PLEASE TAKE NOTICE that, on January 30, 2002, GC Companies,
Inc., and its affiliated debtors-in-possession (the "Debtors")
and the Official Committee of Unsecured Creditors (the
"Committee") filed their First Amended Joint plan of
Reorganization (as amended or modified, the "Plan") with the
United States Bankruptcy Court for the District of Delaware, 824
Market Street, Wilmington, DE 19801 (the "Court").

   PLEASE TAKE FURTHER NOTICE that on January 30, 2002, the
court entered an order approving the Disclosure Statement with
respect to the Plan (as amended, modified or supplemented from
time to time, the "Disclosure Statement").

   PLEASE TAKE FUTHER NOTICE that a hearing (the "Confirmation
Hearing") will be held before the Honorable Erwin I. Katz, in
the United States District court, 844 King Street, Wilmington,
DE 19801, on March 12, 2002, at 10:30 a.m. (Eastern), or as soon
thereafter as counsel may be heard, to confirm the Plan.

   PLEASE TAKE FURTHER NOTICE that objections, if any, to
confirmation of the Plan shall (a) be in writing, (b) state the
name and address of the objecting party and nature of the claim
or interest of such party, (c) state with particularity the
basis and nature of any objection, (d) propose specific language
changes to the Plan to cure the objection and indicate the
corresponding section(s) and page(s) in the Plan to which such
modifications are proposed to be made and (e) be filed, together
with a proof of service, with the Court and served so that they
are received no later than March 4, 2002, at 4:00 p.m. (Eastern)
by the following parties: (i) counsel for the Debtors:  Goodwin
Procter LLP, Exchange Place, Boston, MA 02109, Attn. Daniel M.
Glosband, P.C., and Colleen A. Murphy, Esq., and Pepper Hamilton
LLP, 1201 Market Street, Suite 1600, Wilmington, DE 19801-1709,
Attn. David M. Fournier, Esq., (ii) counsel for AMC
Entertainment, Inc.: Lathrop & Gage, L.C., 2345 Grand Boulevard,
Suite 2800, Kansas City, MO  64108-2612, Attn. Raymond F.
Beagle, Jr., Esq., and Wallace E. Brockhoff, Esq., and Stutman,
Treister & Glatt, P.C., 3699 Wilshire Blvd., Suite 900, Los
Angeles, CA 90010, Attn:  Isaac M. Pachulski, Esq. (iii) counsel
for the Official Committee of Unsecured Creditors;  Pachulski,
Stang, Ziehl, Young & Jones, PC, 10100 Santa Monica Blvd., Suite
1100, Los Angeles, CA 90067, Attn. Marc A. Beilinson, Esq., and
Jeremy V. Richards, Esq., and (iv) Office of the United States
Trustee for the District of Delaware, 844 King Street, Suite
2313, Lockbox 35, Wilmington, DE 19801-3519.

   PLEASE TAKE FURTHER NOTICE that the Disclosure Statement and
Plan are on file with the Clerk of the Court and may be examined
by any interested parties at the office of the Clerk of the
Court, 824 Market Street, Wilmington, DE 19801.  Any creditor,
equity security holder or any other party in interest may also
obtain a copy of the Disclosure Statement and Plan, at their own
expense, from Parcels, Inc., /DDR (302)658-9911.

   PLEASE TAKE FURTHER NOTICE that January 28, 2002, at 5:00
p.m. (Eastern) is the "voting record date" for determining which
holders of claims against the Debtors may be entitled to vote to
accept or reject the Plan.

   PLEASE TAKE FURTHER NOTICE THAT MARCH 4, 2002, AT 4:00 P.M.
(Eastern) IS FIXED AS The DEALINE FOR VOTING AND FOR BALLOTS
ACCEPTING OR REJECTING THE PLAN TO BE RCEIVED BY POORMAN-DOUGLAS
CORP., BALLOTING AGENT FOR THE DEBTORS.  BALLOTS SHALL BE FILED
WITH THE DEBTORS BALLOTING AGENT AT THE FOLLOWING ADDRESS:  GC
Companies, Inc., c/o Poorman-Douglas Corp., PO Box 4390,
Portland, OR 97208-4390 (address for hand delivery or overnight
courier:  GC Companies, Inc., c/o Poorman-Douglas Corp., 10300
SW Allen Blvd., Beaverton, OR 97005).

   PLEASE TAKE FURTHER NOTICE that if you believe you are the
holder of a claim in an impaired class receiving a distribution
under the Plan and are entitled to vote to accept the Plan, but
did not receive a ballot, you should contact GC Companies, Inc.,
c/o Poorman-Douglas Corp., PO Box 4390, Portland, OR 97208-4390,
(877) 301-5528 (toll free).

   PLEASE TAEK FURTHER NOTICE that the Confirmation Hearing may
be adjourned from time to time without further notice to
creditors or parties in interest other than be an announcement
in the Court of such adjournment on the date scheduled for the
Confirmation Hearing.

Daniel M. Glasband, PC           David M. Fournier, Esq.
Colleen A. Murphy, Esq.          PEPPER HAMILTON LLP
GOODWIN PROCTER LLP              1201 Market Street, Suite 1600
Exchange Place                   Wilmington, Delaware 1980
Boston, Massachusetts 02109      (302)777-6500
(617)570-1000

       ATTORNEYS FOR THE DEBTORS AND DEBTORS-IN-POSSESSION

               Marc A. Beilinson, Esq.
               Jeremy V. Richards, Esq.
               PACHULSKI, STANG, ZIEHL, YOUNG & JONES PC
               10100 Santa Monica Boulevard
               Suite 1100
               Los Angeles, California 90067
               (310)277-6910
    
  ATTORNEYS FOR THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS


GLOBAL CROSSING: Seeks Approval of Agreement with Hutchison/STT
---------------------------------------------------------------
Global Crossing Ltd., and its debtor-affiliates move the Court
for approval of a Letter of Intent and term sheet dated January
28, 2002, among Global Crossing Ltd., Hutchison Whampoa Limited
and Singapore Technologies Telemedia Pte. Ltd.

Paul M. Basta, Esq., at Weil Gotshal & Manges LLP in New York,
New York, tells the Court that the Debtors and the Investors
entered into the Letter of Intent immediately prior to the
commencement of these chapter 11 cases.  This deal constitutes a
fundamental premise of the Debtors' proposed reorganization.
Prior to entering into exclusive negotiations with the
Investors, the Debtors say they reviewed a number of strategic
alternatives, including exploratory discussions with a number of
other potential financial and strategic investors and concluded
that securing a potential investment by the Investors was the
most viable alternative.  Before the Commencement Date, the
Debtors, with the assistance of Blackstone and counsel, engaged
in intensive arm's-length negotiations with the Investors which
resulted in the Letter of Intent.

The Debtors anticipate that a plan sponsor such as the Investors
will enable them to emerge from the chapter 11 process as a
viable, stand-alone business.  The net effect of a restructuring
consummated through an investment and a confirmed plan of
reorganization will enable Global Crossing to continue to fund
and develop the Network, to expand its customer base, and
present to the market the world's most extensive and advanced
IP-based fiber-optic network.

Mr. Basta submits that Hutchison and Singapore Technologies are
globally recognized telecommunications leaders -- not only
familiar with the telecommunications industry on the whole, but
are also familiar with the Debtors' business, strategy and
operations.  Indeed, Hutchison has had a financial stake in the
Debtors' since January 2000, when it acquired $400,000,000 of
the Debtors' convertible preferred equity as part of a joint
venture with respect to telecommunications activities in Hong
Kong.

Mr. Basta relates that Hutchison is a Hong Kong-based
multinational conglomerate with origins dating back to the 1800s
and part of the Li Ka-shing group of companies, which together,
represent about 15% of the total market capitalization of the
Hong Kong stock market.  In 2000, Hutchison's consolidated
revenue was over $10,000,000,000, and its consolidated net
profit was approximately $4,400,000,000.  With approximately
100,000 employees worldwide, Hutchison operates five core
businesses in 36 countries: ports and related services;
telecommunications and e-commerce; property and hotels; retail
and manufacturing; and energy and infrastructure.

Mr. Basta relates that Singapore Technologies is a leading
technologies based info-communications conglomerate based in
Singapore with business interests in the provision of fixed and
mobile telecommunications services, wireless data communications
services, Internet mobile services, global IP network, Internet
infrastructure and managed hosting services, satellite services,
broadband cable and video services and e-business software
development services.

The Letter of Intent provides that the Investors will become the
economic sponsors of a plan of reorganization that provides for:

A. the Investors' purchase of 79% of the equity in the
     reorganized Global Crossing for $750,000,000, which shall
     be used to fund the reorganization and Reorganized Global
     Crossing's ongoing business; and

B. Reorganized Global Crossing's issuance of $800,000,000 in new
     debt instruments and 21% of the equity of Reorganized
     Global Crossing to creditors and the distribution of
     $300,000,000 in cash to creditors.

The material terms of the Letter of Intent are:

A. General Terms: The Investors will fund a plan of
     reorganization through the purchase of equity of
     Reorganized Global Crossing.

B. Form Of Investment: The Investors will purchase a combination
     of common and convertible preferred stock of Reorganized
     Global Crossing, such that the Investors shall own 79% of
     the equity of Reorganized Global Crossing, subject to
     dilution.

C. Aggregate Investment Amount: The Investors will invest
     $750,000,000 in the aggregate in cash.

D. Use Of Proceeds: Proceeds from the transaction will be
     utilized by Reorganized Global Crossing to fund its
     business on an ongoing basis.

E. Board Representation: Reorganized Global Crossing's board of
     directors will have no more than 10 members, at least 8 of
     which will be chosen by the Investors, including the
     Chairman. The Investors' designees shall be appointed
     Chairman of the Executive Committee, Nominating Committee,
     Compensation Committee and Audit Committee.

F. Conditions To Closing: The obligations of the Investors to
     complete the Transaction will be subject to the fulfillment
     of conditions customary for transactions of this nature and
     other agreed conditions, including:

       a. the concurrent completion of the Global Crossing
            restructuring,

       b. financial and business status of AGC;

       c. regulatory approvals;

       d. the absence of any material adverse changes;

       e. amendment of "change of control" provisions if
            necessary;

       f. certain minimum Service Revenues and Service EBITDA
            performance targets set forth in the LOI;

       g. management employment arrangements on terms
            satisfactory to the Investors;

       h. modification of certain noncompete provisions, if
            necessary;

       i. compliance with debtor in possession loan covenants in
            the event the Debtors obtain DIP financing;

       j. making certain efforts with respect to the listing of
            the new equity issued in connection with a
            restructuring on a US national stock exchange;

       k. Global Crossing having complied with all other
            applicable pre-closing covenants and customary
            representations and warranties and

       l. compliance with this timetable:

         1. file a motion seeking approval of Buyer Protection
              Order within seven days of the Commencement Date,

         2. obtain approval of Buyer Protection Order and apply
              for regulatory approvals within 45 days of
              Commencement Date,

         3. collect qualified bids within 90 days of the
              Commencement Date,

         4. conduct the Auction, if qualified bids are received,
              within 110 days of the Commencement Date,

         5. filing of a plan of reorganization and disclosure
              statement within 125 days of the Commencement Date

         6. approval of disclosure statement and commencement of
              solicitation of votes on plan of reorganization
              within 160 days of the Commencement Date,

         7. confirmation of a plan of reorganization within 205
              days of the Commencement Date,

         8. the occurrence of the effective date of a plan of
              reorganization subject to receipt of any consent,

         9. approval or authorization of any government entity,

        10. closing of the new exit financing within 230 days of
             the Commencement Date.

        If there are no Qualified Investment Proposals
        submitted, the timetable can be accelerated.

G. Global Crossing Restructuring: Global Crossing will confirm a
     plan of reorganization and pursue other proceedings under
     the laws of jurisdictions outside the United States as
     necessary to give effect to a restructuring. The terms of
     the Global Crossing Restructuring must be acceptable to the
     Investors, including:

     a. $800,000,000 in new debt securities to be distributed to
          existing Global Crossing creditors;

     b. 21% of the share capital of Global Crossing to be
          distributed to existing Global Crossing creditors;

     c. $300,000,000 in cash to be distributed to existing
          Global Crossing creditors;

     d. all of Global Crossing's existing bank debt, bond debt
          and claims relating to entities having filed for
          bankruptcy protection to be eliminated in exchange for
          the consideration set forth above;

     e. new exit financing to be arranged by Global Crossing;

     f. elimination of all existing preferred and common shares
          and other equity interests;

     g. Hutchison to surrender its existing convertible
          preferred stock and invest new cash of $375,000,000 in
          exchange for a combination of new Senior Convertible
          Preferred Stock and common shares;

     h. STT to invest new cash of $375,000,000 to subscribe for
          a combination of new Senior Convertible Preferred
          Stock and common shares;

     i. net working capital of Global Crossing of at least
          $1,000,000,000, including a minimum cash balance of
          Global Crossing of at least $700,000,000 as of
          September 30, 2002 as reflected in a pro forma balance
          sheet;

     j. post-restructuring liabilities of Global Crossing,
          including taxes, not to exceed a cap to be specified
          in the pro forma balance sheet, subject to adjustments
          to be agreed upon if the Closing Date occurs before or
          after September 30, 2002; and

     k. establishment of a new Global Crossing compensation plan
          providing for equity-based compensation to management
          of Global Crossing in an amount of up to 10% of the
          fully diluted common equity of Reorganized Global
          Crossing as of the Closing Date.

     At the Closing Date, an allocation shall be made under the
     Management Plan of a target level of 5% of the common
     equity as of such date at an exercise price equal to the
     per share buy-in price of the Investors on the Closing Date
     and with a vesting schedule to be determined at the time of
     the grant.

H. New Exit Financing: New debt financing in an amount of not
     less than $350,000,000 to be arranged by Global Crossing on
     terms acceptable to the Investors.

I. Conditions To Signing Definitive Documentation: Signing of
     definitive documentation will be subject to:

     a. negotiation of definitive documentation acceptable to
          Global Crossing and the Investors,

     b. compliance by Global Crossing and the Investors with all
          the pre-closing covenants and conditions set forth
          herein,

     c. the terms of the Global Crossing Restructuring to be
          supported by the agents for the banks and the
          statutory creditors' committee by no later than the
          date of the proposed Auction;

     d. availability of debtor-in-possession financing for
          Global Crossing of no less than $150,000,000 on terms
          satisfactory to Investors;

     e. satisfaction of the Investors with respect to the status
          of AGC and the status of any AGC restructuring; and

     f. the completion of due diligence satisfactory to the
          Investors.

J. Back-End Date: If the Closing Date does not occur by Sept.
     30, 2002, the Investors and Global Crossing shall each have
     the discretion to terminate the transaction provided that
     if, on such date, the only unsatisfied condition to closing
     is obtaining a requisite regulatory approval, such date
     shall be extended to December 31, 2002.

K. Miscellaneous: Global Crossing agrees to:

     a. continue to operate its business in the ordinary course
          prior to the closing,

     b. make information available to Investors,

     c. give the Investors reasonable access to Global
          Crossing's management and premises and periodically
          update them on material business developments and

     d. consult with the Investors on all matters outside of the
          ordinary course relating to its business, strategy
          financing and restructuring.

     The Investors and Global Crossing agree to cooperate under
     the terms of the LOI, and make necessary filings, to obtain
     necessary or appropriate regulatory approvals. (Global
     Crossing Bankruptcy News, Issue No. 3; Bankruptcy
     Creditors' Service, Inc., 609/392-0900)


GOLDMAN INDUSTRIAL: Case Summary & 20 Largest Unsec. Creditors
--------------------------------------------------------------
Lead Debtor: Goldman Industrial Group, Inc.
             One Post Office Square
             Suite 4100
             Boston, MA 02109

Bankruptcy Case No.: 02-10467-MFW

Debtor affiliates filing separate chapter 11 petitions:

        Case No.         Entity
        --------         ------   
        02-10468-MFW     Fellows Corporation
        02-10469-MFW     J & L Metrology Company, Inc.  
        02-10470-MFW     Bryant Grinder Corporation  
        02-10471-MFW     Bridgeport Machines, Inc.  
        02-10472-MFW     Hill-Loma, Inc.  
        02-10473-MFW     Jones & Lamson Vermont Corp.

