TCR_Public/020222.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

            Friday, February 22, 2002, Vol. 6, No. 38     

                          Headlines

360NETWORKS: Will Provide Documents to SEC Re Global Crossing
ANC RENTAL: Lease Decision Deadline Hearing Continues on Apr. 12
ADVANTICA RESTAURANT: Sr. Notes Exchange Offer to Expire Today
ALGOMA STEEL: Begins Trading 20MM New Shares on TSE in Canada
ALLCITY INSURANCE: Nasdaq to Delist Shares Effective Monday

ALLEGIANCE TELECOM: Fitch Affirms B+ Senior Secured Debt Rating
AMAROQ INC: T.H. Lehman Terminates Warrant Purchase Agreement
ASHTON TECHNOLOGY: Faces Imminent & Likely Bankruptcy Risk
ATLAS AIR: Pilots & Engineers Reject Proposed Labor Agreement
BALANCED CARE: Meditrust Will Acquire 12 Facilities for $43MM

BELL CANADA: Issues 4.7BB Shares as Part of Recapitalization
BRIDGE INFO: Court Approves Savvis Settlement Agreement
BURLINGTON INDUSTRIES: Wants More Time to Remove Civil Actions
CALICO COMMERCE: Delays Form 10-Q Filing Due to PeopleSoft Deal
CAPTAIN D'S SEAFOOD: S&P Affirms Junk Rating on Planned Merger

CHIQUITA BRANDS: Liquidation Analysis Underpinning Amended Plan
CLASSIC COMMS: Committee Brings-in Walsh Monzack as Co-Counsel
CONOCO CANADA: Commences Consent Solicitation for Senior Notes
CONTINENTAL AIRLINES: Vanguard Windsor Holds 8.96% Equity Stake
ENRON CORP: Continental Casualty Seeks Appointment of Examiner

ENRON CORP: James Derrick Retires as Exec. VP & General Counsel
ENRON: Court Lifts Stay for Severed Employees' Suits to Proceed
ENRON WIND: Case Summary & Largest Unsecured Creditor
ETOYS INC: Will Delay Financial Statements Filing with SEC
EXODUS COMMS: Seeks Approval of Stipulation with Phoenix Leasing

FEDERAL-MOGUL: Court Okays Bayard as Committee's Co-Counsel
FRUIT OF THE LOOM: UST Asks Court to Disqualify Ernst & Young
GT GROUP TELECOM: Slashing 350 Jobs to Save CDN$30MM Annually
GALEY & LORD: Seeks OK to Pay Prepetition Critical Vendor Claims
GALEY & LORD: Wants Schedule Filing Deadline Moved to April 22

GLOBAL CROSSING: Schedule Filing Deadline Extended to May 13
GOLDMAN INDUSTRIAL: Taps Greenberg Taurig as Bankruptcy Counsel
GOLDMAN INDUSTRIAL: Hires Morris Anderson as Financial Advisors
HARVARD SCIENTIFIC: 341 Meeting of Creditors Set for March 7
HINES HORTICULTURE: Plan to Sell Unit Has S&P Watching B+ Rating

HUBBARD HOLDING: 2 Subsidiaries File for Receivership in Canada
HYBRID NETWORKS: Reviewing Options Including Bankruptcy Filing
IT GROUP: Secures Approval to Hire Logan & Co. as Claims Agent
ITC DELTACOM: Increased Liquidity Concerns Spur S&P's Downgrade
INACOM CORP: Wants Plan Filing Exclusivity Extended Until June 1

INDIGO BOOKS: Working Capital Deficit Tops $7MM at Dec. 29, 2001
INTEGRATED HEALTH: Gets Sixth Extension of Exclusive Periods
KAISER ALUMINUM: Wins Nod to Pay $9.5MM Critical Vendor Claims
KMART: U.S. Trustee Appoints Financial Institutions' Committee
KMART CORP: Store Closing List Expected to Surface by March 11

LAIDLAW INC: Taps PricewaterhouseCoopers as External Auditors
LODGIAN INC: Obtains Open-Ended Lease Decision Period Extension
LUBY'S INC: Dimensional Fund Discloses 7.03% Equity Stake
MAGNNUM SPORTS: Nasdaq to Delist Shares Effective Monday
MCLEODUSA: Seeks Approval of Proposed Solicitation Procedures

PACIFIC GAS: Says CPUC's Plan Doesn't Have Snowball's Chance
PRIMIX: Closes Sale of NA Consulting Business to Burntsand
PSINET INC: Holding Creditors' Meeting Set for March 19, 2002
QUALITY STORES: Alamo Group to Acquire Valu-Bilt for $7.5 Mill.
RCN CORPORATION: Says Key Accomplishments Slip Moody's Analysis

STEAKHOUSE PARTNERS: Case Summary
TALK AMERICA: Lack of Capital Spurs S&P to Further Junk Ratings
TIDEL TECH: Pursuing Talks to Restructure $18MM Conv. Debentures
TOWER AIR: Dimensional Fund Discloses 5.9% Equity Stake
UCAR INT'L: Dec. 31 Balance Sheet Upside-Down by $316 Million

W.R. GRACE: Peninsula Entities Disclose 9.83% Equity Stake
VALEO ELECTRICAL: French Unions Condemn Attempt to Break Pact
WINSTAR: Citicorp's Omnibus Objection to Admin. Expense Claims
YORK RESEARCH: Court Names Buchwald as NEAC Chapter 11 Trustee

* BOOK REVIEW: The ITT Wars: An Insider's View of Hostile
                             Takeovers

                          *********

360NETWORKS: Will Provide Documents to SEC Re Global Crossing
-------------------------------------------------------------
360networks said that it has received a third-party subpoena
from the United States Securities and Exchange Commission
seeking documents in connection with the SEC's investigation of
Global Crossing Ltd. The Company intends to cooperate fully with
the SEC's request for such documents.

360networks offers optical network services to
telecommunications and data communications companies in North
America. The company's optical mesh fiber network spans
approximately 36,000 kilometers (22,000 miles) in the United
States and Canada.

On June 28, 2001, the company and several of its operating
subsidiaries voluntarily filed for protection under the
Companies' Creditors Arrangement Act (CCAA) in the Supreme Court
of British Columbia. Concurrently, the company's principal U.S.
subsidiary, 360networks (USA) inc., and 22 of its affiliates
voluntarily filed for protection under Chapter 11 of the U.S.
Bankruptcy Code in the U.S. Bankruptcy Court for the Southern
District of New York. In October 2001, four operating
subsidiaries that are part of the 360atlantic group of companies
also voluntarily filed for protection in Canada. Insolvency
proceedings for several subsidiaries of the company have been
instituted in Europe and Asia.

For more information about 360networks, visit http://www.360.net


ANC RENTAL: Lease Decision Deadline Hearing Continues on Apr. 12
----------------------------------------------------------------
The hearing on the motion of ANC Rental Corporation, and its
debtor-affiliates seeking an order extending its lease decision
period until Confirmation hearing is continued to April 12,
2002, and by application of the Local Bankruptcy Rules
applicable in the District of Delaware, the deadline within
which the Debtors must assume or reject leases is extended
through the conclusion of that hearing. (ANC Rental Bankruptcy
News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 609/392-
0900)


ADVANTICA RESTAURANT: Sr. Notes Exchange Offer to Expire Today
--------------------------------------------------------------
Advantica Restaurant Group Inc. (OTC BB:DINE), announced that it
has extended to 5:00 p.m., New York City time, on February 22,
2002, its offer to exchange up to $204.1 million of registered
12.75% senior notes due 2007 to be jointly issued by Denny's
Holdings Inc., and Advantica for up to $265.0 million of
Advantica's 11.25% senior notes due 2008 (the "Old Notes"), of
which $529.6 million aggregate principal amount is currently
outstanding. The exchange offer was scheduled to expire at 5:00
p.m., New York City time, on February 19, 2002. Except for the
extension of the expiration date, all other terms and provisions
of the exchange offer remain as set forth in the exchange offer
prospectus previously furnished to the holders of the Old Notes.

To date, an aggregate of approximately $64.8 million Old Notes
have been tendered for exchange.

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

DebtTraders reports that Advantica Restaurant Group's 11.250%
bonds due 2008 (ADVRES1) are trading between 73 and 76. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ADVRES1for  
real-time bond pricing.


ALGOMA STEEL: Begins Trading 20MM New Shares on TSE in Canada
-------------------------------------------------------------
Algoma Steel Inc., (TSE:ALG) announced that its 20,000,000 new
Common Shares created and issued pursuant to the implementation
of the Company's Plan of Arrangement and Reorganization will be
listed and posted for trading on the Toronto Stock Exchange on
Thursday, February 21, 2002. The new Common Shares will trade
under the symbol AGA. Under the Plan, former holders of the
Company's First Mortgage Notes received 15,000,000 new Common
Shares; employees received 4,000,000 new Common Shares; and
unsecured creditors who did not elect to receive cash in respect
of their unsecured claims received 1,000,000 new Common Shares.

The Company's old Common Shares (symbol ALG) were cancelled
under the Plan and holders of the old Common Shares are not
entitled to receive any new Common Shares. Certificates
representing the old Common Shares have no value and will not be
accepted in settlement of trades of Common Shares of the
Company.

Algoma Steel Inc., based in Sault Ste. Marie, Ontario, is
Canada's third largest integrated steel producer. Revenues are
derived primarily from the manufacture and sale of rolled steel
products, including hot and cold rolled sheet and plate.

DebtTraders reports that Algoma Steel Inc.'s 12.375% bonds due
2005 (ALGC05CAR1) are trading between 22 and 24. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ALGC05CAR1
for real-time bond pricing.


ALLCITY INSURANCE: Nasdaq to Delist Shares Effective Monday
-----------------------------------------------------------
Allcity Insurance Company (ALCI-NASDAQ) said it has received
notice from Nasdaq Stock Market, Inc., indicating that the
Nasdaq staff has determined that its shares will be delisted,
effective February 25, 2002, due to the Company's failure to
hold its annual shareholders' meeting and to otherwise meet
Nasdaq's proxy solicitation requirements for the fiscal year
ended December 31, 2001, as required by Nasdaq's Marketplace
Rules 4350(e) and 4350(g), respectively. The Company was also
advised by Nasdaq that for the last 30 consecutive days it has
failed to meet the minimum market value of publicly held shares
and the minimum bid price per share as required by Nasdaq's
Marketplace Rules 4450(a)(2) and 4450(a)(5).

The Company anticipates that its common shares may be quoted on
the over-the-counter bulletin board commencing on February 25,
2002 under a new ticker symbol.

As part of the Empire Group, Allcity is a property casualty
insurer that formerly specialized in commercial and personal
property and casualty insurance business primarily in the New
York metropolitan area.


ALLEGIANCE TELECOM: Fitch Affirms B+ Senior Secured Debt Rating
---------------------------------------------------------------
Fitch Ratings has affirmed Allegiance Telecom's (ALGX) 'B+'
senior secured rating assigned to its $500 million secured
credit facilities and its 'B' senior unsecured ratings assigned
to its 11-3/4% senior discount notes due 2008 and 12-7/8% senior
notes due 2008. The Rating Outlook for this credit is Stable.

The rating confirmation reflects ALGX's ability to continue to
generate strong sequential revenue growth while managing its
expenses in light of a weaker economy and negative industry
sentiment. This performance can be attributed to its strong
management team and relatively conservative financing strategy,
pre-funding its business plan. Fitch believes this performance
should continue, driven by the revenue and cost benefits of its
Integrated Access Service (IAD) offering. Fitch will continue to
monitor the success of this offering from a demand and
provisioning perspective as ALGX's funded business plan and
liquidity position relies upon its success. IAD is important to
ALGX as it generates significantly more revenue per customer
while decreasing SG&A costs as a percentage of revenue. Fitch
will also continue to monitor ALGX's ability to manage its
working capital, expecting a slight improvement in accounts
receivable day sales outstanding (DSO) from further enhancements
to its back office. Although Fitch is comfortable with the
performance of IAD in 2001, the continued success of the product
is critical in order for ALGX's business model to succeed and
for the company to remain in compliance with its revenue
covenant in 2002. Fitch believes this is possible as IAD line
sales have been increasing at an accelerated pace and ALGX's
back office provisioning has improved to satisfy the demand.
However, Fitch will be closely monitoring the performance of
this product and ALGX's ability to generate positive EBITDA in
4Q'02. Accordingly, if ALGX is unable to perform as expected, a
rating action will be taken.

Unlike many of its CLEC peers, ALGX's revenue mix was not
heavily weighted toward wholesale, reciprocal compensation and
Web hosting, leading to a more stable and predictable revenue
stream. That being said, ALGX provides data services to Genuity
Solutions, a dial-up Internet Service Provider (ISP) that
generates material revenue and EBITDA for ALGX. Inherent in the
rating is the company's exposure to this material customer.
Thus, a material adverse change in the nature of this
relationship would have a dramatic affect on the financial
performance of Allegiance.

A major factor that led to the bankruptcy filings and
recapitalizations of many of ALGX's competitors was their
inability to meet bank covenants. To date, ALGX has not been in
danger of violating any of its covenants. Its most stringent
covenant in 2002 is its quarterly revenue covenant, requiring
$755 million in revenue for 2002 ($155 million 1Q'02; $180
million 2Q'02; $200 million 3Q'02; $220 million 4Q'02). The
current public forecast is $800 million, and Fitch believes if
demand for IAD remains strong and the company is able to
continue to successfully provision the service, it will satisfy
its revenue covenant.

The company is on track to turn EBITDA positive in 4Q'02 and
full-year EBITDA positive in 2003. ALGX entered 2002 with $399
million in cash on its balance sheet and has $150 million
remaining outstanding under its credit facility, which it does
not expect to draw upon further in 2002. Given that its 36-
market buildout is complete, ALGX expects to reduce capital
expenditures from $364 million in 2001 to $225 million in 2002.
By Fitch estimates, the current business model is fully funded.

At the end of 2001, ALGX purchased Intermedia's Internet
backbone assets from WorldCom for an undisclosed amount. This
effectively enabled Allegiance to achieve Tier 1 Internet
status, essentially reducing the company's transit costs.


AMAROQ INC: T.H. Lehman Terminates Warrant Purchase Agreement
-------------------------------------------------------------
T.H. Lehman & Co. Incorporated (OTCBB:THLM) said that Amaroq
Inc., filed for bankruptcy under Chapter 7. On Nov. 20, 2001,
THLM and Amaroq entered into a Warrant Purchase Agreement for
50% of the outstanding shares of Amaroq Inc. THLM is currently
exploring the effect of Amaroq's filing regarding THLM's rights
under the Warrant Purchase Agreement.

T.H. Lehman & Co. Incorporated was organized in March 1983 as a
Small Business Development Company and was an SBDC until April,
1988. From April, 1988 to August, 1990 it operated through
subsidiaries as a broker/dealer and investment advisor. THLM
continues to maintain certain of its investments. In 1992 THLM
entered the business of medical accounts receivable financing
and furnishing medical providers with non-medical management
services.


ASHTON TECHNOLOGY: Faces Imminent & Likely Bankruptcy Risk
----------------------------------------------------------
The Ashton Technology Group, Inc., said that to date, the
Company has recognized recurring operating losses and has
financed its operations primarily through the issuance of equity
securities. As of December 31, 2001, it had an accumulated
deficit of $82,605,379, a working capital deficiency of
$315,324, and stockholders' deficiency of $2,435,982, all of
which raise substantial doubt as to its ability to continue as a
going concern.

The Company developed a plan which it believes will enable it to
continue operating for at least the next 12 months. The plan
includes the purchase of approximately 80% of its common stock
and the execution of a secured convertible note by OptiMark
Innovations, Inc. for total consideration of $30 million, and
interim bridge financing from HK Weaver Group, Limited for
$500,000. The $30 million consideration to be paid by OptiMark
Innovations includes $10 million in cash and intellectual
property and other non-cash assets valued, for purposes of the
securities purchase agreement, at $20 million. Closing of the
OptiMark Innovations transaction is contingent upon, among other
things, shareholder approval of an amendment to the Company's
certificate of incorporation to increase the number of
authorized shares of common stock and to define its interest and
expectancy in specified business opportunities, completion of
certain creditor negotiations, closing of a private equity
investment in OptiMark Innovations, OptiMark Innovations'
satisfaction with its due diligence investigation of Ashton, and
installation of a new board of directors of Ashton reflective of
OptiMark Innovations' ownership stake in Ashton. Should the
securities purchase agreement with OptiMark Innovations not
close, Ashton would not have access to the capital or
intellectual property being sought through the transaction.
Without such additional capital, it will not have sufficient
financial resources nor access to alternative resources that
would permit continued business operations.  Accordingly, Ashton
would face the imminent and likely potential for bankruptcy
or liquidation.

As of December 31, 2001, Ashton's operating subsidiaries and
joint ventures included:

     * Universal Trading Technologies Corporation (UTTC), and
       its subsidiaries, Croix Securities, Inc. and REB
       Securities, Inc.
     * ATG Trading LLC,
     * Ashton Technology Canada, Inc., and
     * Kingsway-ATG Asia, Ltd. (KAA).

Total comprehensive loss, which includes net loss, unrealized
gains and losses on available-for-sale securities, and foreign
currency translation adjustments, amounted to $3,048,534 and
$5,284,049, respectively, for the three months ended December
31, 2001 and 2000, and $9,951,351 and $12,661,073,
respectively for the nine months ended December 31, 2001, and
2000.

Ashton incurred a net loss from continuing operations totaling
$3,031,012 for the three months ended December 31, 2001,
compared to $4,475,159 for the three months ended December 31,
2000. The decrease in the net loss from continuing operations is
primarily due to a $699,703 increase in revenues and a $645,057
decrease in total costs and expenses.  Other expenses, interest
expense and equity in income (losses) of affiliates, net of
interest income, decreased by an aggregate of $99,387.

Revenues totaled $750,296 for the three-month period ended
December 31, 2001, and $50,593 for the three-month period ended
December 31, 2000.  The revenues in each period were generated
entirely by the Company's intelligent matching systems business
through the operation of eVWAP and securities commissions on
trades executed through Croix.  The increase in revenues is a
result of the increase in the aggregate number of shares
executed to 69 million during the three months ended December
31, 2001 from 6.2 million shares during the same period last
year.  During the three months ended December 31, 2001, Croix
accounted for 50.1 million of the total shares executed in the
eVWAP system.

Croix also executed an additional 7.6 million shares away from
eVWAP at a volume-weighted average price. During December 2001,
due to limited cash resources and the inability to maintain
higher than the minimum required net capital, Ashton has limited
its trading activities until such time that it has sufficient
cash available to increase its capital levels.

The Company incurred a net loss from continuing operations
totaling $10,545,464 for the nine months ended December 31,
2001, compared to $11,077,700 for the nine months ended December
31, 2000. Revenues for the nine months ended December 31, 2001
increased $2.0 million from the prior year period.  The increase
in revenues was partially offset by a $1.1 million increase in
total costs and expenses, primarily as a result of increased
brokerage, clearing and exchange fees. Additionally, there was
an increase in other expenses, which includes interest expense,
equity in income (loss) of affiliates, and net of interest
income, of $405,229.

Total revenues were $2,162,760 for the nine-month period ended
December 31, 2001, and $134,488 for the nine-month period ended
December 31, 2000.  The revenues in each three-month period were
generated entirely by the Company's intelligent matching systems
business through the operation of eVWAP and securities
commissions on trades executed through Croix.  The increase in
revenues is a result of the increase in the aggregate number of
shares executed to 218.5 million during the nine-month period
ended December 31, 2001 from 17.5 million shares during the same
period last year.  During the nine months ended December 31,
2001, Croix accounted for 135.4 million of the total shares
executed in the eVWAP system.  Croix also executed an additional
23.5 million shares away from eVWAP at a volume-weighted average
price.

At December 31, 2001, Ashton's principal source of liquidity
consisted of cash and cash equivalents of $960,250, compared to
cash and cash equivalents of $6,028,883 and securities available
for sale of $1,483,350 at March 31, 2001. The decrease in cash
and cash equivalents and securities available for sale is
primarily a result of the net loss for the nine months ended
December 31, 2001 of $9,951,140. Included in the December 31,
2001 cash and cash equivalents balance was approximately
$476,957 required to meet the minimum net capital requirements
of Ashton's broker/dealer subsidiaries, and $450,000 set aside
to collateralize a letter of credit.

At December 31, 2001, Ashton had total assets of $4,002,266
compared to $13,065,778 at March 31, 2001.  Current assets at
December 31, 2001 totaled $1,473,871, and current liabilities
from continuing operations were $1,657,856. Stockholders' equity
(deficiency) decreased to ($2,435,982) at December 31, 2001 from
$2,898,089 at March 31, 2001 due primarily to the increase in
accumulated deficit as a result the net loss of $9,951,140 for
the nine months ended December 31, 2001.  Other changes in
stockholders' equity (deficiency) during the period were a
$1,800,000 increase related to the issuance of 12,132,865 shares
of common stock in three equity line transactions, a $704,334
increase related to conversions of a secured convertible note
into 4,360.081 shares of common stock, a $3,000,000 increase
related to the conversion of the UTTC series KW convertible
preferred stock into 18,489,274 shares of common stock, a
decrease of $109,437 in issuance costs related to the equity
line, and a decrease of $747,809 related to the accrued premium
on the series F preferred stock, which was exchanged for a
secured convertible note on July 10, 2001.  The premium was
included in the principal amount of the note and reclassified
from additional paid-in-capital to long-term liabilities at the
time of the exchange.

Should Ashton's securities purchase agreement with Optimark
Innovations not close, Ashton has indicated that the Company
would not have access to the capital or intellectual property
being sought through this transaction. Without such additional
capital, it will not have sufficient financial resources nor
access to alternative resources that would permit continued
business operations.  Accordingly, the Company has said it would
face the imminent and likely potential for bankruptcy or
liquidation.

The Ashton Technology Group, Inc., was formed as a Delaware
corporation in 1994.  It is an eCommerce company that develops
and operates electronic trading and intelligent matching systems
for the global financial securities industry. It develops and
operates alternative trading systems, or ATSs.  It is in the
business of providing equity trading services to exchanges,
institutional investors and broker-dealers in the U.S. and
internationally.  It enables these market participants to trade
in an electronic global trading environment that provides large
order size, absolute anonymity, no market impact and low
transaction fees.  The services offered by the Company compete
with services offered by brokerage firms and with providers of
electronic trading and trade order management systems.  Its
eVWAP also competes with various national and regional
securities exchanges and execution facilities such as ATSs and
electronic communication networks, or ECNs.


