TCR_Public/020228.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

           Thursday, February 28, 2002, Vol. 6, No. 42     

                          Headlines

360NETWORKS: Court Approves DoveBid as Debtor's Auctioneer
AES CORPORATION: Putting Drax Power Station Up for Sale
ANC RENTAL CORP: Pushing for Operations Consolidation at Bradley
ACCLAIM ENTERTAINMENT: Retires $9M Notes in Debt-for-Equity Swap
ADVANTICA RESTAURANT: Agrees to Support FRD's Chapter 11 Plan  

AKORN INC: Asks Senior Lenders for Continued Forbearance
ASHIL HYDE: Case Summary & Largest Unsecured Creditors
BETHLEHEM STEEL: Seeks Okay to Extend Loan to Columbus Coating
BRIDGE INFO: Wins Nod to Modify Alvarez & Marsal's Compensation
CALPINE CORP: Firming-Up Talks to Expand Secured Credit Facility

CALYPTE BIOMEDICAL: Issues $850K Secured Debentures to Bristol
CASUAL MALE: Otterbourg Organizes 7% Sub. Noteholders' Committee
CHELL GROUP: Fails to Comply with Nasdaq Listing Requirements
COMDISCO: Court Allows Mellon Bank to Setoff Prepetition Amounts
CONTINENTAL AIRLINES: Resumes Delayed ExpressJet Holdings IPO

CYGNIFI DERIVATIVES: SDNY Court Fixes April 3 Claims Bar Date
ENRON CORP: Taps PricewaterhouseCoopers for Financial Advice
EXODUS: Wins Okay to Assign Storageway Pacts to Digital Island
FIRST AMERICAN: Continued Losses May Impair Ability to Continue
FOCAL: Declares 35-to-1 Reverse Stock Split Under Recap. Plan

FUTUREONE INC: Industry Slowdown Has Negative Impact on Revenue
GLOBAL CROSSING: Signs-Up Blackstone Group as Financial Advisors
GLOBAL CROSSING: Will Delay Release of Q4 and FY 2001 Results
GLOBAL FRANCHISE: Loss Expectation Prompts Fitch to Cut Ratings
HCC INDUSTRIES: Feeble Financials Force Moody's Junks Ratings

HUMPHREY HOSPITALITY: Negotiates Extended Loan Covenant Waivers
HURRY INC: Intends to Close Remaining Stores by March 4, 2002
ICG COMMS: Files First Amended Joint Plan & Disclosure Statement
IT GROUP: Taps UBS Warburg & Lehman Brothers as Fin'l Advisors
INTEGRATED HEALTH: Highland Partners to Acquire 52-Acre Property

KAISER ALUMINUM: Court Allows Use of Cash Management System
KMART: Wants to Honor Letter of Credit Reimbursement Obligations
LTV CORP: Copperweld Debtors' Cash Collateral Use Expires Today
LTV CORP: Picks WL Ross Best Bidder for Integrated Steel Assets
LASON INC: VIP Litho Employees Acquire Assets with Sequoia Loan

LODGIAN: Court Approves & Appoints Joint Fee Review Committee
MCLEODUSA: Seeks Approval of Proposed Compensation Procedures
MEDCOMSOFT INC: Has Working Capital Deficit of About $500,000
NATIONSRENT: Secures Okay to Hire Ordinary Course Professionals
NEON COMMS: Pursuing Talks to Restructure Optica's Senior Notes

NOVO NETWORKS: Has Until Today to Make Lease-Related Decisions
NUEVO ENERGY: Fitch Affirms Senior Subordinated Rating at B
O2WIRELESS: Likely Loss Could Speed-Up Default on Loan Covenants
OZ.COM: Primary Revenue Source -- Ericsson -- Evaporates
PACIFIC GAS: Parent Delays 4th Quarter Earnings Release

PACIFIC GAS: Will Pay $333MM Mortgage Bonds Maturing Tomorrow
POLAROID CORP: Committee Has Until March 7 to Challenge Liens
PRIMIX SOLUTIONS: Completes Winding Down of European Operations
PROVIDIAN FINANCIAL: Jan. Net Credit Loss Rate Pegged at 13.33%
PROVIDIAN FINANCIAL: Sells Assets to Chase Manhattan for $2.87BB

PROXITY DIGITAL: Sectec Cancels Letter of Intent to Acquire CSA
PSINET INC: Sues to Recover $23MM Preference Payment from FLAG
PSINET INC: Inks Definite Deal to Sell Key U.S. Assets to Cogent
REVLON INC: Fourth Quarter Results Show Net Loss Narrows to $28M
SAFETY-KLEEN CORP: Sets-Up Chemical Services Bidding Procedures

SIMON TRANSPORTATION: Receives Approval of 'First Day Orders'
SWEET FACTORY: Committee Retains Kronish Lieb as Lead Counsel
TRM CORP: Bank of America Grants Extension of Loan Facility
TANDYCRAFTS: Court Extends Removal Period Until April 11, 2002
USG CORP: Seeks Approval of Streamlined Acquisition Procedures

UCAR INT'L: Names Ferrell P. McClean to Board of Directors
VALLEY MEDIA: Looks to Stretch Removal Period through June 20
W.R. GRACE: Engages Carella Byrnes for Honeywell Litigation

* DebtTraders Real-Time Bond Pricing

                          *********

360NETWORKS: Court Approves DoveBid as Debtor's Auctioneer
----------------------------------------------------------
Judge Gropper authorizes 360networks inc., and its debtor-
affiliates to employ and retain DoveBid Inc., as their
auctioneer for the sale of certain excess assets.

The Court rules that subsequent to each sale or group of sales
conducted for the Debtors, Dovebid will file a report with the
Court, which shall include a list of all amounts paid to
Dovebid. A copy of the Settlement Report will be provided to the
Debtors, the Debtors' counsel, the Official Committee of
Unsecured Lenders and the United States Trustee.

The Debtors expect DoveBid to:

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

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

(iii) sell assets to the highest bidder;

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

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

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

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

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

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

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

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

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

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

(viii) Debtors agree to reimburse DoveBid for all costs incurred
      in obtaining an auctioneer bond from the Auction
      Allowance, regardless of the amount of proceeds realized
      from the sale of the Assets. (360 Bankruptcy News, Issue
      No. 19; Bankruptcy Creditors' Service, Inc., 609/392-0900)   


AES CORPORATION: Putting Drax Power Station Up for Sale
-------------------------------------------------------
AES Corporation has put its Drax power station up for sale,
DebtTraders reports, citing the Telegraph newspaper. Potential
bidders are thought to include Scottish and Southern Energy and
German utility RWE.

AES, the report says, purchased the power station three years
ago from Nation Power for 1.8 billion pounds ($2.58 billion).
The power station, which is Britain's largest, is expected to
bring in approximately 800 million pounds ($1.1 billion).