Type of Business:

Chapter 11 Petition Date: February 14, 2002

Court: District of Delaware

Judge: Mary F. Walrath

Debtors' Counsel: Laurie A. Krepto, Esq.
                  Victoria Watson Counihan, Esq.
                  Scott D. Cousins, Esq.
                  Greenberg Traurig, LLP
                  1000 West Street, Suite 1540
                  The Brandywine Building
                  Wilmington, DE 19801
                  302-661-7000
                  Fax : 302-661-7360
                  Email: bankruptcydel@gtlaw.com

Estimated Assets: $0-50,000

Estimated Debts: $50 Million to $100 Million

List of Debtor's 20 largest Unsecured Creditors:

Entity                        Nature of Claim     Claim Amount
------                        ---------------     ------------
Brown Rudnick Freed & Gesmer  Trade               $407,676
One Financial Center
Boston, MA 02111
Attn: Jeff Keffer, Esq.
Phone: 617/856-8200
Fax: 617/856-8201

Lake Contracting              Trade               $164,908
5 Middlesex Avenue
Somerville, MA 02145
Attn: Dana Lake

Equity Office                 Trade                $74,128
One Post Office Square L.L.C
File No. 3841
Collections Center Drive
Chicago, IL 60693
Attn: Robert Briely
Phone:617/314-2900
Fax:617/314-2855

Ricci Consultants             Trade                $33,134
35 Highland Circle
Needham, MA 02494
Phone: 781/449-4312
Fax: 781/449-7623

Creative Office Pavilion      Trade                $26,577
One Design Center Place
Boston, MA 02210
Phone: 617/956-4100
Fax : 617/426-6541

Argus Management Corporation  Trade                $19,184
207 Union Street
South Natick, MA 01760
Attn: John Haggerty
Phone: 508/651-3777
Fax: 508/651-7072

Balance Scorecard             Trade                $15,686
55 Old Bedford Road
Lincoln, MA 01773
Phone:781/402-1159
Fax: No fax

New England Financial         Trade                $10,040
Post Office Box 4332
Carol Stream, IL 60197-4332
Attn: Denise Desatels
Phone: 617/585-4505
Fax:

CFS Consulting, Inc.          Trade                 $9,089
19 Pequot Road
Marblehead, MA 01945
Phone: 781/639-1966
Fax: 781/639-0443

American Express              Trade                 $7,984
P.O. Box 1270
Newark, NJ 01701-1270
Phone:800/553-6464

InfoSystems Intergrated Inc.  Trade                 $7,031
199 State Street
Boston, MA 02109
Attn: Kevin Shea
Phone:617/719-1913
Fax: 617/720-3525

Russell Reynolds Associates   Trade                 $5,089
Old City Hall
45 School Street
Boston, MA 02108-3296
Phone: 617/523-1111
Fax: 617/523-7305

McMahon Architects, Inc.      Trade                 $2,860
535 Albany Street
Boston, MA
Phone:617/482-5353
Fax :617/482-3288

Linford E. Stiles             Trade                 $2,696
Associates, L.L.C.  
46 Newport Road, Ste. 208
New London, NH 03257
Phone: 603/526-6566
Fax: 603/526-6185

Staples Communications        Trade                 $2,299
4 Research Drive
Ste 500
Shelton, CT 06484
David Iraman
Phone:203/402-7650

Randall Straaton Inc.         Trade                 $1,955
325 W. 38th Street,
Suite 1603
New York, NY 10018
Randall Straaton
Phone:212/868-7669
Fax:212/868-7671

Nutter McClennan & Fish       Trade                 $1,425
One International Place
Boston, MA 02110-2699
Phone:671/439-2000

IKON Office Solutions         Trade                 $1,374
Customer Service Center
855 Winding Brook Drive
Glastonbury, CT 06033
Phone:888/645-6005

AT&T                          Trade                 $1,325
P.O. Box 2969
Omaha, NE 68103-2969
Phone:800/524-2455

Purchase Power                Trade                 $1,110
P.O. Box 856042
Louisville, KY 40285-6042
Phone:800/997-9907


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

As explained in the Debtors' application for the extension of
the lease decision period, the unexpired leases are for
properties used by the Debtors for the operation of their
corporate and manufacturing facilities and are assets of the
estates and are thus integral to the Debtors' continued
operations as they seek to reorganize.  Although the Debtors may
seek the court's permission to reject some of the unexpired
leases prior to the conclusion of these chapter 11 cases, at
this time, the Debtors believe that most of the unexpired leases
will either prove to be desirable -- or necessary -- to the
continued operation of the Debtors' business.


HOMESTORE.COM: Nasdaq Halts Trading, Requesting Additional Info.
----------------------------------------------------------------
The Nasdaq Stock Market(R) announced that the trading halt
status in HomeStore.com Inc. (Nasdaq: HOMS) was changed to
"additional information requested" from the company.  Trading in
the company had been halted Wednesday at 9:10 a.m. Eastern Time
for News Pending at a last sale price of .72.  Trading will
remain halted until HomeStore.com Inc., has fully satisfied
Nasdaq's request for additional information.


HUDSON RESPIRATORY: Taps Deloitte & Touche to Replace Andersen
--------------------------------------------------------------
On January 25, 2002, Hudson Respiratory Care Inc. dismissed
Arthur Andersen LLP as its independent accountant.  Andersen
provided both accounting and audit services to the Company, and
was the primary consultant for the implementation of the
Company's SAP software platform.

The Company's Board of Directors approved the decision to change
accountants on January 17, 2002, and the Audit Committee of the
Board of Directors approved the decision to change accountants
on January 25, 2002.  The Board of Directors believes that it is
in the best interests of the Company to make a change in the
Company's certifying accountants.

In connection with its audits for the two most recent fiscal
years and through January 25, 2002, there have been no
disagreements with Andersen on any matter of accounting
principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not
resolved to the satisfaction of Andersen, would have caused
Andersen to make reference thereto in its report on the
financial statements of the Company for such time periods,
except as follows:

     * During the audit of its financial statements for the year
ended December 31, 2000, the Company had a disagreement with
Andersen regarding the reserves for accounts receivable
(doubtful accounts and rebates) as of December 31, 2000.
Andersen informed the Company of its concerns as to the
methodology utilized to establish the level of these reserves as
well as that inadequate support had been provided for these
reserves. Upon further review and analysis by the Company, and
continuing discussions with Andersen, these reserves were
adjusted, and backup substantiation developed, to the
satisfaction of Andersen, which issued its report on the
Company's financial statements for the year ended December 31,
2000.

Members of the Audit Committee of the Board of Directors of the
Company met with Andersen to discuss these matters.  The Company
believes that the concerns expressed by Andersen with respect to
the foregoing issue have been addressed, as evidenced by the
fact that Andersen has issued an unqualified report covering the
Company's 2000 financial statements, and that the Company now
has policies and procedures in place to properly establish
reserve balances, and substantiation, in respect of its accounts
receivable in accordance with GAAP.  The Company has authorized
Andersen to respond fully to the inquiries of the successor
accountant concerning this matter.

Andersen informed the Company in a letter dated July 30, 2001
that the following material weaknesses in internal control
existed during fiscal year ended December 31, 2000:

     * The Company did not prepare on a timely basis
reconciliations for substantially all of the Company's balance
sheet accounts, and the Company's internal process for review
and approval of reconciliations was informal and inconsistent.

     * The Company's support for the required reserves for
accounts receivable (doubtful accounts and rebates) was
initially inadequate; upon further review, adjustments required
to properly state such reserves as of December 31, 2000 were
material to the Company's consolidated financial statements.

     * The Company's consolidated financial statements were not
prepared on a timely basis and eliminating entries were not
initially well-supported.

     * The Company had a shortage of accounting and finance
personnel, and had retained accounting and finance personnel who
lacked the appropriate expertise; as a result, the Company's
former Chief Financial Officer was responsible for a
disproportionate amount of the Company's financial reporting
process, and the efficiency, timeliness and accuracy of the
Company's financial reporting was adversely impacted.

Members of the Audit Committee of the Board of Directors of the
Company discussed these matters with Andersen.  Except as
described above, these conditions did not result in any
disagreements or differences in opinion between the Company and
Andersen.  Andersen advised the Company in the July 30, 2001
letter that it understood that the Company had taken certain
steps subsequent to December 31, 2000 to mitigate these material
weakness conditions.  The Company has authorized Andersen to
respond fully to the inquiries of the successor accountant
concerning these matters.

                     New Independent Accountant

On February 1, 2002, the Company engaged Deloitte & Touche LLP
as the Company's new principal independent accountant to audit
the Company's financial statements, to replace Andersen.


IGI: Inks Definite Deal to Sell Assets to Vetoquinol for $16.7MM
----------------------------------------------------------------
On February 6, 2002, IGI, Inc. entered into a definitive asset
purchase agreement for the sale of substantially all of the
assets of its companion pet products division to Vetoquinol
U.S.A., Inc., an affiliate of Vetoquinol, S.A. of Lure, France.
IGI's companion pet products division produces and markets
products under the names EVSCO Pharmaceuticals, Tomlyn and Luv
Em. Under the terms of the Asset Purchase Agreement, IGI will
receive at closing cash consideration of $16.7 million. In
addition, specified liabilities of IGI's companion pet products
division will be assumed by Vetoquinol U.S.A. The cash
consideration is subject to certain post-closing adjustments.

The transaction also contemplates a license by IGI to Vetoquinol
U.S.A. of specified rights relating to the patented Novasome(R)
microencapsulation technology for use in specified products and
product lines in the animal health business, as well as a supply
relationship under which IGI will supply to Vetoquinol U.S.A.
certain products relating to the patented
Novasome(R)microencapsulation technology.

The closing of the transaction contemplated by the Asset
Purchase Agreement is subject to the authorization of IGI's
stockholders and other customary closing conditions.

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 had a total shareholders' equity deficit
of $3.5 million.


IT GROUP: Seeks Okay of Proposed Interim Compensation Procedures
----------------------------------------------------------------
Gary A. Rubin, Esq., at Skadden Arps Slate Meagher & Flom LLP in
Wilmington, Delaware, states that to eliminate the burdens
placed on the Court by a requirement that the Court hear
uncontested monthly fee applications, to enable all parties to
closely monitor the costs of administering these cases, to
better enable The IT Group, Inc., and its debtor-affiliates to
maintain a consistent level of cash flow availability and to
ensure that Professionals are compensated for their fees and
reimbursed for their expenses in a timely fashion, the Debtors
request that the Court establish procedures for compensating and
reimbursing such court-approved Professionals.

Specifically, the Debtors propose that the payment of
compensation and reimbursement of expenses of the Professionals
be structured as follows:

A. On or before the 25th day of each month following the month
     for which compensation is sought, each Professional will
     prepare a monthly statement of all fees and costs incurred
     during the preceding months which Monthly Fee Statement
     will include detailed itemizations of the services and
     hours expended by matter and Professional, and a summary
     statement of the status of prior compensation requests, but
     which summary need not include the narrative discussion
     generally included in interim fee applications or a
     notarized certification of the Professional.

B. The Monthly Fee Statement will be filed with the Court and
     served on the following parties:

     a. The IT Group, Inc., 2790 Mosside Boulevard, Monroeville,
          PA 15146-2792 (Attn: James M. Redwine);

     b. counsel for the Debtors, Skadden, Arps, Slate, Meagher &
          Flom (Illinois), 333 West Wacker Drive, Chicago,
          Illinois 60606 (Attn: David S. Kurtz, Esq. and Timothy
          R. Pohl, Esq.), and Skadden, Arps, Slate, Meagher &
          Flom LLP, One Rodney Square, P.O. Box 636, Wilmington,
          Delaware 19899-0636 (Attn: Gregg M. Galardi, Esq.);

     c. counsel for the lenders, Weil, Gotshal & Manges (Attn:
          Stephen Karotkin, Esq.);

     d. the Office of the United States Trustee, J. Caleb Boggs
          Federal Building, 844 King Street, Suite 2313, Lockbox
          35, Wilmington, Delaware 19801 (Attn: Mark Kenney,
          Esq.) and

     e. counsel to the official Committee of Unsecured
          Creditors, White & Case, First Union Financial Center,
          2000 South Biscayne Blvd., Miami, Florida 33131-2352
          (Attn: Thomas Lauria, Esq.), and to any other official
          committees appointed in these cases.

C. Each Notice Party will have 20 days after service of a
     Monthly Fee Statement to object thereto. Any objections to
     a Monthly Fee Statement will set forth the nature of the
     objection and the specific amount of fees and/or costs at
     issue and will be filed with the Court and served so as to
     be received on or before 20 days following service of the
     Monthly Fee Statement by the Professional whose statement
     is objected to and the other Notice Parties.

D. If none of the Notice Parties objects before the Objection
     Deadline, then the Debtors will be authorized to pay each
     Professional 90% of the fees and 100% of the expenses
     requested in the Monthly Fee Statement. If an objection is
     received, then the objecting party and the affected
     Professional may attempt to resolve the objection on a
     consensual basis. If the parties are unable to reach a
     resolution of the Objection, the affected Professional may
     either:

     a. file a request for payment with the Court, which request
          will be heard at the first scheduled omnibus hearing
          occurring at least 20 days after the filing and
          service of such request, or

     b. forego payment of the disputed amount until the next
          interim or final fee application hearing, at which
          time the Court will consider and dispose of the
          Objection.

     Even where an Objection is received, the Debtors will be
     authorized to pay 90% of the fees and 100% of the
     reimbursements requested that are not the subject of the
     objection.

E. Thereafter, at three-month intervals, each of the
     Professionals must file with the Court and serve on the
     Notice Parties an interim fee application for Court
     approval of the compensation and reimbursement of expenses
     sought in the Monthly Fee Statements filed during such
     3-month period. In addition to the service requirement in
     the previous sentence, each Professional will serve notice
     of its Interim Fee Application on all parties that have
     entered their appearance pursuant to Bankruptcy Rule 2002.

F. Each Professional must file its first Interim Fee Application
     on or before May 25, 2002, and the first Interim Fee
     Application should cover the Interim Fee Period from the
     Petition Date through and including April 30, 2002.
     Thereafter, Interim Fee Applications will be due on or
     before the 25th day of the month following the end of the
     3-month Interim Fee Period for which interim approval of
     compensation and reimbursement is sought.

G. Any Professional that fails to file an Interim Fee
     Application when due will be ineligible to receive further
     interim payments of fees or expenses under these Procedures
     until such time as a further Interim Fee Application is
     submitted by the Professional.

H. The Debtors will request that the Court schedule a hearing on
     the Interim Fee Applications after all such Applications
     for the Interim Fee Period have been filed, or at such
     other intervals as the Court deems appropriate. Upon
     allowance by the Court of a Professional's Interim Fee
     Application, the Debtors will be authorized to promptly pay
     such Professional all fees and expenses not previously paid
     pursuant to the Monthly Fee Statements.

I. The pendency of an objection to payment of compensation or
     reimbursement of expenses will not disqualify a
     Professional from the future payment of compensation or
     reimbursement of expenses.

J. Neither the payment of or the failure to pay, in whole or in
     part, monthly or interim compensation and reimbursement of
     expenses under these Procedures nor the filing of or
     failure to file an Objection will bind any party in
     interest or the Court with respect to the allowance of
     interim or final applications for compensation and
     reimbursement of expenses of Professionals. All fees and
     expenses paid to Professionals under these Procedures are
     subject to disgorgement until final allowance by the Court.
     (IT Group Bankruptcy News, Issue No. 4; Bankruptcy
     Creditors' Service, Inc., 609/392-0900)  


INSILCO: Will Use Bond Indenture Grace Period to Review Options
---------------------------------------------------------------
Insilco Holding Co. (OTCBB:INSL) said that in connection with
its earlier decision to seek outside assistance in the review of
its strategic alternatives, the Company will utilize the 30-day
grace period under the indenture governing its 12% Senior
Subordinated Notes due 2007, and will not make its scheduled
$7.2 million interest payment due February 15, 2002. The failure
to make the required interest payment within the 30-day grace
period will create an event of default under the indenture
governing the notes and the senior credit facility.