ATLAS AIR: Pilots & Engineers Reject Proposed Labor Agreement
-------------------------------------------------------------
DebtTraders reports Wednesday that Atlas Air pilots and
engineers have rejected a tentative labor agreement reached with
the Company on January 25. Further talks are expected to resume
early next month.

In addition, the report says that the Company recently reported
a fourth quarter loss of $8.1 million, which included aircraft
impairment charges and U.S. government grants. The Company had
EBITDAR of $79.7 million for the quarter. However, Atlas Air's
total block hours fell 18% to 37,488. The Company took a $44.9
million impairment charge on six aircraft that Atlas had
previously parked.

DebtTraders analysts Daniel Fan, CFA, and Blythe Berselli, CFA,
advise that Atlas Air's 9.25% bonds due 2008 was last quoted at
a price of 84. For real-time bond pricing, go to
http://www.debttraders.com/price.cfm?dt_sec_ticker=ATLAS


BALANCED CARE: Meditrust Will Acquire 12 Facilities for $43MM
-------------------------------------------------------------
On February 6, 2002, Balanced Care Corporation, certain
subsidiaries of the Company, IPC Advisors S.a.r.l., Meditrust
Acquisition Corporation II LLC and La Quinta TRS II, Inc.
entered into an Option, Settlement and Release Agreement.

Under the Option Agreement, (i) Meditrust granted an option to
IPC to acquire the real estate and improvements of 12 assisted
living facilities for an aggregate purchase price of
$43,000,000, which is currently leased from Meditrust by 11
third party lessees and one wholly-owned subsidiary of the
Company pursuant to individual Facility Lease Agreements, (ii)
La Quinta agreed to dismiss the "Pending Litigation" against the
Company and IPC, and (iii) the Company, IPC, Meditrust and La
Quinta agreed (a) to release each other from certain claims as
more specifically set forth in the Option Agreement and (b) not
to commence or otherwise participate in any suit or other
proceeding adverse to the other party in connection with the
matters covered by the respective Releases.

In consideration for the grant of the Option, the dismissal of
the Pending Litigation, and the exchange of the Releases and the
Covenants-Not-To-Sue, among other things, IPC paid $13,000,000
to Meditrust. The Option Payment is non-refundable, subject to
certain exceptions provided in the Option Agreement. If IPC
exercises the Option and consummates the purchase of the Leased
Property in accordance with the provisions of the Option
Agreement, the Option Payment will be credited against the
Purchase Price at Closing. The Option is exercisable by IPC
until July 26, 2002, and closing must occur on or before August
5, 2002 (subject to extension as provided in the Option
Agreement). Once exercised, the Option is irrevocable. IPC has
the right to designate one or more nominees to take title to the
Leased Property at Closing.

The Closing and IPC's obligations under the Option Agreement are
conditioned upon the satisfaction of certain conditions
precedent unless waived by IPC. Similarly, Closing and
Meditrust's obligations under the Option Agreement are
conditioned upon the satisfaction of certain conditions
precedent unless waived by Meditrust, including, without
limitation, (i) the acquisition of the stock of the 3rd Party
Lessees by Balanced Care Tenant (MT), Inc., a wholly owned
subsidiary of the Company, (ii) the merger of the 3rd Party
Lessees into Balanced Care Tenant (MT), Inc., and (iii) provided
Closing on the Option has not yet occurred, simultaneously with
consummation of the Stock Transfers and the Mergers, the
amendment, restatement and consolidation of the Existing Leases
into a Master Lease Agreement to be executed between Balanced
Care Tenant (MT), Inc. and Meditrust for the lease of
the Leased Property.

In the event that, after IPC exercises the Option in accordance
with the terms of the Option Agreement and all conditions
precedent to the Closing are satisfied or waived, Meditrust
fails to consummate the Closing, the sole remedy, at law or in
equity, of IPC shall be, at IPC's option, to (i) institute an
action for specific performance against Meditrust or (ii)
receive a full refund of the Option Payment from Meditrust. In
the event that, after IPC exercises the Option in accordance
with the terms of the Option Agreement, IPC fails to consummate
the Closing, Meditrust's sole remedy, at law or in equity, shall
be to terminate the Option Agreement and retain the Option
Payment. Meditrust has no right to institute an action for
specific performance.

As noted above, the Option Agreement contains certain Releases
and Covenants-Not-To-Sue:

      - IPC/BCC Release and Covenant Not-To-Sue - In general,
each of the Meditrust Parties (as defined in the Option
Agreement) released the Released IPC/BCC Parties (as defined in
the Option Agreement) from, and agreed not to commence or
otherwise participate in any suit or other proceeding pertaining
to, any claims relating to (i) that certain Promissory Note (as
defined in the Option Agreement), (ii) that certain Option
Agreement dated December 30, 1999, as amended, among the
Company, IPC and New Meditrust Company, LLC, and (iii) that
certain lawsuit styled La Quinta TRS II, Inc. v. Balanced Care
Corporation, et al., in the Superior Court Department of the
Trial Court of the Commonwealth of Massachusetts at Civil Action
No. 01-2810C.

      - BCC Release and Covenant-Not-To-Sue - In general,
Meditrust released the Released BCC Parties (as defined in the
Option Agreement) from, and agreed not to commence or otherwise
participate in any suit or other proceeding pertaining to, any
claims relating to certain Existing Defaults (as defined in the
Option Agreement), including without limitation, the Company's
failure to (i) pay past due rent under the Existing Leases as
more specifically set forth on Exhibit G to the Option
Agreement, (ii) pay rent as the same comes due under the
Existing Leases, and if applicable, the Master Lease, during the
term of the Option, (iii) pay other payment obligations, and
(iv) comply with certain financial and operational covenants.

      - Meditrust Release and Covenant-Not-To-Sue - In general,
the IPC/BCC Parties (as defined in the Option Agreement)
released the Released Meditrust Parties (as defined in the
Option Agreement) from, and agreed not to commence or otherwise
participate in any suit or other proceeding pertaining to, any
claims relating to (i) the Promissory Note, (ii) the 1999 Option
Agreement, (iii) the Existing Lease Documents (as defined in the
Option Agreement), (iv) the Leased Property, (v) the Existing
Indebtedness (as defined in the Option Agreement), and (vi) the
Pending Litigation.

The IPC/BCC Release, the BCC Release and the Covenant-Not-To-Sue
granted by the Meditrust Parties are conditional and will be
void and of no further force and effect upon the occurrence of
certain conditions subsequent. In general, the Conditions
Subsequent include (i) if the Company and/or IPC or any
affiliate or other party claiming by or through any of them ever
commences or otherwise participates in any suit or other
proceeding against any Released Meditrust Party (as defined
under the Option Agreement") as an adverse party or adverse
witness relating to any of the matters covered by the Meditrust
Release, (ii) the Option Payment is rendered void or is
rescinded by operation of law or a final non-appealable court
order, and (iii) the Meditrust Release is rendered void, is
rescinded or adjudicated unenforceable by operation of law or a
final non-appealable court order. The Meditrust Release and the
Covenants-Not-To-Sue granted by the IPC/BCC Parties are
unconditional; provided, however, IPC shall not be prohibited
from commencing any action to enforce its rights and remedies
under the Option Agreement, including a refund of the Option
Payment.

The company operates about 65 assisted living and skilled
nursing facilities for middle and upper income seniors in 10
states. Its Outlook Pointe assisted living facilities offer 24-
hour personal and health care services, including help with
bathing, eating, and dressing. The Balanced Gold program
provides services aimed at improving residents' cognitive,
emotional, and physical well-being. Like many assisted-living
providers, Balanced Care is having trouble paying its rent, due
in part to an increase in supply that grew faster than demand. A
Luxembourg-based investment firm owns more than 50% of the
company. At June 30, 2001, Balanced Care's balance sheet showed
a total shareholders' equity deficit of $9 million.


BELL CANADA: Issues 4.7BB Shares as Part of Recapitalization
------------------------------------------------------------
Bell Canada International Inc., (Nasdaq:BCICF) (TSE:BI.)
announced that it issued 4,718,290,245 common shares on February
15 pursuant to the recapitalization plan announced by BCI on
December 3, 2001.

The weighted average price of BCI shares for the 20-day trading
period of January 14, 2002 to February 8, 2002 was $0.2888 per
share.

Upon the automatic exercise of the principal warrants issued to
BCI shareholders who exercised their rights in the recently-
completed rights offering of BCI, 2,988,986,201 common shares
were issued at a price of $0.147288 per share, representing a
49% discount to the Weighted Average Price. In addition,
1,457,938,474 common shares were issued in payment of the
principal amount of $400 million owing under BCI's 6.75% and
6.50% convertible debentures at a price of $0.27436 per share,
representing a 5% discount to the Weighted Average Price, and
271,365,570 common shares were issued to BCE Inc., with respect
to the conversion of the principal and interest of approximately
$78 million owing under a convertible loan to BCI at a price of
$0.2888 per share. BCE's percentage ownership interest in BCI is
62.2% following the issuance of these shares.

The number of BCI common shares issued on February 15 does not
reflect any shares that may be issued to American International
Group, Inc. or any of its affiliates in satisfaction of its put
right and pursuant to the exercise of the anti-dilutive
secondary warrants which were issued to BCI shareholders who
exercised their rights.

BCI, through Telecom Americas, owns and operates 4 Brazilian B
Band cellular companies serving more than 4.3 million
subscribers in territories of Brazil with a population of
approximately 60 million. BCI is a subsidiary of BCE Inc.,
Canada's largest communications company. BCI is listed on the
Toronto Stock Exchange under the symbol BI and on the NASDAQ
National Market under the symbol BCICF. Visit our Web site at
http://www.bci.ca


BRIDGE INFO: Court Approves Savvis Settlement Agreement
-------------------------------------------------------
SAVVIS Communications Corporation provides Bridge Information
Systems, Inc., and its debtor-affiliates with network services
needed to deliver financial information services to their the
customers.

Kurt A. Mayr, Esq., at Cleary, Gottlieb, Steen & Hamilton, in
New York, New York, relates that this relationship between the
Debtors and SAVVIS supported the Debtors' global operations and
involved numerous contracts and past agreements.  It gave rise
to claims asserted between the parties, including but not
limited to claims relating to:

    (a) the Network Services Agreement,

    (b) a promissory note pursuant to which SAVVIS owes the
        Debtors approximately $23,000,000, and

    (c) various accounts receivable.

In addition, Mr. Mayr continues, Savvis leased certain space
from the Debtors and made improvements that gave rise to certain
mechanics lien claims, which are subject of an adversary
proceeding pending before the Court.

Mr. Mayr reminds the Court the some of the issues between the
Debtors and Savvis were resolved pursuant to the:

  (1) Agreement Regarding the Supplemental Terms of the Interim
      Savvis Financing, and

  (2) Sharing Agreement between and among Savvis, the Debtors,
      General Electric Capital Corporation, and the Debtors'
      secured lenders.

But despite these agreements, Mr. Mayr notes that significant
disputes remain to be resolved by the parties.  Thus, the
Debtors and SAVVIS have agreed and now seek the Court's approval
of a Settlement Agreement, which is a final and global
settlement of all outstanding issues between them.  The salient
terms of the Settlement Agreement provides that:

  (i) in lieu of the issuance of SAVVIS Preferred Stock required
      by the Supplemental Agreement, the Agreeing Parties shall
      setoff the monetary obligations owing between each other
      which shall result in a net cash payment to the Debtors of
      $11,850,000, upon the closing of SAVVIS' currently
      contemplated refinancing;

(ii) SAVVIS shall assign to the Debtors all remaining claims
      held by SAVVIS against the Debtors or its affiliates
      outside the United States other than Canada;

(iii) at the closing, SAVVIS shall make an additional payment of
      approximately $900,000 to the Debtors, as required by the
      Sharing Agreement;

(iv) the Agreeing Parties shall work to resolve the Mechanics
      Liens Claims pending in the adversary proceeding pursuant
      to certain agreed upon parameters;

  (v) the Debtors shall assign to SAVVIS, at no additional
      charge, the smart rack patent and set top box patent and
      any interest the Debtors have in any plans, drawings and
      warranties respecting the Data Center;

(vi) the Debtors shall have one board representative on the
      SAVVIS Board of Directors for a term ending on:

      (a) the earlier of 3 years;

      (b) the date upon which the Debtors' ownership of SAVVIS'
          outstanding common stock falls below 20%; or

      (c) the date upon which the SAVVIS shares held by the
          Debtors are distributed to its creditors.

(vii) the Agreeing Parties' obligations and liabilities to one
      another arising up to and including the date of the
      Agreement shall be limited to those obligations
      specifically set forth in the Agreement and the Agreeing
      Parties mutually release one another from all other claims
      and liabilities; and,

(viii) SAVVIS shall support Bankruptcy Court approval of the
      Debtors' disclosure statement and plan of liquidation and
      shall not object to the rejection by the Debtors of any
      executory contracts and unexpired leases between the
      Debtors and SAVVIS.  SAVVIS has further agreed to waive,
      release and forever discharge the Debtors from any claims
      including any claim for indemnity or contribution
      regarding any claims of third parties, resulting from the
      rejection of any executory contract or unexpired lease
      between the Agreeing Parties.

According to Mr. Mayr, the Lenders' agent supports the
Agreement.

Mr. Mayr further asserts that the Agreement serves the best
interests of the Debtors' estates and their creditors.  "The
Agreement globally resolves a wide range of issues between the
Agreeing Parties, which, if litigated, would likely consume
significant estate resources and involve lengthy litigation with
an unpredictable outcome," Mr. Mayr adds.  Moreover, the
Agreement provides that SAVVIS will support confirmation of the
Plan, which serves the interests of all parties because it will
facilitate the Debtors' timely emergence from chapter 11.  The
Agreement further benefits unsecured creditors by resolving
significant potential unsecured claims and administrative claims
that SAVVIS might have asserted.  "The payments to be received
from SAVVIS under the Agreement shall also reduce the Lenders'
deficiency claims against the Debtors thus, increasing unsecured
creditors' potential recoveries," Mr. Mayr says.

Considering the merits of this Settlement, Judge McDonald gave
it his stamp of approval.  (Bridge Bankruptcy News, Issue No.
26; Bankruptcy Creditors' Service, Inc., 609/392-0900)   


BURLINGTON INDUSTRIES: Wants More Time to Remove Civil Actions
--------------------------------------------------------------
As of the Petition Date, Burlington Industries, Inc., and its
debtor-affiliates were parties to numerous civil actions pending
before multiple courts and tribunals.

By this motion, the Debtors ask the Court for an order extending
their time to remove these actions from those remote venues to
the District of Delaware to the later of:

    (a) June 13, 2002, or

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

To determine whether to remove any particular Action, Patrick M.
Leathem, Esq., Richards, Layton & Finger PA, in Wilmington,
Delaware, explains that the Debtors must examine and evaluate a
variety of issues.  "At this early state of their chapter 11
cases, the Debtors have not yet had an opportunity to evaluate
these matters and determine which of the Actions they will seek
to remove," Mr. Leathem informs Judge Newsome.  As a result of
the nature and complexity of these chapter 11 cases, Mr. Leathem
reports that the Debtors have devoted substantially all of their
time and resources since the Petition Date to:

-- completing a smooth transition to operations in chapter 11,

-- engaging in discussions with key constituencies, and

-- fulfilling their various administrative and reporting
   obligations arising in connection with the commencement of
   these cases.

For these reasons, Mr. Leathem explains, the Debtors have not
had sufficient time to analyze each of the Actions.  
Accordingly, the Debtors assert that an extension of the time
period during which they may determine which Actions should be
removed is warranted.

Mr. Leathem assures the Court that such an extension will not
prejudice the rights of the adverse parties in the Actions.  If
the Debtors remove any Action to federal court, Mr. Leathem
says, the affected Adverse Party will retain its right to seek
remand of the removed Action back to state court.

By application of Local Bankruptcy Rule 9006-2, the current
deadline is automatically extended through the February 27,
2002, hearing date when the Court will consider this Motion.
(Burlington Bankruptcy News, Issue No. 8; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   


CALICO COMMERCE: Delays Form 10-Q Filing Due to PeopleSoft Deal
---------------------------------------------------------------
For the following reasons, Calico Commerce, Inc., delayed in
filing its most current financial information with the SEC.  The
Company recently completed a sale of substantially all of its
intellectual property and operating assets to PeopleSoft, Inc.  
The negotiation of this sale required a significant commitment
of time and effort on the part of the Company's management
personnel and finance staff, particularly its Chief Financial
Officer. This commitment left Calico Commerce with insufficient
management resources to complete the necessary forms by February
14, 2002 without unreasonable effort and/or expense.

Calico Commerce, Inc. (OTCBB:CLIC) is a provider of interactive
selling software for organizations selling complex products or
services.


CAPTAIN D'S SEAFOOD: S&P Affirms Junk Rating on Planned Merger
--------------------------------------------------------------
Standard & Poor's, Feb. 20

Standard & Poor's said today it affirmed its triple-'C'-plus
corporate credit rating on Captain D's Seafood Restaurants after
Shoney's Inc., the parent of Captain D's, announced that it will
merge with an affiliate of Lone Star Funds and that Lone Star
has acquired the $135 million bank loan of Captain D's from the
existing bank group.

At the same time, Standard & Poor's removed the ratings from
CreditWatch. The outlook is negative.

The bank loan was scheduled to mature on March 31, 2002, but has
been extended until Oct. 31, 2002. The final agreement, which is
subject to approval by Shoney's shareholders, is expected to
close in the second quarter of 2002.

The rating reflects the potential that the deal may not close
thereby leaving the risk of default if Captain D's is unable to
refinance its $135 million bank loan.


CHIQUITA BRANDS: Liquidation Analysis Underpinning Amended Plan
---------------------------------------------------------------
Chiquita Brands International, Inc., believes that the Plan is
most beneficial to the creditors compare to the option of
liquidating the Company. Under Chapter 7, Chiquita Brands
International Senior Vice-President Robert W. Olson notes that
unsecured creditors and interest holders are paid from available
assets generally in the this descending order:

    (1) Secured creditors -to the extent of the value of their
        collateral;

    (2) Priority creditors;

    (3) Unsecured creditors;

    (4) Debt expressly subordinated by its terms or by order of
        the Bankruptcy Court; then

    (5) Equity Interest Holders.

In fact, fewer Equity Interests Holders will have a chance to
recover their claims compared to when the Plan is approved as
shown in this comparison:

                          Summary of Projected Recoveries
                          -------------------------------
     Class No.         Under the Plan        Under Chapter 7
     ---------         --------------        ---------------
     Class 1             100%                     100%
     Class 2             100%                     100%
     Class 3             100%                     43.2%
     Class 4A            87.4%                    43.2%
     Class 4B            46.5%                    0%
     Class 5             $16,000,000              0%
     Class 6             $36,900,000              0%
     Class 7             $0                       0%
     
Mr. Olson states that the value of any distributions in a
Chapter 7 case would be less than the value of distributions
under the Plan because, among other reasons, such distributions
in a chapter 7 case may not occur for a longer period of time
thereby reducing the present value of such distributions. In
this regard, Mr. Olson says, it is possible that distribution of
the proceeds of a Liquidation could be delayed for a period in
order for a Chapter 7 trustee and its professionals to become
knowledgeable about the Bankruptcy Case and the Claims against
Debtor. In addition, Mr. Olson continues, the proceeds received
in a Chapter 7 liquidation are likely to be significantly
discounted due to the distressed nature of the sale, and the
fees and expenses of a Chapter 7 trustee would likely exceed
those of the Estate Representative, thereby further reducing
Cash available for distribution.

Accordingly, Mr. Olson says, the decrease in the amount of debt
on Debtor's balance sheet will substantially reduce Debtor's
interest expense, improving its cash flow. Based on the terms of
the Plan, at emergence Reorganized Debtor will have $250,000,000
of debt in contrast to more than $950,000,000 of debt and
accrued interest prior to the restructuring.

Furthermore, Mr. Olson adds, the Projections on the feasibility
of the Plan indicate that Reorganized Debtor should have
sufficient cash flow to pay and service its debt obligations,
including the New Notes, and to fund its operations.  Thus, the
Debtor concludes that the Plan complies with the financial
feasibility standard of section 1129(a)(11) of the Bankruptcy
Code. (Chiquita Bankruptcy News, Issue No. 6; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


CLASSIC COMMS: Committee Brings-in Walsh Monzack as Co-Counsel
--------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
chapter 11 cases of Classic Communications, Inc. asks the U.S.
Bankruptcy Court for the District of Delaware to authorize its
retention and employment of Walsh, Monzack and Monaco, P.A. nunc
pro tunc as of November 28, 2001 as their co-counsel.

Judging from WM&M attorneys' experience on these matters, the
Committee is confident that WM&M is qualified to represent them
in these Chapter 11 cases.

At the Committee's request, WM&M has rendered services since
November 28, 2001, the date the Committee selected WM&M to
represent them as their co-counsel.

Specifically, WM&M will:

    a) generally attend hearing pertaining to the cases;

    b) periodically review applications and motions filed in
       connection with the cases;

    c) communicate with OH&S the Committee's lead counsel;

    d) communicate with and advise the Committee and
       periodically attend meetings of the Committee, as
       necessary;

    e) provide expertise on the substantive law of the State of
       Delaware and procedural rules and regulations applicable
       to these cases; and

    f) perform all other legal services for the Committee, as
       needed.

The rates applicable to the principal attorneys and paralegal
proposed to represent the Committee are:

       a) Francis A. Monaco, Jr.        $325 per hour
       b) Joseph J. Bodnar              $255 per hour
       c) Kevin J. Mangan               $220 per hour
       d) Heidi Sasso                   $100 per hour

To ensure that there is no unnecessary duplication of services,
WM&M intends to work closely with lead counsel to the Committee.