DebtTraders analysts Daniel Fan, CFA, and Blythe Berselli, CFA,
advise that AES Corporation's 9.500% bonds due '09 is "one of
[their] Actives." The said bonds are now trading between 62 and
64. For real-time bond pricing, go to
http://www.debttraders.com/price.cfm?dt_sec_ticker=AES09USR1


ANC RENTAL CORP: Pushing for Operations Consolidation at Bradley
----------------------------------------------------------------
ANC Rental Corporation, and its debtor-affiliates ask for
permission from the Court to reject an Alamo Concession
Agreement with the State of Connecticut Department of
Transportation and to assume National's Lease and Concession
Agreement and assign them to ANC Rental Corporation.

Mark J. Packel, Esq., at Blank Rome Comisky & McCauley in
Wilmington, Delaware, tells the Court that the Debtors will
secure significant savings from their operations at the Bradley
International Airport.  The Debtors are also asking the Court to
approve a settlement agreement with the Connecticut DOT, where
the Minimum Annual Guarantee payment under the National
Concession Agreement is increased and the DOT will waive all
pre-petition and post-petition claims that it may have against
Alamo related to the rejection of the concession agreement.

The Debtors will also assume the Service Center Site Lease
Agreement entered into by and between National and the
Connecticut transportation department for the operation of a
rent-a-car service facility at the Hartford Airport. Mr. Packel
estimates that the consolidation of operations at the Bradley
airport will result in savings of approximately $987,000 per
year in fixed facility charges and other operational cost
savings for the Debtors. There is currently $29,000 in pre-
petition amounts owing that should be cured upon assumption of
the National agreements. (ANC Rental Bankruptcy News, Issue No.
8; Bankruptcy Creditors' Service, Inc., 609/392-0900)


ACCLAIM ENTERTAINMENT: Retires $9M Notes in Debt-for-Equity Swap
----------------------------------------------------------------
On February 13, 2002, Acclaim Entertainment, Inc. issued a total
of 7,166,667 shares of its common stock in a private placement
to certain qualified institutional buyers and accredited
investors at a price of $3.00 per share, for aggregate gross
proceeds of $21,500,000. The per share price represents an
approximate 10% percent discount to the then-recent public
trading price of the common stock. The proceeds of the private
placement are intended to be used for the Company's working
capital, the acquisition of products and product licensing,
possible strategic acquisitions and a portion of the proceeds
may be used to retire a portion of the Company's 10% convertible
subordinated notes due March 2002 and other liabilities.

The private placement was effected under the exemption from
registration provided under Section 4(2) of the Securities Act
of 1933, as amended. The Company, however, has agreed to
register with the SEC the resale by the investors of all the
common stock issued in the offering within 30 days following the
closing. If the registration statement is not declared effective
within 90 days following the closing, the Company is obligated
to pay each investor an amount equal to 1% of the purchase price
paid for the shares purchased by that investor. Thereafter, for
every 30 days that pass without the registration statement being
declared effective, the Company is obligated to pay to each
investor an additional amount equal to 1% of the purchase price
paid for the shares purchased by that investor. UBS Warburg
acted as exclusive placement agent for the transaction.

In a separate transaction, on February 13, 2002, the Company
entered into an agreement to retire $9.3 million principal
amount of the Notes, plus accrued interest, in exchange for
3,253,420 shares of common stock. The Company will record an
additional extraordinary loss on the early retirement of the
Notes of approximately $1.0 million in the second quarter of
fiscal 2002, reflecting the excess of the fair market value of
the shares of approximately $10.8 million over the principal
amount of the Notes retired plus accrued interest.

Acclaim Entertainment, Inc., is a leading worldwide developer,
publisher and mass marketer of software for use with interactive
entertainment game consoles including those manufactured by
Nintendo, Sony Computer Entertainment and Microsoft Corporation
as well as personal computer hardware systems. Acclaim owns and
operates six studios located in the United States and the United
Kingdom which includes a motion capture and recording studio in
the U.S., and publishes and distributes its software through its
subsidiaries in North America, the United Kingdom, Germany,
France and Spain. At December 2, 2001, the company reported a
working capital deficit of about $34 million, and a total
shareholders' equity deficiency of $1.2 million.


ADVANTICA RESTAURANT: Agrees to Support FRD's Chapter 11 Plan  
-------------------------------------------------------------
On Tuesday, February 19, 2002, a stipulation and agreement of
settlement was entered into by FRD Acquisition Co., the Official
Committee of Unsecured Creditors of FRD, Advantica Restaurant
Group, Inc., Denny's, Inc., FRI-M Corporation, Coco's
Restaurants, Inc. and Carrows Restaurants, Inc.  Pursuant to the
Settlement Agreement, the parties have agreed to a global
resolution of various disputes relating to the administration of
FRD's Chapter 11 case before the United States Bankruptcy Court
for the District of Delaware and jointly to support a plan of
reorganization for FRD consistent with the terms thereof. The
Settlement Agreement was filed with the Bankruptcy Court on
February 19, 2002 and is subject to Bankruptcy Court approval as
well as to various other terms and conditions.

One of the nation's largest restaurant companies, Advantica
Restaurant Group (formerly Flagstar) plans to undergo its fifth
name change (to Denny's) after selling its Coco's and Carrows
chains.  Denny's is the country's largest full-service family
restaurant chain at more than 1,800 units.  Coco's serves bakery
items at about 480 locations, and Carrows offers family dining
at about 140 restaurants. Advantica sold its Hardee's and
Quincy's Family Steakhouse chains after emerging from Chapter 11
in 1998 and exited the quick-service restaurant business in 1999
by selling the El Pollo Loco chain.

According to DebtTraders, Advantica Restaurant Group's 11.250%
bonds due 2008 (DINE08USR1) are trading between 73 and 76. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=DINE08USR1
for real-time bond pricing.


AKORN INC: Asks Senior Lenders for Continued Forbearance
--------------------------------------------------------
Akorn, Inc. (Nasdaq: AKRN) announced results for the fourth
quarter and year ended December 31, 2001.

Net sales were $12,693,000 for the fourth quarter of 2001, as
compared to $15,085,000 for the same period last year.  
Operating income was $714,000 for the fourth quarter of 2001 as
compared to an operating loss of $3,124,000 for the same period
of 2000.  Net income for the fourth quarter was $120,000 as
compared to a net loss of $2,206,000 reported for the fourth
quarter of 2000.

For the year ended December 31, 2001, net sales were $42,248,000
compared to $66,927,000 for the same period of 2000.  Net loss
for the year was $19,611,000 compared to net income of
$2,187,000 for the comparable period of the prior year.

Tony Pera, Akorn's president and chief operating officer stated,
"Our results for the fourth quarter are further evidence that
Akorn has stabilized its business.  By achieving profitability
in the fourth quarter, we are beginning to see the results of
our cost reduction efforts and our plans to focus on and grow
our current base of business.  By continuing to focus on our
core strengths in ophthalmics, injectables and contract
services, we feel comfortable that Akorn will continue to
achieve improved financial results."