Further, the Company will seek formation of an ad hoc committee
of its note holders to participate in discussions with Insilco
and its senior secured lenders concerning Insilco's strategic
alternatives, including a consensual restructuring of its
capital structure. As with any negotiation, no assurance can be
given as to when and if the Company will succeed in concluding
any such agreement with its stakeholders.

Insilco currently has approximately $24 million in cash and cash
equivalents. The Company emphasized that all of its business
units are operating, and will continue to operate, as usual.
Moreover, the Company stated that its financial resources
currently enable it to pay in a timely manner all the operating
and trade obligations associated with conducting its businesses.

David A. Kauer, President and CEO of Insilco, said, "We
currently have the resources to continue providing our customers
with the high quality products and services to which they are
accustomed, and we are committed to all current and future
projects.

"Our core businesses remain sound. However, the cyclical
weakness in our primary markets has created a challenge for the
Company given its current capital structure, which entails
substantial debt-servicing at the corporate level. To assist the
Company in evaluating the best way to address this situation, we
recently sought the assistance of financial advisors. Insilco
and our advisors look forward to working with the Company's
senior secured lenders and note holders to develop a capital
structure that will allow Insilco to capitalize on our strong
customer relationships, broad product line and global operating
presence when our primary markets rebound," he concluded.

Insilco Holding Co., through its wholly-owned subsidiary Insilco
Technologies, Inc., is a leading global manufacturer and
developer of a broad range of magnetic interface products, cable
assemblies, wire harnesses, high-speed data transmission
connectors, power transformers and planar magnetic products, and
highly engineered, precision stamped metal components.

Insilco maintains more than 1.5 million square feet of
manufacturing space and has 21 locations throughout the United
States, Canada, Mexico, China, Northern Ireland, Ireland and the
Dominican Republic serving the telecommunications, networking,
computer, electronics, automotive and medical markets. For more
information visit the sites at http://www.insilco.comor  
http://www.insilcotechnologies.com


INSPIRE INSURANCE: Nasdaq Halts Trading, Requesting More Info.
--------------------------------------------------------------
The Nasdaq Stock Market(R) announced that the trading halt
status in INSprire Insurance Solutions Inc., (Nasdaq: NSPR) was
changed to "additional information requested" from the company.
Trading in the company was halted Friday at 3:34 p.m. Eastern
Time for News Pending at a last sale price of 0.10. Trading will
remain halted until INSprire Insurance Solutions Inc. has fully
satisfied Nasdaq's request for additional information.

For news and additional information about the company, please
contact the company directly or check under the company's symbol
using InfoQuotes(SM) on the Nasdaq Web site.

For more information about The Nasdaq Stock Market, visit the
Nasdaq Web site at http://www.nasdaq.comor the Nasdaq  
Newsroom(SM) at http://www.nasdaqnews.com


INTEGRATED HEALTH: Rotech Presents a 2nd Amended Joint Plan
-----------------------------------------------------------
In their Second Amended Joint Plan of Reorganization filed with
the Court, the Rotech Debtors have make certain amendments in
the (1) Definitions of Terms, (2) Treatment of Claims and (3)
Restructuring Transactions.

    (1) Definistions of Terms

(a) Reorganized Rotech

  In the Second Amended Plan, "Reorganized Rotech" means (i)
  Rotech, as reorganized as of the Effective Date in accordance
  with this Plan of Reorganization and, if the Restructuring
  Transactions are implemented, (ii) RRC Corp., a Florida
  corporation.

  The phrase starting with "and ... " has been added.

(b) Aggregate Senior Lender Distribution Value

  The original version is: "Aggregate Senior Lender Distribution
  Value" means the dollar amount equal to the sum of (without
  duplication) (i) the value of the New Common Stock to be
  distributed under Section 4.3 with each share deemed to have a
  value of $20, (ii) the Net Distributable Cash, and (iii) to
  the extent that the High Yield Offering and/or the Term Loan B
  Agreement is not fully consummated, the face amount of the
  Distributable Notes.

  In the Second Amended Plan, the phase " High Yield Offering
  and/or the" is stricken, and the new version reads:

       "Aggregate Senior Lender Distribution Value" means the
        dollar amount equal to the sum of (without duplication)
        (i) the value of the New Common Stock to be distributed
        under Section 4.3 with each share deemed to have a value
        of $20, (ii) the Net Distributable Cash, and (iii) to
        the extent that the Term Loan B Agreement is not fully
        consummated, the face amount of the Distributable Notes.

(c) Distributable Notes

  In the original version, "Distributable Notes" means the
  Senior Subordinated Notes and/or Term Loan B Notes, if any, to
  be distributed to the holders of Allowed Senior Lender Claims
  pursuant to the Plan of Reorganization.

  In the Second Amended Plan, the phrase " Senior Subordinated
  Notes and/or" is stricken out.

  The amended version reads as:

       "Distributable Notes" means the Term Loan B Notes, if
        any, to be distributed to the holders of Allowed Senior
        Lender Claims pursuant to the Plan of Reorganization.

  (2) Treatment of Claims

The treatment of Senior Lender Claims (Class 3) has been amended
as follows:

* Allowance of Senior Lender Claims:

  As in the original version of the Joint Plan, on the
  Confirmation Date, the Senior Lender Claims shall be allowed
  in the aggregate amount of $2,326,354,803.05.

* Aggregate Distribution to Class 3:

  Under the Second Amended Plan, on the Effective Date, or as
  soon thereafter as is practicable, holders of Senior Lender
  Claims shall receive (a) 25,000,000 shares of New Common
  Stock, representing 100% of the total shares of New Common
  Stock to be issued and outstanding as of the Effective Date;
  (b) the Distributable Cash; (c) in the event that the Term
  Loan B Agreement is not consummated, Term Loan B Notes in a
  principal amount of $200 million.

  The Debtors have deleted the provision regarding distribution
  in the event High Yield Offering is not consummated.

  Distributions to Individual Holders that have made either the
  "Stock Election" or the "Cash Election" remain the same. (See
  prior entry at [00385].)

* Distribution of Distributable Notes

  Pursuant to amendments regarding High Yield Offering,
  amendments has been made under this item accordingly.

  The original version is:

     In the event that the High Yield Offering and/or the Term
     Loan B Agreement is not consummated or is consummated in
     an aggregate principal amount of less than $500 million,
     the holders of Allowed Claims in this Class 3 will receive
     (i) the net proceeds of the High Yield Offering and the
     Term Loan B Agreement, is any, plus (ii) Distributable
     Notes in the principal amount equal to the difference
     between $500 million and the principal amount of
     Distributable Notes issued pursuant to the High Yield
     Offering. For purposes of the Senior Lender Election, such
     Distributable Notes shall be treated and distributed to
     holders of Allowed Claims in Class 3 as if they constituted
     Distributable Cash.

  After amendments regarding the High Yield Offering have been
  made, "Distribution of Distributable Notes" under the Second
  Amended Plan is as follows:

     In the event that the Term Loan B Agreement is not
     consummated or is consummated in an aggregate principal
     amount of less than $200 million, the holders of Allowed
     Claims in this Class 3 will receive (i) the net proceeds of
     the Term Loan B Agreement, is any, plus (ii) Distributable
     Notes in the principal amount equal to the difference
     between $200 million and the net proceeds of the Term Loan
     B Agreement, if any. For purposes of the Senior Lender
     Election, such Distributable Notes shall be treated and
     distributed to holders of Allowed Claims in Class 3 as if
     they constituted Distributable Cash.

  (3) Restructuring Transactions and Related Transactions.

Again, amendment has been made in connection with deletion of
the High Yield Offering. The amended version reads as:

If the Unofficial Senior Lenders' Working Group so request prior
to the Confirmation Date, the distributions provided for in the
Plan shall be effectuated pursuant to the following
Restructuring Transactions which shall occur on or prior to the
Effective Date in seriatim:

(1) New Rotech shall be formed (but no shares of capital stock
    shall be issued prior to the issuances as described below);

(2) On the Effective Date, the following shall occur
    simultaneously:

  (a) Reorganized Rotech shall transfer, or cause to be
      transferred, to New Rotech substantially all of the assets
      of Reorganized Rotech used in connection with the Rotech
      Debtors' businesses and operations (which may include
      stock of the Rotech Subsidiaries), other than the Retained
      Assets. The assets transferred to New Rotech shall be
      subject to, and New Rotech shall assume sole and exclusive
      responsibility for

      (i)   all unpaid claims, liabilities and obligations of
            the Rotech Debtors incurred after the Commencement
            Date (including, without limitation, those incurred
            pursuant to the Plan) to the extent not paid on or
            prior to the Effective Date, other than any claims,
            liabilities and obligations directly relating to the
            Retained Assets, and

      (ii)  any tax liabilities of the Rotech Debtors for
            periods ending on or before the Effective Date to
            the extent payable after the Effective Date
            (whether or not relating to the transferred assets),
            including, without limitation, any taxes incurred
            in connection with the transfer of the assets;

   (b) In consideration for the transfer of the assets in (a),

       New Rotech shall transfer to Reorganized Rotech

       (i)   all of the New Common Stock of New Rotech,

       (ii)  in the event that New Rotech is the initial issuer
             of, or borrower under, the Revolving Credit
             Facility, the Term Loan B Notes, or the High Yield
             Offering, any cash necessary for Reorganized Rotech
             to fund the cash distributions to be made on the
             Effective Date pursuant to the Plan,

       (iii) in the event that the Term Loan B Agreement is not
             fully consummated, and New Rotech is the initial
             issuer of the Distributable Notes, any
             Distributable Notes to be issued to holders of
             Allowed Senior Lender Claims, and

       (iv)  if the Unofficial Senior Lenders' Working Group so
             desires, the New Rotech Note; and

    (c) New Rotech will issue 250,000 shares of the New Rotech
        Preferred Stock to the New Rotech Profit Sharing Plan as
        partial compensation for future services to be rendered
        to it and its subsidiaries; and

(3) On the Effective Date, and in accordance with Section 4.3(b)
   of the Plan, Reorganized Rotech shall distribute to the
   holders of Allowed Senior Lender Claims all of the New Common
   Stock (comprising all of the common stock of New Rotech and
   Reorganized Rotech), Cash and if necessary, Distributable
   Notes.

   In addition, except as otherwise set forth in the Plan, prior
   to or as of the Effective Date, the Rotech Debtors may
   (subject to the approval of the Unofficial Senior Lenders'
   Working Group), or, at the request of the Unofficial Senior
   Lenders' Working Group, shall cause any or all of the Rotech
   Debtors to engage in any other transactions deemed necessary
   or appropriate to effectuate the implementation of the
   Restructuring Transactions (including, without limitation,
   merging, dissolving or transferring assets between or among
   Rotech Debtors), provided, however, that Reorganized Rotech
   shall not be liquidated, as determined for federal income tax
   purposes, for at least 5 years after the Effective Date.
   (Integrated Health Bankruptcy News, Issue No. 29; Bankruptcy
   Creditors' Service, Inc., 609/392-0900)   


KMART CORP: Seeks Approval to Hire Ordinary Course Professionals
----------------------------------------------------------------
In the ordinary course of business, Kmart Corporation, and its
debtor-affiliates customarily retain the services of various
attorneys, accountants, and other professionals to represent
them in various matters.

The Debtors wish to continue the retention of these ordinary
course professionals and compensate their post-petition services
without the need of additional Court approval, Kmart CEO Charles
C. Conaway informs Judge Sonderby.

Mr. Conaway explains that the continued retention of the
Ordinary Course Professionals is important because the Debtors
have come to rely on them for services such as:

  (a) tax preparation and other tax advice;

  (b) employee relations and compensation;

  (c) legal advice pertaining to corporate matters, advertising,
      collections, and communications;

  (d) legal representation for matters such as personal injury
      and commercial matters;

  (e) real estate consulting; and

  (f) other matters requiring the expertise and assistance of
      professionals.

"With the number of Ordinary Course Professionals involved, it
would be costly and inefficient for the Debtors to submit
individual applications and proposed retention orders to the
Court of each such professional," Mr. Conaway notes.

In addition, Mr. Conaway says, the Ordinary Course Professionals
should not be required to seek compensation through the formal
application process.

Mr. Conaway states that the Ordinary Course Professionals have
already gained expertise and background knowledge on the
Debtors' businesses and operations.  "Thus, it would be very
difficult and expensive to replace them," Mr. Conaway asserts.

A. Payment of Fees and Expenses

  The Debtors propose that they be permitted to pay, without
  formal application to the Court by any Ordinary Course
  Professional, 100% of the post-petition interim fees and
  disbursements to each Ordinary Course Professional upon the
  submission to the Debtors of an appropriate invoice setting
  forth in reasonable detail the nature of the services rendered
  after the Petition Date.

  The Debtors warrant that such interim fees and disbursements
  will not exceed a total of $25,000 per month per Ordinary
  Course Professional.  The Debtors propose that all payments of
  compensation to any Ordinary Course Professional will become
  subject to approval upon application to the Court for
  allowance of compensation and reimbursement of expenses, if
  such payments exceed $25,000 per month.  With respect to the
  Ordinary Course Professionals retained by the Debtors, not
  including those that are Key Ordinary Course Professionals,
  the Debtors anticipate the total fees to be between $500,000
  and $700,000 per month.

  At present, the Debtors employ three Ordinary Course
  Professionals who may receive payment for services in excess
  of the $25,000 per month limits:

  (1) Foley & Lardner - a law firm which assists the Debtors
      with employment issues;

  (2) Howard & Howard - a law firm which pursues commercial
      litigation on behalf of the Debtors;

  (3) Dickinson Wright PLLC - a law firm which provides to the
      Debtors advice pertaining to real estate matters.

  The amount of work performed by the Key Ordinary Course
  Professionals will vary from month-to-month depending on the
  Debtors' needs:

  (a) Foley & Lardner's monthly fees depend on the number and
      complexity of the employment issues the Debtors face;

  (b) Howard & Howard's monthly fees depend on the course of
      the commercial litigation matters it is pursuing on
      behalf of the Debtors; and

  (c) Dickinson Wright's fees may exceed the $25,000 ceiling
      depending on the amount of real estate work it performs
      for the Debtors.

  The Debtors propose that to the extent that fees payable to
  Key Ordinary Course Professional exceed the $25,000 monthly
  limit, they shall, on or before the 30th day of the month
  following the month for which compensation is sought, submit
  a monthly statement for the additional compensation sought
  to:

  (a) the Debtors at Kmart Corporation
      Kmart Resource Center
      3100 West Big Beaver Road, Troy, Michigan 48084-3163
      Attn: Janet Kelley;

  (b) counsel to the Debtors
      Skadden, Arps, Slate, Meagher & Flom (Illinois)
      333 West Wacker Drive, Suite 2100
      Chicago, Illinois 60606
      Attn: John Wm. Butler, Jr.;

  (c) counsel to the Debtors' post-petition lenders;

  (d) counsel to any official committee formed in these cases;
      and

  (e) the United States Trustee
      227 West Monroe Street, Suite 3350
      Chicago, Illinois 60606.

  The Interested Parties will have 20 days after the Monthly
  Statement Date to review the statement for the additional
  compensation and object to the fees requested by the Key
  Ordinary Course Professionals. If any of the Interested
  Parties object to the payment of fees, then the Key Ordinary
  Course Professionals will be required to submit a formal
  application to the Court for the additional compensation.

B. The Submission of Rule 2014 Affidavits

  The Debtors propose that each Ordinary Course Professional
  that is an attorney be required to file with the Court and
  serve upon the United States Trustee an Affidavit of
  Ordinary Course Professional within 60 days of the date of
  an Order granting this Motion.