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


CONOCO CANADA: Commences Consent Solicitation for Senior Notes
--------------------------------------------------------------
Conoco Canada Resources Limited, a subsidiary of Conoco Inc.
(NYSE: COC), announced that it has commenced a consent
solicitation with respect to its US$8.1 million in outstanding
8.375 percent senior notes due 2005, its US$3.9 million in
outstanding 8.35 percent senior notes due 2006 and its US$8.2
million in outstanding 8.25 percent senior notes due 2017 to
eliminate its financial reporting obligations under these notes.
Conoco Inc. has irrevocably guaranteed the Corporation's payment
obligations on the U.S. Notes and has agreed to provide the
trustee for the notes copies of Conoco's required U.S. SEC
filings. The Corporation also is providing a redemption notice
to the holders of the remaining US$375,000 outstanding 7.125
percent notes due 2011.

Substantially all of the original principal amount of the U.S.
Notes was repaid by the Corporation by way of tender offer
completed in September 2001. If the requisite noteholder
consents are obtained, the U.S. Notes and the trust indentures
under which they were issued will be amended to eliminate the
contractual requirement of the Corporation to file periodic
reports with the Alberta Securities Commission or provide
equivalent financial information to the noteholders. The consent
solicitation is scheduled to expire on March 1, 2002.

The Corporation is effecting these transactions, plus the
redemption of its preferred shares and medium term notes as
announced on Feb. 14, 2002, in order to simplify its capital
structure and eliminate its public reporting obligations along
with the costs associated with reporting.

Questions concerning the terms of the consent solicitation may
be directed to the solicitation agent for the consent
solicitation, Credit Suisse First Boston Corporation (CSFB), at
(800) 820-1653 or (212) 325-2537.

Questions concerning the procedures for consenting or requests
for the Consent Solicitation Statement may be directed to the
Information Agent, Mellon Investor Services LLC, at (212) 269-
5550 or (800) 431-9643.

Conoco Canada Resources Limited is a Canadian based exploration
and production company with primary operations in Western
Canada, Indonesia, the Netherlands and Ecuador. Conoco Inc., is
a major, integrated energy company active in more than 40
countries.


CONTINENTAL AIRLINES: Vanguard Windsor Holds 8.96% Equity Stake
---------------------------------------------------------------
Vanguard Windsor Funds-Windsor Fund beneficially owns 8.96% of
the outstanding common stock of Continental Airlines.  The Funds
hold sole power to vote, and shared power to dispose of the       
4,964,700 shares beneficially held.

Continental Airlines serves more than 135 US cities and more
than 95 cities. The #5 US carrier (trailing United, American,
Delta, and Northwest) has hubs in Cleveland, Houston, and
Newark, New Jersey. Continental Micronesia serves the western
Pacific from Guam, and regional carrier Continental Express
serves 70 US cities. Continental code-shares with airlines such
as Air France, Alitalia, and Virgin Atlantic. It has a major
alliance with Northwest Airlines, which includes code-sharing as
well as shared frequent-flyer programs. In the wake of terrorist
attacks in 2001, the airline is paring down flights and laying
off more than 21% of its workforce.

DebtTraders reports that Continental Airlines' 8% bonds due 2005
(CAL2) are trading between 88 and 90. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CAL2for  
real-time bond pricing.


ENRON CORP: Continental Casualty Seeks Appointment of Examiner
--------------------------------------------------------------
As previously reported, Continental Casualty Company, National
Fire Insurance Company and Federal Insurance Company -- as well
as certain other sureties -- issued various surety bonds to
Enron North America Corporation and Enron Natural Gas Marketing
Corporation prior to the Petition Date.

David S. Tannenbaum, Esq., at Duane Morris LLP, in New York,
tells the Court that the face amount of the bonds issued by the
Sureties on behalf of Enron Natural Gas is over $1,200,000,000.
According to Mr. Tannenbaum, Enron Corporation guaranteed the
obligations of Enron Natural Gas and Enron North America
pursuant to certain General Agreements of Indemnity with the
Sureties.

Mr. Tannenbaum relates that Enron Natural Gas and the American
Public Energy Agency entered into a gas purchase agreement that
calls for Enron Natural Gas to supply natural gas directly to
various delivery points on behalf of American Public's customers
from April 1999 to April 2011.

American Public paid 100% of the contract price -- $300,000,000
-- to Enron Natural Gas.  Accordingly, the Sureties issued bonds
on behalf of Enron Natural Gas and in favor of American Public.

But then, Mr. Tannenbaum notes, Enron Natural Gas defaulted on
its obligations under the Gas Purchase Agreement.  This led
American Public to terminate the Gas Purchase Agreement and make
a demand on the Sureties for a "Termination Payment" in the
amount of $251,755,201 by January 16, 2002.

Thus, Mr. Tannenbaum says, Federal Insurance paid $126,000,000
to American Public on January 16, 2002 -- representing its 50%
allocation of the Termination Payment.  The other half was paid
by American Home Assurance Company, Mr. Tannenbaum explains.

As a result of Federal Insurance's payment, Mr. Tannenbaum
asserts that the Sureties hold fixed, liquidated and non-
contingent claims against Enron Natural Gas in the corresponding
amount of $126,000,000.

Mr. Tannenbaum reminds the Court that the Sureties also
previously issued bonds on behalf of Enron Natural Gas in favor
of Mahonia Natural Gas Limited, which relate to certain oil and
natural gas forward sales contracts.

All in all, Mr. Tannenbaum informs Judge Gonzales, the Sureties
currently hold:

  (i) fixed, liquidated and non-contingent claims against Enron
      Corporation in excess of $252,000,000 as a result of the
      payments on the American Public and other miscellaneous
      bonds; and

(ii) contingent claims against Enron Corporation in excess of
      $2,000,000,000 as a result of the issuance of the Mahonia
      bonds.

Mr. Tannenbaum points out that Enron Natural Gas allegedly has
limited assets of $79,000 and limited creditors.  All funds
which Enron Natural Gas received pre-petition were allegedly
"upstreamed" Enron North America, Mr. Tannenbaum reports.

Considering the Sureties' fixed, liquidated, unsecured claims
against Enron Natural Gas, Mr. Tannenbaum asserts that the Court
should appoint an examiner.

Mr. Tannenbaum adds that the immense disparity between Enron
Natural Gas' stated assets of $79,000 and its liabilities of
$1,300,000,000 is in itself noteworthy.

"What happened to the American Public funds of $300,000,000?"
Mr. Tannenbaum asks.  According to Mr. Tannenbaum, these
questions cannot be answered without the assistance of an
examiner to investigate this and the other likely irregularities
in Enron Natural Gas' pre-petition activities.

"Even assuming that Enron Natural Gas expended a portion of the
American Public Funds to enter into other contracts or for other
activities, more than $79,000 should remain from a prepayment of
$300,000,000 made less than three years ago!" Mr. Tannenbaum
contends.  Clearly, the Sureties insist that the best interests
of the creditors, equity security holders, and other interests
of Enron Natural Gas' estate mandate the appointment of an
examiner. (Enron Bankruptcy News, Issue No. 14; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


ENRON CORP: James Derrick Retires as Exec. VP & General Counsel
---------------------------------------------------------------
In connection with the restructuring and reorganization of Enron
Corp. (OTC: ENRNQ), the company announced that James V. Derrick,
Jr., executive vice president and general counsel, will retire
from Enron, effective March 1, 2002.  Derrick, 57, has served
the company since June 1991.

Additionally, the Enron Corp. Board of Directors announced that
Robert H. Walls, Jr., currently deputy general counsel, has been
named Derrick's successor.  To ensure an orderly transition,
Walls will serve as acting general counsel, effective
immediately.

"I am profoundly grateful to have been afforded the privilege of
serving for many years as a member of a legal team comprised of
truly outstanding women and men for whom I have the deepest
respect and the greatest admiration," Derrick said.  "I am
extremely pleased that Rob Walls has been chosen to succeed me.  
Rob is an individual of great integrity, a superb leader, and a
very able lawyer.  I look forward to working closely with him to
effect a seamless transition of responsibilities."

Enron markets and delivers energy products to customers around
the world. Enron's Internet address is http://www.enron.com

DebtTraders reports that Enron Corp.'s 9.125% bonds due 2003
(ENRON2) are trading between 16 and 18.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ENRON2for  
real-time bond pricing.


ENRON: Court Lifts Stay for Severed Employees' Suits to Proceed
---------------------------------------------------------------
Attorneys for the Severed Enron Employees Coalition (SEEC)
applauded Wednesday's decision by a bankruptcy judge in New York
to allow lawsuits pending in federal court in Houston to move
forward.

Those claims were placed on hold when Enron (OTC: ENRNQ) filed
for Chapter 11 bankruptcy protection.  Such a "stay" is
automatic in the case of bankruptcy filings.  Attorneys for SEEC
had filed suit against Enron's directors and administrators of
its 401K plan, but the stay had prevented them from naming Enron
itself.

But attorneys representing other Houston federal court
plaintiffs had asked U.S. Bankruptcy Judge Arthur Gonzalez to
consider lifting the stay on the Houston cases.  On Wednesday,
Judge Gonzalez agreed to do so, following a hearing on the
motion.

In court Wednesday, Martin Dies, an attorney for SEEC, argued in
favor of lifting the stay.  Mr. Dies told the court that the
Enron situation has created an extraordinary hardship for former
employees, and that it was in their interest to move forward
with the litigation.

Judge Gonzalez ordered for the stay to be lifted in 120 days, or
on Friday, June 21, subject to Enron filing a motion prior to
that date to show cause why the stay should not be lifted.

As soon as the federal judge overseeing the Houston case
implements a trial plan, Judge Gonzalez also ordered Enron to
begin making available all documents it has produced to Congress
and the federal regulatory agencies for discovery to the parties
who made the motion to lift the stay.

Richard Hile, one of the attorneys representing SEEC, applauded
the ruling and said SEEC expects to amend its lawsuit against
Enron's directors to include Enron itself.

"We anticipate filing an amended complaint naming Enron as an
additional defendant after the court enters its written order in
this matter," says Hile.

The SEEC legal team is made up of the following attorneys and
law firms: George Whittenburg, Whittenburg Whittenburg &
Schachter, P.C.; Randy McClanahan and Scott Clearman, McClanahan
& Clearman, L.L.P.; Martin Dies, III and Richard Hile, Dies &
Hile, L.L.P.; Broadus Spivey, Spivey & Ainsworth, P.C.; and
Scott Baena, Bilzin Sumberg Dunn Baena Price & Axelrod LLP.


ENRON WIND: Case Summary & Largest Unsecured Creditor
-----------------------------------------------------
Lead Debtor: Enron Wind Corp.
             13000 Jameson Road
             P.O. Box 1910
             Tehachapi, CA 93581

Bankruptcy Case No.: 02-10743

Debtor affiliates filing separate chapter 11 petitions:

                  Entity                        Case No.
                  ------                        --------
     Enron Wind Systems, Inc.                   02-10747
     Enron Wind Energy Systems Corp.            02-10748
     Enron Wind Maintenance Corp.               02-10751
     Enron Wind Constructors Corp.              02-10755
     EREC Subsidiary I, LLC                     02-10757
     EREC Subsidiary II, LLC                    02-10760
     EREC Subsidiary III, LLC                   02-10761
     EREC Subsidiary IV, LLC                    02-10764
     EREC Subsidiary V, LLC                     02-10766

Type of Business: To Manufacture and Sell Wind
                  Turbines and Develop Independent
                  Power Projects Utilizing Wind Turbines   

Chapter 11 Petition Date: February 20, 2002

Court: Southern District of New York (Manhattan)

Judge: Arthur J. Gonzales

Debtors' Counsel: Brian S. Rosen, Esq.
                  Weil, Gotshal & Manges LLP
                  767 Fifth Avenue
                  New York, NY 10153
                  212-310-8602
                  Fax: 212-310-8007      

                  Melanie Gray, Esq.
                  Weil, Gotshal & Manges LLP
                  700 Louisiana, Suite 1600  
                  Houston, Texas 77002
                  Tel: (713} 546-5000

Total Assets: $292,018,954

Total Debts: $293,326,069

Debtor's Largest Unsecured Creditor:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
SG-J, Inc.                Contract Obligation     Approx.
C/o General Electric                               $9,000,000
Capital Corporation
120 Long Ridge Road
Stamford, Connecticut
06927-1560


ETOYS INC: Will Delay Financial Statements Filing with SEC
----------------------------------------------------------
eToys Inc. will not be filing its required financial statements
with the Securities & Exchange Commission on a timely basis
because the Company has advised the SEC that on March 7, 2001,
the Company filed a petition for relief under Chapter 11 of the
United States Bankruptcy Code in the United States Bankruptcy
Court for the District of Delaware, ceased all operations and
terminated all its employees except for certain employees needed
to manage the orderly liquidation of its assets. The Company is
currently managing its assets as a debtor in possession and is
in the process of liquidating its assets for the benefit of its
estate and creditors.

The Company anticipates filing a plan of liquidation with the
Bankruptcy Court calling for the disposition of its remaining
assets and distributing all of the proceeds therefrom to its
creditors. There is no possibility that any net liquidation
proceeds will be available for distribution to the Company's
stockholders.

eToys indicates that it will endeavor to file its Quarterly
Report for the quarter ending December 31, 2001 within a
reasonable period of time after it is able to file its Annual
Report for the fiscal year ended March 31, 2001, its Quarterly
Report for the quarter ended June 30, 2001 and its Quarterly
Report for the quarter ended September 30, 2001, taking into
account the limited human resources currently available to the
Company. However, to date eToys has not closed its books for the
quarters ended June 30, 2001, September 30, 2001 and December
31, 2001 or for the fiscal year ended March 31, 2001. Until such
time as the Company is able to file such quarterly reports and
annual report, the Company intends to file with the Securities
and Exchange Commission under cover of Current Reports, copies
of the monthly reports that are required to be filed by it with
the United States Trustee pursuant to the United States
Trustee's "Operating Guidelines and Financial Reporting
Requirements."

eToys, Inc., now known as EBC I Inc, is a web-based toy retailer
based in Los Angeles, California. The Company filed for Chapter
11 Petition on March 7, 2001 in the U.S. Bankruptcy Court for
the District of Delaware. Robert J. Dehney, at Morris, Nichols,
Arsht & Tunnell and Howard Steinberg at Irell & Manella
represents the Debtors in their restructuring efforts. When the
company filed for protection from its creditors, it listed
$416,932,000 in assets and $285,018,000 in debt.


EXODUS COMMS: Seeks Approval of Stipulation with Phoenix Leasing
----------------------------------------------------------------
Exodus Communications, Inc., and its debtor-affiliates ask the
Court for approval of a stipulation and agreement with Phoenix
Leasing Incorporated to allow the transfer of leased equipment
to Digital Island.

John P. Sheahan, Esq., at Skadden Arps Slate Meagher & Flom LLP
in Wilmington, Delaware, informs the Court that prior to the
Petition Date, Service Metrics Inc. and Phoenix entered into a
Master Equipment Lease Agreement No. 6233 and certain attached
schedules.  The Debtors asserted that the Phoenix Lease is not a
true lease, but a capital lease or a disguised financing
arrangement.  Phoenix does not dispute the characterization of
its lease and has filed Uniform Commercial Code Financing
Statements to perfect a first priority security interest in the
Equipment.

The salient terms of the stipulation are:

A. Subject to the terms and conditions of this Stipulation and
     of the Sale Order, Phoenix consents to the sale of the
     Phoenix Equipment pursuant to the Agreement free and clear
     of all claims, liens and security and other interests of
     Phoenix therein;

B. At the Closing, the Debtors shall deposit the sum of
     $1,000,000.00 out of the Cash Consideration into a
     segregated, interest-bearing deposit account with a
     federally-insured depositary institution approved to hold
     funds of a Debtor's Bankruptcy estate in the District of
     Delaware. The set aside account shall be titled in such a
     manner as to reflect that it contains the Cash
     Consideration attributable, in whole or in part, to the
     Phoenix Equipment;

C. Upon the deposit of the set-aside amount into the account,
     Phoenix shall have a fully perfected security interest in
     such account in the same priority and to the same extent as
     the security interests of Phoenix in the Phoenix Equipment,
     and such security interest in such account shall be fully
     perfected without further act of any party, including
     without the necessity of the entry of Phoenix and the
     Debtors into a security agreement or a deposit account
     control agreement with respect thereto;

D. As soon as practicable after the deposit of the set-aside
     amount into the account, Service Metric shall notify
     counsel to Phoenix in writing of the name and location of
     the depositary and of  the title and number of such
     account. Such depository is authorized and instructed
     hereby to verify such deposit and such information to
     Phoenix on its request;

E. The Debtors shall not commingle in the account with the
     set-aside amount funds subject to the security interests or
     liens of any other party;

F. Phoenix and the Debtors shall  attempt within the 45 days
     (the following the Closing to agree on the value, on a
     going concern basis, of the Phoenix Equipment as of the
     Petition Date and the validity and priority of the security
     interests of Phoenix therein as of the Petition Date as
     valid and first priority;

G. The Debtors shall as soon as practicable after the Closing
     notify counsel to Phoenix in writing of the date of the
     Closing;

H. If Phoenix and the Debtors are unable within the Attempted
     Resolution Period to agree on both the Equipment Value and
     the Security Interest Matters, either Phoenix or the
     Debtors may bring before the Court on regular notice a
     motion to determine the same to the extent there has been
     no agreement thereon. Prior to the hearing on any such
     motion, Phoenix and the Debtors may present documentary and
     testimonial evidence, including the opinions of expert
     appraisers, in support of or in opposition to such motion;

H. As soon as is practicable after either the agreement of
     Phoenix and the Debtors on the Equipment Value and the
     Security Interest Matters or the entry of a Final Order of
     the Court determining such of those on which the Debtors
     and Phoenix had not been able to agree, the Debtors shall
     pay to Phoenix the lesser of the Equipment Value determined
     as set forth above and the Set-Aside Amount to the extent
     that Phoenix had a valid, first priority security interest
     in the Phoenix Equipment as of the Petition Date' by a
     federal funds wire transfer under such transfer
     instructions as Phoenix may give in writing to the Debtors'
     counsel;

I. The maximum amount of the secured claim of Phoenix against
     Service in respect of the Phoenix Lease and the Phoenix
     Equipment shall be $1,000,000. Any amounts due Phoenix by
     Service in respect of the Phoenix Lease and the Phoenix
     Equipment in excess of the lesser of the Equipment value
     determined as set forth' above and Set-Aside Amount shall
     be an allowed unsecured claim of Phoenix against Service in
     the Case; (Exodus Bankruptcy News, Issue No. 14; Bankruptcy
     Creditors' Service, Inc., 609/392-0900)


FEDERAL-MOGUL: Court Okays Bayard as Committee's Co-Counsel
-----------------------------------------------------------
The Official Committee of Unsecured Creditors of Federal-Mogul
Corporation, and its debtor-affiliates obtained Court authority
to employ and retain The Bayard Firm as its co-counsel nunc pro
tunc to October 23, 2001, in the Debtors' chapter 11 cases.

The services Bayard has rendered and may be required to render
for the Committee include, without limitation:

A. providing legal advice with respect to its powers and duties
   as an official committee appointed under bankruptcy Code
   section 1102;

B. assisting in the investigation of the acts, conduct, assets,
   liabilities and financial condition of the Debtors, the
   operation of the Debtors' businesses, and any other matter
   relevant to the case or to the formulation of a plan of
   reorganization or liquidation;

C. preparing on behalf of the Creditors Committee necessary
   applications, motions, answers, orders, reports and other
   legal papers;

D. reviewing, analyzing and responding to all pleadings filed by
   the Debtors and appearing in court to present necessary
   motions, applications and pleadings and to otherwise
   protect the interests of the Committee; and

E. performing all other legal services for the Creditors
   Committee in connection with these chapter 11 cases.

Bayard will be compensated on a hourly basis, plus reimbursement
of the actual and necessary expenses that Bayard incurs, in
accordance with the ordinary and customary rate which are in
effect on the date the services are rendered. The primary
attorneys and paralegals expected to represent the Committee,
and their respective hourly rates are:

      Charlene D. Davis             $375 per hour
      Ashley B. Stitzer             $250 per hour
      Eric M. Sutty                 $225 per hour
      Heidi Snyder (paralegal)      $125 per hour

In addition, other attorneys and paralegals will render services
to the Committee as needed, whose current hourly rates are:

      Directors      $300 to $415 per hour
      Associates     $175 to $260 per hour
      Paralegals     $115 to $125 per hour

Charlene D. Davis, a Director of The Bayard Firm, relates that
neither Bayard nor any of its members, counsel or associates has
had or presently has any connection with the Debtors, their
creditors, equity security holders, or any other party in
interest, or their respective attorneys, accountants, the United
States Trustee, or any person employed in the Office of the
United States Trustee, in any matters relating to the Debtors or
their estates, except that:

A. Past or current clients of The Bayard Firm in matters
   unrelated to the Debtors' Chapter 11 Cases:

       1. The Bank of New York - prior, unrelated representation
          of The Bank of New York in the capacity as indenture
          trustee in Centennial Coal bankruptcy case; prior
          representations of agents for bank syndicates in which
          The Bank of New York had an interest in unrelated
          cases.

       2. Bank of America - prior and current representation of
          the Bank of America as agent bank or lender in several
          unrelated bankruptcy cases in the District of Delaware
          including the Owens Corning and the W.R. Grace
          bankruptcy cases.

B. Past or current parties that The Bayard Firm may be
   currently, or in the past may have been, adverse to General
   Electric Capital Corporation and affiliates in matters
   unrelated to the Debtors' Chapter 11 Cases.

Ms. Davis asserts that Bayard has not received any retainer from
the Debtors, the Creditors Committee, or any other entity in
this case. (Federal-Mogul Bankruptcy News, Issue No. 10;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


FRUIT OF THE LOOM: UST Asks Court to Disqualify Ernst & Young
-------------------------------------------------------------
The United States Trustee reminds the Court that Fruit of the
Loom Ltd., applied to retain E&Y as its Tax Accountants and
Auditors.  An Affidavit by James J. Doyle in support E&Y's
Retention under an engagement letter agreement dated November
30, 1999, were attached to the E&Y Retention Application.  That
Engagement Agreement provides that E&Y will:

  (a) assist and advise the Debtors with respect to general tax
      matters, prepare Federal and state corporate income tax
      returns, review and evaluate proposed income tax
      assessments, represent the Debtors before taxing
      authorities, and provide additional tax services as
      requested by the Debtors;

  (b) audit the annual consolidated financial statements and
      review the quarterly filings for Fruit of the Loom, and
      other auditing services in connection therewith, as
      requested by the Debtors;

  (c) provide Internal Audit Services; and

  (d) consistent with the above, provide such other accounting,
      tax and consulting services as may be requested by the
      Debtors.