Mr. Pera added, "Our research and development pipeline continues
to report ongoing progress and is indicative of the ANDAs that
we anticipate filing over the course of 2002.  We continue to
identify new products that complement our strengths in
controlled substances, suspensions and ophthalmic ointments.  By
combining a prudent product development strategy with effective
cost controls, we are optimistic that our efforts will result in
continued operating success and enhanced shareholder value."

                    Analysis of Results

The decrease in fourth quarter 2001 net sales from the fourth
quarter of 2000 reflects declining sales levels in the
injectable and ophthalmic product lines as anticipated due to
the Company's restructuring program and the elimination of
discount practices.  The Company believes these sales levels
accurately reflect the current nature of the market and present
demand for such products.  Net sales for the fourth quarter of
2001 were approximately the same as net sales for the third
quarter of 2001 demonstrating the stability of the Company's
core business.

Selling, general and administrative expenses for the quarter
were $3,959,000, representing a decrease of 20% from the same
period last year. This decrease primarily reflects the cost
reduction efforts implemented by the Company in the second and
third quarters of 2001.

For the fourth quarter of 2001, research and development
expenses decreased to $270,000, a decline of 80% from the same
period in 2000.  As previously discussed, the Company has scaled
back its research activities and will continue to focus on
strategic product niches in the areas of controlled substances
and ophthalmics.  The Company continues to make progress on its
existing ANDA pipeline and has identified a total of 8 ANDA
projects targeting controlled substances, suspensions and
ophthalmic solutions and ointments.

Interest expense for the fourth quarter of 2001 was $1,039,000,
an increase of $420,000 over the 2000 period, resulting from
higher average interest rates and higher outstanding debt
balances.

The Company benefited from an income tax provision adjustment of
$370,000 in the fourth quarter of 2001.  This adjustment
reflects a refinement in the estimated effective income tax rate
the Company had been using to determine its tax assets and
liabilities.

Cash from operations totaled $157,000 in the fourth quarter of
2001.  The Company has begun to see the results of its focused
working capital management program and anticipates continued
improvement in operating cash flow in 2002.

The Company is currently in discussions with its senior lenders
for an extension of its Forbearance Agreement for a longer-term
period and is optimistic this will be completed in the near
future.

                            Outlook

Akorn has and will continue to focus on its key areas of
strength in its core business.  The Company has also reinstated
key product development programs, which are expected to provide
for future growth and profit opportunities.

"We regard our performance in the fourth quarter of 2001 as
reinforcing our focused corporate strategy, which is based on
high value initiatives and effective financial management.  Our
near-term goal is to grow our core business, which we believe
will allow us to achieve continued sales and earnings growth in
2002 and to set higher benchmarks thereafter," concluded Dr.
John N. Kapoor, Akorn's chairman and interim chief executive
officer.

Akorn, Inc. manufactures and markets sterile specialty
pharmaceuticals, and markets and distributes an extensive line
of pharmaceuticals and ophthalmic surgical supplies and related
products.


ASHIL HYDE: Case Summary & Largest Unsecured Creditors
------------------------------------------------------
Debtor: Ashil Hyde Park, LLC
        c/o Ofeck & Heinze
        401 Broadway, Suite 408
        New York, NY 10013   

Bankruptcy Case No.: 02-40532

Type of Business: The Debtor's business is real estate
                  investment in 197 condominium units in Hyde
                  Park Condominium, Hyde Park, NY.

Chapter 11 Petition Date: February 26, 2002

Court: Southern District of New York (Manhattan)

Judge: Robert E. Gerber

Debtors' Counsel: Mark F. Heinze, Esq.
                  Ofeck & Heinze
                  401 Broadway
                  Suite 408
                  New York, NY 10007
                  (212) 343-2668
                  Fax : (212) 966-4333

Total Assets: $10,000,000

Total Debts: $8,894,450

Debtor's Largest Unsecured Creditors:

Entity                                            Claim Amount
------                                            ------------
The Chase Manhattan Bank                           $8,873,679
Morgan Lewis
10 Park Ave.
NY, NY 10178

Ladipus & Smith                                       $20,771


BETHLEHEM STEEL: Seeks Okay to Extend Loan to Columbus Coating
--------------------------------------------------------------
Columbus Coatings Company is owned by Alliance Coatings Company
and Dearborn Leasing Company, a wholly owned subsidiary of the
LTV Corporation.  To finance its modernization plan, Columbus
Coatings borrowed about $110,000,000 from Columbus Steel
Facility LLC under a Loan and Security Agreement dated November
18, 1999. The loan is secured by all of Columbus' assets.  
Additionally, Bethlehem and LTV jointly and severally guaranteed
Columbus' repayment obligation.

When LTV and Dearborn filed for chapter 11 protection, the Loan
Agreement defaulted. Thereby, the Lender was stayed from
enforcing its rights against LTV and Dearborn but not against
the Debtors. Accordingly, Bethlehem and the Lender entered into
a forbearance agreement on March 16, 2001 and Bethlehem issued a
letter of credit in the amount of $30,000,000 in favor of the
Lender.

Due to the maturity of the Modernization Loan on June 30, 2001,
all the parties involved entered a renewed forbearance agreement
on June 29, 2001.  The Forbearance Agreement supersedes the
Original Forbearance Agreement but the letter of credit and the
Bethlehem Mortgage remain in place. Additionally, Columbus must
make monthly debt payments of approximately $2,000,000 to the
Lender.

Bethlehem Steel Corporation, and its debtor-affiliates defaulted
under the Agreement when the chapter 11 cases were commenced.
However, Columbus has made its monthly payments to date so the
Lender did not draw the letter of credit or taken action against
Columbus.

Because Columbus is not able to generate the necessary funds
from its operation for the monthly payment, Columbus request
Alliance and Dearborn to make capital contribution and operating
cost contribution to Columbus on a 50-50 basis for the December
2001 and January 2002 monthly loan payments pursuant to the
Partnership Agreement between the two.  LTV informed the Debtors
that neither LTV nor Dearborn will make any more contributions
as they are not utilizing the facility. Accordingly, the Lender
has threatened to foreclose Columbus' assets and draw the
$30,000,000 letter of credit if Columbus defaults in making its
monthly payments.

With the contribution of Alliance, Columbus only has enough cash
to:

  (a) pay the monthly debt payment for December 2001 and January
      2002, and

  (b) operate in January 2002, without receipt of Dearborn's
      share of the contribution.

However, Columbus will not have sufficient cash to pay:

  (a) the monthly debt payment due in the future if Dearborn
      does not make its contribution and

  (b) Columbus' operating costs by the end of February without
      the payment of Operating Cost Contribution from Alliance
      and Dearborn.

Under the Partnership Agreement between Alliance and Dearborn,
in the event that a partner fails to make a required capital
contribution to Columbus, the other partner may contribute the
needed amounts, on commercially reasonable terms payable on
demand. Thus, Alliance has the option to loan to Columbus the
amounts Dearborn cannot contribute.