C. Additional Ordinary Course Professionals

  The Debtors also request that they be authorized and
  empowered to employ and retain additional Ordinary Course
  Professionals needed by the Debtors in the ordinary course
  of their businesses without the need to file individual
  retention applications for each by filing a supplement with
  the Court and serving the Supplement on the United States
  Trustee, counsel for any creditors' committee and counsel
  for the post-petition lenders, without the need for any
  further hearing or notice to my other party.

D. Objections to the Retention of an Ordinary Course
   Professional

  The Debtors propose that the United States Trustee, any
  creditors' committee, and the post-petition lenders shall
  have 20 days after the receipt of each Ordinary Course
  Professional's Affidavit to object to the retention of such
  Ordinary Course Professional.

  If any such objection cannot be resolved within 20 days, the
  matter shall be scheduled for hearing before the Court at
  the next regularly scheduled omnibus presentment date or
  date otherwise agreeable to the Ordinary Course
  Professional, the Debtors, and the United States Trustee.

  If no objection is received within 20 days after the filing
  of an Ordinary Course Professional's Affidavit, the Debtors
  shall be deemed authorized to retain such Professional as a
  final matter.

E. Statement of Ordinary Course Professionals

  The Debtors further propose to file a statement with the
  Court approximately every 120 days, or such other period as
  the Court shall order, and serve such statement upon the
  United States Trustee, counsel for the Debtors' post-
  petition lenders, and counsel for any official committees
  appointed in these cases, a statement that includes these
  information for each Ordinary Course Professional:

  (a) the name of such Ordinary Course Professional;

  (b) the aggregate amounts paid as compensation for services
      rendered and reimbursement of expenses incurred by such
      Ordinary Course Professional during the 120 days; and

  (c) a general description of the services rendered by each
      Ordinary Course Professional.

To avoid any disruption in the professional services required in
the day-to-day operation of their businesses, the Debtors urge
the Court to grant the relief requested. (Kmart Bankruptcy News,
Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-0900)   


LASERSIGHT INC: Falls Below Nasdaq Continued Listing Standards
--------------------------------------------------------------
LaserSight Incorporated (Nasdaq: LASE) announced that it has
been advised by The Nasdaq Stock Market, Inc. (Nasdaq), that
because the Company's common stock has closed below the minimum
$1.00 per share requirement for continued listing for a period
of 30 consecutive trading days, in accordance with Nasdaq Market
Place Rules the Company will be provided until May 15, 2002, to
regain compliance. If at any time before May 15, 2002, the bid
price of the Company's common stock closes at $1.00 per share or
more for a minimum of 10 consecutive trading days, Nasdaq will
provide written notification that the Company has regained
compliance with its rules.

If compliance cannot be demonstrated by May 15, 2002, Nasdaq
will provide the Company with written notification that it is no
longer in compliance with Nasdaq requirements for inclusion in
the Nasdaq National Market. At that time, the Company may appeal
the Nasdaq staff's determination to a Listing Qualifications
Panel, or if the Company meets the requirements for inclusion in
the Nasdaq SmallCap Market and applies for transfer to that
Market before May 15, 2002, Nasdaq proceedings will be delayed
pending review of the transfer application. If the transfer
application is approved, the Company will have the SmallCap
Market's grace period until August 13, 2002, and if it meets
certain listing criteria may be eligible for an additional 180
day grace period. In addition, if by February 10, 2003 the
Company's bid price meets the $1 per share requirement for 30
consecutive trading days and the Company meets other
requirements, it may be eligible for transfer back to the Nasdaq
National Market.

LaserSight is a leading supplier of quality technology solutions
for laser vision correction and has pioneered its patented
precision microspot scanning technology since it was introduced
in 1992. Its products include the LaserScan LSX(R) precision
microspot scanning system, its international research and
development activities related to the Astra family of products
used to perform custom ablation procedures known as CustomEyes
and its MicroShape(TM) family of keratome products. The Astra
family of products includes the AstraMax(TM) diagnostic work
station designed to provide precise diagnostic measurements of
the eye and CustomEyes CIPTA and AstraPro(TM) software, surgical
planning tools that utilize advanced levels of diagnostic
measurements for the planning of custom ablation treatments. In
the United States, the Company's LaserScan LSX excimer laser
system operating at 200 Hz is approved for the LASIK treatment
of myopia and myopic astigmatism. The MicroShape family of
keratome products includes the UltraShaper(TM) durable keratome
and UltraEdge(R) keratome blades.


LEAR CORP: S&P Assigns BB+ Rating to $200MM Conv. Senior Notes
--------------------------------------------------------------
Standard & Poor's assigned its double-'B'-plus rating to Lear
Corp.'s $200 million convertible senior notes due 2022. Proceeds
from the debt issue are to be used to refinance existing debt.

At the same time, Standard & Poor's affirmed its double-'B'-plus
corporate credit rating on Southfield, Michigan-based Lear, a
supplier of automotive interior products. The company has about
$2.5 billion of debt. The outlook is stable.

"The ratings on Lear reflect the company's heavy debt load and
below-average credit protection measures, which more than offset
its above-average business position as a leading global
automotive supplier," said Standard & Poor's analyst Martin
King.

The convertible senior notes will be guaranteed by certain Lear
subsidiaries and will be pari passu to the company's
unsubordinated unsecured debt. The conversion premium is 20%,
and the notes are putable to the company beginning in five
years.

Financial risk increased following Lear's $2 billion (net of
divestiture proceeds), debt-financed acquisition of UT
Automotive Inc. in 1999. Although the acquisition strengthened
Lear's business profile, it also resulted in a more leveraged
capital structure and weaker cash flow protection. Since the
acquisition, Lear has primarily used its free cash flow to
reduce debt, and the company's total debt to capital now stands
at about 65%. Management expects free cash flow to total $150
million - $225 million in 2002, but future debt reduction may be
hindered by acquisitions in the consolidating automotive supply
industry, or by the current downturn in demand for new
automotive vehicles.

Lear's strong market positions, efficient operations, and  
variable cost structure should limit downside risk. Upside
ratings potential is limited by an aggressively leveraged
capital structure, competitive and cyclical market conditions,
and ongoing investment requirements.


LEINER HEALTH: Eyeing Prepack Chapter 11 to Restructure Finances
----------------------------------------------------------------
Leiner Health Products Inc., reported financial and operating
results for its third quarter ended December 31, 2001. The
Company said that a number of factors including its
restructuring initiative, which began in July 2000, and an
improving U.S. private label vitamin, mineral and supplement
(VMS) market, have continued to contribute to improving year-
over-year results.

Net sales for the third quarter were $146.4 million compared to
$159.5 million through the same period a year ago. Gross profit
was $29.1 million compared with the prior year period of $24.8
million representing an increase in the gross profit as a
percentage of net sales from 15.6% to 19.9%. This improvement
was due to a number of factors including improved plant
efficiencies due to the Company's restructuring initiatives.

Operating expenses have been reduced from $31.5 million in the
prior year quarter to $28.0 million in the current year quarter.
The reduction was due primarily to lower advertising
expenditures, reduced payroll spending and travel and
entertainment related expenses offset by expenses related to the
Company's financial and operational restructuring.

The Operating loss improved from $5.2 million in the prior year
quarter to $2.5 million in the current year quarter. In the nine
months ended December 31, 2001 the operating loss was $1.8
million against income of $5.5 million in the prior year period.
The prior year period includes $20.0 million of settlement
income arising from a supplier dispute. After exclusion of this
non-recurring item the operating loss improved by $12.7 million.

Primarily as a result of the factors discussed above, the
reported net loss for the quarter was $11.1 million compared
with the prior year quarter's reported net loss of $9.6 million.
The prior year quarter benefited from the recognition of $4.4
million of net settlement income and a $4.5 million income tax
benefit. The current year quarter was negatively impacted by
non-recurring expenses related to the Company's financial and
operational restructuring. These include $3.2 million of
professional fees and expenses, $1.2 million of severance
payments and $0.8 million of employee retention bonuses.

Net sales for the third quarter were $146.4 million compared to
$159.5 million during the same period a year ago. Gross profit
was $31.0 million in the third quarter compared with the prior
year period of $24.8 million. Gross profit as a percentage of
net sales improved to 21.2% in the current quarter vs. 15.5% in
the prior year period. This improvement was due to a number of
factors including improved plant efficiencies as a result of the
Company's restructuring initiatives.

Operating expenses in the current quarter have been reduced from
$31.5 million in the prior year quarter to $23.6 million in the
current year quarter. The reduction (3.6 percentage points of
net sales) was due primarily to lower advertising expenditures,
reduced payroll spending and travel and entertainment related
expenses. The pro-forma reflects the exclusion of $4.4 million
of restructuring related expenses incurred in the current
quarter. These comprise $3.2 million of restructuring
professional fees and expenses, $0.4 million of severance
payments and $0.8 million of employee retention bonuses.

Operating Income before Restructuring Charges and Settlement
Income for the quarter increased by $12.6 million from a loss of
$8.3 million in the prior year quarter to a profit of $4.3
million. The improvement was due to improved gross profit
dollars and reduced operating expenses.

In the nine months ended December 31, 2001 Operating Income
Before Restructuring Charges and Settlement Income improved from
a loss of $13.2 million in the prior year nine month period to
$9.1 million of income in the current year nine month period.
This $22.3 million improvement was due to a number of factors
including improved plant efficiencies and $12.4 million of
operating expense improvement due primarily to lower advertising
expenditures, reduced payroll spending and travel and
entertainment related expenses. The operating expense
improvement is stated after exclusion of net restructuring
related expenses of $10.5 million, which primarily comprise of
restructuring professional fees and expenses.

               Leiner's Operational Restructuring

The reengineering of the Company's operations continued in the
quarter. These have included the previously announced closure of
three OTC drug manufacturing facilities, the reduction of
approximately 3,200 of it's 6,700 SKUs and the elimination of
more than 600 positions.

In addition to the improvement in gross profit margins, the
company's reengineering has yielded significant working capital
improvements in inventory turns and accounts receivable days'
outstanding. These improvements have been realized while
simultaneously improving customer service levels significantly
during the nine months ended December 31, 2001 and reducing the
U.S. outstanding order backlog during the quarter.

Commenting on the third quarter results, Robert M. Kaminski,
chief executive officer of Leiner Health Products, said, "The
improvements seen in our nine months results attest to the
dedication and hard work of the men and women of Leiner. Their
continued commitment to the Company remains important as we work
to finalize the previously announced financial restructuring."

On January 30, 2002, Leiner began formally soliciting Senior
Bank Lender and bondholder votes of its previously announced
consensual prepackaged plan of reorganization. Ballots and
disclosure statements were mailed on January 30, 2002 to the
Company's Senior Bank Lenders and holders of its Senior
Subordinated Notes.

The Company continues to make progress and, subject to a
favorable vote on its proposed plan of reorganization, it
currently intends to implement its financial restructuring
through a consensual prepackaged plan of reorganization under
Chapter 11 of the US Bankruptcy Code. Leiner said that under the
proposed restructuring plan, suppliers will be unimpaired and
normal business operations will continue. Also, Leiner's
Canadian business would continue as usual and Vita Health's
creditors will not be impaired.

Kaminski continued, "We continue to be gratified by the ongoing
support we have received from our customers and suppliers
throughout our restructuring. Their confidence in Leiner has
helped to allow us to achieve significant progress in our
efforts to restructure the Company's finances. Once finalized,
the financial restructuring will enable Leiner to reduce its
debt burden and gain access to new working capital." Kaminski
added, "I look forward to putting the financial restructuring
behind us and I am excited about the prospect of accelerating
the growth of one of America's leading VMS suppliers."

Leiner Health Products Inc., headquartered in Carson,
California, is one of America's leading vitamin, mineral,
nutritional supplement and OTC pharmaceutical manufacturers. The
company markets products under several brand names, including
Natures Origin, YourLife(R) and Pharmacist Formula(R). For more
information about Leiner Health Products, visit
http://www.leiner.com  


MCLEODUSA: Court Allows Payment of Prepetition Tax Obligations
--------------------------------------------------------------
McLeodUSA Inc., asks the Court for authority to pay certain
prepetition tax obligations.

Randall Rings, McLeodUSA's Group Vice President, Secretary and
General Counsel, says that in the ordinary course of business,
the Debtor incurs tax liabilities, including, among others,
Sales and Use Taxes and Employment and Withholding Taxes.  These
tax obligations, Mr. Rings says, were generally paid by the
Debtor on time before the Chapter 11 filing.

As of the petition date, Mr. Rings estimates that the aggregate
amount of Employment and Withholding Taxes due and owing to
various Taxing Authorities is approximately $70,919.  He
estimates that the Debtor does not owe any Sales and Use Taxes
to Taxing Authorities at the petition date.

But since the Debtor and Non-Debtor Affiliates operate numerous
facilities in several states and, due to their sales and
distribution operations, Mr. Ring does not discount the
possibility that the Debtor may presently owe Taxes in a number
of states.

David Kurtz at Skadden, Arps, Slate Meagher & Flom (Illinois),
says payment of the Taxes in full and on time is both necessary
and in the estate's best interests. Failure to timely pay, Mr.
Kurtz says, may give rise to a flurry of lien filings, thereby
resulting in significant administrative problems.

Mr. Kurtz tells the Court that the federal government and many
states in which the Debtor operates have laws providing that,
because the Taxes constitute "trust fund" taxes, the Debtor's
officers or directors or other responsible employees could,
under certain circumstances, be held personally liable for the
payment of such Taxes.

To the extent any accrued Taxes of the Debtor were unpaid as of
the Petition Date in these jurisdictions, the Debtor's officers
and directors could be subject to lawsuits during the pendency
of the Chapter 11 case, Mr. Kurtz says. These lawsuits, he says,
would be extremely distracting for the Debtor's directors and
officers, whose full-time focus must be to implement a
reorganization under the Plan.

Judge Erwin Katz, having determined that the relief requested in
the Motion is in the best interests of the Debtor, its estate,
its creditors and other parties-in-interest, grants the Motion.
(McLeodUSA Bankruptcy News, Issue No. 3; Bankruptcy Creditors'
Service, Inc., 609/392-0900)  


MEDMIRA INC: Appoints Dr. Shou-Ching Tang as New Director
---------------------------------------------------------
MedMira Inc. announced that it has appointed Dr. Shou-Ching Tang
to fill a vacancy on its Board of Directors. Dr. Tang is
Director of Cancer Research, Newfoundland Cancer Treatment and
Research Foundation and a Medical Oncologist, Associated
Professor and a tenured member of the Faculty of Medicine at
Memorial University of Newfoundland. Dr. Tang is also the Chair
of the Atlantic Canada Oncology Group and a Nucleus Member of
the Medical Oncology Specialty Committee with the Royal College
of Physicians and Surgeons of Canada. "Dr. Tang's extensive
research and medical experience will be a great asset to the
MedMira Board" said Stephen Sham, Chairman and CEO.

"This is a very exciting time to get involved with MedMira,"
said Dr. Tang. "The Company has just received Turkish approval
for its products and is at its final phase of the United States
Food and Drug Administration Pre- Market Approval process for
the approval of its HIV product. MedMira has completed the two
most difficult phases of the process; the pre-clinical and
clinical phases, and is now only awaiting the final phase of
this approval, which is an on-site manufacturing inspection. I
am honoured to be a part of this growing and dynamic Company."

In anticipation of MedMira's pending purchase orders, MedMira
also announced today that it has engaged Brad Romoff to provide
the Company with management consulting services. Mr. Romoff is a
financial professional with extensive experience in strategic
planning, acquisitions, joint ventures, organizational
restructuring, management information systems, asset/liability
management, budgeting/forecasting, controllership and financial
analysis. MedMira will compensate Mr. Romoff for his consulting
services by granting him an option to purchase 20,000 common
shares of the Corporation at market closing price of February
12, 2002, subject to CDNX approval.

MedMira is a publicly traded (CDNX:MIR), ISO 9001 registered
Canadian medical biotechnology company that develops,
manufactures and markets a new generation of "easy to use" rapid
diagnostic tests and instrumentation to aid in the diagnosis of
both infectious and non-infectious human disease.