The Court approved the Debtors' retention of E&Y under Sections
327 and 330 of the Bankruptcy Code.

Around July 23, 2001, E&Y filed a supplement to the Doyle
Affidavit. In the Supplemental Disclosure, Mr. Doyle stated that
E&Y "serves as auditors for a publicly traded company that is
potentially interested in purchasing certain assets from the
Debtors."

The Supplemental Disclosure organized into three categories the
services E&Y was providing and would provide to the Potential
Purchaser in the future upon the occurrence of certain events.
The first category relates to services prior to submission of an
offer. E&Y indicated that they would provide the following pre-
offer services for the Potential Purchaser:

      (a) assisting [Potential Purchaser] in gathering
information as necessary to compute the post-combination
effective tax rate for pro formas and forward-looking
information and

      (b) providing advice on tax structuring for the Proposed
Transaction, including, but not limited to, (i) determining the
optimum form of the Proposed Transaction (e.g., asset
acquisition vs. stock purchase); (ii) determining whether the
acquired interests and assets should be owned by an existing
subsidiary, a newly formed subsidiary or some combination
thereof; (iii) determining the country of domicile for any new
entity to be formed to effect the Proposed Transaction, (iv)
considering transfer pricing alternatives and structures; (v)
identifying opportunities to use APB Opinion No. 23 indefinite
investment criteria for financial reporting purposes and (vi)
integration of target operations into existing state and local
tax structures of the Potential Purchaser.

Mr. McMahon reminds the Court that if the Potential Purchaser
elected to submit an offer, E&Y indicated that it would provide
the following services:

  (1) providing assistance in with [sic] the development of pro
      forma balance sheets and income statements to depict the
      acquisition as if it had occurred as of an earlier date
      (as required by Regulation S-X, Article 11 of the federal
      securities laws);

  (2) providing assistance in the preparation of financial
      sections of prospectus, placement memoranda, or other
      documents as may be necessary to secure financing and
      comply with the federal securities laws;

  (3) providing Ernst & Young's consent for the use of its
      report on the Potential Purchaser in various SEC filings
      and (d) providing comfort letters to underwriters and/or
      placement agents with respect to equity or debt
      financings.

If the Potential Purchaser were the successful bidder and
consummates the Proposed Transaction, E&Y indicated that it
would provide the following services:


  (a) providing assistance in preparation of Form 8-K filing(s)
      with respect to the transaction;

  (b) providing assistance with allocation of the purchase price
      (not to include any valuation work); and

  (c) providing post-merger integration services.

The UST has been advised that the Potential Purchaser is not the
party currently seeking to purchase the Debtors' assets. As a
result, it appears that E&Y has not rendered services within the
scope of the Supplemental Disclosure. The UST is not certain
whether the Potential Purchaser's expressions of interest in,
and preliminary steps toward, a transaction rose to the level of
an "offer" for purposes of the Supplemental Disclosure. However,
the UST believes it is undisputed that, at a minimum, E&Y
rendered pre-offer services to the Potential Purchaser within
the scope of the Supplemental Disclosure.  Therefore, Joseph J.
McMahon, Jr., Esq., on behalf of Donald F. Walton, the Acting
United States Trustee for Region 3, wants three things:


  (a) Ernst & Young partially disqualified;

  (b) Ernst & Young to disgorge compensation and reimbursement
      that has been paid;

  (c) prospective denial of compensation and reimbursement due
      to E&Y.

Mr. McMahon informs Judge Walsh that Section 327 of the
Bankruptcy Code requires that professionals retained under
Section 327 "do not hold or represent an interest adverse to the
estate." This Court is required to disapprove a proposed
retention under section 327 "if there is an actual conflict of
interest."

Mr. McMahon argues that representation of both sides to a
potential transaction is the classic example of a conflict of
interest. E&Y rendered services to the Potential Purchaser, and
stood ready to render additional services, which placed E&Y in a
conflict of interest. E&Y was obligated to recommend to the
buyer what would be in the buyer's best interest regarding, for
instance, the optimal form of a transaction, while at the same
time it remained obligated to render tax and accounting advice
to the Debtors who are adverse parties in the transaction.

As a result of E&Y's conflict and adverse interest, Mr. McMahon
holds that this Court has the authority under sections 327(a)
and 328(a) of the Bankruptcy Code to disqualify E&Y in whole or
in part, and/or to order disallowance and disgorgement of any
portion or all of the compensation sought by E&Y.

Also, E&Y was in a conflict and represented an interest adverse
to the estate for the duration of the period from when it was
first approached by the Potential Purchaser to represent its
interests in the matter, through the date when the Potential
Purchaser withdrew any interest in a transaction with the
Debtors or involving the Debtors' assets.  Mr. McMahon suggests
that E&Y should disgorge and/or not be paid any compensation
from the Debtors during the time it was engaged in the
conflicting representation of the Potential Purchaser. (Fruit of
the Loom Bankruptcy News, Issue No. 49; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   


GT GROUP TELECOM: Slashing 350 Jobs to Save CDN$30MM Annually
-------------------------------------------------------------
DebtTraders reports that GT Group Telecom is reducing its
workforce by 28% or 350 people. The Company will take a one-time
cash charge in the second quarter of C$20 million and expects
the layoffs will result in annual savings of C$30 million. The
Company also announced its goal of achieving positive EBITDA by
the fourth quarter of 2002.

DebtTraders analysts Daniel Fan, CFA, and Blythe Berselli, CFA,
advise that GT Group Telecom's 13.25% bonds due 2010 was last
quoted at a price of 7.5. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=GTGR10CAR1


GALEY & LORD: Seeks OK to Pay Prepetition Critical Vendor Claims
----------------------------------------------------------------
Galey & Lord, Inc., and its debtor-affiliates ask authority from
the U.S. Bankruptcy Court for the Southern District of New York
to pay pre-petition claims of critical vendors and service
providers to avoid adverse effects on the Debtors' businesses.
The Debtors seek discretionary authority to pay the Yarn
Vendors, Dyes and Chemicals Vendors, Cotton Vendors and
Warehousing and Freight Services Provider.

The Debtors also seek authority to require that in order to
receive payment on account of any pre-petition claim, each of
the Critical Vendors must agree to supply goods/services to the
Debtors during the course of these bankruptcy cases in their
usual and customary fashion.

                              Yarn

Upon closing their Yarn facility, the Debtors negotiate and
entered into a Yarn Contract to replace the lost production
capacity. The Debtors are most concerned that without the
authority to pay the Yarn Vendors' pre-petition claims, the Yarn
Vendors would refuse to continue ship yarn.

The Debtors also have favorable pricing terms with the other
Yarn Vendors and believe that they would not be able to obtain
similar rates and terms from any alternative yarn suppliers.
This alone, would not materially affect the amount of payment
available to other creditors.

In addition to yarn, dyes and chemicals are also vital
ingredients in the Debtors' on-going operations. Without these
dyes and chemicals, much of the Debtors' business would cease.

                      Dyes and Chemicals

The two important chemical suppliers to the Debtors' businesses
are Buffalo Color Corporation and Nano-Tex, LLC.

Buffalo Color Corporation is the sole supplier of indigo, which
the Debtors' are using in denim production. If the Debtors will
have to replace Buffalo indigo, they would be forced to
reformulate their entire product mix and may be forced to cease
operations temporarily which is potentially devastating on the
Debtors' denim business.

Nano-Tex, LLC, on the other hand supplies proprietary chemicals
(and trademark) vital to the Debtors' marketing and product
strategies. The Debtors would suffer enormous harm if their
production were disrupted by a failure to receive Nano-Tex's
products.

The Debtors estimate that as of the Petition Date, the aggregate
outstanding amount of the Dye and Chemical Claims is
approximately $3.4 million.

                           Cotton

Another primary and critical raw material used in the Debtors'
business is cotton. The Debtors assert that they should maintain
their current cotton supplier because cotton from alternative
sources would introduce variations in product qualities,
creating significant manufacturing inefficiencies and additional
delays.

In addition, the Debtors purchase cotton pursuant to the
Southern Mill Rules, as adopted by the American Textile
Manufacturers Institute, Inc. and the American Cotton Shippers
Association. In accordance with the Southern Mill Rules, the
Debtors pay for all cotton five days after delivery.

As of the Petition Date, the only amounts owed for cotton relate
to cotton delivered during the five or six days immediately
before the Petition Date. The payment of such claims pursuant to
this Motion would not deplete the Debtors' assets generally
available to general, unsecured creditors.

                    Warehousing and Freight

Unless the Debtors continue to receive delivery of goods on a
timely and uninterrupted basis, their manufacturing operations
(including subcontractors) will shut down within a matter of
days, causing irreparable damage to the Debtors' business and
their reorganization efforts.

The Debtors expect that the Shippers and the Warehousers will
argue that they are entitled to possessory liens as of the
Petition Date and will refuse to deliver or release such goods
unless their claims are satisfied.

The Debtors anticipate that as of the Petition Date, the
aggregate amount of pre-petition claims of the Shippers and
Warehousers is approximately $482,000.

DebtTraders reports that Galey & Lord Inc.'s 9.125% bonds due
2008 (GNL1) are trading between 19 and 21. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=GNL1for  
real-time bond pricing.


GALEY & LORD: Wants Schedule Filing Deadline Moved to April 22
--------------------------------------------------------------
Galey & Lord, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Southern District of New York to extend
their deadline -- through April 22, 2002 -- to file schedules of
assets and liabilities, statements of financial affairs, and
schedules of executory contracts and unexpired leases.

The Debtors relate to the Court that with the critical matters
which the Debtors' finance department is dealing, they have not
yet had sufficient time to collect and assemble all of the
requisite financial data and other information to complete all
of the Schedules and Statements required by the Bankruptcy Rules
-- and they won't within the next 15 days.

The Debtors assure the Court that they have already begun and
will continue to work diligently to compile the information
necessary to complete the Schedules and Statements. They expect
to complete the posting of the Debtors' books of account on the
date requested.

G&L, a leading global manufacturer of textiles for sportswear,
including cotton casuals, denim, and corduroy, and is a major
international manufacturer of workwear fabrics, filed for
chapter 11 protection on February 19, 2002 together with its
affiliates. Joel H. Levitin, Esq., Henry P. Baer, Jr., Esq.,
Anna C. Palazzolo, Esq. at Dechert represent the Debtors in
their restructuring efforts. When the Company filed for
protection from its creditors, it listed $694,362,000 in
liabilities.


GLOBAL CROSSING: Schedule Filing Deadline Extended to May 13
------------------------------------------------------------
Global Crossing Ltd., and its debtor-affiliates sought and
obtained an extension through May 13, 2002, of the deadline by
which they must file comprehensive schedules and statements,
without prejudice to their ability to request additional time
should it become necessary.

Harvey R. Miller, Esq., at Weil Gotshal & Manges LLP in New
York, tells the Court that due to the complexity and diversity
of their operations, the Debtors anticipate that they will be
unable to complete their Schedules and Statements in the time
required under Bankruptcy Rule 1007(c). To prepare their
required Schedules and Statements, the Debtors must compile
information from books, records, and documents relating to a
multitude of transactions at numerous locations throughout the
world, which requires an enormous expenditure of time and effort
on the part of the Debtors and their employees.

Mr. Miller states that while the Debtors, with the help of their
professional advisors, are mobilizing their employees to work
diligently and expeditiously on the preparation of the Schedules
and Statements, resources are strained. Unavoidably, the primary
focus thus far has been on getting these large complex cases
filed and reacting to the trauma of filing. In view of the
amount of work entailed in completing the Schedules and
Statements and the competing demands upon the Debtors' employees
and professionals to assist in efforts to stabilize the business
operations during the initial postpetition period, the Debtors
will not be able to properly and accurately complete the
Schedules and Statements within the 15 day time period imposed
by the Bankruptcy Code.

The Debtors submit that the vast amount of information that must
be assembled and compiled, the multiple locations of such
information, and the hundreds of employee and professional hours
required for the completion of the Schedules and Statements all
constitute good and sufficient cause for granting the extension
of time requested herein. Mr. Miller adds that employee efforts
during the initial postpetition period are critical and the
Debtors must devote their time and attention to business
operations in order to maximize the value of the Debtors'
estates during the first critical months. (Global Crossing
Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


GOLDMAN INDUSTRIAL: Taps Greenberg Taurig as Bankruptcy Counsel
---------------------------------------------------------------
Goldman Industrial Group, Inc., and its debtor-affiliates seek
authority from the U.S. Bankruptcy Court for the District of
Delaware to retain and employ Greenberg Taurig, LLP as counsel
for the Debtors in their chapter 11 cases.

The Debtors relate to the Court that their choice of retaining
Greenberg Taurig is based on the firm's extensive general
experience and knowledge in the field of debtors' and creditors'
rights and business reorganizations under chapter 11 of the
Bankruptcy Code. The Debtors also considered the firm's
expertise, experience and knowledge practicing before this
Court, its proximity to the Court, and its ability to respond
quickly to emergency hearings and other emergency matters in
this Court which will be efficient and cost-effective for the
Debtors' estates.

The Debtors desire to retain Greenberg Taurig under a general,
advance payment retainer because of the extensive legal services
that may be required by the Debtors and the fact that the nature
and extent of such services are not known at this time. The
professional services Greenberg Taurig is expected to render to
the Debtors include:

    a) providing legal advice with respect to the Debtors'
powers and duties as debtors-in-possession in the continued
operation of their business and management of their property;

    b) negotiating, drafting and pursuing confirmation of a plan
of reorganization and approval of an accompanying disclosure
statement;

    c) preparing on behalf of the Debtors necessary
applications, motions, answers, orders, reports and other legal
papers;

    d) appearing in Court and to protect the interest of the
Debtors before the Court;

    e) assisting with any disposition the Debtors' assets, by
sale or otherwise; and

    f) performing all other legal services for the Debtors,
which may be necessary and proper in these proceedings.

The Debtors propose that Greenberg Taurig will be compensated in
an hourly basis plus reimbursement of expenses in accordance
with the firm's ordinary and customary rates. The hourly rates
applicable to the principal attorneys and paralegals are:

             Nancy A. Mitchell             $450 per hour
             Jeffrey M. Wolf               $375 per hour
             Christopher M. Cahill         $325 per hour
             Todd L. Boudreau              $300 per hour
             Laurie A. Krepto              $300 per hour
             Victoria Watson Counihan      $285 per hour
             Robert W. Lannan              $275 per hour
             Yolanda Henderson             $150 per hour
             Elizabeth Thomas               $95 per hour

Generally, Greenberg Taurig's hourly rates ranges in:

             Title                         Rate per Hour
             -----                         -------------
             Shareholders                  $350-$500
             Associates                    $280-$340
             Legal Assistants/Paralegal    $85 -$170

Greenberg Taurig received an advance payment in the amount of
$520,000, which will be applied to pre-petition fees.

Goldman Industrial Group, Inc., with its affiliates, provide
metalworking machinery to manufacturers; marketing and selling
original equipment primarily to the aerospace, automotive,
computer, defense, medical, farm, construction, energy,
transportation and appliance industries. The Company filed for
chapter 11 protection on February 14, 2002. Victoria W. Counihan
at Greenberg Traurig, LLP represents the Debtors in their
restructuring efforts.


GOLDMAN INDUSTRIAL: Hires Morris Anderson as Financial Advisors
---------------------------------------------------------------
Goldman Industrial Group, Inc., and its debtor-affiliates seek
authority from the U.S. Bankruptcy Court for the District of
Delaware to retain and employ Morris-Anderson & Associates, Ltd.
as their financial and restructuring advisor during these
chapter 11 cases effective as of the Petition Date.

The Debtors claim that Morris Anderson is well suited to provide
the type of services they require. The Debtors anticipate that
Morris Anderson will act effectively to provide financial
advisory and restructuring services as needed throughout the
course of these Cases. The professional services that Morris-
Anderson will render to the Debtors are:

    a) manage the day-to-day operations and businesses of the
Debtors;

    b) manage the chapter 11 process for the Debtors and
interface directly with chapter 11 counsel;

    c) supervise the banking relationships, cash management and
budgeting process for the Debtor;

    d) supervise the management employees of the Debtor;

    e) make recommendations regarding the hiring and firing of
management personnel of the Debtor;

    f) develop restructuring plan, including plans for
restructuring assets and for sale divestitures, liquidations or
disposition of assets of the Debtors;

    g) implement strategic direction and alternatives for the
Debtors; and

    h) perform such other functions consistent with the
Agreement and as directed by the Debtors

On February 13, 2002, the Debtors provided a $150,000 retainer
to Morris Anderson in connection with Anderson's services. With
the Court's permission, Morris Anderson will reduce future
professional fees payable by the Debtors. Morris Anderson shall
receive a monthly fee of $148,000 during its engagement, pro-
rated for any partial month, the Debtors proposed.

Goldman Industrial Group, Inc., with its affiliates, provide
metalworking machinery to manufacturers; marketing and selling
original equipment primarily to the aerospace, automotive,
computer, defense, medical, farm, construction, energy,
transportation and appliance industries. The Company filed for
chapter 11 protection on February 14, 2002.


HARVARD SCIENTIFIC: 341 Meeting of Creditors Set for March 7
------------------------------------------------------------
Harvard Scientific Corp. (OTC Bulletin Board: VGEN) announced
that a 341 meeting of creditors will be held on March 7, 2002
with the court-appointed trustee to present its plan of
reorganization and proposed merger with Smart Access, Inc.  A
spokesperson for the company stated, "We anticipate that the
merger will move forward with the blessing of both the trustee
and the court and are hopeful that the merger will be completed
soon."

Harvard Scientific Corp, (OTC Bulletin Board: VGEN) previously
announced that it has entered into a letter of intent to acquire
all issued and outstanding shares of Smart Access, Inc. an
Airport Security Company founded in 1984 to provide state-of-
the-art access control systems for Airports and Commercial
Establishments. To date, Smart Access has installed access
control systems for: Fort Wayne International Airport (Indiana),
General Ford International Airport (Michigan), Bush Field
Airport (Georgia), Pensacola Regional Airport (Florida), Nassau
International Airport (Bahamas) Cherry Capital Airport
(Michigan) as well as numerous manufacturing facilities,
correctional facilities, chemical and industrial plants,
hospitals, government facilities, utility companies, medical
facilities, newspaper offices, police stations, courthouses,
business offices, universities, banks and credit unions. More
information about Smart Access can be found at
http://www.smartaccess.com  

Smart Access designs and manufacturers both simple and complex
micro controller based access and security systems for airports
and commercial establishments. They are an industry leader in
innovative electronic security products featuring fully
integrated card access and computer based identification badging
systems. Smart Access continues to lead the way in technology
with their newly developed twelve-channel fiber optic
multiplexer and digital, self-healing fiber optic modems. Their
Access Control Manager (ACM) is a Multi user software, running
in a Microsoft(R) Windows environment that offers complete
control of access monitoring and response of alarms. The user-
friendly system also provides a sophisticated computer-based
photo identification badging system, as well as an integrated
personnel manager that stores a photo of each individual,
his/her employer and other pertinent information.


HINES HORTICULTURE: Plan to Sell Unit Has S&P Watching B+ Rating
----------------------------------------------------------------
Standard & Poor's said that it placed its single-'B'-plus
corporate credit rating on one of the largest North American
suppliers of horticulture products, Hines Horticulture Inc., on
CreditWatch with positive implications. This follows the
company's announcement that it plans to sell its Canadian
subsidiary, Sun Gro Horticulture Canada Ltd., and the business
and assets of Sun Gro Horticulture Inc., to the Sun Gro
Horticulture Income Fund, a newly established Canadian income
fund.

Total rated debt is about $425 million.

Sun Gro Horticulture Income Fund has filed a preliminary
prospectus for the initial public offering of units in the fund
with the Canadian securities authorities. The net proceeds from
the offering of units will be used by the fund to acquire the
common shares of the Sun Gro subsidiaries from Hines
Horticulture.

"Standard and Poor's will monitor the situation and meet with
management to discuss the impact of this transaction on Hines
Horticulture's capital structure over the near term," said
Standard & Poor's credit analyst Jayne Ross.

Hines Horticulture is a supplier of a wide variety of
horticulture products, with three operating divisions: color,
nursery, and growing media products.


HUBBARD HOLDING: 2 Subsidiaries File for Receivership in Canada
---------------------------------------------------------------
Hubbard Holding Inc., a Montreal-based textile manufacturer and
converter of fabrics, announces that its wholly owned
subsidiaries, Hubbard Fabrics Inc., and Hubbard Dyers (1991)
Inc., have filed a Notice of Intention with the Official
Receiver stating their intention to make a proposal under the
provisions of Section 50.4(1) of the Bankruptcy and Insolvency
Act and appointing KPMG Inc., Licensed Trustee, to act as
trustee under the proposal.

Consequently, and unless the Court grants an additional delay,
the Subsidiaries must file a proposal to their creditors within
thirty (30) days following the filing of the Notice.

The Subsidiaries plan to continue operations during this period,
knitting, dying, finishing and shipping goods to their customers
in the normal course.

The common shares of HUBBARD are listed on The Canadian Venture
Exchange and trade under the symbol "HUB".


HYBRID NETWORKS: Reviewing Options Including Bankruptcy Filing
--------------------------------------------------------------
Hybrid Networks Inc. (Nasdaq: HYBR), the worldwide leader in
high-capacity MMDS fixed broadband wireless Internet access
systems, reported financial results for the Company's fourth
quarter and fiscal-year ended December 31, 2001.

Net sales for the fourth quarter were $7.6 million compared with
$12.9 million in the year-ago fourth quarter.  The Company
reduced its net loss to approximately $347,000 on 22.5 million
shares outstanding for the fourth quarter from a net loss of
approximately $5.6 million on 21.8 million shares outstanding in
the year-ago quarter.

Net sales for the twelve months ended December 31, 2001 were
approximately $27.9 million compared with $22.8 million in the
year-ago period.  The Company reduced its net loss for the
twelve-month period to approximately $10.7 million on 22.4
million shares outstanding from a net loss of approximately
$37.2 million on 18.3 million shares outstanding in the year-ago
period.