LTV and Dearborn are in the process of selling all its interest
in Columbus and the Debtors are involved in the process to
protect the value of its own interest. The Debtors believe that
the value of their interest in Columbus is best protected by not
filing a bankruptcy petition for Columbus, but instead by
working with LTV, Dearborn and the Lender to sell the Dearborn's
share in Columbus.

Accordingly, the Debtors seek the Court's authority to allow
Alliance to loan funds to Columbus in the amounts of the monthly
debt payment contribution and the Operating Cost Contributions
not made by Dearborn through June 1, 2002.

George A. Davis, Esq., at Weil, Gotshal & Manges, LLP in New
York, argues that Bethlehem's request is appropriate in light
of:

  -- the expected timing of the sale process of LTV and
     Dearborn's interest in Columbus, and

  -- efforts of Columbus to contract with third parties to fill
     the facility's capacity unutilized by LTV and Dearborn in
     an effort to generate funds to minimize Columbus' need for
     Operating Cost Contributions.

Mr. Davis asserts that pursuant to section 363(b)(1) of the
Bankruptcy Code, the Debtors are applying good business reasons
to lend fund to Columbus because:

  (1) if the Lender draws on the letter of credit, Bethlehem
      will incur a reimbursement obligation of $30,000,000 with
      no comfort that LTV or Dearborn will ever reimburse
      Bethlehem of the $15,000,000 that represents LTV and
      Dearborn's share of the Modernization Loan,

  (2) the failure of Columbus to pay its expenses and operate
      normally will likely lead to a draw on the letter of
      credit,

  (3) the continuance of normal operations by Columbus is
      necessary to the Debtors' restructuring, and

  (4) it is best to be able to preserve the value of the
      Debtors' interest in Columbus by avoiding filing a
      bankruptcy petition on behalf of Columbus.

Upon negotiation with the Lender, Mr. Davis notes that the
Lender is willing to:

  (a) work with LTV, Dearborn, Bethlehem, Alliance and Columbus
      to effectuate a satisfactory sale of the interest of LTV
      and Dearborn in Columbus, and

  (b) seek a restructuring of the Modernization Loan as part of
      or after such a sale.

Also, Mr. Davis contends that the DIP Order authorized Alliance
to loan funds to Columbus.  Pursuant to paragraphs 16 and 18 of
the DIP Order, Mr. Davis reminds the Court, the Debtors may use
cash collateral of the Debtors' pre-petition lenders and
proceeds of the Debtors' post-petition financing in accordance
with the terms of that certain Revolving Credit and Guaranty
Agreement, dated as of October 15, 2001, among the Debtors and
their post-petition lenders.  Thus, Mr. Davis asserts, the
Credit Agreement allows Bethlehem to make capital advances to
Alliance and allows Alliance to make advances to Columbus,
either as loans or capital expenditures. Accordingly, Mr. Davis
relates that the loans that Alliance proposes to grant to
Columbus are authorized by the DIP Order.

However, out of an abundance of caution, the Debtors seek
authorization for Alliance to loan funds to Columbus because
such loans could be considered a use of estate property not
authorized by section 363(c)(1) of the Bankruptcy Code as in the
ordinary course of Alliance's business. (Bethlehem Bankruptcy
News, Issue No. 11; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


BRIDGE INFO: Wins Nod to Modify Alvarez & Marsal's Compensation
---------------------------------------------------------------
Alvarez & Marsal is employed by Bridge Information Systems,
Inc., and its debtor-affiliates as their restructuring officers
to provide restructuring advice in connection with the Debtors'
chapter 11 proceedings.

Deborah M. Buell, Esq., at Cleary Gottlieb Steen & Hamilton, in
New York, explains that in addition to the substantial services
already provided by Alvarez & Marsal, the firm also collects and
continues to collect receivables, which are pledged for the
benefit of certain senior secured creditors of the Debtors.  In
recognition of the efforts expended by Alvarez & Marsal and to
provide further incentive to maximize the collection of
receivables, the Debtors, Alvarez & Marsal and Deloitte & Touche
-- the Debtors' accountants -- agreed to further modify Alvarez
& Marsal's compensation structure.

In accordance to the Second Engagement Modification Letter, Ms.
Buell states that the Debtors shall pay Alvarez & Marsal an
incentive fee based upon the actual amount of accounts
receivable collected.  Ms. Buell emphasizes that no Accounts
Receivable Incentive Fee shall be payable until the amount the
collected is equal to or greater than 60% of the accounts
receivable, net of certain adjustments.  "The Accounts
Receivable Incentive Fee shall increase in amount as the
percentage of Net Collectible Base collected increases," Ms.
Buell adds.

According to Ms. Buell, the Second Engagement Modification
Letter does not alter the original Engagement Letter or the
Retention Order other than what is stated in this motion.  "The
modification alters the compensation payable to Alvarez & Marsal
in an equitable manner to compensate for additional valuable
services that it has provided and will continue to provide to
the Debtors' estates, which was not contemplated in the Original
Letter," Ms. Buell asserts.

Therefore, the Debtors ask the Court to authorize them to modify
Alvarez & Marsal's engagement as provided in the Second
Engagement Modification Letter.

Finding the Debtors' Motion well taken, Judge McDonald gave it
his stamp of approval. (Bridge Bankruptcy News, Issue No. 26;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   


CALPINE CORP: Firming-Up Talks to Expand Secured Credit Facility
----------------------------------------------------------------
Calpine Corporation (NYSE: CPN), the nation's leading
independent power company, issued the following statement in
response to an announcement by Standard & Poor's which
subsequently has been withdrawn:
    
     Calpine's highest priority as it enters 2002 is to build a
strong cash cushion -- in fact, to "overkill" liquidity. As
previously announced, the company is actively exploring a wide
range of options to accomplish just that. Among these options is
a new, expanded and secured credit facility that would
significantly improve Calpine's cash position. Calpine is
currently finalizing its discussions with lenders.

     The company said that it would have no further comment on
this subject until public disclosure is timely and appropriate.
    
Based in San Jose, Calif., Calpine Corporation is an independent
power company that is dedicated to providing customers with
clean, efficient, natural gas-fired power generation.  It
generates and markets power, through plants it develops, owns
and operates, in 29 states in the United States, three provinces
in Canada and in the United Kingdom.  Calpine also is the
world's largest producer of renewable geothermal energy, and it
owns 1.3 trillion cubic feet equivalent of proved natural gas
reserves in Canada and the United States.  The company was
founded in 1984 and is publicly traded on the New York Stock
Exchange under the symbol CPN.  For more information about
Calpine, visit its Web site at http://www.calpine.com


CALYPTE BIOMEDICAL: Issues $850K Secured Debentures to Bristol
--------------------------------------------------------------
On February 12, 2002, Calypte Biomedical Corporation announced
that it had completed a private placement of up to $850,000 in
two secured convertible debentures with Bristol Investment Fund,
Ltd., a private investment fund. Calypte also issued warrants to
the Bristol for the purchase of 13,700,000 shares of the
Company's common stock. The agreement obligates Bristol to
exercise certain of the warrants to purchase shares of Calypte's
common stock during the twelve months following the
effectiveness of a registration statement that Calypte will file
with the Securities and Exchange Commission to register the
resale of the debenture shares and the warrant shares.