As reported in the Troubled Company Reporter Jan. 8 Edition, the
B.C. Securities Commission has issued a cease trade order with
respect to the common shares of MedMira. Trading in the shares
of MedMira has been halted by the CDNX. MedMira has failed to
file on a timely basis its audited financial statements for the
year ended July 31, 2001 and its quarterly financial statements
for the period ended October 31, 2001 due to severe cash flow
problem.

MedMira is working with its independent auditors, BDO Dunwoody
LLP, to complete the audit of its financial statements for the
year ended July 31, 2001. The Company is preparing its quarterly
financial statements for the period ended October 31, 2001.
MedMira is proceeding diligently and currently expects that this
work will be completed on or before January 21, 2001.


MESABA AIRLINES: Reaches Deal with Flight Attendants on Contract
----------------------------------------------------------------
Mesaba Airlines (Nasdaq:MAIR) and the Association of Flight
Attendants announced they have reached a tentative agreement on
a new contract for the airline's 550 flight attendants. The AFA
and Mesaba have been meeting regularly for approximately 20
months to negotiate the first contract for flight attendants.

"The negotiating committee believes this agreement will serve
our members well," said Timothy Evenson, master executive
council president for the AFA.

"We look forward to a cooperative working relationship with our
flight attendants and with the AFA," said John Spanjers, vice
president flight operations for Mesaba Airlines. "Our flight
attendants are skilled safety professionals who are also
integral to our efforts to provide excellent customer service.
We're pleased to have reached a tentative agreement that
reflects their importance to Mesaba."

Details of the tentative agreement were not released pending a
review by the AFA's master executive council. If approved, the
AFA then will conduct a membership ratification vote on the
terms of the tentative agreement.

Mesaba and the AFA are grateful for the expert assistance
provided by senior mediator Patricia Sims of the National
Mediation Board.

Mesaba Aviation, Inc., d/b/a Mesaba Airlines, operates as a
Northwest Jet Airlink and Airlink partner under code-sharing
agreements with Northwest Airlines. Currently, the airline
serves 96 cities in 28 states and Canada from Northwest's and
Mesaba's three major hubs, Detroit, Minneapolis/St. Paul, and
Memphis. During January 2002, Mesaba operated a fleet of 106
regional jet and jet-prop aircraft including the 69 passenger
Avro RJ 85 and the 30-34 passenger Saab 340.

Mesaba Holdings, Inc. is traded under the symbol MAIR on the
NASDAQ National Market.

More information about Mesaba Airlines is available on the
Internet at: http://www.mesaba.com


MOHEGAN TRIBAL: S&P Rates 8% Senior Subordinated Notes at BB-
-------------------------------------------------------------
Standard & Poor's assigned its double-'B'-minus rating to
Mohegan Tribal Gaming Authority's $250 million 8% senior
subordinate notes due 2012. Proceeds will be used to refinance
outstanding borrowings under the Authority's revolving credit
facility. Concurrently, the Mohegan Tribal Gaming Authority's
double-'B'-plus corporate credit and senior secured debt
ratings, and other ratings were affirmed. Debt outstanding was
$990 million as of December 31, 2001.

The outlook remains negative.

The ratings for Connecticut-based Mohegan Tribal Gaming
Authority, the entity formed to operate the Mohegan Sun casino,
reflect the high quality of the Mohegan Sun casino and related
amenities, limited regional competition, and favorable
demographics of the southeastern Connecticut market. These
factors are offset by a lack of geographic diversity, high debt
leverage for the rating, and lower-than-expected cash flow in
the immediate months after the first phase of the Project
Sunburst expansion opened on September 25, 2001.

"The outlook incorporates high debt leverage for the rating, and
ongoing challenges associated with an expansion of the Project
Sunburst's magnitude," said credit analyst Craig Parmelee. It
will be revisited as the project is completed, and debt leverage
declines to levels more consistent with the ratings.

Mr. Parmelee added that "the competitive landscape remains a
longer-term rating factor." He notes that the greatest
competitive concern would be a sizable expansion by nearby
Foxwoods, owned and operated by the Mashantucket Western
Pequots, and the realization of plans by certain Native American
tribes to build casinos in Rhode Island or Massachusetts. A
number of political hurdles exist to the expansion of gaming
into either adjacent state, though. Moreover, lead times for
casino development are long, and no projects have been
announced.

Mr. Parmelee also notes that the market could be affected by new
competition in other parts of Connecticut and nearby states.
Standard & Poor's believes that near-term capacity growth
anticipated in Atlantic City, N.J., and the potential for casino
gaming in New York is likely to have a modest affect on cash
flow in Connecticut, although no material impact to visitor
demand is expected in the intermediate term.


NII HOLDINGS: Taps Houlihan to Explore Restructuring Options
------------------------------------------------------------
NII Holdings, Inc., announced its preliminary consolidated
financial results for the full-year 2001 including operating
revenues of $680 million, a consolidated operating cash flow
loss (earnings before impairment and restructuring charges,
interest, taxes, depreciation and amortization) of $100 million
and approximately 1.19 million global proportionate subscribers.

Consolidated operating revenues rose 106% from $330 million in
2000 to $680 million in 2001. Fourth-quarter 2001 revenues grew
to $194 million, a 64% increase over the same period in 2000. At
the end of 2001, NII Holdings had 1.19 million global
proportionate subscribers. The company added 27,400 subscribers
during the fourth quarter of 2001 and 479,000 subscribers during
the year. During the fourth quarter, NII Holdings implemented
cash preservation initiatives, which included reduced subscriber
growth among other measures designed to improve cash flow. The
subscriber base was also adjusted due to the sale of our
minority position in Telus Corporation during the fourth quarter
of 2001.

Consolidated operating cash flow loss (earnings before
impairment and restructuring charges, interest, taxes,
depreciation and amortization) for the entire year was reduced
by 25% from a $133 million loss in 2000 to a $100 million loss
in 2001. During the fourth quarter, the consolidated operating
cash flow loss was $4 million, an 88% improvement over the same
period last year.

As previously disclosed, NII Holdings is in discussions with its
various creditors regarding the restructuring of its debt
obligations, which could include such matters as a potential
sale of strategic assets, reorganization under Chapter 11 of the
United States Bankruptcy Code or other measures, and has
retained the investment banking firm Houlihan Lokey Howard &
Zukin Capital to assist it in exploring strategic alternatives.

As a result of its cash preservation initiatives and proposed
debt restructuring, NII Holdings has revised its business plan,
and as a result, expects to record pre-tax non-cash impairment
and restructuring charges for the full year 2001 of between $1
billion and $2 billion in accordance with Statement of Financial
Accounting Standards No. 121. The amount of the charge will be
finalized in our annual report on Form 10-K expected to be filed
by April 1, 2002 and will be determined based on the expected
outcome of the proposed debt restructuring efforts at that time.

NII Holdings, Inc. has wireless operations and investments in
Mexico, Argentina, Brazil, the Philippines, Peru and Chile.


NQL INC: Files for Chapter 11 Protection in New Jersey
------------------------------------------------------
NQL Inc. (OTC Bulletin Board: NQLI) announced that it filed a
voluntary petition for relief under Chapter 11 of the United
States Bankruptcy Code in the United States Bankruptcy Court for
the District of New Jersey.

In addition NQL reported that it has entered into an Asset Sale
Agreement with White Shark Technologies, LLC whereby WST will
purchase the assets of the NQL Software Division, including its
Network Query Language(TM), related hardware, domain names,
trademarks, copyrights, patents, patent applications, and
certain contract rights for $250,000.  Other assets,
particularly NQL's stock interests, including its interest in
its wholly owned subsidiary Delta Computec Inc. are not part of
the sale to WST. "Neither the bankruptcy filing by NQL nor the
sale of the NQL Software Division should affect the operations
of DCI," stated Matthew Harrison, Chairman of the Board.

The consummation of the sale is dependent on a number of
factors, including the entry of an order authorizing and
approving the Asset Sale Agreement by the Bankruptcy Court.

NQL previously reported that it had entered into an Asset
Management Agreement with E-botz.com, the sole member of WST,
whereby E-botz.com has been operating the assets of the NQL
Software Division.  It is anticipated that the provisions of the
Asset Management Agreement will continue until the closing
of the sale of the NQL Software Division to WST.

NQL also reported that it has received the resignations of Jason
Meyer and Tracey L. Rudd from its Board of Directors, effective
February 14, 2002.  Mr. Matthew Harrison continues as the sole
member of the NQL Board of Directors.

NQL is a registered trademark of NQL Inc.  Network Query
Language, NQL ContentAnywhere and all names of NQL Inc.'s other
services or products are trademarks of NQL Inc. in the U.S. and
certain other countries.


NATIONSRENT: Committee Taps Berenson Minella as Fin'l Advisors
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of NationsRent
Inc., and its debtor-affiliates submits its application to
employ and retain Berenson Minella & Company as financial
advisors and investment bankers in these Chapter 11 cases, nunc
pro tunc to January 4, 2002.

Committee chairman James Schaeffer states that Berenson Minella
will be rendering these services:

A. Financial analysis related to the proposed DIP financing
     motion and other first day motion including assistance in
     negotiations, attendance at hearings and testimony;

B. The review of all financial information prepared by the
     Debtors or their consultants as requested by the Committee
     including, but not limited to, a review of the Debtors'
     financial statements as of the Petition Date showing in
     detail all assets and liabilities and priority and secured
     creditors;

C. Monitoring of the Debtors' activities regarding cash
     expenditures, receivable collections, asset sales and
     projected cash requirements;

D. Attendance at meetings including the Committee, the Debtors,
     creditors, their attorneys and consultants, federal and
     state authorities if required;

E. Review of the Debtors' periodic operating and cash flow
     statements;

F. Review of the Debtors' books and records for inter-company
     transactions, related party transactions, potential
     references, fraudulent conveyances and other potential pre-
     petition investigations;

G. Any investigation that may be undertaken with respect to the
     pre-petition acts, conduct, property, liabilities and
     financial condition of the Debtors, their management,
     creditors including the operation of their businesses, and
     where appropriate, avoidance actions;

H. Review of any business plant prepared by the Debtors or their
     consultants;

I. Review and analysis of proposed transaction for which the
     Debtors seek Court approval;

J. Assistance in a sale process of the Debtors collectively or
     in segments or other delineations;

K. Assist the Committee in developing, evaluating, structuring
     and negotiating the terms and conditions of all potential
     plans of reorganization;

L. Estimate the value of the securities, if any, that may be
     issued to unsecured creditors under any such plan;

M. Provide the Committee with other and further financial
     advisory services with respect to the Debtors, including
     valuation, general restructuring and advice with respect to
     financial, business and economic issues that may arise
     during the course of restructuring as requested by the
     Committee.

Mr. Schaeffer states that Berenson Minella will be compensated
on these terms:

A. $100,000 fixed monthly rate beginning January 4, 2002;

B. Success fee of 1% of the value attained by the Unsecured
     Creditors pursuant to a Plan of Reorganization; and

C. Reimbursement for reasonable out of the pocket expenses.

Berenson Minella managing director Perry M. Mandarino, submits
that the firm researched its client database to determine
whether it had any relationships with any of the parties-in-
interest in these cases. Berenson Minella has been involved in
engagements wholly unrelated to the Debtors' Chapter 11 cases to
the Debtors' creditors including Citicorp, Credit Lyonnais, GE
Capital Corp., LaSalle Bank, Deustche Bank, Bank One, Union Bank
of California, Citizens Bank, First Union National Bank,
Archimedes Funding; Merrill Lynch, Morgan Stanley, Paribas
Capital Funding, Ares Leveraged Investment Fund, Bank of
America, Van Kampen, BNP Paribas, Insosuez Capital, Bank of
Montreal, The Bank of New York, Investcorp, David L. Babson &
Co., Teachers Advisors, ING Pilgrim, PPM America, Blackrock
Financial Management, Ford Motor Credit; Transamerica Business
Credit, Fleet Capital and IBJ Whitehall Business Credit.

Also, certain professionals retained by parties-in-interest in
these cases have been involved in unrelated engagements with
Berenson Minella. Mr. Mandarino, however, admits that because
the Debtors are a large enterprise with thousands of creditors
and other relationships, they cannot say with certainty that all
relationships and connections have been disclosed. (NationsRent
Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


NEXTERA ENTERPRISES: Fails to Meet Nasdaq Listing Requirements
--------------------------------------------------------------
Nextera Enterprises, Inc. (Nasdaq: NXRA), announced that it
received a letter from Nasdaq notifying the Company that its
common stock did not meet the $1.00 per share minimum closing
bid standard for the last 30 consecutive trading days as
required by the Nasdaq National Market.

Under Nasdaq National Market rules, Nextera must demonstrate
compliance by maintaining a $1.00 minimum closing bid for a
minimum of 10 consecutive trading days by May 15, 2002, or its
common stock will be delisted. The Company may appeal any
decision concerning its Nasdaq listing status to a Nasdaq
Listing Qualifications Panel.

Nextera may choose to apply to transfer its common stock to the
Nasdaq SmallCap Market prior to May 15. In order to transfer,
the Company would have to satisfy the continued inclusion
requirements of the Nasdaq SmallCap Market. If the Company
qualified and a transfer application were approved, the Company
would be afforded an additional 90 calendar day minimum bid
grace period, which would end August 13, 2002. The grace period
could then be extended for an additional 180 days if the Company
meets the core initial listing requirements of the Nasdaq
SmallCap Market.

Nextera Enterprises Inc., consists of Lexecon consulting group,
one of the world's preeminent economics consulting firms.
Lexecon provides its law firm and corporate clients with
analysis of complex economic issues in connection with legal and
regulatory proceedings, strategic-planning decisions, and other
business activities. The firm has offices in Boston, Cambridge
and Chicago. More information can be found at
http://www.nextera.comand http://www.lexecon.com


PACIFIC AEROSPACE: Amends Proposed Debt Workout Agreement
---------------------------------------------------------
As of February 1, 2002, Pacific Aerospace & Electronics, Inc.
and the holders of approximately 97.5% of its 11-1/4% senior
subordinated notes executed an amendment to the Second Amended
and Restated Agreement dated January 11, 2002 regarding a
proposed restructuring of the Company's debt and equity
structure. The Amendment extended certain deadlines in the Lock-
up from January 31, 2001 to March 1, 2002.

Despite heavyweight customers like Boeing and BAE Systems,
Pacific Aerospace & Electrics (PA&E) is having its "metal"
tested. The company produces a broad range of products for the
aerospace, defense, medical, and telecommunications industries.
It makes machined and cast metal components such as aircraft
skin panels and aircraft engine outer guide vanes, and
electronic components such as filters, relays, and solenoids.
PA&E's aviation components and parts are installed in major
aircraft including the Boeing 777 and Airbus A330/340. Deeply in
debt, PA&E plans to sell its UK-based Aeromet subsidiary, which
produces nearly half of the company's sales. It is also
considering selling non-core, US-based operations.


PACIFIC GAS: Parent Wrestles with CA A.G. over Fraud Suit Venue
---------------------------------------------------------------
Pacific Gas and Electric Company Parent Company, PG&E
Corporation, filed a motion on February 8, 2002 transferring the
civil lawsuit filed against it by the California Attorney
General from San Francisco Superior Court to the Northern
District U.S. Bankruptcy Court, according to an announcement by
PG&E.  The transfer is effective immediately, PG&E says.

The lawsuit, filed by California Attorney General Bill Lockyer,
alleges that PG&E Corporation and its directors made improper
use of the Bankruptcy Court by virtue of PG&E Corporation's co-
sponsoring of the pending Plan of Reorganization. It seeks up to
$4 billion in damages from PG&E Corp. for allegedly engaging in
fraudulent business practices that drove its subsidiary utility,
Pacific Gas & Electric Co., into bankruptcy. The State charges
that PG&E "drained the assets of its California utility and put
billions of dollars" into unregulated affiliates in order to
become one of the nation's largest unregulated power companies.
It seeks restitution of assets allegedly wrongfully transferred
to PG&E Corporation from Pacific Gas and Electric Company.