"We faced a number of challenges in 2001, including a slowing
domestic economy, weakening telecommunications industry, and
dramatically reduced demand for the Company's products by our
key customers as a result of their revised business strategies.  
Nonetheless, we were able to increase our year- over-year annual
revenues and decrease our net losses," said Michael D.
Greenbaum, President and CEO of Hybrid Networks.  "During 2001,
the Company refocused its targeted opportunities to the
international marketplace as we adjusted to the abrupt downturn
in the domestic markets, in particular Sprint Corporation's and
certain other domestic operator's decisions to cease the
expansion of their deployments.  Unfortunately, international
opportunities did not develop as rapidly as we had anticipated,
and we believe that domestic and international revenues will be
depressed for substantially all of 2002. As a result, we do not
foresee sufficient revenues to meet our operating expenses,"
concluded Mr. Greenbaum.

                      Liquidity Issues

The Company's current liabilities, including the $5.5 million
debenture due April 30, 2002, exceeded its cash and cash
equivalents by approximately $4.2 million at December 31, 2001,
and working capital at that date was only $736,000.  As a result
of these factors, the Company expects that its audit report from
its independent accountants, Hein + Associates LLP, for the year
ended December 31, 2001 will be qualified based on the Company's
potential inability to meet its debt and cash flow obligations.

The Company for some time has been evaluating its strategic
alternatives, including a sale or merger of the Company.  The
Company further noted that if a sale or merger of the Company on
favorable terms cannot be consummated, the Company may be forced
to seek protection under the federal bankruptcy laws. There is
no assurance that the Company will be able to consummate a sale
or merger of the Company.

               Resignations and Staff Reduction

The Company also announced that Arthur A. Kurtze has resigned
from the board of directors of the Company due to his retirement
from Sprint Corporation.  Mr. Cameron Rejali remains on the
board of directors as a representative of Sprint Corporation.  
The Company also announced that Scott C. McDonald has resigned
as the Company's Executive Vice President and Chief Financial
Officer.  Mr. Michael D. Greenbaum has assumed the additional
responsibilities of Chief Financial Officer of the Company.

In response to the current challenges facing the Company and its
liquidity concerns, the Company has continued its efforts to
reduce its operating expenses, including the recent elimination
of nine positions.  This force reduction involves approximately
18% of the Company's workforce and is expected to lower
operating expenses by approximately $150,000 per quarter. This
follows a prior force reduction in November 2001 involving 15
employees. After these reductions, the Company has 41 employees.

Headquartered in San Jose, California, Hybrid Networks Inc.
designs, develops, manufactures and markets fixed broadband
wireless systems that enable telecommunications companies,
wireless systems operators and network providers to offer high-
speed Internet data and voice services to businesses and
residences.  Hybrid was first to market with patented two-way
wireless products that focus on the MMDS and WCS spectrum in the
United States. Hybrid's customers include the nation's largest
MMDS spectrum holders as well as several system integrators and
regional ISPs.  With systems in use in 77 markets across five
continents, Hybrid is part of more fixed broadband wireless
deployments than any of its competitors.  For more information,
call (408) 323-6252 or visit http://www.hybrid.com


IT GROUP: Secures Approval to Hire Logan & Co. as Claims Agent
--------------------------------------------------------------
The IT Group, Inc., and its debtor-affiliates sought and
obtained entry of an order authorizing them to retain and employ
Logan & Company, Inc. as claims, noticing and balloting agent
to, among other things:

A. serve as the Court's notice agent to mail notices to the
     estates' creditors and parties in interest,

B. provide computerized claims, objection and balloting database
     services, and

C. provide expertise and consultation and assistance in claim
     and ballot processing and with other administrative
     information with respect to the Debtors' bankruptcy cases.

James M. Redwine, the Debtors' Vice President and General
Corporate Counsel, relates that the Debtors have numerous
creditors, potential creditors and parties in interest to whom
certain notices, including notice of these chapter 11 cases,
must be sent. The size of the Debtors' creditor body makes it
impracticable for the Debtors to undertake that task and send
notices to the creditors and other parties in interest. The
Debtors submit that the most effective and efficient manner by
which to provide notice and solicitation in these cases is to
engage an independent third party to act as an agent of the
Court.

Mr. Redwine informs the Court that Logan is a data processing
firm that specializes in noticing, claims processing, voting and
other administrative tasks in chapter 11 cases. The Debtors wish
to engage Logan to send out certain designated notices and
maintain claims files and a claims and voting register. The
Debtors believe that such assistance will expedite service of
notices, streamline the claims administration process and permit
the Debtors to focus on their reorganization efforts.

The Debtors believe that Logan is well-qualified to provide such
services, expertise, consultation and assistance. Mr. Redwine
submits that Logan has assisted and advised numerous chapter 11
debtors in connection with noticing, claims administration and
reconciliation and administration of plan votes including
Diamond Brands Operating Corp., and ICG Communications, Inc.

Under the Logan Agreement, Logan will perform the following
services, if necessary, as the Claims, Noticing and Balloting
Agent, at the request of the Debtors or the Clerk's Office:

A. Prepare and serve required notices in these chapter 11 cases,
     including:

     a. A notice of commencement of these chapter 11 cases and
          the initial meeting of creditors under section 341(a)
          of the Bankruptcy Code;

     b. A notice of the claims bar date;

     c. Notices of objections to claims;

     d. Notices of any hearings on a disclosure statement and
          confirmation of a plan of reorganization; and

     e. Such other miscellaneous notices as the Debtors or the
          Court may deem necessary or appropriate for an orderly
          administration of these chapter 11 cases;

B. Within five business days after the service of a particular
     notice, file with the Clerk's Office an affidavit of
     service that includes a copy of the notice served, an
     alphabetical list of persons on whom the notice was served,
     along with their addresses, and the date and manner of
     service;

C. Maintain copies of all proofs of claim and proofs of interest
     filed in these cases;

D. Maintain official claims registers in these cases by
     docketing all proofs of claim and proofs of interest in a
     claims database that includes the following information for
     each such claim or interest asserted:

     a. The name and address of the claimant or interest holder
          and any agent thereof, if the proof of claim or proof
          of interest was filed by an agent;

     b. The date the proof of claim or proof of interest was
          received by Logan and/or the Court;

     c. The claim number assigned to the proof of claim or proof
          of interest; and

     d. The asserted amount and classification of the claim;

     e. Implement necessary security measures to ensure the
          completeness and integrity of the claims registers;

     f. Transmit to the Clerk's Office a copy of the claims
          registers on a weekly basis, unless requested by the
          Clerk's Office on a more or less frequent basis;

     g. Maintain a current mailing list for all entities that
          have filed proofs of claim or proofs of interest and
          make such list available upon request to the Clerk's
          Office or any party in interest;

     h. Provide access to the public for examination of copies
          of the proofs of claim or proofs of interest filed in
          these cases without charge during regular business
          hours;

     i. Record all transfers of claims pursuant to Bankruptcy
          Rule 3001(e) and provide notice of such transfers as
          required by Bankruptcy Rule 3001(e);

     j. Comply with applicable federal, state, municipal and
          local statutes, ordinances, rules, regulations, orders
          and other requirements;

     k. Provide temporary employees to process claims, as
          necessary;

     l. Promptly comply with such further conditions and
          requirements as the Clerk's Office or the Court may at
          any time prescribe; and

     m. Provide such other claims processing, noticing and
          related administrative services as may be requested
          from time to time by the Debtors.

In addition to the foregoing, the Debtors seek to employ Logan
to assist it with:

A. the preparation of their schedules, statements of financial
     affairs and master creditor lists, if necessary, and any
     amendments thereto; and

B. if necessary, administrative tasks in connection with the
     reconciliation and resolution of claims.

The Debtors request that the fees and expenses of Logan incurred
in the performance of the above services be treated as an
administrative expense of the Debtors' chapter 11 estates and be
paid by the Debtors in the ordinary course of business.

Kathleen M. Logan, President of Logan & Company, Inc., assures
the Court that neither Logan nor any employee thereof has any
connection with the Debtors, their creditors or any other party
in interest herein; they are "disinterested persons," as that
term is defined in section 101(14) of the Bankruptcy Code; and
they do not hold or represent any interest adverse to the
Debtors' estates, except as set forth herein and in the Logan
Affidavit.

Ms. Logan represents that:

A. Logan will not consider itself employed by the United States
     government and shall not seek any compensation from the
     United States government in its capacity as the Claims,
     Noticing and Balloting Agent in these chapter 11 cases;

B. By accepting employment in these chapter 11 cases, Logan
     waives any rights to receive compensation from the United
     States government;

C. In its capacity as the Claims, Noticing and Balloting Agent
     in these chapter 11 cases, Logan will not be an agent of
     the United States and will not act on behalf of the United
     States; and

D. Logan will not employ any past or present employees of the
     Debtors in connection with its work as the Claims, Noticing
     and Balloting Agent in these chapter 11 cases. (IT Group
     Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
     Service, Inc., 609/392-0900)  


ITC DELTACOM: Increased Liquidity Concerns Spur S&P's Downgrade
---------------------------------------------------------------
Standard & Poor's said it lowered its corporate credit rating on
ITC DeltaCom Inc., a telecommunications services provider, to
triple-'C'-minus from triple-'C'-plus due to increased concerns
over liquidity.

At the same time, Standard & Poor's placed its ratings on the
company on CreditWatch with negative implications.

The downgrade is based on the company's limitations to draw down
the remaining $70 million available on its existing preferred
stock agreement with ITC Holding Company Inc., SCANA Corp., and
HBK Master Fund L.P. due to the possibility of a change of
control situation.

At current stock price levels, additional investments from ITC
Holding Company Inc., the largest of the three investors in this
commitment, would trigger a change of control event under the
senior notes and senior credit indentures. Currently, the $70
million availability is the company's only source of liquidity.
Although the company is pursuing alternatives for long-term
financing, Standard & Poor's is concerned that the company may
face a funding gap in the very near term.

ITC provides integrated voice and data telecommunications
services to midsize and major regional businesses. The company
is also a leading regional provider of wholesale long-haul
services to other telecommunications companies in the Southwest.


INACOM CORP: Wants Plan Filing Exclusivity Extended Until June 1
----------------------------------------------------------------
Inacom Corp., and its debtor-affiliates ask the U.S. Bankruptcy
Court for the District of Delaware to extend their exclusive
periods to file a chapter 11 plan and to solicit acceptances of
that plan. The Debtors wish to extend their Exclusive Plan
Filing Period through June 1, 2002 and want their Exclusive
Solicitation Period to run through August 1, 2002.  A hearing on
the motion is scheduled on February 22, 2002 at 9:30 a.m.

The Debtors remind the Court that they are involved in two
pieces of litigation, the outcome of which will significantly
affect the administration of their estates and the distributions
to be made to creditors under a plan of liquidation.  During the
last several months, the Debtors have continued to make progress
with each litigation.

The Debtors, the Committee, the Bank Group and Compaq Computer
Corporation have participated in settlement discussions and a
court ordered mediation to attempt to resolve their disputes.
These discussions have been constructive and may ultimately lead
to a settlement, which could pave the way toward confirmation of
a liquidating plan.

Preservation of plan exclusivity during the litigation period
process is important so as to maintain a level playing field and
not provide Compaq with a way to do an end around the litigation
by seeking to resolve the disputes on the context of competing
plans.

Furthermore, the resolution of WARN Act claims will have a
significant impact on distributions to be made under any plan
wherein there is approximately 1600 individual proofs of claims.
Also, A class proof of claim covering all of the Debtors' former
employees has been filed asserting more than $20 million of
priority claims. Thus, necessitates the extension.

Inacom Corp. filed for Chapter 11 petition on June 16, 2000.
Laura Davis Jones and Christopher James Lhulier at Pachulski
Stang Ziehl Young & Jones PC represent the Debtors in their
restructuring efforts.


INDIGO BOOKS: Working Capital Deficit Tops $7MM at Dec. 29, 2001
----------------------------------------------------------------
Indigo Books & Music Inc., reported improved third quarter
results, with total consolidated revenues rising to $273.9
million, an increase of 10.6% from $247.6 million for the same
period last year. In addition to comparable store sales increase
in superstores and traditional stores of 1.9% and 3.8%
respectively, the increase was attributable to the addition of
15 existing Indigo superstores and 1 new Indigo opened in
December.

This $29.9 million in sales was offset by sales decreases from
closing 27 traditional format stores and lower sales at Chapters
Online. On a year to date basis total consolidated revenues were
$565.0 million as compared to $538.5 million on a year to date
basis last year.

Consolidated earnings before amortization, interest, taxes,
restructuring charges and non-controlling interest increased to
$34.9 million compared to operating earnings of $27.2 in the
third quarter last year. This represents an increase in
operating earnings of $7.7 million or 28.3% in the quarter. On a
year-to-date basis, operating earnings were $34.2 million as
compared to $11.3 million on a year to date basis last year, an
increase in operating earnings of $22.9 million or 203%.

On a year to date basis, restructuring and other costs of $21.2
million, recorded in the second quarter, relate to store
closures and other costs associated with the amalgamation
between the Company and Old Indigo. The charges are comprised of
$12.3 million in capital asset write downs, $4.5 million
relating to store closings, $1.7 million relating to relocation
and other costs associated with the acquisition and $2.7 million
in finance charges. Of the total restructuring charges,
approximately $8.6 million are cash charges of which $3.0
million have been paid. The balance of approximately $12.5
million relates to non-cash transactions.

Excluding restructuring charges, the net income on a year to
date basis was $1.7 million as compared to a net loss of $11.5
million on a year to date basis last year. This represents an
increase of $13.2 million.

The consolidated net income for the third quarter was $18.8
million as compared to a net income of $9.0 million in the third
quarter last year, a $9.8 million or a 109% improvement.

The consolidated net loss on a year to date basis, after the
one-time restructuring charges described above, was $19.4
million as compared to a net loss of $11.5 million on a year to
date basis last year.

"We are pleased with our improved third quarter performance,"
said Heather Reisman, Chief Executive Officer of Indigo. "We
will continue to focus on strengthening all aspects of the
retail experience for our customers and on addressing the
opportunity to streamline our portfolio of stores in areas
where we feel there is over-capacity.

"I am particularly proud of the employees in this company who
have worked and continue to work relentlessly and with spirit to
reverse the problems which were negatively affecting
performance."

Subsequent to the quarter end 13 superstores and 10 traditional
stores, previously offered for sale pursuant to a Consent Order
issued by the Commissioner of Competition, reverted to Indigo as
no divestitures were completed by the trustee appointed to
effect the sale. It is anticipated that a few stores in the
portfolio will close and that costs related to this process will
be incurred.

                              Retail

Retail sales in the third quarter were $263.5 million as
compared to $232.1 million in the third quarter of last year, an
increase of $31.4 million or 13.5%. Operating earnings increased
to $35.0 million in the third quarter from $33.3 million in the
third quarter last year, an increase of $1.7 million or 5.1%.
The increase, as compared to last year, can be attributed to
improved gross margin dollars, reduced warehousing and
distribution costs offset slightly by higher occupancy and
labour costs due to the expansion of the superstore portfolio.

Retail sales on a year to date basis were $538.4 million as
compared to $497.6 million last year, an increase of $40.8
million or 8.2 %. On a year to date basis, operating earnings
were $37.0 million as compared to $35.4 million last year.

                         Superstores

In the third quarter, revenues at the Chapters and Indigo
superstores, including the World's Biggest Bookstore, grew to
$176.1 million, a 26.0% increase compared to revenue of $139.8
million in the third quarter last year. The growth in revenue
was generated by the operation of 16 additional superstores as
compared to the third quarter last year and positive performance
on a comparable store basis. Comparative store sales increased
1.9% during the quarter as compared to 1.3% in the same period
last year. Following challenges in the post September 11th
environment, comparable store sales in the key month of December
increased 5.7%.

Year to date revenues increased $51.7 million to $367.8 million
as compared to last year. This growth in revenue is attributable
to the operation of a larger superstore portfolio and
improvement in merchandising.

                         Traditional Stores

Total traditional store revenues declined to $72.4 million in
the third quarter, a decrease of $5.3 million or 6.8% in
comparison to $77.7 million in the third quarter last year. The
decline in revenue was the result of operating 27 fewer mall
stores, or approximately 12% fewer stores as compared with the
third quarter last year. The comparative store sales increase of
3.9% during the quarter was a significant improvement over the
0.4% decline in the third quarter last year. The total number of
traditional stores as at the end of the quarter was 190 as
compared to 217 stores last year. Comparable store sales in the
key month of December increased 4.3%.

Year to date revenues decreased $10.8 million to $145.5 million
as compared to last year. Comparative store sales increased 2.5%
on a year to date basis, a significant improvement over the 3.1%
decrease during the same period last year.

                              Online

Revenues in the third quarter were $10.4 million as compared to
$15.5 million in the third quarter last year, a decrease of $5.1
million or 32.9%. The decline was attributable to less
aggressive marketing, discounting and promotional activities
during the third quarter of this year as compared to
the third quarter last year. Losses before interest, taxes,
amortization and restructuring charges were reduced by $5.9
million to $71,000 primarily due to significant reductions in
operating costs as a result of restructuring activities
undertaken over the previous three quarters.

On a year to date basis, revenues were $26.6 million as compared
to $40.9 million on a year to date basis last year, a $14.3
million decrease. Operating losses were reduced by $21.2 million
on a year to date basis to $2.8 million, a significant
improvement over last year's performance.

                    Financial Position

As at December 29, 2001, the company's balance sheet showed that
its total current liabilities exceeded its total current assets
by over $7 million.

Indigo is a Canadian company and the largest book retailer in
Canada, operating bookstores in all provinces under the names
Indigo Books Music & more, Chapters, Coles, SmithBooks, and
World's Biggest Bookstore. Indigo operates
http://www.chapters.indigo.ca, an online retailer of books,  
videos and DVDs.


INTEGRATED HEALTH: Gets Sixth Extension of Exclusive Periods
------------------------------------------------------------
Integrated Health Services, Inc., and its debtor-affiliates
obtained sixth extension of its exclusive periods. The U.S.
Bankruptcy Court for the District of Delaware, pursuant to
section 1121(d) of the Bankruptcy Code:

(1) further extends the Rotech Debtors' Exclusive Solicitation
    Period, within which to solicit acceptances of its proposed
    plan of reorganization through and including July 26, 2002.

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


KAISER ALUMINUM: Wins Nod to Pay $9.5MM Critical Vendor Claims
--------------------------------------------------------------
Kaiser Aluminum Corporation, and its debtor-affiliates sought
and obtained authority to pay $9,500,000 of prepetition claims
held by certain critical vendors and service providers in the
ordinary course of business . . . as if these chapter 11 cases
had never been filed.

Joseph Bonn, the Debtors' Executive Vice President, relates that
in their day-to-day operations, the Debtors utilize a number of
businesses that perform essential specialized maintenance,
operational and manufacturing services for certain of the
Debtors' facilities. As of the Petition Date, the Specialized
Service Companies had outstanding claims for prepetition goods
and services provided to the Debtors.

Because of the specialized nature of the services provided by
the Specialized Service Companies and the invaluable expertise
and institutional knowledge developed over time by these
entities, who in some cases actually built the unique equipment
they service, the Debtors have no readily available substitute
vendors to provide these services. Moreover, the Debtors believe
that any interruption in the services provided by the
Specialized Service Companies could potentially disrupt the
production at the Debtors' facilities and, in some cases, even
jeopardize the Debtors' ability to ensure the safety of their
operations. If the Debtors fail to pay the Specialized Service
Claims, Mr. Bonn fears that the Specialized Service Companies
may cease doing business with the Debtors, thereby eliminating
these sources for certain key services and jeopardizing the
Debtors' ability to maintain operations and reorganize
successfully.

To the extent that the Debtors have not yet paid Specialized
Service Companies for repair, construction, installation or
similar services, Daniel J. DeFranceschi, Esq., at Richards
Layton & Finger in Wilmington, Delaware, points out that the
Specialized Service Companies may, under applicable state law,
be entitled to liens against the real or personal property of
the Debtors that was the subject of such services, whether or
not that property still is in the possession or control of the
respective Specialized Service Company, to secure payment of the
prepetition amounts owed, and which is expressly excluded from
the automatic stay. Moreover, to protect their asserted lien
rights, the Specialized Service Companies may refuse to release
goods in their possession unless and until their prepetition
claims for services have been satisfied. Therefore, many of the
Specialized Service Companies:

A. may be entitled to assert and perfect Liens against the
       Debtors' property, which would entitle them to payment
       ahead of other general unsecured creditors; and

B. may hold the property subject to the asserted Liens pending
       payment, to the direct detriment of the Debtors and their
       respective estates.

In addition, since the amount of any Specialized Service Claims
likely is less than the value of any property securing those
claims, the Specialized Service Companies holding lien rights
are in all likelihood fully secured creditors. Consequently, Mr.
DeFranceschi believes that payment of the Specialized Service
Claims, will give the Specialized Service Companies no more than
that to which they otherwise would be entitled under a plan of
reorganization; and save the Debtors the interest costs that
otherwise may accrue on the Specialized Service Claims during
these chapter 11 cases. The Debtors estimate that, as of the
Petition Date, the aggregate amount of Specialized Service
Claims was approximately $1,500,000.

Mr. DeFranceschi tells the Court that certain essential raw
materials, supplies and other goods and services are required to
manufacture the Debtors' products and are available only from a
single supplier. Because the Debtors do not have any viable
alternatives to obtain substitute goods or services from other
suppliers, the Debtors have determined that they must be able to
satisfy the prepetition claims of the Single Source Vendors to
ensure that these essential Single Source Goods will continue to
be available without interruption.

In many cases, Mr. DeFranceschi submits that no other
manufacturer or supplier can provide the required Single Source
Goods in any form. In other cases, substitute goods technically
are available from more than one source, but these alternate
suppliers cannot provide Single Source Goods that meet the
Debtors' requirements for quality, quantity or reliability, or
cannot ensure availability on a cost-efficient and timely basis.