Calypte Biomedical's urine-based HIV-1 test is touted as having
several benefits over blood tests, and has received FDA approval
for use in professional laboratories. The test is also available
in China, Indonesia, Malaysia, and South Africa. The company
would like to extend its HIV test by making it faster and
adapting it for over-the-counter sale. The firm is working on
urine- and blood-based tests for other diseases and participates
in a national HIV testing service known as Sentinel. Calypte
Biomedical also owns about 30% of Pepgen, which is developing an
interferon-based drug to treat multiple sclerosis. At September
30, 2001, the company's total liabilities exceeded its total
assets by about $4 million.


CASUAL MALE: Otterbourg Organizes 7% Sub. Noteholders' Committee
----------------------------------------------------------------
An unofficial committee of holders of the 7% Convertible
Subordinated Notes has been formed to address issues concerning
the restructuring of Casual Male Corp. and its affiliates, whose
chapter 11 proceedings are currently pending in the United
States Bankruptcy Court for the Southern District of New York.
The Notes represent the largest unsecured creditor constituency
in the jointly administered chapter 11 cases.

The unofficial committee invites any bondholder to join its
committee. To do so, please call Brett Miller, Esq., at
Otterbourg, Steindler, Houston & Rosen, P.C. at 212-661-9100.  
State Street Bank and Trust Company, as Trustee for the holders
of the Notes, serves as a member and Co-Chairperson of the
Official Committee of Unsecured Creditors and will continue in
that role at this time.


CHELL GROUP: Fails to Comply with Nasdaq Listing Requirements
-------------------------------------------------------------
Chell Group Corporation (NASDAQ:CHEL) announced that it received
a NASDAQ staff determination in a letter dated February 20,
2002, indicating that the Company's securities are subject to
delisting from NASDAQ based upon the Company's noncompliance
with the Net Tangible Assets and Shareholder Equity requirements
for continued listing of its securities on NASDAQ as set forth
in Marketplace Rule 4310(c)(2)(b). The Company will appeal the
staff determination and is requesting an oral hearing, which
will stay the delisting until at least the date of the hearing.
The Company's appeal will be based upon its plan to achieve and
sustain compliance through a private placement offering, which
has had an initial closing on February 12, 2002, and pending
acquisitions including, but not limited to, Logicorp Data
Systems Ltd., Logicorp Service Group Ltd. and Stardrive
Solutions, Inc.

The Company believes that upon the occurrence of a number of
matters including the completion of these acquisitions, each of
which is pursuant to previously executed and announced
definitive agreements, it will be in compliance with the
requirements for continued listing. There can be no assurance
that the Panel will grant the Company's request for continued
listing. If the Company's listing is withdrawn, the Company
anticipates that its common stock will be quoted on the NASD
Bulletin Board and that it will make all efforts to have its
listing restored.

Chell Group Corporation (NASDAQ Small Cap: CHEL) is a technology
holding company seeking to create value by acquiring and growing
undervalued technology companies. Chell Group's portfolio
includes NTN Interactive Network Inc. www.ntnc.com, Magic
Lantern Communications Ltd. www.magiclantern.ca, GalaVu
Entertainment Network Inc. www.galavu.com, Engyro Inc.
(investment subsidiary) www.engyro.com, and cDemo Inc.
(investment subsidiary) www.cdemo.com . For more information on
the Chell Group, please visit http://www.chell.com


COMDISCO: Court Allows Mellon Bank to Setoff Prepetition Amounts
----------------------------------------------------------------
Prior to the Petition Date, Comdisco, Inc., and its debtor-
affiliates obtained $500,000,000 of credit pursuant to:

  (1) that certain 364 Day Credit Agreement among the Debtors,
      various banks, Bank of America as Syndication Agent, Bank
      One as Documentation Agent, Banc of America Securities LLC
      and Salomon Smith Barney Inc. as Lead Arrangers, and
      Citibank N.A. as Administrative Agent; and

  (2) that certain Fifth Amended and Restated Global Credit
      Agreement dated as of December 1996 among the Debtors,
      various banks, financial institutions as Tranche Agents,
      Bank of America as Syndication Agent, and Citibank as
      Administrative Agent.

Mellon Bank is a signatory to both Credit Agreements.

The Debtors defaulted under the Credit Agreements when they
filed for Chapter 11 protection, which makes all outstanding
obligations immediately due and payable.  As of the Petition
Date, the Debtors owe Mellon Bank in excess of $37,570,000 under
the Credit Agreements.

In a Swap Agreement dated August 1999, Mellon Bank agreed to a
swap of interest rate under the 1992 International Swap Dealers
Association Master Agreement between the Debtors and Mellon
Bank. In a separate agreement, Mellon Bank agreed to terminate
the Swap Agreement in return for the payment by Mellon Bank to
Comdisco of $3,000,000 due on July 16, 2001.  As of January this
year, this Cancellation Payment remains unpaid.

By its motion, Mellon Bank sought and obtained relief from the
automatic stay in order to setoff the Cancellation Payment
against the $37,570,000 due under the Credit Agreements.

James R. Daly, Esq., at Jones, Day, Reavis & Pogue, in Chicago
Illinois, asserts that that Mellon Bank has a right of setoff,
preserved by section 553 of the Bankruptcy Code, pursuant to the
terms of the Global Credit Agreement.

Mr. Daly points out that the Debtors owe Mellon Bank
approximately $37,570,000 under the terms of the Credit
Agreements while Mellon Bank owes the Debtors $3,000,000 under
the Cancellation Agreement.  "The claim and the debt are mutual,
valid and enforceable," Mr. Daly contends.

Besides, Mr. Daly says, the Debtors have no equity in these
funds since the debt became immediately due and owing as of the
Petition Date.  "Moreover, should Mellon Bank pay the Debtors
the Cancellation Payment without applying a setoff or receiving
adequate protection -- Mellon Bank's interest will be
compromised because the funds are currently in Mellon Bank's
hands," Mr. Daly explains.  And since the Debtors have
$1,700,000,000 in cash, Mr. Daly notes, the Debtors' ability to
reorganize effectively will not be compromised by a $3,000,000
setoff. (Comdisco Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


CONTINENTAL AIRLINES: Resumes Delayed ExpressJet Holdings IPO
-------------------------------------------------------------
DebtTraders reports that Continental Airlines filed for initial
public offerings of its regional carrier. Continental Airlines
will resume a delayed IPO of its regional carrier, ExpressJet
Holdings Inc.

According to the report, the spin off was shelved in the fall
following the September 11 attacks. ExpressJet intends to sell
20 million common shares to the public, up from an initially
planned 18.75 million. The shares will be sold at a target price
range of $14 to $16 per share, representing a potential market
value of $896 million to $1.02 billion when the IPO is
completed.