"The attorney general's complaint is without merit, and clearly
appears to be part of his ongoing efforts to obstruct our
utility's plans for emerging from bankruptcy," said Bruce
Worthington, Senior Vice President and General Counsel for PG&E
Corporation. "It makes sense for the complaint to be moved to
Bankruptcy Court, which has original and exclusive jurisdiction
of claims involved in the bankruptcy process and participation
in that process." "While both allegations are patently absurd,
both provide grounds to transfer this case to Bankruptcy Court,"
said Worthington.

"The financial transactions cited by the attorney general have
been thoroughly reviewed and audited multiple times - by the
California Public Utilities Commission, and by the state
Legislature - with no findings that the transactions were
anything but entirely appropriate and legal," PG&E says.

According to Reuters, PG&E has made its own legal challenge by
sending a $4.1 billion bill to a state victims compensation
board claiming California officials abandoned a complex
agreement to shift power pricing authority from state to federal
energy regulators.

California State Attorney General Bill Lockyer vowed to fight
the move by PG&E Corp. to shift the $4 billion state lawsuit to
the Bankruptcy Court, a report by Reuters says.

The state suit, which was filed in San Francisco Superior Court,
belongs in a state rather than federal courtroom because it is
based on alleged violations of California business laws, the
report cites Sandra Michioku, a spokeswoman for Lockyer.
Michioku also said the utility, not its parent, is the party
named in the federal bankruptcy court case, according to the
report.

"'Not so, responded Greg Pruett,' a spokesman for PG&E," reports
Reuters, "He said both the parent company and its utility
subsidiary jointly filed the bankruptcy reorganization plan, so
that means the state's suit belongs in Montali's federal court."
Bruce Worthington, senior vice president and chief attorney for
PG&E, said the bankruptcy court has "original and exclusive
jurisdiction of claims," the report adds.

Separately, San Francisco Monday last week filed its own lawsuit
against PG&E Corp. seeking to return up to $5 billion to
consumers who shouldered up to a 40 percent jump in their energy
bills last year in a failed bid to keep the utility solvent.
City Attorney Dennis Herrera said the lawsuit, filed in San
Francisco Superior Court, complements the one filed by Lockyer
on behalf of the state, but added that the city, as a PG&E
creditor, needed to protect its interests in a separate suit.
(Pacific Gas Bankruptcy News, Issue No. 23; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


PACIFIC GAS: Parent Moves to Dismiss Attorney General's Lawsuit
---------------------------------------------------------------
PG&E Corporation (NYSE: PCG) filed a motion late last week in
the Northern District U.S. Bankruptcy Court to dismiss a lawsuit
filed by the California Attorney General.  PG&E Corporation said
the attorney general's complaint illegally interferes with the
court's supervision of Pacific Gas and Electric Company's plan
of reorganization process and illegally seeks to punish PG&E
Corporation for co-sponsoring the plan of reorganization.

The attorney general's complaint alleges that PG&E Corporation
and its directors made improper use of the Bankruptcy Court by
virtue of PG&E Corporation's co-sponsoring of the pending Plan
of Reorganization. It also seeks restitution of assets allegedly
wrongfully transferred to PG&E Corporation from Pacific Gas and
Electric Company.

The financial transactions cited by the attorney general have
been thoroughly reviewed and audited multiple times - by the
California Public Utilities Commission, and by the state
Legislature - with no findings that the transactions were
anything but entirely appropriate and legal.

The company said it believes the attorney general's complaint is
without merit, and is part of his ongoing efforts to obstruct
Pacific Gas and Electric Company's plans for emerging from
bankruptcy.


PHOENIX GOLD: Faces Delisting for Nasdaq Requirement Violation
--------------------------------------------------------------
Phoenix Gold International, Inc. (Nasdaq: PGLD) reported that it
has received notification from the Nasdaq Stock Market, Inc.
that its common stock had not maintained a minimum market value
of publicly held shares of $1 million over the last 30
consecutive trading days as required for continued inclusion on
the Nasdaq SmallCap Market in accordance with Marketplace Rule
4310(c)(7).  The Company has been provided until May 15, 2002 to
regain compliance with this rule.  If the Company cannot
demonstrate compliance with this rule, then the Nasdaq Staff
will notify the Company that its common stock will be delisted.  
At that time, the Company may appeal the Staff's determination
to the Nasdaq Listings Qualifications Panel.  There can be no
assurance that the Company will regain compliance with this rule
or that the Nasdaq Listings Qualifications Panel would grant a
request from the Company for continued listing on the Nasdaq
SmallCap Market should the Company not regain compliance.

Phoenix Gold International, Inc. designs, manufactures, markets
and sells innovative, high quality, high performance
electronics, accessories and speakers for the audio market.  The
Company sells its products under the brand names Phoenix Gold,
Carver Professional and AudioSource.  The Company's products are
used in car audio, professional sound and home audio/theater
applications.


PILLOWTEX CORP: Seeks Approval of Proposed Solicitation Protocol
----------------------------------------------------------------
To facilitate transmittal of the Disclosure Statement, creditor
voting, ballot tabulation and confirmation of Pillowtex Corp.'s
Joint Plan of Distribution, the Debtors ask the Court to enter
an Order:

  (i) establishing the procedures for solicitation and
      tabulation of votes to accept or reject the Joint Plan of
      Reorganization of Pillowtex Corporation and its
      subsidiaries, including approval of:

      (a) the forms of ballots for submitting votes on the Plan;

      (b) the deadline for submission of ballots;

      (c) the contents of the proposed solicitation packages to
          be distributed to creditors and other parties in
          interest in connection with the solicitation of votes
          on the Plan; and

      (d) the proposed record date for Plan Voting.

(ii) scheduling a hearing on confirmation of the Plan.

In light of the substantial number of creditors involved and the
size and complexity of these cases, Michael G. Wilson, Esq., at
Morris, Nichols, Arsht & Tunnell, in Wilmington, Delaware,
anticipates it is possible that numerous objections will be
filed.  The Debtors believe that issues raised in objections and
proposed resolutions can more efficiently and effectively be
considered if they are permitted to file a consolidated reply.

            Proposed Procedures for Tabulation of Votes

(A) Approval of Form of Ballots

Mr. Tunnell explains that one or more ballots will be
distributed to creditors entitled to vote on the Plan.  The
Debtors propose that the appropriate ballot form will be
distributed to holders of claims in the following classes
entitled to vote to accept or reject the Plan:

  Ballot No.1   Ballot for convenience claims in Class 2 under
                the Plan

  Ballot No.2   Ballot for Secured Claims in Division 4F of
                Class 4 under the Plan

  Ballot No.3   Ballot for Bank Loan Claims in Class 5 under the
                Plan

  Ballot No.4   Ballot for Unsecured Claims in Class 6 under the
                Plan, other than claims under or evidenced by
                Old Senior Subordinated Notes or Old 6%
                Debentures

  Ballot No.5A  Individual ballot to be returned directly to the
                Solicitation and Tabulation Agent for Class 6
                Claims under or evidenced by Old Senior
                Subordinated Notes or Old 6% Debentures

  Ballot No.5B  Individual ballot to be returned to a Master
                Ballot Agent for Class 6 claims under or
                evidenced by Old Senior Subordinated Notes or
                Old 6% Debentures

  Ballot No.6   Master ballot for Class 6 claims under or
                evidenced by Old Senior Subordinated Notes or
                Old 6% Debentures

Since Classes 1 and 3 and Divisions 4A, 4B, 4C, 4D and 4E of
Class 4 under the Plan are unimpaired, Mr. Tunnell says, they
are presumed to accept the Plan.  Accordingly, Mr. Tunnell
notes, holders of interests in Classes 8 and 9 under the Plan
neither retain nor receive any property under the Plan -- thus,
they are deemed to reject the Plan.  "Holders of intercompany
claims in Class 7 will receive nothing under the Plan, but each
of the Debtor entities holding such a claim will be deemed to
have consented," Mr. Tunnell relates.  For these reasons, Mr.
Tunnell tells the Court, solicitation of Classes 1, 3, 7, 8 and
9 and Divisions 4A, 4B, 4C, 4D and 4E under the Plan is not
required and no Ballots have been proposed for creditors and
interest holders in these classes.

Furthermore, certain beneficial owners hold Old Senior
Subordinated Notes or Old 6% Debentures through brokers, banks,
dealers or other agents or nominees.  Mr. Tunnell informs Judge
Robinson that these Master Ballot Agents will receive:

  (i) a Public Notes Master Ballot to be completed by the Master
      Ballot Agent; and,

(ii) Form B Public Notes Individual Ballots to be completed by
      the beneficial owners of Old Senior Subordinated Notes or
      Old 6% Debentures for whom the Master Ballot Agent
      provides services.

(B) Voting Deadline for Receipt of Ballots

The Debtors propose that all ballots must be properly executed,
completed and delivered to their Solicitation and Tabulation
Agent either:

  (i) by mail in the return envelope provided with each ballot;

(ii) by overnight courier; or

(iii) by personal delivery.

Each ballot must be received by the Solicitation and Tabulation
Agent no later than 5:00 p.m. Eastern Time, on the date
established by the Debtors that is at least 30 days after the
commencement of the solicitation period.

(C) Procedures for Vote Tabulation

Solely for the purpose of voting, the Debtors propose that each
claim within a class of claims entitled to vote to accept or
reject the plan be temporarily allowed these rules:

  (a) unless otherwise provided in the Tabulation Rules, a claim
      will be deemed temporarily allowed for voting purposes in
      an amount equal to the lesser of:

        (i) the amount of such claim as set forth in the
            schedules; or,

       (ii) the amount of such claim as set forth in a timely
            filed proof of claim.

  (b) if a claim is deemed allowed in accordance with the Plan,
      such claim will be temporarily allowed for voting purposes
      in the deemed allowed amount set forth in the Plan;

  (c) with respect to claims for which a proof of claim has been
      timely filed but not yet reconciled by the Debtors, if
      such claim is:

        (i) marked as contingent, unliquidated or disputed on
            its face;

       (ii) listed as contingent, unliquidated or disputed in
            the schedules, either in whole or in part; or,

      (iii) not listed in the schedules, such claim will be
            disallowed for voting purposes;

  (d) if a claim for which a proof of claim has been timely
      filed is marked as a priority claim, either in whole or in
      part, but is listed in the schedules as a nonpriority
      claim or as a priority claim only in part, such claim will
      be temporarily allowed for voting purposes as a
      nonpriority claim in an amount lesser of:

        (i) the entire amount of such claim as set forth in the
            proof of claim; or,

       (ii) the nonpriority claim set forth in the schedules,
            provided that such claim is not listed in the
            schedules or marked on the proof of claim as
            contingent, unliquidated or disputed in which case
            it will be subject to Rule C.

        (e) if a claim has been estimated or otherwise allowed
            for voting purposes by order of the Court, such
            claim will be temporarily allowed for voting
            purposes in the amount so estimated or allowed by
            the Court;

        (f) if a claim is listed in the schedules as contingent,
            unliquidated or disputed and a proof of claim was
            not timely filed, such claim will be disallowed for
            voting purposes;

        (g) if a claim for which a proof of claim has been
            timely filed has been reconciled by the Debtors,
            such claim will be temporarily allowed for voting
            purposes in the amount determined to be owed
            pursuant to the Debtors' reconciliation;

        (h) if the Debtors have filed and served an objection to
            a claim at least 15 days before the Voting Deadline,
            such claim will be temporarily allowed or disallowed
            for voting purposes in accordance with the relief
            sought in the objection;

        (i) with respect to claims based on obligations under
            the Debtors' Pre-petition Credit Facility, the
            amount of such claims for voting purposes will be
            the lesser of:

              (i) the amounts provided to the Debtors by the
                  Administrative Agent under the Debtors' Pre-
                  Petition Credit Facility on the Master Bank
                  Loan Claims Listing; or,

             (ii) the amounts identified by an individual holder
                  of a Bank Loan Claim in a Bank Loan Claims
                  Ballot, unless the applicable holder obtains
                  an order of the Court allowing such claim in a
                  different amount for voting purposes;

        (j) if a claim holder identifies a claim amount on its
            Ballot that is less than the amount otherwise
            calculated in accordance with the Tabulation Rules,
            the claim will be temporarily allowed for voting
            purposes in the lesser amount identified on such
            Ballot; and

        (k) with respect to Public Note Claims asserted by
            holders of Old Senior Subordinated Notes or Old 6%
            Debentures, the amounts of such claims for voting
            purposes will be the lesser of:

              (i) the amounts provided to the Debtors by the
                  corresponding Indenture Trustee on the Record
                  Holder Register or the Master Ballot Agent
                  Register, as applicable; or

             (ii) the amounts identified by an Individual Record
                  Holder in a Form A Public Notes Individual
                  Ballot, in each case calculated in accordance
                  with the procedures.

The Debtors assert that the proposed Tabulation Rules will
establish a fair and equitable voting process.  In addition, Mr.
Tunnell suggests to include these procedures:

  (i) any ballot that is properly completed, executed and timely
      returned to the Solicitation and Tabulation Agent or a
      Master Ballot Agent but does not indicate an acceptance or
      rejection of the Plan will be deemed a vote to accept the
      Plan;

(ii) if no votes to accept or reject the Plan are received with
      respect to a particular class, such class will be deemed
      to have voted to accept the Plan;

(iii) if a creditor casts more than one ballot voting the same
      claim before the Voting Deadline, the latest dated ballot
      will be deemed to reflect the voter's intent and thus will
      supersede any prior Ballots; and

(iv) creditors will be required to vote all of their claims
      within a particular class under the Plan either to accept
      or reject the Plan and may not split their votes; thus, a
      Ballot that partially rejects and partially accepts the
      Plan will not be counted.

(D) Confirmation Hearing

The Debtors ask Judge Robinson to schedule a special hearing
date in late April 2002 or early May 2002 to consider the
confirmation of the Plan.  Furthermore, the Debtors propose that
objections to the Confirmation of the Plan must:

  (i) be in writing;

(ii) state the name and address of the objecting party and the
      nature of the claim or interest of such party;

(iii) state with particularity the basis and nature of any
      objection to the confirmation of the Plan; and,

(iv) be filed with the Court and served on the parties that
      have filed requests for notices in these cases so that
      they are received no later than the date established by
      the Debtors that is at least 30 days after the
      commencement of the solicitation period.

(E) The Record Date

The Debtors further ask the Court to establish February 25, 2002
as the Record Date for purposes of determining which creditors
are entitled to receive Solicitation Packages and vote on the
Plan.

(F) The Solicitation Package

Mr. Tunnell identifies the materials included in the
Solicitation Package as:

  (i) the plan or a court-approved summary of the plan;

(ii) the disclosure statement approved by the Court;

(iii) notice of the time within which acceptances and rejections
      of such plan may be filed; and

(iv) any other information as the court may direct, including
      any court opinion approving the disclosure statement or a
      court-approved summary of the opinion.

Currently, Mr. Tunnell reports that the Debtors lack necessary
information to solicit votes of the individual bank syndicate
members under the Pre-petition Credit Facility or the Public
Noteholders.  Thus, the Debtors request that the Administrative
Agent be required to provide a list identifying each Bank Loan
Claimant and its respective address and holdings within three
business days after the Record Date -- to facilitate the
solicitation of votes. (Pillowtex Bankruptcy News, Issue No. 22;
Bankruptcy Creditors' Service, Inc., 609/392-0900)    


PRINTPACK HOLDINGS: S&P Rates $400 Million Bank Facility at BB
--------------------------------------------------------------
Standard & Poor's raised its corporate credit rating on
Printpack Inc., a leading domestic player in the flexible
packaging market, to double-'B' from double-'B'-minus due to
improved operating and financial performance and the expected
enhancement in financial flexibility.

At the same time, Standard & Poor's assigned its double-'B'
corporate credit rating to Printpack Holdings Inc. (parent
company of Printpack Inc.). In addition, Standard & Poor's
assigned its double-'B' rating to the proposed $400 million
senior secured bank facility, based on preliminary terms and
conditions. Proceeds of the bank facility will be used to
refinance existing debt (accordingly, Standard & Poor's will
withdraw its existing senior unsecured and subordinated debt
ratings upon completion of the transaction). The outlook is
stable. Atlanta Georgia-based Printpack has about $380 million
in outstanding debt.