For these reasons, the Debtors believe that any interruption in
the supply of Single Source Goods from the Single Source Vendors
would immediately jeopardize their ability to maintain their
refining and manufacturing operations and, in turn, generate
revenues. For certain of the Debtors' facilities, Mr.
Defranceschi believes that the Debtors must continue to incur a
substantial portion of the costs necessary to operate the
facility even if production has stopped. More important, even a
temporary disruption in the Debtors' refining or manufacturing
operations will cause the Debtors to fall short on their supply
commitments to customers and may therefore irreparably damage
the Debtors' critical customer relationships. Under these
circumstances, the Debtors believe that it is essential to pay
the Single Source Vendor Claims to ensure that Single Source
Goods continue to be supplied without interruption on a
postpetition basis. The Debtors estimate that, as of the
Petition Date, the aggregate amount of Single Source Vendor
Claims was approximately $7,000,000.

According to Mr. DeFranceschi, the Debtors, in their day-to-day
operations, also engage a number of small, local businesses to
perform essential specialized maintenance, operational and
manufacturing services or to supply essential goods at certain
of the Debtors' manufacturing facilities and for whom the
Debtors are their primary or exclusive customer. As of the
Petition Date, the Captive Vendors had outstanding claims for
prepetition goods and services provided to the Debtors.

Because of the specialized nature of the services and the
essential nature of the goods provided by the Captive Vendors
and the invaluable expertise and institutional knowledge
developed by these entities over time, Mr. DeFranceschi claims
that the Debtors have no readily available substitute vendors to
provide these services. Moreover, because many of the Captive
Vendors work primarily or exclusively for the Debtors, certain
of these Captive Vendors could not absorb losses resulting from
the Debtors' failure to pay outstanding Captive Vendor Claims on
ordinary business terms. Accordingly, any delay in paying the
Captive Vendor Claims could force these Captive Vendors into
bankruptcy or out of business, eliminating the Debtors' sources
for certain key services and jeopardizing the Debtors' ability
to maintain operations and reorganize successfully. Accordingly,
the Debtors believe that it is essential to satisfy these
Captive Vendor Claims to ensure that essential services remain
available without interruption. The Debtors estimate that, as of
the Petition Date, the aggregate amount of Captive Vendor Claims
was approximately $1,000,000.

The Debtors believe that the payment of the Specialized Service
Claims, the Single Source Vendor Claims and the Captive Vendor
Claims, in the Debtors' sole discretion, is essential and
appropriate. In particular, paying the Critical Vendor Claims is
necessary to:

A. ensure that the Debtors continue to receive essential goods
       and services that are actually or practically unavailable
       from other sources and

B. preserve critical relationships with the Debtors' key
       vendors, service providers and customers.

By contrast, failure to grant the relief sought herein would
severely impede the Debtors' ability to obtain essential goods
and services, operate their businesses and effectuate a
successful reorganization. Under these circumstances, similar
relief has been granted in other cases in this District and
elsewhere.

To maximize the benefits to the Debtors' estates, the Court
authorizes the Debtors to condition the payment of each Critical
Vendor Claim on such terms as the Debtors deem necessary, in the
Debtors' sole discretion, to ensure that the holder of such
claim will continue to supply goods or services to the Debtors
after the Petition Date on the terms and in the manner that such
goods or services were provided prior to the Petition Date. The
Debtors estimate that the aggregate amount of Critical Vendor
Claims to be paid pursuant to this Motion is approximately
$9,500,000.  Mr. DeFranceschi assures the Court that the Debtors
have sufficient cash reserves, together with anticipated access
to sufficient debtor in possession financing, to pay all
Critical Vendor Claims, as such amounts become due in the
ordinary course of their businesses. (Kaiser Bankruptcy News,
Issue No. 2; Bankruptcy Creditors' Service, Inc., 609/392-0900)   


KMART: U.S. Trustee Appoints Financial Institutions' Committee
--------------------------------------------------------------
Ira Bodenstein, United States Trustee for Region 11, appoints
these 7 representatives to the Official Committee of
Financial Institutions for Kmart's chapter 11 cases:

               JP Morgan Chase
               380 Madison Avenue, Floor 9
               New York, New York 10017
               Attn: Agnes L. Levy

               Bank of New York
               One Wall Street
               New York, New York 10286
               Attn: Harold F. Dietz

               Fleet National Bank
               100 Federal Street
               Boston, Massachusetts 02110
               Attn: James J. O'Brien

               Wilmington Trust Co.
               520 Madison Avenue, 33rd Floor
               New York, New York 10022
               Attn: James Nesci

               HSBC Bank USA
               Issuer Services Department
               452 Fifth Avenue
               New York, New York 10018-2076
               Attn: Robert Conrad

               First Union National Bank
               1339 Chestnut Street
               Philadelphia, Pennsylvania 19107
               Attn: Jill W. Akre

               Credit Suisse First Boston
               11 Madison Avenue
               New York, New York 10010
               Attn: Sharon M. Meadows

Kathryn Gleason, Esq., is the trial attorney for the U.S.
Trustee's office assigned to Kmart's chapter 11 cases.

At its first meeting, the Committee voted to retain Jones, Day,
Reavis & Pogue as its legal counsel. (Kmart Bankruptcy News,
Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900)   


KMART CORP: Store Closing List Expected to Surface by March 11
--------------------------------------------------------------
DebtTraders reports that, according to a bankruptcy filing,
Kmart Corporation will release by March 11 a list of stores it
intends to close as part of its attempts to cut costs and return
to profitability. Although, the report says, the Company has not
given the total number of its 2,114 stores it intends to close,
Kmart anticipates savings of $250 million a year as a result of
the closures.  The Company intends to hire a liquidator to sell
off the contents of the eliminated store.

DebtTraders analysts Daniel Fan, CFA, and Blythe Berselli, CFA
advise that Kmart Corporation's 12.5% bonds due 2005 is one of
its Actives. The bonds are currently trading between 42 and 45.
See http://www.debttraders.com/price.cfm?dt_sec_ticker=KMART9
for real-time bond pricing.


LAIDLAW INC: Taps PricewaterhouseCoopers as External Auditors
-------------------------------------------------------------
Laidlaw Inc., and its debtor-affiliates sought and obtained the
Court's approval to employ and retain PriceWaterhouseCoopers LLP
(Canada) as their external auditors, nunc pro tunc to January
17, 2002.

Joseph M. Witalec, Esq., at Jones, Day, Reavis & Pogue, in
Columbus, Ohio, relates that PwC Canada is already familiar with
the Debtors' corporate structure and accounting systems because
PwC Canada has been the auditor of the Debtors since 1998.
Accordingly, Mr. Witalec asserts, PwC Canada has a "unique base
of relevant experience" to perform the audits in an efficient
manner "than no other accounting firm can".

As Laidlaw's external auditors, PwC Canada will audit the
company's consolidated balance sheet as of August 31, 2001, and
August 31, 2002 and the related statements of operations,
retained earnings and cash flows for the year in accordance with
Canadian Generally Accepted Auditing Standards. The audit will
include:

    (a) examining, on a test basis, evidence supporting the
        amounts and disclosures in the financial statements;

    (b) assessing accounting principles used and significant
        estimates made by the Debtors' management; and

    (c) evaluating the overall financial statement presentation.

In addition, Mr. Witalec continues, PwC Canada will also provide
the Debtors with accounting, consulting, and advisory services,
which may include:

    (a) advice and assistance in the preparation and filing of
        financial information as requested by the Debtors;

    (b) performance of other related accounting or assurance
        services for the Debtors as may be necessary or
        desirable;

    (c) advice and assistance regarding tax planning issues;

    (d) review and assistance in the preparation and filing of
        any income tax returns; and

    (e) any and all other tax assistance as may be requested
        from time to time.

PwC partner Michael R. Van Every relates that the firm will
charge the Debtors:

    (a) an Audit Fee of $2,235,000 and estimated out-of-pocket
        expenses of $125,000 for conducting the 2001 Audit, of
        which $325,000 was paid pre-petition;

    (b) a fee of $75,000 plus actual and necessary out-of-pocket
        expenses each quarterly review; and

    (c) applicable goods and services tax owed under Canadian
        law.

The $2,035,000 balance of the Audit Fee will be paid based in
four installments:

    Upon court approval of retention            $600,000
    February 28, 2002                            600,000
    March 31, 2002                               600,000
    April 30, 2002                               235,000

In the event that the Audits involve extraordinary efforts due
to unforeseen events, Mr. Van Every says, PwC Canada and the
Debtors shall negotiate a revised fee agreement, which shall be
approved by the Court. For additional accounting, consulting and
advisory services that may be requested by the Debtors, PwC will
bill the Debtors on the prevailing hourly rates; provided it
does not exceed $50,000 per project or $300,000 in the
aggregate.  If it exceeds these limits, Judge Kaplan emphasizes
that PwC and the Debtors must seek the Court's approval of the
compensation.

Mr. Van Every assures the Court that PwC Canada has no
connection with the Debtors, their creditors, the US Trustee, or
any other party with an actual or potential interest in the
Chapter 11 cases or their respective attorneys or accountants.  
Out of an abundance of caution, Mr. Van Every discloses that:

    -- PwC Canada is not employed by any entity other than the
       Debtors in matters related to these Chapter 11 cases;

    -- PwC Canada waives an unpaid amount of $225,000 for the
       services PwC rendered to the Debtors prior to petition
       date;

    -- PwC Canada continues to provide the Debtors with various
       services in matters unrelated to the chapter 11 cases;

    -- PwC Canada and PwC US have not and will not perform any
       services related to the chapter 11 cases for any members
       of the Bank Group that are existing clients of PwC;

    -- some professionals hired by the Debtors for the cases
       may have or continue to provide services to PwC in
       matters unrelated to the Debtors or these cases;

    -- as co-defendant of the Debtors to a litigation case in
       the US, PwC Canada will give the Debtors a written
       representation that PwC Canada has no knowledge at the
       time of its auditors' reports of any material errors or
       irregularities in certain financial statements of the
       Debtors or its subsidiaries, including Safety-Kleen
       Corp., or that the Individual Defendants or any of the
       present or former officers or directors of the Debtors,
       except Kenneth Winger, knowingly participated in making
       any material misrepresentations relating to, or delayed
       the audit of, such financial statements;

    -- PwC US has withdrawn its audit opinions of Safety-Kleen
       Corp. for 1998 and 1999 and is no longer the auditor of
       Safety-Kleen Corp.;

    -- PwC Canada has a case against Peter Widdrington, chairman
       of the board of the Laidlaw, Inc.. The action was
       commenced in Widdrington's capacity as a bondholder of
       Castor Holding, Ltd. and does not relate to the business,
       affairs or financial statements of the Debtors;

    -- PwC Canada employs Rita Bishop, wife of Wayne Bishop -
       Vice President and Controller of the Debtors, as a
       manager in the executive recruitment and human resource
       area at the Hamilton, Ontario office and not as an
       auditor;

    -- PwC Canada and the Debtors entered into a tolling
       agreement dated March 1, 2001 where both parties agreed
       to toll limitation periods for claims against each other
       until February 28, 2002;

    -- PwC have thousands of professionals worldwide who may
       possibly hold interests in mutual funds or other
       investment vehicles of the Debtors; and

    -- PwC, its partners or employees does not hold or represent
       any interest adverse to the Debtors' estates in the
       matters for which PwC Canada is proposed to be retained;
       (Laidlaw Bankruptcy News, Issue No. 14; Bankruptcy
       Creditors' Service, Inc., 609/392-0900)  


LODGIAN INC: Obtains Open-Ended Lease Decision Period Extension
---------------------------------------------------------------
Lodgian, Inc., and its debtor-affiliates sought and obtained an
open-ended extension of the date by which they must decide
whether to assume, assume and assign, or reject unexpired non-
residential real property leases. The extension runs through the
date on which an order is entered confirming a plan of
reorganization in the Debtors' chapter 11 cases, without
prejudice to:

    A. Lodgian's right to seek a further extension after notice
       and a hearing, and

    B. the right of any lessor to request that the extension be
       shortened with respect to a particular Unexpired Lease.

It is irrefutable, Adam C. Rogoff, Esq., at Cadwalader
Wickersham & Taft in New York, argued, that Debtors' Unexpired
Leases are valuable assets of their estates and integral to the
continued operation of their businesses.  Indeed for a hotel
operator, the location of its hotels and related facilities and
the determination as to which properties constitute hotels
underlying the "core configuration" of reorganized Lodgian must
be made in an informed and reasoned fashion.

Mr. Rogoff told the Court that it is impossible to expect that
Lodgian could make reasoned decisions as to whether to assume or
reject all the Unexpired Leases within the sixty-day period
specified in 11 U.S.C. Sec. 365(d)(4).  The Debtors, however,
does not want to forfeit its right to assume any Unexpired Lease
as a result of the "deemed rejected" provision of section
365(d)(4) of the Bankruptcy Code, or be compelled to assume all
such Unexpired Leases within that same period in order to avoid
rejections, with the resultant imposition of potentially
substantial administrative expenses on Lodgian's estates.

Mr. Rogoff contends that cause exists to extend the initial
sixty-day period within which Lodgian may assume or reject the
Unexpired Leases because:

A. In compliance with section 365(d)(3), the Debtors fully
     intends to remain current with respect to all outstanding
     postpetition obligations under the Unexpired Leases.

B. Although the Debtors' lessors may be inconvenienced by any
     extension that this Court may grant, an extension of a
     debtor's time to assume or reject its unexpired leases of
     nonresidential real property is appropriate when such
     extension has "for all practical purposes, only an
     administrative rather than a substantive effect" and merely
     shifts "the burden of coming forward - not the burden of
     persuasion - to the property owners."

C. The Debtors operate major hotel businesses and are party to
     numerous Unexpired Leases, which are critical assets that
     are integral to the Debtors' reorganization. It is beyond
     peradventure that the Debtors cannot operate a substantial
     portion of its hotel businesses without its hotels and
     ancillary properties that are the subject of the Unexpired
     Leases. The Debtors' evaluation of its Unexpired Leases and
     its determination as to the operations at its various
     hotels is of the utmost importance to a successful
     reorganization of their businesses.

D. It is patent that a reasoned determination as to all
     Unexpired Leases cannot be made within the 60-day period
     specified in section 365(d)(4) of the Bankruptcy Code. In
     order to make informed decisions regarding whether to
     assume or reject each of their Unexpired Leases, the
     Debtors will require substantial time to adequately assess
     the potential value of each of the Unexpired Leases within
     the marketplace as well as within Lodgian's own operations.

Given their importance to the Lodgian's continued operations,
the Unexpired Leases will be an integral component of Lodgian's
reorganization.  In order for Lodgian's determination to assume
or reject each Unexpired Lease to be reasoned and informed, it
must be made in the context of a long-term business plan and
with an eye toward the formulation of a workable plan of
reorganization.

Moreover, Mr. Rogoff points out, the multitude of operational
and procedural issues that have arisen during the initial stages
of the Debtors' chapter 11 cases have generally required the
full and immediate attention of the Debtors' management, making
it virtually impossible for the Debtors to devote the resources
necessary to complete their Unexpired Lease analysis and make
informed decisions with respect to all such leases within the
first sixty days of these chapter 11 cases. Given the numerous
business and administrative emergencies that typically are
attendant to the commencement of large chapter 11 cases, the
Debtors submit that they will not have an adequate opportunity
to carefully review and analyze each of the Unexpired Leases and
determine within the statutory 60-day period:

A. the economics of each Unexpired Lease,

B. the benefits or burdens of each Unexpired Lease to the
       Debtors' estates, and

C. whether each Unexpired Lease is necessary in connection with
       the ongoing business operations of the Debtors.

Notably, Mr. Rogoff relates that the Debtors does not intend to
wait until confirmation to make a global determination as to the
assumption or rejection of the Unexpired Leases.  Rather, the
Debtors will continue to evaluate the Unexpired Leases on an
ongoing basis as expeditiously as practicable, and will file
appropriate motions as soon as informed decisions can be made.
(Lodgian Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., 609/392-0900)  


LUBY'S INC: Dimensional Fund Discloses 7.03% Equity Stake
---------------------------------------------------------
Dimensional Fund Advisors Inc. hold 1,577,200 shares of the
common stock of Luby's, Inc.  This amount represents
7.033849173% of the outstanding common stock of Luby's.  
Dimensional Fund Advisors exercise sole power to vote or direct
the vote of, and sole power to dispose of, or direct the
dispostion of the shares.

Dimensional Fund Advisors Inc., an investment advisor, furnishes
investment advice to four investment companies registered under
the Investment Company Act of 1940, and serves as investment
manager to certain other commingled group trusts and separate
accounts.  These investment companies, trusts and accounts are
the "Funds". In its role as investment advisor or manager,
Dimensional possesses voting and/or investment power over Luby's
securities held by the Funds.  All securities reported here are
owned by the Funds. Dimensional disclaims beneficial ownership
of such securities.

Luby's has about 220 cafeteria-style restaurants across 10
states (about three-quarters are in Texas). Each restaurant
serves 12-14 entrees, 15-20 salads, 12-14 vegetable dishes, and
18-20 desserts. The restaurants are expanding their take-out
offerings (13% of sales), with about 65 Luby's restaurants now
featuring pickup service. The deeply troubled company has
brought in new management with money to invest to try and cope
with a major slump in its revenues and stock price, as well as
the default on its credit.


MAGNNUM SPORTS: Nasdaq to Delist Shares Effective Monday
--------------------------------------------------------
Magnum Sports & Entertainment, Inc., (Nasdaq: MAGZ) announced
that it received a written Nasdaq Stock Market Staff
Determination on February 15, 2002 that its common stock will be
delisted from The Nasdaq SmallCap Market effective on the
opening of business on February 25, 2002.  The Nasdaq Staff
Determination advised Magnum Sports & Entertainment, Inc. that
it was not in compliance with several Nasdaq Stock Market, Inc.
marketplace requirements for continued listing on the Nasdaq
Stock Market, including (a) maintaining at least $2,000,000 in
net tangible assets pursuant to Marketplace Rule 4310(c)(2)(B);
(b) payment of listing fees to Nasdaq in accordance with
Marketplace Rule 4350(d)(2) and (c) maintaining a $1.00 minimum
bid price for its common stock as required by Marketplace Rule
4310(c)(4).  Magnum Sports & Entertainment, Inc. has determined
not to appeal this delisting notice from the Nasdaq Stock Market
Staff.  Effective on the opening of business on February 25,
2002, Magnum Sports & Entertainment, Inc.'s common stock will
trade on the over the counter bulletin board market under the
symbol Magz.


MCLEODUSA: Seeks Approval of Proposed Solicitation Procedures
-------------------------------------------------------------
On or before 5 days after the Disclosure Statement is approved,
McLeodUSA Inc., will direct Logan & Company to transmit by first
class mail, to the holders of Claims and Interests in Class 5
and Class 6, as of the Record Date, a solicitation package
containing:

    (a) the Plan;
    (b) the Disclosure Statement;
    (c) an appropriate ballot;
    (d) the Confirmation Hearing Notice;
    (e) the Solicitation Procedures Order; and
    (f) such other information as the Court may direct or
        approve

                       Holders of Contingent,
                  Unliquidated or Disputed Claims

The Debtor proposes that each Claim or Interest within a Class
of Claims or Interests entitled to vote on the Plan be
temporarily allowed in an amount equal to the amount of such
Claim or Interest provided that the Debtor reserves the right to
object to the amount of any Claim set forth for voting purposes
on a Ballot. If a Claim or Interest was listed in the Plan as
contingent, unliquidated or disputed, the Debtor did not solicit
a vote from such creditor and requests that the Court disallow
such Claim for voting purposes.

For all persons or entities who are described in the Plan as
having a claim or interest or a portion of a claim or interest
which is disputed, unliquidated or contingent or which the
Debtor asserts no amounts are owed, or who filed a proof of
claim prior to the Solicitation Date reflecting a claim or
interest or portion of a claim or interest that is disputed,
unliquidated or contingent, the Debtor proposes to distribute a
Solicitation Package that contains, in lieu of a ballot and the
Confirmation Hearing Notice, a Notice of Disputed Claim Status
advising the person or entity that their claim or interest has
been identified as disputed, contingent, or unliquidated and
informing that person or entity that absent having filed a
motion seeking to be allowed to vote an the Plan, they are
precluded from submitting a vote with respect to such claim or
interest. Such persons will be instructed in the notice to
contact the Claims and Noticing Agent to receive a ballot for
any such claim if a Rule 3018 (a) Motion is timely filed.

           Holders of Notes and Old Preferred Stock

Class 5 and Class 6 creditors include holders of the Debtor's
various prepetition unsecured senior Notes and the Debtor's Old
Preferred Stock.

Because of the complexity and difficulty in identifying and
reaching beneficial owners of publicly traded securities, Mr.
Kurtz proposes that all known Record Holders be required to
provide the Claims and Noticing Agent with the addresses of such
beneficial holders in electronic format as of the Record Date on
or before five days before the Disclosure Statement Hearing.

For those that fail to provide such information, the Debtor
requests that the Record Holders be required to send the
appropriate solicitation materials in a manner customary in the
securities industry so as to maximize the likelihood that
beneficial owners of the Notes and holders of the Old Preferred
Stock will receive the materials and be given the opportunity to
vote on the Disclosure Statement in a timely fashion.

Accordingly, the Claims and Noticing Agent will transmit the
Solicitation Packages to holders of the Notes and Old Preferred
Stock, by mailing the materials by first class mail no later
than the Solicitation Date.

The Debtor further proposes that the Court order that the Record
Holders (or their agents) through which beneficial owners hold
the Notes or the Old Preferred Stock as of the Record Date and
who have failed to provide the Claims and Noticing Agent or its
designated agent with addresses of beneficial holders in
electronic format, distribute promptly the Solicitation Packages
to the beneficial owners for whom they held such securities. The
Solicitation Packages to be transmitted to beneficial holders of
the Notes and Old Preferred Stock by Record Holders will include
a ballot for the beneficial owners and a return envelope
provided by, and addressed to, the requisite Record Holders (or
their agents) of the beneficial owners.

The Record Holders (or their agents), as appropriate, must then
summarize the individual votes of their beneficial owners from
the Beneficial Owner Ballots on a Master Ballot to be provided
to them by the Debtor. The Record Holders (or their agents)
shall then return the Master Ballot to the Claims and Noticing
Agent by the Voting Deadline.

                        Voting Procedures

So as to avoid uncertainty, to provide guidance to the Debtor
and the Claims and Noticing Agent, and to avoid the potential
for inconsistent results, the Debtor requests that the Court
establish guidelines for tabulating the vote to accept or reject
the Plan.