DebtTraders analysts Daniel Fan, CFA, and Blythe Berselli, CFA,
advise that Continental Airlines Inc.'s 8.00% bonds due 2005 was
last quoted at a price of 91.0. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=CAL2


CYGNIFI DERIVATIVES: SDNY Court Fixes April 3 Claims Bar Date
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
fixes April 3, 2002, as the deadline by which creditors of
Cygnifi Derivatives Services, LLC, must file proofs of claim and
proofs of interest.  Claim forms should be mailed to:

           The Clerk of Court
           United States Bankruptcy Court
           One Bowling Green
           New York, NY 10004-1408

Those who failed to submit their proofs of claim on or before
the Claims Bar Date shall be forever barred to assert any claim
and waive its right to vote on any proposed plan.

Cygnifi Derivatives Services, LLC, which provides a wide range
of services relative to the management of its clients'
derivatives portfolios, filed for Chapter 11 petition on October
3, 2001. Marc E. Richards, Esq. at Blank Rome Tenzer Greenblatt,
LLP represents the Debtor in its restructuring effort. When the
Company filed for protection from its creditors, it listed total
assets of $34,200,000 and $5,100,000 in total debts.


ENRON CORP: Taps PricewaterhouseCoopers for Financial Advice
------------------------------------------------------------
Enron Corporation, and its debtor-affiliates seek to employ and
retain PricewaterhouseCoopers to perform advisory services for
the Debtors in these chapter 11 cases, nunc pro tunc to December
21, 2002.

According to Brian S. Rosen, Esq., at Weil, Gotshal & Manges
LLP, in New York, PwC has been providing financial advisory
services to the Debtors since December 21, 2001.  The Debtors
are aware of PwC's wealth of experience in providing accounting,
tax and financial advisory services in restructurings and
reorganizations.  Since its engagement, Mr. Rosen says, PwC has
developed a great deal of institutional knowledge regarding the
Debtors' operations, finance and systems.  "Such experience and
knowledge will be valuable to the Debtors in its efforts to
reorganize," Mr. Rosen notes.

As financial advisors, PwC will be expected to provide:

-- Assistance to the Debtors in the preparation of financial
   related disclosures required by the Court, including the
   Schedules of Assets and Liabilities, the Statement of
   Financial Affairs and Monthly Operating Reports;

-- Assistance with the identification of executory contracts and
   leases and performance cost/benefit evaluations with respect
   to the affirmation or rejection of each;

-- Assistance with the identification of reclamation claims and
   the analysis with respect to the agreement or objection
   thereto;

-- Assistance with the analysis of creditor claims by type,
   entity and individual claim;

-- Review of the Debtors' business plan as requested by the
   Debtors' management;

-- Assistance in the analysis of inter-company transactions, as
   necessary;

-- Assistance with the evaluation, analysis, procedures,
   negotiations, testimony or other services as necessary for
   the purposes of the wind-down and liquidation of the trading
   books of the various debtors;

-- Assistance with short-term cash management and reporting;

-- Assistance with the preparation and implementation of reports
   and procedures as required by the DIP lenders, the Unsecured
   Creditors' Committee in this Chapter 11 case, the U.S.
   Trustee, and other parties-in-interest and professionals
   hired by the same, as requested;

-- Attendance at meetings and assistance in discussions with the
   lenders, the Unsecured Creditors' Committee appointed in this
   Chapter 11 case, the U.S. Trustee, and other parties-in-
   interest and professionals hired by the same, as requested;

-- Assistance with the planning for and implementation of the
   wind-down or restructuring of various business entities;

-- Assistance with the identification and allocation of
   corporate overhead and expenses;

-- Assistance in the preparation of information and analysis
   necessary for the Plan of Reorganization and Disclosure
   Statement in this Chapter 11 case;

-- Assistance in the identification and analysis of avoidance
   actions, including fraudulent conveyances and preferential
   transfers;

-- Litigation advisory services along with expert witness
   testimony on case related issues as required by the Debtors
   and as appropriate in the circumstances;

-- Assistance with tax planning and compliance issues with
   respect to any proposed plans of reorganization, and ordinary
   course tax compliance issues with respect to expatriate
   employees of the Debtors, as well as any and all other tax
   assistance as may be requested from time to time;

-- Assistance in connection with the development and
   implementation of key employee retention and other critical
   employee benefit programs;

-- Assistance with appraisal of real estate in which the Debtors
   hold an interest; and

-- Such other general business consulting, testimony or other
   such services as Debtors' management or counsel may deem
   necessary that are not duplicative of services provided by
   other debtor professionals in this proceeding.

Mr. Rosen emphasizes that the scope of PwC's services will not
extend to assistance with forensic accounting, provision of
expert testimony or consulting on any claims by the Debtors
relating to audits of Enron's consolidated financial statements.

In addition, Mr. Rosen assures the Court that PwC coordinate
with the Blackstone Group LP, Batchelder & Partners Inc., and
any other financial advisors or accountants employed by the
Debtor to avoid duplication of services provided.

The Debtors will compensate PwC based on the firm's customary
hourly rates, subject to periodic adjustments:

       Partners                              $500 - 625
       Managers and Directors                 350 - 500
       Associates and Senior Associates       175 - 325
       Administration and Paraprofessionals    85 - 150

PwC may charge higher rates if the firm finds it necessary to
use the services of their specialists in varied practice groups.  
The firm also intends to apply to the Court for allowances of
compensation and reimbursement of expenses for financial
advisory services.

Dominic DiNapoli, a partner at PricewaterhouseCoopers LLP,
informs Judge Gonzalez that the firm's professionals have
conducted a review of its contacts with the Debtors and other
interested parties.  "Our review consisted primarily of queries
of various internal computer databases containing names of
individuals and entities that are present or recent former
clients of PwC in order to identify potential relationships,"
Mr. DiNapoli explains.

These current or recent prior engagements of PwC for the Debtors
or their subsidiaries are:

  (1) PwC has performed and concluded various consulting and
      advisory engagements for certain of the Debtors and their
      affiliates, including services relating to systems design
      and implementation, human resource and benefits
      management, and risk management in Enron's trading
      operations;

  (2) In 2000 and 2001, PwC performed valuation calculations to
      be used in connection with Enron's financial reporting of
      its employees' stock options.  This engagement has
      concluded, and the practice group that performed the work
      is no longer associated with PwC;

  (3) PwC has performed tax consulting engagements for Enron and
      ordinary course tax compliance services with respect to
      expatriate employees of Enron or its affiliates.  It also
      has performed similar tax consulting and tax compliance
      services for Enron Capital LLC, Enron Capital Resources
      LP, EOTT Energy Partners and Northern Border Partners LP.

Mr. DiNapoli tells the Court that PwC's engagements to provide
these services are ongoing.  However, Mr. DiNapoli makes it
clear that the firm did not participate in the audit of Enron's
consolidated financial statements or provide any accounting
advice to Enron either in connection with the preparation of its
consolidated financial statements or on transactions with any
partnership entities.