"Printpack's leading niche market shares in the relatively
stable snack food packaging segment, stable cash flow
generation, and improved financial flexibility (following the
completion of its proposed refinancing plan) provide support for
the ratings," said Standard & Poor's credit analyst Liley Mehta.

The company's financial profile has shown an improving trend
since the acquisition of James River's flexible packaging
operations in 1997, which resulted in aggressive debt leverage.
With the gradual integration of operations and an improved cost
structure, total debt (adjusted for capitalized operating
leases) to EBITDA has improved significantly to about 2.8 times
from a peak level of 6.4x in 1997.

The company has used free cash flow to reduce total debt to
around $380 million in 2001 from a peak level of $590 million in
1997. Although capital spending is expected to increase modestly
in the intermediate term, ongoing cost-cutting initiatives
coupled with lower interest expenses (upon completion of the
proposed bank loan facility) should continue to offset
competitive pressures and sustain free cash flow generation.

Financial flexibility is aided by ample availability under
Printpack's proposed revolving credit facility, and an extended
debt maturity schedule.

The ratings incorporate expectations that the company will
maintain its modest financial profile, while balancing growth
objectives.


PSINET INC: UST Appoints Consulting Unit's Creditors Committee
--------------------------------------------------------------
Pursuant to Section 1102(a) and 1102(b) of the Bankruptcy Code,
the United States Trustee appoints the following creditors,
being among the largest unsecured claimants, to serve on the
Official Committee of Unsecured Creditors in the chapter 11
cases of PSINet Consulting Solutions Holdings, Inc.:

(1) The Bank of New York, as Indenture Trustee
    1155 Avenue of the Americas
    New York, New York 10036-2787
         Attn: Irene Siegel, Vice President
         (212) 819-7982

(2) Argent Classic Convertible Arbitrage Fund (Bermuda) L.P.
    73 Front Street
    P.O. Box HM 3013
    Hamilton HMMX, Bermuda
         Attn: Henry Cox
         (441) 292-9718

(3) Argent Classic Convertible Arbitrage Fund, L.P.
    c/o Bobby Richardson
    3100 TowerBlvd., Suite 1104
    Durham, N.C. 27707
    (919) 403-2644

(4) Argent Convertible Growth Fund, Ltd.
    3100 Tower Blvd., Suite 1104
    Durham, N.C. 27707
         Attn: Elliot Bossen
         (919) 419-9098

(5) Magten Asset Management Corp.
    35 East 21st Street
    New York, New York 10010
         Attn: Talton R. Embry, Chairman
         (212) 529-6600

(6) Imperial Capital, LLC
    150 5. Rodeo Drive, Suite 100
    Beverly Hills, CA 90212
         Attn: Lawrence B. Gill
         (310) 246-3750

(7) General Electric Capital Corporation
    260 Long Ridge Road
    Stamford, Connecticut
         Attn: Joseph Noga
         (203) 961-5736
         Counsel: Kaye Scholer, LLP
         425 Park Avenue
         New York, New York 10022
         Attn: Joseph D. Hansen, Esq.
         (212) 836-8000 (PSINet Bankruptcy News, Issue No. 14;
         Bankruptcy Creditors' Service, Inc., 609/392-0900)   


RHI REFRACTORIES: Three Subsidiaries File Chapter 11 Petitions
--------------------------------------------------------------
RHI Refractories Holding Company announced that three of its
businesses, Global Industrial Technologies, Inc. (GIT),
Harbison-Walker Refractories Company, and A.P. Green Industries,
Inc., as well as a number of their subsidiaries, Thursday filed
voluntary petitions for reorganization under Chapter 11 of the
United States Bankruptcy Code.  These businesses provide high-
grade fireproof ceramic refractory products and services for
high-temperature applications in the cement and lime, energy,
chemicals, non-ferrous metals, glass, iron and steel, and
environmental technology industries.

RHI said the Chapter 11 filings were necessary to help the
businesses manage through the current severe economic climate
and the meteoric rise in the number of asbestos-related legal
claims filed against Harbison-Walker and A.P. Green.  The
petitions were filed in the U. S. Bankruptcy Court for the
Western District of Pennsylvania.  North American Refractories
Company (NARCO) previously filed Chapter 11 on January 4, 2002.

GIT, Harbison-Walker, and A.P. Green are seeking court approval
of a new $35 million debtor in possession financing facility
that they believe would provide adequate capital to these
businesses to meet future obligations to customers, vendors and
employees.  This facility is in addition to the $20 million
debtor in possession financing facility obtained by NARCO, which
has received interim court approval.

On Jan. 4, 2002, RHI Refractories Holding Company announced a
major restructuring plan to reduce debt, lower costs and
increase efficiency at its core North American businesses,
citing the negative impact of the slowing economy, sharply lower
demand from the financially-troubled U.S. steel industry, and
increasing asbestos litigation.

"In the past month, facing tough market conditions and a
proliferating number of asbestos claims, we reached the
conclusion that Chapter 11 reorganization would also be
necessary for GIT, Harbison-Walker and A.P. Green in order to
strengthen the financial stability of these businesses," said
Guenter Karhut, chief executive officer of RHI Refractories
Holding Company. "RHI remains strongly committed to aligning our
core businesses to serve key markets with products and services
that exceed customer expectations.  These businesses will
continue operations and customer service during the
reorganization process."

As part of last month's announcement, RHI Refractories Holding
Company stated that it would close or consolidate some
facilities to reduce production capacity and redundancies.  To
date, the company has taken steps to reduce the workforce at its
North American businesses by approximately 20 percent through
layoffs and through the planned closings of A.P. Green's
facility in Mexico, Missouri; and NARCO's facility in
Cincinnati, Ohio.  Additionally, NARCO's facilities in Ione and
Indian Hill, California will also be closed or sold in the near
future.

The company continues to evaluate its businesses and facilities
for potential cost savings and manufacturing efficiencies in
order to better serve its customers and markets.


SERVICE MERCHANDISE: Gets OK to Amend DIP Facility for Wind-Down
----------------------------------------------------------------
Service Merchandise Company, Inc., and its debtor-affiliates
sought and obtained the Court's approval to amend the Post-
petition Credit Facility, to incorporate the post-petition
lenders' agreement to fund the wind-down of the Debtors' ongoing
business operations through the spring of 2002.

Beth A. Dunning, Esq., at Bass, Berry & Sims, PLC, in Nashville,
Tennessee, relates the salient points of the Amendment:

  (a) All extensions of Credit shall be made solely for payment
      of the types of expenses, and not materially in excess of
      the aggregate total amount for any line item, as set forth
      in the Budget;

  (b) The Aggregate Outstanding Extensions of Credit shall not
      exceed the Borrowing Base, subject to reserves established
      by the Administrative Agent as provided in the Amendment;

  (c) Interest shall accrue on the Aggregate Outstanding
      Extensions of Credit shall be calculated, at a rate per
      annum equal to the ABP plus three percent;

  (d) The Standby L/C Fee Rate and the Trade L/C Fee Rate shall
      be calculated equal to the sum of the rate that would
      otherwise be applicable thereto as set forth in the DIP
      Facility plus 2% per annum;

  (e) All other conditions to the making of Extensions of Credit
      and all other provisions of the Credit Agreement shall
      remain in full force and effect; and

  (f) Terms of the Carve Out for professionals have been
      modified as set forth in the Amendment.

With the approval of the Amendment, the Debtors contend that
distributions to creditors will be maximized. (Service
Merchandise Bankruptcy News, Issue No. 26; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


SOUTHWEST AIRLINES: State Street Discloses 11.8% Equity Stake
-------------------------------------------------------------
State Street Bank and Trust Company, of Boston, Massachusetts,
acting in various fiduciary capacities, holds 90,628,304 shares
of the common stock of Southwest Airlines Company.  This amount
represents 11.8% of the outstanding common stock of the airline.  
State Street Bank and Trust Company expressly disclaims
beneficial ownership of all shares reported but in its fiduciary
capacity has the sole power to vote, or to direct the vote of
13,673,337 shares, shared power to vote or to direct the vote of
75,035,952 shares, sole power to dispose or to direct the
disposition of 90,565,950 shares and shared power to dispose or
to direct the disposition of 62,354 shares.

Southwest Airlines will fly any plane, as long it's a Boeing
737, and let passengers sit anywhere they like, as long as they
get there first. Sticking with what works, Southwest has
expanded its low-cost, no-frills, no-reserved-seats approach to
air travel throughout the US to serve about 60 cities in 29
states. To curb maintenance and training costs, the airline uses
only Boeing 737s; it operates about 320. Southwest offers
ticketless travel to trim back-office costs and operates its own
reservation system. The airline boasts a highly participative
corporate culture and only one strike during its 30-year
history. It has also enjoyed 28 straight profitable years.
Southwest is expanding service to the eastern US. At September
30, 2001, the company had a working capital deficit of $175
million.


SUN HEALTHCARE: Names K. Pendergest as Chief Financial Officer
--------------------------------------------------------------
Sun Healthcare Group, Inc. (OTC: SHGE) Chairman and CEO Richard
K. Matros announced that Kevin W. Pendergest will join the
company as Chief Financial Officer. Mr. Pendergest is currently
President of Strategic Alliance Network, a healthcare services
advisory firm.  He joins Sun on February 25, 2002.

Said Mr. Matros, "Kevin is a seasoned finance executive who has
extensive experience in the development and management of
effective financial, planning and operating initiatives in the
long-term care business.  During our bankruptcy proceedings
Kevin evaluated Sun's revenue initiatives and cost structures as
a Court-appointed Examiner, so he is already well acquainted
with the Company's financial needs post-emergence.  I have known
Kevin for many years, and I have confidence in his ability to
help Sun reestablish itself as a leader in long-term care."

Mr. Pendergest has twenty years of experience in healthcare
financial management.  Prior to founding the Strategic Alliance
Network in 1995, he was Executive Vice President and Chief
Financial Officer of GranCare, Inc., a long-term care company
comprising skilled nursing facilities, institutional pharmacy
operations and a home health agency.  Working for GranCare from
1990 to 1995, he was instrumental in taking the company from a
small, unprofitable private company to a publicly-traded
healthcare provider with $800 million in revenues.  Before
joining GranCare, he held several positions with the consulting
firm Deloitte Haskins & Sells from 1981 to 1989, including
Partner-in-Charge for the western region healthcare consulting
practice, and National Director of hospital cost management
systems.

Mr. Pendergest replaces Wallace E. Boston, Jr., who has been
Sun's Chief Financial Officer since August 2001.  In an interim
capacity, Mr. Boston has been instrumental in helping guide the
Company out of bankruptcy.

"Wally's leadership during this challenging piece of Sun's
reorganization was absolutely critical to our ability to
finalize our Plan of Reorganization and arrange for exit
financing to position Sun well for the immediate future," said
Mr. Matros.  Mr. Boston will remain with the Company for a
period past its emergence from bankruptcy to assure a smooth
transition of responsibilities to Mr. Pendergest.

A certified public accountant, Mr. Pendergest holds a bachelor
of science degree in accounting.  He resides in California with
his wife and four children.

Headquartered in Albuquerque, N.M., Sun Healthcare Group, Inc.,
through its subsidiaries is a leading long-term care provider in
the United States, operating more than 240 long-term and
postacute facilities in 25 states.  Sun companies also provide
high-quality therapy, pharmacy, home care and other services for
the healthcare industry.


SUNSHINE PCS: Says Bankruptcy Filing or Wind-Down Likely
--------------------------------------------------------
Sunshine PCS Corporation is a development stage company with no
operations to date.  Its ability to develop a profitable
personal communications service business is subject to  
substantial risks.  Moreover because the Company is a C-Block
licensee, it must provide personal communications service to at
least one-quarter of the population or make a showing of
substantial service in the areas covered by each of its licenses
by September 17, 2001, or risk losing them and/or the imposition
of fines and sanctions.  Presently, it does not have the funds
to meet these build out requirements,  forcing it to either
borrow them, sell its licenses, or enter into a joint venture
with someone who has the necessary funds. All of these options
present various risks.

The Company was incorporated in July 2000, as the successor to
Fortunet Communications, L.P., a  combination of five
partnerships that were awarded 31 personal communications
service licenses in the Federal Communications Commission's 1996
C-Block auction.  These licenses had an aggregate purchase price
of $216 million after a 25% bidding credit, and were financed
primarily by the Federal Communications Commission. Fortunet
Communications, L.P. experienced substantial problems in  
servicing this debt because a perception developed in both the
public and private debt and equity  markets that the supply of
spectrum greatly exceeded realistic customer demand. While the
Federal Communications Commission offered Fortunet
Communications, L.P. a relief plan, because this plan required
Fortunet Communications, L.P. to forfeit 30% of its down
payment, in 1997, it established a reserve of $6.6 million to
reflect the impairment in the value of its licenses.  In June
1998,  Fortunet Communications, L.P. returned 28 of its
licenses, and 15 megahertz of its three 30 megahertz licenses
and surrendered 70% of its down payment to the Federal
Communications Commission in exchange for credits, which were
used to pay all remaining indebtedness to the Federal
Communications Commission.  On April 15, 1999, the Federal
Communications Commission completed a reauction of all the C-
Block licenses that were returned to it. Due to considerably
lower amounts bid for these licenses, in the quarter ended March
31, 1999, Fortunet Communications, L.P. recorded a further
reserve of $18.5 million to write down its investment in the
licenses, plus an additional $0.1 million of capitalized
expenses, leaving a net carrying value of $2.7 million at
December 31, 1999.

Because Sunshine PCS has incurred losses since inception, has
not yet adopted a business plan, determined how to finance its
operations, and may forfeit its licenses or be subject to the  
imposition of fines and sanctions if it does not meet its build
out requirements, the report of Ernst & Young LLP, the Company's
independent auditors, with respect to the Company's financial
statements  as of December 31, 1999 and 2000 and for each of the
three years in the period ended December 31, 2000 and the period
from July 27, 1995 (inception) to December 31, 2000, included in
the Company Form 10-KSB/A, an explanatory paragraph as to
Sunshine's ability to continue as a going concern.  A going
concern opinion indicates that auditors believe that substantial
doubt exists regarding the ability to remain in business.  Such
an opinion may adversely affect Sunshine's ability to obtain new
financing on reasonable terms or at all.  

                      Results of Operations

Neither Sunshine PCS, nor its predecessors, have had any
operating history or revenues. Through March 31, 2001, the
Company had cumulative net losses of $83,301,662, resulting from
net interest charges of $60,602,448, including commitment fees,
and reserves aggregating $25,032,989 for impairment of its
personal communications service licenses.

                 Liquidity and Capital Resources

Under Federal Communications Commission regulations, the Company
needs to construct a system to provide personal communications
services to at least one-quarter of the population in the areas  
covered by its licenses, or make a showing of substantial
service, by September 17, 2001. While it has not yet performed
the engineering studies necessary to estimate the cost of
providing these services, an internal study based on information
available from publicly traded personal communications service
providers suggests that the costs would be between $30 and $60
per person to be served.  As the total population in its
licensed areas is 900,000, and it would need to offer service to
at least one quarter of these persons, or 225,000 persons,
Sunshine estimates that it would cost between $7.0 million and
$14.0 million to meet these build out requirements.  To raise
this money, it would consider a number of alternatives,
including debt financing from a lending institution, borrowing
from vendors providing the capital equipment used in providing
service, a private equity offering and/or a public equity
offering.  Alternatively, the Company would consider  selling
its licenses to a company that currently provides service to the
areas covered by its licenses or entering into a joint venture
with a company that provides service to a nearby area and then
developing its licenses together. Finally, if the Company
believes that it would be unable to  timely satisfy its build
out requirements, the Company could ask the Federal
Communications  Commission for a waiver or extension of these
requirements but the chances of obtaining a waiver or extension
are highly uncertain.  Sunshine is uncertain of its ability to
achieve any of these alternatives because it has yet to pursue
in earnest any of these courses.