David Kurtz, Esq., at Skadden, Arps, Slate, Meagher & Flom,
outlines the Debtor's proposal:

    Votes Counted. Any ballot timely received that contains
      sufficient information to permit the identification of the
      claimant and is cast as an acceptance or rejection of the
      Plan will be counted and will be deemed to be cast as an
      acceptance or rejection, as the case may be, of the Plan.
      Ballots timely received that are cast in a manner that
      neither indicate an acceptance or rejection of the Plan or
      which indicate both an acceptance and rejection of the
      Plan shall be counted as an acceptance.

    Votes Not Counted. The following ballots will not be counted
      or considered for any purpose in determining whether the
      Plan has been accepted or rejected:

        (a) any ballot received after the Voting Deadline;
        (b) any ballot that is illegible or contains
            insufficient information to permit the
            identification of the claimant;
        (c) any ballot cast by a person or entity that does not
            hold a claim in a class that is entitled to vote to
            accept or reject the Plan;
        (d) any ballot cast for a claim identified as
            unliquidated, contingent or disputed and for which
            no Rule 3018(a) Motion has been filed by the Rule
            3018(a) Motion Deadline; or
        (e) any unsigned ballot

    Changing Votes. Notwithstanding Bankruptcy Rule 3018(a),
      whenever two or more ballots are cast voting the same
      claim prior to the Voting Deadline, the last ballot
      received prior to the Voting Deadline will be deemed to
      reflect the voter's intent and thus to supersede any prior
      ballots, without prejudice to the Debtor's right to object
      to the validity of the second ballot on any basis
      permitted by law, including under Bankruptcy Rule 3018(a),
      and, if the objection is sustained, to count the first
      ballot for all purposes.

    No Vote Splitting: Effect. The Debtor proposes that the
      Court clarify that claim splitting is not permitted and
      order that creditors who vote must vote all of their
      claims within a particular class to either accept or
      reject the Plan.

    Counting Ballots from Beneficial Holders. Mr. Kurtz proposes
      the following procedures for tabulating votes cast by
      holders of the Debtor's Notes and old Preferred Stock. The
      procedures are designed to enable the Claims and Noticing
      Agent to tabulate votes from holders of the Notes and Old
      Preferred Stock and to enable the Court to verify the
      results of that vote by requiring the collection and
      retention of data and documents regarding the vote.

         First, banks, brokerage firms or agents electing to use
           the Master Ballot voting process will be required to
           retain for inspection by the Court the ballots cast
           by beneficial owners for one year following the
           Voting headline.

         Second, to avoid double counting, (a) votes cast by
           beneficial owners holding the Notes or Old Preferred
           Stock through a Record Holder (or its agent) and
           transmitted by means of a Master Ballot will be
           applied against the positions held by such Record
           Holder with respect to the Notes or Old Preferred
           Stock, and (b) votes submitted by a Record Holder
           (or its agent) on a Master Ballot will not be
           counted in excess of the position maintained by the
           respective bank or brokerage firm on the Record Date
           in the Notes or old Preferred Stock.

  To the extent that conflicting votes or overvotes are
  submitted on a Master Ballot, Mr. Kurtz proposes that the
  Claims and Noticing Agent attempt to resolve the conflict or
  overvote prior to the Voting headline in order to ensure that
  as many of the Note claims as possible are accurately
  tabulated.

  To the extent that overvotes an a Master Ballot are not
  reconcilable prior to the Voting Deadline, the Claims and
  Noticing Agent count votes in respect of such Master Ballot in
  the same proportion as the votes to accept and reject the Plan
  submitted on the Master Ballot that contained the overvote,
  but only to the extent of the applicable bank's or brokerage
  firm's position an the Record Date in the Notes. (McLeodUSA
  Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service,
  Inc., 609/392-0900)  


PACIFIC GAS: Says CPUC's Plan Doesn't Have Snowball's Chance
------------------------------------------------------------
PG&E Corporation (NYSE: PCG) and Pacific Gas and Electric
Company jointly filed their response to the California Public
Utilities Commission's (CPUC) term sheet for a proposed plan of
reorganization.

"The term sheet's $4.5 billion shortfall is fatal to the CPUC's
overall proposal," PG&E said in it is filing.  "The Court need
go no further than this critical threshold fact to conclude that
the plan described in the term sheet is patently defective and
unconfirmable.

"The CPUC's contemplated plan endangers PG&E's ability to meet
its obligation to serve by limiting its capital expenditures and
fails to restore PG&E to a financial position that will allow it
to effectively resume power procurement."

               The CPUC's Proposal Does Not Work -
        It is Short by More Than $4.5 Billion Available Cash           
             Must Be Decreased By More Than $2.0 Billion

     -- In the term sheet, the CPUC overstates PG&E's available
cash because it did not account for the $650 million the company
paid in December 2001 for income and property taxes.

     -- The term sheet also forecasts approximately $1.75
billion in residual generation revenues ("headroom") between
December 1, 2001 and January 31, 2003.  The CPUC failed to
reflect the federal and state income taxes the utility would be
required to pay on that income - approximately $710 million.

     -- The CPUC fails to provide $500 million in funding for
needed infrastructure improvements and enhancements to allow the
utility to fulfill its functions.  The $500 million represents
1/3 of the utility's 2002 capital expenditures.  These funds are
earmarked for critical infrastructure projects such as replacing
gas pipelines, upgrading transmission lines for Path 15 and the
Tri-Valley and San Jose areas, and undergrounding the electric
system.

     -- The term sheet understates interest payments on mortgage
bonds and other obligations by approximately $220 million.

               Cash Obligations Must Be Increased
                    By At Least $2.5 Billion

     -- The term sheet understates the amount paid to creditors
that have general unsecured claims (Class 5) by $1.06 billion.  
The CPUC attempted to reclassify the $1.06 billion owed to
qualifying facilities from general unsecured claims into
administrative expense claims.  However, PG&E's plan of
reorganization already accounted for this, so the CPUC's term
sheet does not accurately reflect the amount owed to general
unsecured claimants.  Because the term sheet requires general
unsecured claimants to be paid in cash, the CPUC would need an
additional $1.06 billion.

     -- The term sheet calls for approximately $5.8 billion of
debt to be reinstated.  However, about $940 million of that debt
cannot be reinstated.

     -- At least $333 million in Secured First Mortgage Bonds
matures on March 1, 2002, and the CPUC's contemplated plan would
not become effective by this date.

     -- The $610 million in Letter of Credit Backed PC Bond
Claims and Letter of Credit Bank Claims are not reinstatable
because the Letter of Credit Banks cannot be forced to renew or
extend these letters of credit (all of which expire in 2002 or
2003).

     -- The term sheet attempts to take the $500 million in
estimated Federal Energy Regulatory Commission (FERC) refunds
and other adjustments away from paying creditors and places the
money into a litigation trust.  In PG&E's plan the money is used
to offset generator and energy service provider claims.  As a
result, the CPUC would need an additional $500 million to pay
these creditors.

             The Term Sheet Will Not Restore the Utility
                to Investment Grade and Thus Keeps
              the State in the Power Buying Business

     -- The CPUC's contemplated plan would not allow PG&E to
return to investment grade status.  The financial markets and
rating agencies currently have no basis to believe that the CPUC
will implement structural regulatory reforms to restore the
utility's financial health.

     -- Standard & Poor's recently stated, "although the
[CPUC's] reorganization plan purports to address [PG&E's]
defaulted obligations, it is silent on whether PG&E will exhibit
long-term financial performance consistent with investment grade
ratings.  Therefore, under the CPUC proposal, it remains unclear
whether and when PG&E's ratings will be restored to investment
grade."

     -- Since the CPUC's term sheet would not restore PG&E to
investment grade status, the utility could not enter into long-
term contracts for gas and electricity and would only be able to
purchase on the volatile "spot market," if it had the resources
to post adequate collateral.  Customers would be directly
exposed to monthly price volatility.  As a result, the State of
California would have to remain in the power procurement
business for several more years.

          Other Problems with the CPUC's Term Sheet

     -- Financing a $4.5 billion shortfall is not feasible under
the CPUC's existing regulatory framework, which the term sheet
assumes will continue.

     -- The term sheet would require significant spending
reductions or force PG&E to borrow money with no clear means of
repaying it.  The CPUC proposes that PG&E secure credit to fund
capital expenditures and working capital. However, based on the
lack of assurance regarding PG&E's investment grade status, such
a credit facility would almost certainly not be available to the
utility.

     -- The CPUC's term sheet seeks to take at least $1.2
billion of the utility's authorized return on investment and use
the money to pay the creditors.  The proposal is unlawful and
would require the Bankruptcy Court to preempt the CPUC's own
decisions, federal and state laws, and the U.S. and California
Constitutions.

     -- The CPUC's term sheet will impair the rights of a
significant amount of creditors and equity holders, which could
lead those who are disadvantaged to pursue protracted litigation
that could delay the resolution of the case.

             Why the CPUC'S Term Sheet Does Not Work
        Overstates Available Cash by More than $2 Billion

     -- Fails to account for $650 million in taxes paid in
December 2001.

     -- Fails to account for $710 million in taxes (due in 2002)
on the $1.75 billion the CPUC estimates will be earned.

     -- Fails to provide $500 million for necessary capital
expenditures, such as new distribution lines or gas pipeline
replacement projects.

     -- Miscalculates $223 million in interest payments on
mortgage bonds and other obligations.

               Understates Claims by $2.5 Billion

     -- Fails to account for $1.06 billion in general unsecured
claims.

     -- Illegally tries to reinstate $943 million in debt.

     -- Removes $500 million used to pay generators and places
the money in another account.  PG&E's plan uses the estimated
$500 million in FERC refunds to offset generator claims.  The
CPUC places the refunds in a trust.  As a result, the CPUC will
need an additional $500 million to pay the generator claims.

       Does Not Restore Utility to Investment Grade Status

     -- Keeps the utility at below investment grade status for
years to come.

     -- FERC regulations require either an investment grade
rating or being able to post collateral in order to buy power.

     -- Since the term sheet does not restore PG&E to investment
grade status and it will have limited access to the financial
markets, it will be extremely difficult for the utility to
resume procurement.  As a result, the state will have to
continue buying power.

     -- Utility will have limited access to credit necessary to
fund necessary infrastructure projects.

     -- Without access to financial markets, the CPUC proposal
would jeopardize PG&E's ability to meet its obligation to serve.

          Treats Creditors and Shareholders Unfairly

     -- Mistreats several groups of creditors, which could lead
to years of protracted legal challenges beyond any timeline
associated with PG&E's plan.

     -- Violates fundamental Constitutional principles by taking
at least $1.2 billion from the authorized return on investment
and uses the funds to pay creditors.


PRIMIX: Closes Sale of NA Consulting Business to Burntsand
----------------------------------------------------------
On February 8, 2002, Primix Solutions Inc., a Delaware
corporation, consummated the sale of its North American
consulting business to Burntsand (New England) Inc., a Delaware
corporation and a wholly-owned subsidiary of Burntsand (Pacific)
Inc., a Delaware corporation and wholly-owned subsidiary of
Burntsand Inc., a Canadian corporation. Burntsand acquired the
North American consulting business operations of Primix for a
cash payment of $6.8 million, $1.0 million of which is subject
to escrow for indemnification obligations. Burntsand also
assumed certain assets and liabilities related to
the North American consulting business of $2.4 million and $2.6
million, respectively.

The Company's business now consists of its European operations
in Sweden and Denmark and its U.S.-based corporate staff. Primix
has scaled down its U.S. corporate administrative functions and
reduced its corporate staff to four employees.

As Primix has agreed not to compete with the Burntsand business
in North America without the prior written consent of Burntsand
for three years after the closing, Primix is currently
evaluating alternatives for the remainder of its business. There
is a significant possibility that the Company will liquidate its
remaining assets following the closing of the Transaction and
distribute residual assets, if any, to its stockholders. In
anticipation of this possibility, Primix has commenced efforts
to find strategic acquirors for its European subsidiaries. In
addition, the Company may investigate opportunities to sell the
entire consolidated business.

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


PSINET INC: Holding Creditors' Meeting Set for March 19, 2002
-------------------------------------------------------------
The United States Trustee will convene a meeting of the PSINet
Consulting Solutions Holdings, Inc.'s creditors on Tuesday,
March 19, 2002 at 2:30 p.m. at 80 Broad Street, 2nd Floor, New
York, New York 10004. (PSINet Bankruptcy News, Issue No. 15;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   


QUALITY STORES: Alamo Group to Acquire Valu-Bilt for $7.5 Mill.
---------------------------------------------------------------
Alamo Group Inc., (NYSE: ALG) announced that it entered into an
Asset Purchase Agreement on February 19, 2002 with Quality
Stores, Inc., to purchase inventory, fixed assets and certain
other assets of its Valu-Bilt Tractor Parts division based in
Des Moines, Iowa.

Valu-Bilt is well known in its markets for providing new, used
and rebuilt tractor parts and other agricultural parts direct to
customers through its catalogue offerings and on a wholesale
basis to dealers. The purchase price is $7.5 million and is
subject to certain contractual adjustments as well as the
assumption of certain limited liabilities of Valu-Bilt necessary
for the continuation of the business. Valu-Bilt's unaudited
sales for the year ending February 2, 2002 were approximately
$14.1 million.

On October 20, 2001, an involuntary petition was filed against
Quality by Century Funding Ltd., Century Funding Corp., Triton
CBO III Limited, Triton CBO IV Limited and Pacholder High Yield
Fund, Inc. On November 1, 2001, Quality answered the Involuntary
Petition and consented to the entry of an order for relief. On
February 21, 2002, Quality will file with the Bankruptcy Court
for the Western District of Michigan the Motion for Orders (A)
Scheduling an Auction and Establishing Bidding Procedures for
the Sale of the Debtors' Valu-Bilt Assets; (B) Approving the
Sale of the Debtors' Valu-Bilt Assets; (C) Authorizing
Assumption and Assignment of Certain Unexpired Leases and
Executory Contracts And (D) Extending The Time to Assume or
Reject the Valu-Bilt Lease of Non-residential Real Property.

On February 28, 2002, Quality will request that the Bankruptcy
Court schedule an auction for March 22, 2002 and establish other
bidding procedures described in the Motion. If such relief is
granted, then Quality will conduct an auction for the Valu-Bilt
Tractor Parts on March 22, 2002. On March 25, 2002, Quality will
request that the Bankruptcy Court approve the sale to Alamo or
another bidder if such bidder submits a higher and better offer
at the auction.

Alamo Group is a leader in the design, manufacture, distribution
and service of high quality equipment for right-of-way
maintenance and agriculture. Our products include tractor-
mounted mowing and other vegetation maintenance equipment,
street sweepers, agricultural implements and related after
market parts and services. The Company, founded in 1969, has
over 1,700 employees and operates twelve plants in North America
and Europe as of December 2001. The corporate offices of Alamo
Group Inc. are located in Seguin, Texas and the headquarters for
the Company's European operations are located in Salford Priors,
England.


RCN CORPORATION: Says Key Accomplishments Slip Moody's Analysis
---------------------------------------------------------------
RCN Corporation (Nasdaq: RCNC) issued the following response to
Moody's Investors Service Ratings Actions:

     RCN believes that Moody's Feb 15th release about RCN is not
supportable and fails to take into account the company's
fundamentals or its significant and positive progress in the
past year.  Instead, it is a reaction to the negative sentiment
toward the overall telecom industry.  The company believes
that Moody's has failed to acknowledge key financial and
operational accomplishments in their analysis.

     Specifically:

         --  RCN realized a 32% year over year increase in
revenue, including a 132% increase in bundled service
connections in 2001.  These numbers indicate continued, strong
consumer demand for its products in competitive markets and
demonstrates the company's ability to operate in its core
markets and sell bundled services.

         --  RCN has retired $816 million in face value of debt
and eliminated over $80 million of annual interest expense at a
cost of $176 million. The company believes that Moody's has
fundamentally misunderstood the economic benefits of RCN's debt
buy-back and de-leveraging strategy.

         --  Moody's statements about the RCN network and assets
demonstrate a lack of understanding about the valuable local
network RCN has built in the most densely populated markets in
the country.

         --  RCN remains in compliance under all terms and
conditions of its bank agreement.  Assuming it can successfully
negotiate an amendment, RCN does not anticipate any default
during the periods referenced by Moody's.

         --  In the absence of a bank amendment, RCN will not be
in payment default under any of its obligations.  Even the
Moody's analysis notes that RCN's liquidity position is strong.

     RCN's focused plan represents a prudent and achievable
response to current financial conditions within the telecom
market.  RCN has reached a size where it is big enough to
support a plan of focusing on its current markets and build upon
its continued success.

RCN Corporation (Nasdaq: RCNC) is the nation's first and largest
facilities-based competitive provider of bundled phone, cable
television and high-speed Internet services to the most densely
populated markets in the U.S. RCN has more than 1 million
customer connections. It operates in seven of the
top ten markets in the U.S., namely Boston, Chicago, Los
Angeles, New York, Philadelphia, San Francisco and Washington
DC.  Additional information can be found at: http://www.rcn.com


STEAKHOUSE PARTNERS: Case Summary
---------------------------------
Lead Debtor: Steakhouse Partners Inc. A Dela
             10200 Willow Creek Road
             San Diego, CA 92131  

Bankruptcy Case No.: 02-12648

Chapter 11 Petition Date: February 15, 2002

Court: Central District of California, Riverside

Judge: MG Goldberg

Debtors' Counsel: Peter M. Gilhuly, Esq.
                  633 W 5th Suite 4000
                  Los Angeles, CA 90071-2007
                  213-485-1234


TALK AMERICA: Lack of Capital Spurs S&P to Further Junk Ratings
---------------------------------------------------------------
Standard & Poor's said that it lowered its corporate credit
rating on competitive local exchange carrier (CLEC) Talk America
Holdings Inc. to double-'C' from triple-'C' following the
company's disclosure that it may not generate sufficient cash
from operations or be able to raise additional capital to meet
the redemption of about $62 million in outstanding 4.5%
convertible subordinated notes in September 2002. The rating
remains on CreditWatch with negative implications.

"With about $22 million in cash at year-end 2001 and company-
projected EBITDA of between $22 million and $35 million for
2002, Talk America will indeed have difficulty meeting the
obligation when it comes due," Standard & Poor's credit analyst
Michael Tsao said.

Talk America had $166 million total debt outstanding as of year-
end 2001. The company provides bundled long distance, local, and
vertical services mainly to consumers. Its network is based
mostly on leased lines from interexchange carriers and unbundled
network element platform (UNE-P) from regional Bell operating
companies.


TIDEL TECH: Pursuing Talks to Restructure $18MM Conv. Debentures
----------------------------------------------------------------
Tidel Technologies Inc. (Nasdaq:ATMS) announced its first
quarter results for the three months ended Dec. 31, 2001.

Tidel reported a net loss of $2,400,716 for the quarter ended
Dec. 31, 2001, compared to net income of $1,888,019 for the same
quarter of the prior year. The loss for the quarter was
primarily attributable to the loss of business of its former
largest customer, Credit Card Center.

For the quarter ended Dec. 31, 2001, revenues were $4,636,651, a
decrease of $12,059,812 from $16,696,463 reported in the same
quarter of the prior year. The decrease in sales for the quarter
was primarily related to the termination of business with CCC.
For the quarter ended Dec. 31, 2000, the Company had sales of
$11,786,718 to CCC. During January 2001, the Company became
aware that CCC was experiencing financial difficulty, and sales
to this customer were discontinued.

For the quarter ended Dec. 31, 2001, the Company shipped a total
of 677 ATM units, an 80% decrease from the 3,310 units shipped
in the same quarter of the prior year. For the quarter ended
Dec. 31, 2001, shipments to non-CCC customers decreased 30% from
the 971 units shipped to non-CCC customers in the same quarter
of the prior year. Management believes that the decline in non-
CCC business in the quarter ended Dec. 31, 2001 was due
primarily to the economic downturn as a result of the events of
Sept. 11, 2001, and the deferral of ATM purchases by certain
retailers until 2002.

In addition to the loss of CCC revenue and the related gross
profit, the operating results for the quarter ended Dec. 31,
2001 were impacted by increases over the prior year of
approximately $300,000 in legal and accounting fees related to
the bankruptcy of CCC and other matters, and approximately
$400,000 in accelerated interest expense related to the missed
"put payment" in August 2001 on the Company's 6% subordinated
convertible debentures.

Mark K. Levenick, Interim CEO, said, "Tidel has come through a
difficult year and management is focused on the turnaround
effort ahead. We continue to work with the holders of $18
million of our convertible debentures to restructure the
obligations, and manage the collection effort from the
bankruptcy estate of CCC. Going forward, we are trying to build
a solid future for the Company by entering into new
relationships, such as our recently announced strategic
partnership with CashWorks, and changing our product slate to
meet the demands of the marketplace. Yesterday, we introduced
our new is800 ATM, our lowest-priced ATM product to date, and
later this year we expect to debut an entirely new product line
designed for mass retailers that combines elements of our
market-leading cash controller technology with our ATM
technology."

Tidel Technologies Inc. is a manufacturer of automated teller
machines and cash security equipment designed for specialty
retail marketers. To date, Tidel has sold more than 35,000
retail ATMs and 115,000 retail cash controllers in the U.S. and
36 other countries. As at December 31, 2001, the company had a
working capital deficit of close to $2 million. More information
about the company and its products may be found on the Internet
at http://www.tidel.com


TOWER AIR: Dimensional Fund Discloses 5.9% Equity Stake
-------------------------------------------------------
Dimensional Fund Advisors Inc., an investment advisor registered
under Section 203 of the Investment Advisors Act of 1940,
furnishes investment advice to four investment companies
registered under the Investment Company Act of 1940, and serves
as investment manager to certain other commingled group trusts
and separate accounts. These investment companies, trusts and
accounts are the "Funds". In its role as investment advisor or
manager, Dimensional possesses voting and/or investment power
over 911,600 shares of the common stock of Tower Air, Inc. that
are owned by the Funds.  All securities reported here are owned
by the Funds. Dimensional disclaims beneficial ownership of such
securities.

Of the outstanding shares of Tower Air, Inc., the amount held by
the Funds represents 5.904527495%. In its capacity of advisor to
the Funds, as described above, Dimensional Fund Advisors Inc.
has sole power to vote and sole power to dispose of the stocks
held.    