In addition, Mr. DiNapoli asserts that PwC is not and has never
been the auditor for LJM Cayman LP, LJM2 Co-Investment LP or
their affiliates.  But Mr. DiNapoli admits that the firm has
performed certain limited engagements for Enron related to LJM
and LJM2, and has provided certain services for LJM, LJM2 and
their affiliates:

  (a) In 1999 and 2000, PwC was engaged by Enron to perform
      valuation analyses and provide fairness opinions in
      connection with two transactions involving LJM and LJM2.
      The opinions addressed whether the consideration received
      by Enron in those transactions was fair from a financial
      point of view.  Those engagements have concluded, and with
      the exception of one partner, the practice group that
      performed the work is no longer associated with PwC.

  (b) From 1999 through 2001, PwC performed and concluded
      various tax consulting engagements for LJM, LJM2 and their
      affiliates.  Those engagements including tax consulting
      services in connection with actual or proposed
      transactions involving Enron.  During the same period, PwC
      was engaged by LJM, LJM2 and Southampton, LP to provide
      tax compliance services for those entities and certain of
      their affiliates.  PwC remains engaged to complete tax
      returns for the period from January 1, 2001 through July
      24, 2001 for LJM, certain of its affiliates and an
      affiliate of LJM2.

  (c) In 2000, PwC performed tax consulting services in
      connection with the formation of the Fastow Family
      Foundation. This limited assignment has concluded.

  (d) In 2001, PwC provided due diligence and advisory services
      to LJM2 in connection with the potential acquisition of a
      business from Enron.  The acquisition was not made, and
      the engagement has concluded.

Mr. DiNapoli relates that PwC has no claim against the Debtors
for any fees for these engagements.  In addition, Mr. DiNapoli
continues, no PwC professional who worked on these engagements
will have a role in the performance of any services in
connection with PwC's role as financial advisor to the Debtors.
Furthermore, Mr. DiNapoli adds, PwC has taken steps, including
the implementation of an ethical wall, to ensure the separation
of the professionals who performed these engagements from the
professionals who are providing services as financial advisors
to the Debtors.

"PricewaterhouseCoopers will likely continue to provide services
to various parties-in-interests in these chapter 11 cases, but
only in matters totally unrelated to the Debtors' cases," Mr.
DiNapoli says.  "To the best of my knowledge, PwC is a
'disinterested person' as that term is defined in section
101(14) of the Bankruptcy Code," Mr. DiNapoli swears.

The Debtors and PricewaterhouseCoopers have agreed to bring any
controversies or claims related to this employment application
to the Bankruptcy Court or the District Court for the Southern
District of New York.  The parties also agree to waive trial by
jury.  But before the controversy is brought to Court, the
Debtors and PwC agree to submit first to non-binding mediation
or binding arbitration. (Enron Bankruptcy News, Issue No. 14;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


EXODUS: Wins Okay to Assign Storageway Pacts to Digital Island
--------------------------------------------------------------
Exodus Communications, Inc., and its debtor-affiliates and
StorageWay Inc. sought and obtained Court approval of a
Stipulation resolving disputes arising from the Debtors'
assumption of the Master Services Agreement, Reseller Agreement,
Alliance Partner Agreement and Loan Documents that will be
assumed by the Debtors and assigned to Digital Island.

Mark S. Chehi, Esq., at Skadden Arps Slate Meagher & Flom LLP in
Wilmington, Delaware, relates that under the Master Services
Agreement, the Debtors agreed to provide certain facilities,
bandwidth, managed services and professional services to
StorageWay. Under the Reseller Agreement, StorageWay provides
data storage management services to the Debtors as the Debtors
provide co-location services to StorageWay, including leasing
floor space to StorageWay. Meanwhile, the Alliance Partner
Agreement obligates the Debtor to pay StorageWay the sum of 10%
of fees generated by StorageWay's solicitation of customers to
utilize the Debtors' services. The Debtors and StorageWay also
entered into a secured promissory note, a security agreement and
related agreements, collectively known as the loan documents,
under which StorageWay agreed to pay the Debtors the principal
amount of $4,496,511 together with interest compounded monthly
at a rate equal to 10.5% per annum for amounts due under the
Reseller Agreement. The principal balance due to the Debtors as
of July 31, 2002 was $3,846,511.

The Debtors, StorageWay and Digital Island agree that:

A. The Master Services Agreement, Joint Marketing Services
     Agreement and Assignment Agreements are assumed and
     assigned to the Buyer in accordance with the Court's
     orders including the assumption order and the Sale Order.
     The term of the reseller agreement is extended to June 30,
     2002. Notwithstanding the foregoing, the Buyer shall not be
     liable for any claims, including setoff of any other claims
     under the Reseller Agreement, Joint Marketing Services
     Agreement or Assignment Agreements accruing prior to the
     losing. In addition, StorageWay shall not assert any
     defenses including its rights of recoupment against the
     Purchaser relating to any claims, defenses, actions,
     conduct or inaction prior to the Closing;

B. In full and complete satisfaction of all pre-petition and
     post-petition amounts due and owing under the Reseller
     Agreement, the MSA and the APA through December 31, 2001
     and all obligations due and owing under the Loan Documents
     through October 1, 2001, the parties have agreed that the
     Debtors will reduce the principal balance due under the
     Loan Documents as of October 1, 2001 to $1,898,511. The
     remaining balance shall be re-amortized and payable in 18
     equal monthly installments of principal only, in the amount
     of $105,472.83, due on the first day of the month following
     the month that this stipulation and order become final. The
     Loan Documents shall not be assumed or assigned to the
     Purchaser or any other entity;

C. After taking into account the mutual offsets of pre-petition
     obligations, StorageWay owes the Debtors the sum of
     $412,410 for debts incurred under the Reseller Agreement,
     the APA and the MSA for all domestic and international
     sites and the loan documents;

D. After taking into account the mutual offsets due and owing
     for post-petition obligations under the Reseller agreement,
     the MSA and the APA for all domestic and international
     sites, the Debtors shall owe StorageWay all net amounts due
     and owing under the Reseller Agreement as of the Petition
     Date through December 31, 2001 in the amount of
     $226,630.91;

E. After the offsets have been reconciled, StorageWay shall pay
     the Debtor the sum of $185,780 on or before the Closing. In
     the event that this stipulation and order does not become
     final by February 28, 2002, the Debtor shall refund the
     $185,780 to StorageWay within 5 business days after;

F. For any and all amounts due and owing under the Reseller
     Agreement, the APA and the MSA for post-petition charges
     from January 1, 2002 through Closing, the Debtor and
     Storageway reserves their rights to assert against each
     other all rights of offset, recoupment and any other
     applicable defenses. Any amounts due and owing from the
     Debtors to StorageWay after mutual offsets have been
     applied shall be treated as an administrative expense and
     shall be paid as soon as practicable. Alternatively,
     StorageWay agrees that any further amount due to the Debtor
     after the mutual offsets are applied shall be paid as soon
     as practicable;