A number of factors have contributed to the delay in choosing a
strategic alternative. Throughout the Company's history and that
of its predecessors, servicing the debt entered into to acquire
licenses  has been very difficult.  In 1996, these difficulties
forced Fortunet Communications, L.P. to return 28 of its 31
licenses and 15 megahertz of spectrum of its three 30 megahertz
licenses.  Lynch Interactive Corporation, Sunshine's minority
owner, was itself spun out of Lynch Corporation and has been an
independent entity for a relatively short time. As Lynch
Interactive Corporation is only a  minority owner of Sunshine
PCS it has had to await a determination of its conventurers, who
have not reached a consensus on exactly which course to pursue.

More recently, Sunshine has been restricted from exploring the
possibility of a sale or joint  venture of its licenses due to
Federal Communications Commission anti-collusion rules.  Under
these rules, both participants in ongoing Federal Communications
Commission personal communications service reauctions, and their
related parties, are prohibited from negotiating with other
participants for the acquisition of additional personal
communications service licenses.  Victoria G. Kane, who
indirectly owns all of Sunshine PCS' Class B common stock and is
its controlling shareholder, Lynch  Interactive Corporation,
which owned all of Sunshine PCS' Class A common stock prior to
the spin-off, a company that may be deemed to be controlled by
Mario J. Gabelli, who may be deemed to control Lynch Interactive
Corporation, and Karen Johnson, Sunshine's  president, are all
investors in Theta Communications, which participated in a
reauction of personal communications spectrum.  Because Ms.
Kane, Lynch Interactive Corporation and Ms. Johnson are related
parties of Sunshine PCS, the Company was restricted from
exploring the idea of selling its licenses or entering into a
joint venture  with any other auction participants from November
6, 2000 until February 12, 2001, and those other participants
are the entities most likely to be interested in Sunshine's
licenses.

As these restrictions have lapsed and Sunshine's debt has been
restructured by Lynch Interactive Corporation, the Company now
intends to fully explore the merits of building out its licenses  
independently, or joint venturing or selling them.  If
negotiations for a sale or joint venture do not develop timely
in relation to the September 17, 2001 build out deadline,
Sunshine intends to build out its licenses to the extent
necessary to meet the Federal Communications Commission
requirements.  The Company believes that it is possible to meet
the build out requirements by September 17, 2001, although there
are some material questions about this possibility.  Any build
out conducted by it prior to September 17, 2001 would probably
only be to the extent necessary to  preserve its licenses and
would require further build out thereafter to establish a viable
business.  In the next two to three months, the Company should
have a better idea which avenue it intends to pursue.

It is Sunshine's understanding that other licensees have
recently spoken informally with the Federal  Communications
Commission about the possibility of extending the build out
requirements for  licenses generally.  However, the Federal
Communications Commission has not indicated whether it would do
so and the Company regards this as highly uncertain.  If there
is no general extension of the build out requirements and if the
Company has not made at least a substantial effort to build out
its licenses, it believes it is likely that the Federal
Communications Commission would not grant it a waiver and would
seek to revoke its licenses.  If the Federal Communications
Commission were  to revoke its licenses, it  would effectively
put it out of business because the licenses are its only
significant assets. If the Federal Communications Commission
were merely to impose fines on it for failing to meet build out
requirements, the ramifications would depend on the amount of
the  sanctions in relation to the value of its licenses. If
these sanctions were substantial, the Company might be forced to
seek protection under the bankruptcy laws or go out of business.


TALK AMERICA: Falls Short of Nasdaq Listing Requirements
--------------------------------------------------------
Talk America (NASDAQ:TALK), an integrated communications
provider, announced it has received notification from NASDAQ
that it did not meet the minimum bid price requirement by the
NASDAQ's National Marketplace Rules.

The Company has 90 calendar days or until May 15, 2002 to regain
compliance with these standards. If at any time before May 15,
2002, the bid price of the Company's stock is at least $3.00 for
a minimum of 10 consecutive trading days, NASDAQ staff will
provide written notification that the Company has achieved
compliance with the rules. If the Company is unable to
demonstrate compliance with the rules on or before May 15, 2002,
the Company would file an application to list its securities on
The Nasdaq SmallCap Market, and if accepted, the Company would
have another 90 days, or until August 13, 2002, to comply with
Nasdaq's SmallCap listing rules, which only require a minimum
bid price of $1.00.

Talk America is an integrated communications provider marketing
a bundle of local and long distance services to residential and
small business customers utilizing its proprietary "real-time"
online billing and customer service platform. Talk America has
added local service to its offerings, after ten years as a long
distance provider. The Company delivers value in the form of
savings, simplicity and quality service to its customers based
on the efficiency of its low-cost, nationwide network and the
effectiveness of its systems that interface electronically with
the Bell Operating Companies. For further information, visit the
Company online at: http://www.talk.com


TELESPECTRUM WORLDWIDE: Bank Lenders Agree to Recapitalization
--------------------------------------------------------------
TeleSpectrum Worldwide Inc. (OTC:TLSP) announced that the
Company has reached an agreement in principle with its bank
lenders to pursue a recapitalization of the Company's balance
sheet and substantially reduce its debt.

Under the terms of the agreement, the Company's bank debt will
be reduced to approximately $25 million, greatly improving the
Company's leverage and freeing up substantial funds for
reinvestment in the Company's infrastructure and meeting
customer needs. The expectation is that approximately $125
million of bank debt will be converted into preferred and common
stock of the Company.

The consummation of the recapitalization is subject to several
contingencies, including among others, the Company's being able
to successfully negotiate settlements with a manageable number
of unsecured creditors.

According to Peter Pierce, TeleSpectrum's Chairman and CEO, the
Company has spent the last thirteen months rationalizing its
cost structure and infrastructure to better serve its customer
base and believes it is now positioned to complete the
recapitalization. "We are pleased that our bank lenders concur
with our assessment that a consensual conversion of much of its
debt to equity is the best course of action here."

Mr. Pierce cautioned that although the Company will remain
public, after the conversion of a portion of the bank debt to
equity, the Company's current shareholders would retain almost
none of their ownership. He also stressed that negotiations with
the necessary unsecured creditors and vendors have not been
completed and that their cooperation is essential in achieving
this plan. Pierce said "There is still work to be done but we
will make every effort to complete this plan which will greatly
benefit both our customers and employees."

Headquartered in King of Prussia, Pennsylvania, TeleSpectrum
Worldwide Inc. is a leading full-service provider of multi-
channel customer relationship management (CRM) solutions for
Global 1,000 companies in diverse industries, including
financial services, telecommunications, technology, insurance,
healthcare, pharmaceuticals and government.

In addition to providing both traditional business-to-consumer
and business-to-business teleservices, TeleSpectrum also offers
inbound customer service, customer care, as well as the ability
to measure, monitor and improve the customer service experience.


UCAR INTERNATIONAL: Completes $400 Million Senior Note Offering
---------------------------------------------------------------
UCAR International Inc. (NYSE:UCR) announced that the closing of
its $400 million private offering of Senior Notes due 2012 is
complete.  The deal was upsized from $250 million. The Senior
Notes have an annual coupon rate of 10.25 percent. The issue
price of the Senior Notes is 100 percent of principal amount
plus accrued interest, with the first semi-annual interest
payment due on August 15, 2002. The Company intends to use the
net proceeds from this offering for the repayment of debt under
its senior secured credit facilities.

The notes have not been and will not be registered under the
Securities Act of 1933, as amended, and may not be offered or
sold in the United States absent such registration or an
applicable exemption from the registration requirements of the
Securities Act.

UCAR International provides natural and synthetic graphite and
carbon products and services to customers in the steel,
aluminum, fuel cell power generation, electronics, semiconductor
and transportation industries.


VERADO HOLDINGS: Prepares to File Liquidating Chapter 11 Prepack
----------------------------------------------------------------
Verado Holdings, Inc. (OTC Bulletin Board: VRDO) announced that
it and its subsidiaries will shortly file for Chapter 11
bankruptcy protection after reaching an agreement on a
prenegotiated liquidation with a committee representing holders
of more than 66-2/3% of Verado's 13% senior discount notes due
2008.  Under the prenegotiated plan, the Bondholders and other
unsecured creditors will receive 90% of the net proceeds derived
from a liquidation of the Company's assets under Chapter 11. The
remaining 10% of such proceeds will be distributed to Verado's
equity holders.  Alvarez and Marsal, Inc., the financial
advisors to the Committee, preliminarily estimates that the
recovery of the Bondholders and other unsecured creditors will
be between $.09 and $.13 on the dollar.

Verado also announced the sale of its Irvine, California Data
Center. The Company will attempt to sell its Denver Data Center
as a going concern through a sale approved by the bankruptcy
court.


VERADO HOLDINGS: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Lead Debtor: Verado Holdings Inc.
             6080 Greenwood Plaza Blvd.
             Greenwood Village, Colorado 80111   

Bankruptcy Case No.: 02-10510

Debtor affiliates filing separate chapter 11 petitions:

Entity                                     Case No.
------                                     --------
Verado, Inc.                               02-10511
FirstWorld Internet Services, Inc.         02-01514
FirstWorld Anaheim                         02-10518
First World SoCal                          02-10517
First World Orange Coast                   02-10513
FirstWorld SGV                             02-10515
FirstWorld Engineering                     02-10519
Intelenet Communications, Inc.             02-10512
FirstWorld Dial-Up, Inc.                   02-10516
PJW Verado Holdings, Inc.                  02-10510

Type of Business: Verado Holdings, Inc., Together with its
                  Subsidiaries and Affiliates Provides
                  Outsourced Managed Services, Professional
                  Services, Data Center and Application
                  Hosting Solutions Relating to Websites and
                  Other Internet Services   

Chapter 11 Petition Date: February 15, 2002

Court: District of Delaware

Judge: Peter J. Walsh

Debtors' Counsel: Mark D. Collins, Esq.
                  Richards, Layton & Finger, PA
                  One Rodney Square, P.O. Box 551
                  Wilmington, Delaware 19899
                  Telephone 302/651-7700
                
Total Assets: $61,800,000

Total Debts: $355,400,000

Debtor's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Morgan Stanley                  Bond              $78,466,710
Dean Witter     
Brandon Stanzl
610-260-7392
610-260-7088 (fax}
One Tower Bridge
11th Floor
West Conshohocken, PA
19428

Putnam Investments              Bond              $47,163,373         
James P. Miller
617/760-7355
617-760-8639 (fax)
1 Post Office Square
Boston, MA 02109

Magten Asset Management         Bond              $29,920,303
Allan Brown
212/529-6600
212/505-0484 (fax)
35 East 21st St
New York NY 10010

Kirkpatrick Pettis              Bond              $26,270,710
Smith Polian (a)
402/392-7975
402/392-8370 (fax)
10250 Regency Circle Suite 200
Omaha, NE 68114

Stonehill Offshore Partners     Bond              $24,639,853
Robert Emerson
212/739-7474
212/838-2291 (fax)
126 East 56th St, 9th Fl
New York, NY 10022

UBS Warburg Account             Bond              $23,663,745
Samantha Silverstein
203/719-7950
203/719-0269 (fax)
677 Washington Blvd.
Stamford, CT 06901

Laog Investors c/o CSFB         Bond              $18,181,730
277 Park Avenue
New York, NY 10172

J.P Morgan Flemming             Bond              $16,540,563  
Asset Management
Joan Huggins
212/483-2323
212/837-2651 (fax)
60 Wall Street 23rd Fl
New York, NY 10260

Oppenheimer Funds               Bond              $13,919,850
Jim Kourkalakos
212/323-0853
498 Seventh Ave
New York, NY 10018

Lutheran Brotherhood            Bond              $12,888,750     
Investments
Tom Haag
612/340-5722
612/371-1581 (fax)
625 Fourth Ave, S.
Minneapolis, MN 55415

Oaktree Capital Management      Bond               $9,041,888
213/830-6300
213/830-6392 (fax)
333 South Grand Ave
Los Angeles, CA 90071

Fidelity Management &           Bond               $8,321,836
Research
Stephen Petersen
617/563-7000
617/476-4123 (fax)
82 Devonshire St.
Boston, MA 02109

Funsten Asset Management        Bond               $5,817,123  
Kenneth Funsten
310/577-7887
310/577-7890 (fax)
121 Outrigger Mall
Marina Del Rey, CA 90292

Deutsche Bank                   Bond               $5,772,442
Securities
Matthew Doheny
212/469-5760
1251 ve of Americas 36th Fl
New York, NY 10020

Royce & Associates              Bond               $3,879,514
Charles Royce
212/486-1445
212/752-8875 (fax)
1414 Ave of Americas
New York, NY 10019

Canyon Capital Advisors         Bond               $3,007,375
310/247-2700
310/247-2701 (fax)
9665 Wilshire Blvd.
Beverly Hills, CA 90212

Goldman Sachs                   Bond               $2,478,077    
High Yield Desk
212/902-1000
212/902-9900 (fax)
85 Broad St
New York, NY 10004

Ross Sinclair & Associates      Bond               $1,069,766
513/381-3939
513/381-0124 (fax)
36 East Seventh St Suite 1550
Cincinnati, OH 45202

Worldcom Network Services,     Trade Debt          $765,121
Inc.
Richard Waresback
918/590-5579   
918/590-5600 (fax)
6929 North Lake Avenue
Tulsa, OK 74117

Microsoft                       Bond                $652,182
425/882-8080
425/936-7329 (fax)
One Microsoft Way
Redmond, WA 98052


ZIFF DAVIS: Appoints Peter Mayer as Corporate Sales Director
------------------------------------------------------------
Ziff Davis Media Inc. announced that Peter T. Mayer will be
joining the company as a Corporate Sales Director. Mayer was
most recently Regional Sales Manager for IDG's InfoWorld
magazine. In his new position, Mr. Mayer will manage the IBM,
Computer Associates, Intel and WorldCom accounts for Ziff Davis
Media, as well as develop new business. He will report to Ken
Beach, Vice President of Corporate Sales.

Mayer brings to Ziff Davis Media more than 15 years of sales
experience at publishing companies such as IDG. and Time Inc.  
He has a proven track record of initiating, maintaining and
developing positive client relationships. "I am pleased that
Peter is joining the Ziff Davis Media team," said Beach.  "He is
an outstanding revenue producer who will expand our
relationships with existing clients and new accounts."

Mayer was InfoWorld's top revenue producer two years in a row
and was continually recognized for his attention to customer
service.  As Regional Sales Manager, he managed the top 30
accounts and brought tech research and market data to both
clients and agencies.  As District Sales Manager, he was a top
producer for two years and was awarded Sales Person of the Year.  
Mayer was also an Account Director at Signal Research, Inc.'s
Game Player's magazine and a Regional Sales Manager for Time
Inc.'s Southern Living magazine.

"I am thrilled that Peter is joining the Ziff Davis Team," said
Stephen D. Moylan, executive vice president, Ziff Davis Media.  
"I worked closely with Peter for 10 years at InfoWorld where he
was a sales superstar -- running the largest territory in the
company.  His industry knowledge is impressive, and Peter was by
far one of the most customer-centric sellers at the company."

Mr. Mayer earned a BA in Communications at Villanova University
in 1983.

Ziff Davis Media Inc. is the leading information authority for
buying and using technology.  In the U.S., Ziff Davis Media
publishes 13 industry-leading business and consumer
publications: PC Magazine, eWEEK, Ziff Davis Smart Business, The
Net Economy, CIO Insight, Baseline, Yahoo! Internet Life,
Electronic Gaming Monthly, Official U.S. PlayStation Magazine,
Computer Gaming World, GameNow, Pocket Games and XBox Nation.
Ziff Davis Media publishes more than 45 titles around the world
through licensing agreements in 30 countries. The company is
also a developer of innovative web sites including PCMag.com
and ExtremeTech.com.  It provides custom media solutions through
Ziff Davis Custom Media; industry analyses through Ziff Davis
Market Experts; and state-of-the-art Internet and technology
testing through eTesting Labs.  The company also produces
conferences, seminars and webcasts. At September 30, 2001, the
company had a working capital deficit of $35 million.

                          *********

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

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

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

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

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

                          *********

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

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

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

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

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

                     *** End of Transmission ***