Tower Air, Inc., is undergoing liquidation proceedings under
Chapter 7 of the U.S. Bankruptcy Code.


UCAR INT'L: Dec. 31 Balance Sheet Upside-Down by $316 Million
-------------------------------------------------------------
UCAR International Inc. (NYSE:UCR) announced financial results
for the fourth quarter and year ended December 31, 2001. Net
income before non-recurring charges and tax benefits and charges
from the Company's corporate legal and tax restructuring was $4
million for the 2001 fourth quarter. Net income before non-
recurring charges and tax charges from the Company's corporate
legal and tax restructuring was $20 million for the year 2001.
Net sales were $155 million for the 2001 fourth quarter, down 18
percent as compared to the 2000 fourth quarter and $654 million
for the year 2001, down 16 percent as compared to 2000. Gross
margin for the 2001 fourth quarter was 26.9 percent and 28.3
percent for the year. This compares to gross margin for the 2000
fourth quarter of 26.5 and 27.9 percent for the year.

Gil Playford, Chairman and Chief Executive Officer of UCAR,
commented, "We have maintained gross margin levels in an
environment where we have lost significant revenues due
primarily to depressed steel industry conditions. Our Graphite
Power Systems (GPS) Division delivered gross margin of 27.3
percent in the 2001 fourth quarter, as compared to 26.1 percent
in the 2000 fourth quarter, even though both graphite electrode
sales volume and production levels were more than 20 percent
lower. The Company generated cash flow (before antitrust fines
and net settlements and related expenses and restructuring
payments) from operations of $44 million for the 2001 fourth
quarter on the strength of our cost savings programs and tight
working capital management. Adjusted EBITDA for the 2001 fourth
quarter was $27 million, after adjusting for the non-recurring
special charges noted above. We achieved our net debt target of
$600 million at the end of the quarter."

The Company announced the closing of its private offering of
senior notes due 2012. The offering was upsized from $250
million to $400 million and the annual interest rate was fixed
at 10.25 percent. Proceeds, net of estimated expenses, were $387
million and will be used to reduce debt under the Company's
senior secured credit facilities.

Mr. Playford, commented, "I am very pleased at the high level of
response to this offering. We believe that both the increased
size and pricing of this offering reflect market recognition of
the progress achieved by the Company through its successful cost
savings plans and business strategy implementation. This
offering, together with the related amendment to the Company's
senior secured credit facilities, has significantly improved the
Company's debt amortization profile, pushing the next scheduled
principal payment to the 2005 third quarter."

The company's financial results at December 31, 2001, showed the
impact of the $400 million senior note offering on the
amortization schedule for the Company's gross debt. Payments
reflect the election of certain lenders under the Company's
senior secured credit facility to decline prepayment unless
earlier maturing principal was prepaid in full.

                         Corporate

Selling, general and administrative expenses were $19 million in
the 2001 fourth quarter, the same as in the 2000 fourth quarter.
Interest expense was $11 million in the 2001 fourth quarter, $3
million lower than in the 2001 third quarter. The reduction in
interest expense was due to lower interest rates and debt
reduction.

The effective tax rate for the 2001 fourth quarter and the year
was 35 percent, excluding non-recurring charges and tax benefits
and charges recorded during the 2001 fourth quarter resulting
from the implementation of the Company's previously announced
corporate legal and tax restructuring. This restructuring has
reduced the Company's current and estimated future cash tax
obligations by repositioning the Company's intercompany debt in
more profitable tax jurisdictions and writing-off and
repositioning certain foreign tax credits which should ensure
the use of all remaining excess foreign tax credits. Tax expense
for the 2001 fourth quarter was $26 million. The $26 million
included approximately $29 million of deferred tax expense
primarily due to deferred tax assets associated with excess
foreign tax credits. 2001 fourth quarter tax expense also
includes a one-time benefit of approximately $3 million
reflecting the change in estimate from an effective tax rate of
45 percent to 35 percent for the full year 2001 resulting from
the implementation of the corporate legal and tax restructuring,
which is expected to be completed during the 2002 first quarter.
Cash tax savings from this restructuring are expected to be $6
million, $10 million and $11 million in 2002, 2003 and 2004,
respectively.

In the 2001 fourth quarter, the Company also recorded $36
million ($33 million net of tax) of impairment, restructuring
and other charges associated primarily with our previously
announced new major cost savings plan which is expected to
generate $80 million in annual savings by 2004. Asset
impairments totaling $27 million are substantially all related
to the mothballing of the Company's Italian plant. A
restructuring charge of $7 million was recorded primarily for
the exit costs associated with this mothballing. A $2 million
charge was recorded for global realignment and related expenses.

Earnings per diluted share, before non-recurring charges and tax
benefits and charges related to the corporate legal and tax
restructuring, were $0.07 for the fourth quarter and $0.39 for
the year in 2001. This compares to fourth quarter and full year
2000 earnings per diluted share, before special charges, of
$0.16 and $0.64, respectively. Net loss per diluted share, after
non-recurring charges and tax benefits and charges related to
the corporate legal and tax restructuring, was ($0.98) for the
fourth quarter and ($1.75) for the year in 2001. This compares
to net income per diluted share after special charges, of $0.07
for the fourth quarter and $0.22 for the year in 2000.

Net cash provided by operations (before antitrust fines and net
settlements and related expenses and restructuring payments) was
$44 million in the 2001 fourth quarter primarily due to reduced
working capital levels from the 2001 third quarter. As expected,
inventory levels were reduced as a result of the completion of
transitioning activities related to the shutdown of US graphite
electrode manufacturing operations.

                         Outlook

Mr. Playford commented on UCAR's outlook, saying, "Business
conditions will remain challenging this year. We expect graphite
electrode volumes to increase about 5 percent from 2001 levels,
primarily during the second half. The average graphite electrode
cost per metric ton for the year 2002 is expected to be $1,550
as a result of the mothballing of our Italian graphite electrode
operations, which should be completed at the end of the 2002
first quarter, and the realization of full year benefits
associated with the shutdown of US graphite electrode operations
which was completed in the 2001 third quarter. Average graphite
electrode prices (excluding the impact of currency exchange rate
changes) for 2002 are expected to be approximately 7-8 percent
lower than average 2001 fourth quarter levels due to poor steel
industry conditions, primarily in North America. The cathode
business remains strong, and we are completely sold out for the
2002 first half and have booked over 80 percent of our cathode
capacity for the 2002 second half. Considering our new portfolio
of fixed and variable interest rate debt, together with
anticipated interest rate management, we expect 2002 interest
expense to be comparable to 2001 levels. As a result of the
corporate legal and tax restructuring, the effective tax rate
for 2002, excluding non-recurring charges and/or benefits to
complete the restructuring, is expected to be 35 percent. Under
our new three-year $80 million annual cost savings plan, we
expect to achieve $45 million of savings during 2002."

"For the 2002 first quarter, we expect graphite electrode sales
volume to follow the historical seasonal pattern of being the
lowest volume quarter for the year. We expect this volume to be
approximately 5 percent lower than the 2001 fourth quarter.
Average graphite electrode cost per metric ton reduction trends
are expected to continue under our new major cost savings plan.
These savings will be realized primarily over the second half of
the year. Average graphite electrode prices are expected to be
approximately $2,100. As we undertake the mothballing process in
Italy during the first quarter, we expect working capital
requirements to temporarily increase, similar to what we
experienced with our US graphite electrode operations shutdown.
Net debt levels will temporarily increase during the 2002 first
quarter as a result of these working capital needs and the
seasonally lower graphite electrode sales."

"We have demonstrated excellent performance in areas within our
direct control over the last several years, including costs,
working capital and debt management. We believe that this
success in such a challenging operating environment, coupled
with our new cost savings plan slated to achieve an additional
$80 million of annual cost savings by 2004 and our recently
completed senior note offering, have put UCAR in its strongest
competitive and financial position in years."

EBITDA means operating profit (loss), plus depreciation,
amortization, the impairment losses on long-lived assets and
other assets, certain inventory write-downs, and the non-cash
portion of restructuring charges (credits). Adjusted EBITDA
means EBITDA plus the cash portion of restructuring charges
(credits). This method of calculating EBITDA is not the same as
the method for calculating EBITDA under the Company's senior
credit facilities or senior note indenture.

UCAR International Inc. is one of the world's largest
manufacturers and providers of high quality natural and
synthetic graphite and carbon based products and services,
offering energy solutions to industry-leading customers
worldwide engaged in the manufacture of steel, aluminum, silicon
metal, automotive products and electronics. We have 13
manufacturing facilities in 7 countries and are the leading
manufacturer in all of our major product lines. We produce
graphite electrodes that are consumed primarily in the
production of steel in electric arc furnaces, the steel making
technology used by all "mini-mills," and for refining steel in
ladle furnaces. We also produce carbon electrodes that are
consumed in the manufacture of silicon metal and cathodes that
are used in the production of aluminum. Our subsidiary, Graftech
Inc., produces flexible graphite that is used in high
temperature fluid sealing and gasket applications and is the
basis for highly engineered products and solutions in fuel cell,
electronics and thermal management applications. At December 31,
2001, the company's balance sheet showed that its total
liabilities exceeded its total assets by $316 million.

For additional information on UCAR, call 302-778-8227 or visit
http://www.ucar.com


W.R. GRACE: Peninsula Entities Disclose 9.83% Equity Stake
----------------------------------------------------------
Peninsula Partners, L.P. and Peninsula Capital Advisors, LLC
beneficially own 899,500 shares of the common stock of W. R.
Grace Company, while R. Ted Weschler beneficially owns 912,311
such shares.  The amount of stock held by the Peninsula entities
represents 9.83%, and Mr. Weschler's holding represents 9.97% of
the outstanding common stock of the Company.

Peninsula Partners, L.P. and Peninsula Capital Advisors, LLC
have shared power to vote or to direct the vote, and shared
power to dispose or to direct the disposition of the 899,500
shares held.

R. Ted Weschler of the 912,311 shares holds shared power to vote
or direct the vote over those shares; 12,811 shares with sole
power to vote or direct the vote; 912,311 shares with shared
power to dispose or to direct the disposition of; and 12,811
shares with sole power to dispose or to direct the disposition
of.

W.R. Grace Company is a leading global supplier of catalysts and
silica products, especially construction chemicals and building
materials, and container products. It filed for Chapter 11
reorganization in the U.S. Bankruptcy Court for the District of
Delaware in Wilmington on April 2, 2001.


VALEO ELECTRICAL: French Unions Condemn Attempt to Break Pact
-------------------------------------------------------------
IUE-CWA Local 509 released a letter of solidarity from the three
unions in France representing workers at Valeo condemning the
company's attempt to break its contract with Local 509 and
expressing solidarity with their U.S. counterparts.

"We condemn Valeo's failure to meet the contract signed between
the management and your union and we reject the (company's) call
for global competition between factories and workers," wrote the
top officials of the three unions.

The French labor leaders were personally briefed on Valeo's
phony bankruptcy by IUE-CWA President Edward Fire during
meetings in Paris, where Valeo is headquartered.  The French
unions released a statement in that country and also pledged to
raise the Rochester situation directly with Valeo's corporate
management.

"Our representatives at Valeo are negotiating with the
(company's) president to demand that Valeo's commitments in the
USA be honored," the French unions wrote.

Valeo filed bankruptcy in December 2001 in an attempt to void an
eight-year collective bargaining agreement it signed in August
2000.

"Three months after signing the contract Valeo wanted to back
out," said IUE-CWA Local 509 President Joe Giffi.  "This is the
company's final ploy to take advantage of Local 509 members and
make them pay for Valeo's mismanagement."

Giffi pointed out that Valeo declared bankruptcy only on the
Rochester operation and a small unit in Michigan, but not the
two plants it bought at the same time in Mexico.  Valeo also
changed corporate identities when it filed for Chapter 11
protections.

"Valeo wants to isolate its Rochester operation and make the
contract disappear, and is playing smoke-and-mirrors with losses
and corporate identities to achieve this goal," Giffi stated.

"This is a fair, equitable agreement for both parties. Trying to
twist the bankruptcy laws to break the contract is a slap in the
face to Local 509 members," said IUE-CWA Automotive Conference
Board Chairman Jim Clark.  "We are asking both state and federal
officials to examine this abuse of U.S. bankruptcy laws."

"Valeo's actions jeopardize collective bargaining agreements
across America," said Fire.  "I do not believe that U.S.
bankruptcy laws were intended to allow companies to pick and
choose what plants for which they want to file bankruptcy."

Fire said the union is more than willing to address legitimate
issues Valeo may have.  "What we will not do is sit down and
tell Valeo it has free reign to make massive cuts to the wages
and benefits of Local 509 members, concessions they cannot
afford to give."

The 100,000-member IUE-CWA is the Industrial Division of the
Communications Workers of America, (CWA).  CWA, America's
largest communications and media union, represents more than
740,000 men and women in both private and public sectors.


WINSTAR: Citicorp's Omnibus Objection to Admin. Expense Claims
--------------------------------------------------------------
Citicorp USA Inc., as agent for the DIP Lenders of Winstar
Communications, Inc., and its debtor-affiliates interposes its
Omnibus Objection to any and all motions requesting immediate
payment of administrative expense claims against the Debtors'
estates.

Richard S. Cobb, Esq., at Klett Rooney Lieber & Schorling in
Wilmington, Delaware, relate that various parties seek orders
directing the Debtors to pay their alleged administrative
expense claims immediately and apparently prior to the payment
of the DIP lender's superpriority claims. However, the Dip
lenders are expressly senior and prior to any and all
administrative claims in the Debtors' chapter 11 cases,
including all claims sought to be paid pursuant to the motions.
Further, no administrative claims may be assessed against or
attributed to any of the DIP Lenders with respect to their
interests in the DIP Collateral by, through or on behalf of the
Debtors.

In view of the foregoing, the claims of the DIP Lenders must be
paid in full before any of the claims in the motions may be
paid. Because the claims of the DIP Lenders currently remain
outstanding in an amount in excess of $160,000,000, the relief
requested in the motions must be denied.

                     Tishman Speyer Objects

Tishman Speyer Properties, LP, as agent for itself and others
and TST Woodland Funding I, LLC as successor to TST Southpointe
I, LLC, file this Response to the Omnibus Objection of Debtor in
Possession Lenders to Motions Seeking Immediate Payment of
Administrative Claims.

Ricardo Palacio, Esq., at Ashby & Geddes P.A. in Wilmington,
Delaware, points out that under Bankruptcy Code section 506(c),
the Debtor may recover from property securing an allowed secured
claim the reasonable, necessary costs and expenses of
preserving, or disposing of, such property to the extent of any
benefit to the holder of such claim.

Notwithstanding the apparent terms of any orders approving the
loans made by the DIP Lenders or the documents evidencing such
loans, Mr. Palacio notes that it is evident that the purpose of
such loans was to facilitate the payment by the Debtors of
certain post-petition obligations and that the DIP Lenders
determined that such payments were in their interests. The
orders approving the loans made by the DIP Lenders cannot be
read and were not intended to be read so as to preclude or
subordinate absolutely the payment of each and every other post-
petition obligation of the Debtors to the payment of the post-
petition loans.

Tishman Speyer and TST Woodland object to the Omnibus Objection
to the extent that the DIP Lenders attempt to achieve, a this
time, an absolute preclusive effect upon each and every other
post-petition creditor which has sought payment of a post-
petition debt or which might do so in the future. (Winstar
Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service,
Inc., 609/392-0900)  


YORK RESEARCH: Court Names Buchwald as NEAC Chapter 11 Trustee
--------------------------------------------------------------
The United States Bankruptcy Court for the Southern District of
New York put its stamp of approval on the U.S. Trustee's
appointment of Lee E. Buchwald as the Chapter 11 Trustee for
North American Energy Conservation, Inc., an affiliate of York
Research Inc.  

Mr. Lee Buchwald is the President and sole owner of Buchwald
Capital Advisors, LLC, an investment banking firm specializing
in financial restructuring advisory services.

On December 13, 2001, the Official Committee of Unsecured
Creditors asked the U.S. Bankruptcy Court for the Southern
District of New York to appoint a chapter 11 Trustee.  The
Committee argued that management is neglecting its fiduciary
duty to creditors by placing the interests of its parent, York
Research Corporation above those of the estate.

The Committee further relates that throughout this case,
management has made them believe that the actions taken by York
are for the benefit of the Debtor's estate.  However, 21 months
after the Petition Date, the Settlement Agreement York promised
to fund is still not funded, and the Debtor must reassess its
position vis-a-vis York.  Until now, the Debtor's management has
been unwilling to waiver.

Although no confirmable plan was in sight, NAEC delayed
collecting a claim it held against Coral because Coral in turn
have a claim against York. As NAEC's president and York's CFO
stated, "at this point in time we decided not to pursue anything
that might upset [York's funding of a plan]." Furthermore, NAEC
refuses to undertake any enforcement of its claims against the
Affiliates, on the basis that York will fund a consensual plan.
However, the Committee sees no plan coming.

The Committee is alarmed upon knowing that related party
receivables of the Debtor apparently disappeared during this
case. Specifically, the Debtor's original Schedules, together
with the financial information provided to the Committee. Though
the Debtor filed an Amendment to the Schedules which deletes
these receivables, this act is contrary to the under oath
testimony of Mr. Trachtenberg.

The Creditors lost confidence on the Debtor's management.  The
Debtor's management has been relieved of their duties at York
but they remain in control of the Debtor, while there is an
ongoing investigation on the alleged misuse or conversion of
over $17,000,000.

In addition, the Debtor provided an analysis of preference
claims to the natural gas business, but not to the electric
energy business where there could be substantial preferential
payments due. The Debtor is only now making demands for these
payments, and the statute of limitations for bringing such
actions is approaching.

Specifically, the Debtor is owed:

         * $7,793,252 due from York Affiliates:

         * $971,252 due from CTI,

         * $2,300,000 due from B-41 Associates,

         * $268,000 due from B-41 Management, and

         * $4,254,000 due from York Cogen Partners.

York Affiliates are liable to NAEC for the outstanding inter-
company debts because the Affiliates have no right to use York's
claims for a setoff.

York, the party responsible for funding the settlement, admits
that the Settlement Agreement will not be completed. Given the
removal of NAEC's management from York, and considering the
undue delay in proposing a plan, the Committee believes that the
appointment of a trustee is appropriate to advance this case and
investigate potential causes of action.

North American Energy Conservation, Inc. was engaged in the
business of marketing natural gas and electric energy. The
Company filed for Chapter 11 protection on March 2, 2000.
Nicholas F. Kajon, Esq. at Salomon Green & Ostrow, P.C.
represent the Debtor in its restructuring efforts.


* BOOK REVIEW: The ITT Wars: An Insider's View of Hostile
                             Takeovers
---------------------------------------------------------
Author:     Rand Araskog
Publisher:  Beard Books
Soft cover: 236 pages
List Price: 434.95
Review by Gail Owens Hoelscher
Order your copy -- and one for a colleague -- today at
http://amazon.com/exec/obidos/ASIN/0471405590/internetbankrupt

This book was originally published in 1989 when the author was
Chairman and Chief Executive Officer of ITT Corporation, a $25
billion conglomerate with more than 100,000 employees and
operations spanning the globe with an amazing array of
businesses: insurance, hotels, and industrial, automotive, and
forest products.  ITT owned Sheraton Hotels, Caesars Gaming, one
half of Madison Square Garden and its cable network, and the New
York Knickerbockers basketball and the New York Rangers hockey
teams.  The corporation had rebounded from its troubles of the
previous two decades.

Araskog was made CEO in 1978 to make sense of years of wild
acquisition and growth. Under Harold Geneen, successor to ITT's
founder and champion of "growth as business strategy," ITT's
sales had grown from $930 million in 1961 to $8 billion in 1970
and $22 billion in 1979.  It had made more than 250 acquisitions
and had 2,000 working units.  (It once acquired some 20
companies in one month.)

ITT's troubles began in 1966, when it tried to acquire ABC.  
National sentiment against conglomerates had become endemic; the
merger became its target and was eventually abandoned.  Next
came a variety of allegations, some true, some false, all well
publicized: funding of Salvador Allende's opponents in Chile's
1970 presidential elections; influence peddling in the Nixon
White House; underwriting the 1972 Republican National
Convention.  ITT's poor handling of several antitrust cases was
also making headlines.

Then came recession in 1973.  ITT's stock plummeted from 60 in
early 1973 to 12 in late 1974.  Geneen found himself under fire
and, in Araskog's words, the "succession wars" among top ITT
officers began.  Geneen was forced out in 1977, and Araskog,
head of ITT's Aerospace, Electronics, Components, and Energy
Group, with more than $1 billion in sales, won the CEO prize a
year later.

Araskog inherited a debt-ridden corporation.  He instituted a
plan of coherent divesting and reorganization of the company
into more manageable segments, but was cut short by one of the
first hostile bids by outside financial interests of the 1980s,
by businessmen Jay Pritzker and Philip Anschutz.  This book is
the insider's story of that bid.

The ITT Wars reads like a "Who's Who" of U.S. corporations in
the 1970s and 1980s. Araskog knew everyone.  His writing
reflects his direct, passionate, and focused management style.  
He speaks of wars, attacks, enemies within, personal loyalty,
betrayal, and love for his company and colleagues.  In the
book's closing sentences, Araskog says, "We fought when the odds
were against us.  We won, and ITT remains one of the most
exciting companies of the twentieth century.  We hope to keep
the wagon train moving into the twenty-first century and not
have to think about making a circle again.  Once is enough."

Araskog wrote a preface and postlogue for the Beard Books
edition, and provides us with ten years of perspective as well
as insights into what came next.  In 1994, he orchestrated the
breakup of ITT into five publicly traded companies.  Wagon
circling began again in early 1997 when Hilton Hotels made a
hostile takeover offer for ITT Corporation. Araskog eventually
settled for a second-best victory, negotiating a friendly merger
with The Starwood Corporation, in which ITT shareholders became
majority owners of Starwood and Westin Hotels, with the
management of Starwood assuming management of the merged entity.

Today Mr. Araskog continues to serve on the boards of the four
corporations created from ITT, as well as on the boards of Shell
Oil Company and Dow Jones, Inc.  He heads up his own investment
company with headquarters on Worth Avenue, in Palm Beach,
Florida.

                          *********

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 ***