G. The automatic stay is modified to the extent necessaary to
     permit StorageWay to offset or recoup any undisputed
     amounts that the Debtors and StorageWay agree StorageWay
     owes the Debtors prior to the Petition Date under the
     Reseller Agreement, the APA, the MSA and the Loan Documents
     and setoff or recoup any undisputed amounts owed by
     StoragWay under the Reseller Agreement, the MSA and the
     loan documents on or after the Petition Date through
     Closing and thereafter;

H. Except as provided in this stipulation and order, on that
     date that StorageWay makes  payments to the Debtors in the
     amount of $185,780, the Debtors and StorageWay shall waive
     and release the other party of any and all claims arising
     under the Reseller Agreement, Master Services Agreement and
     all sales order and the APA through December 31, 2001.
     Except as otherwise provided, the parties have not waived
     or released their respective rights to asserts set-off
     rights, recoupment rights, liabilities or breaches or
     breaches arising after January 1, 2002 and thereafter,
     under the Reseller Agreement, the MSA, the APA or the Loan
     Documents. (Exodus Bankruptcy News, Issue No. 14;
     Bankruptcy Creditors' Service, Inc., 609/392-0900)


FIRST AMERICAN: Continued Losses May Impair Ability to Continue
---------------------------------------------------------------
First American Scientific Corp. manufactures and operates
equipment referred to as the KDS Micronex System.  This patented
process has the capability of reducing industrial material such
as limestone, gypsum, zeolite, wood chips, bio-waste, rubber and
ore containing precious metals to a fine talcum-like powder.  
The process can significantly increase the end value of the host
material.  The Company maintains an office in Vancouver, British
Columbia, Canada.

The Company, through its wholly owned subsidiary, VMH, has
developed an internet sales site known as VMH
Videomoviehouse.com Inc.  The site is designed to sell videos,
CDs and books and, as technology advancements permit, is
expected to become a virtual video rental store.

In September 1999, the Company entered into an agreement with
VMH Videomoviehouse.com Inc., a British Columbia company whereby
the Company acquired 100% of the common shares and the
technology of VMH in return for a cash consideration of
$250,000. VMH possesses domain names, a web page, and technology
for the sale of videos, DVD's, and CD's through the internet.

The Company formed 521345 BC Ltd., a wholly owned subsidiary, in
1998 in order to provide research and development services
exclusively to First American Scientific Corp. that are eligible
for Canadian research and development credits and, when
feasible, operate a profitable production facility in Canada.

The Company's year-end is June 30th.

First American Scientific Corporation has incurred an
accumulated deficit of $7,569,760 through December 31, 2001 and
has very limited sales volume. This, and other circumstances,
raise substantial doubt about the Company continuing as a "going
concern".

Revenue from internet video sales by VideoMovieHouse.com was $
347,501 USD for the quarter or an average of $115,833 per month
for the quarter. This is an increase of 425% quarter over
quarter and represents growth resulting from the Company's
initial marketing campaign.

The Company continues to focus on strengthening its balance
sheet with current assets of $457,204  and current liabilities
of $313,462 providing a positive working capital ratio of 1.48
to 1.   This  compares to current assets of $ 353,690 and
current liabilities of $ 273,088 of September 30, 2001. As of
December 31, 2001, the Company had $ 32,241 cash on hand which
is insufficient to maintain its operation for the short term,
however, there are sales of two machines pending which should
provide cash receipts of $ 247,500 before the end of March 2002
and the balance of $243,500 before 2002 year end. Should these
payments materialize, the Company will have sufficient cash to
sustain its operations for at least the next year, otherwise the
Company will need to raise capital to continue its operation and
plans to actively pursue fund raising activities, either by way
of loans, sale of stock or a combination of both.


FOCAL: Declares 35-to-1 Reverse Stock Split Under Recap. Plan
-------------------------------------------------------------
Focal Communications Corporation (Nasdaq: FCOM), a leading
national communications provider of local phone and data
services, announced its fourth quarter and full year 2001
financial results.  Focal reported fourth quarter revenue of
$83.2 million, an increase of 24% from the same period in 2000,
and annual revenue of $332.4 million, an increase of 42% from
the prior year.  Earnings before interest, taxes, depreciation
and amortization (EBITDA) was negative $6.3 million for the
fourth quarter and negative $7.1 million for the full year.

During the fourth quarter and the full year 2001, the Company
recognized an extraordinary gain of $159 million and $170
million, respectively, related to the early retirement of
approximately 54% of its high yield bonds in conjunction with
its financial recapitalization.  Focal reported a net loss from
continuing operations of $47.4 million for the fourth quarter
and a net loss of $195.5 million for the full year 2001.  Focal
reported net income, after the extraordinary gain, of $111.5
million for the fourth quarter and a net loss of $25.2 million
for the full year.

"2001 was a difficult year for most businesses as the economic
downturn took its toll.  Despite this challenging environment,
Focal continued to demonstrate healthy revenue growth,"
commented Robert Taylor, chairman and chief executive officer of
Focal.  "Our enterprise business continued to grow, doubling
year over year," stated Taylor.

Taylor continued, "While 2001 was not the year we had hoped for,
it was a year in which we had some significant achievements.  
Our enterprise business grew 106% year over year, we finished
our market build out and we completed our financial
recapitalization.  We are now a much stronger company, with a
much healthier balance sheet, and we believe we are fully funded
to free cash flow positive.  The completion of the market build
out will significantly reduce our capital expenditures as we
concentrate on adding more customers to our base and expanding
our presence within our existing markets."

                         2001 Highlights

Enterprise Business -- Focal's enterprise business drove revenue
growth in 2001, with revenue from enterprise customers
increasing 106% year over year. Fourth quarter enterprise
revenue increased 14% to $44.4 million compared to third quarter
2001 enterprise revenue, excluding non-recurring items, of $39.1
million.  Enterprise lines now comprise 60% of total installed
lines, compared to 53% in the third quarter of 2001 and 39% a
year ago.  Enterprise revenue was approximately 53% of total
revenue during the fourth quarter of 2001.

Internet Service Provider Business -- Revenue from Internet
Service Providers (ISPs) in 2001 was $177.5 million, a 12%
increase from the previous year.  Internet Service Provider
revenue was $38.8 million in the fourth quarter compared to
$43.0 million, excluding non-recurring items, for the third
quarter of 2001.  Revenue in the ISP segment fell during the
fourth quarter due to the significant amount of line churn that
the Company experienced, which resulted in net ISP line
disconnects of 23,603.

Markets -- During the year the Company completed its 22-market
business plan.  As a result of growth within its existing
markets, Focal installed additional switches in seven markets
during the year: Boston, Chicago, Los Angeles, New York,
Philadelphia, San Jose and Washington D.C.  The Company offers
high speed Internet access service in 17 markets across the U.S.

          Selected Operational Results and Statistics

Focal provides market specific information to provide insight
into the life-cycle performance of its markets.  The following
table presents the operating results for a group of Focal's
mature markets and its new markets for the three months ended
December 31, 2001.  Mature markets are defined as markets in
operation prior to January 1, 2000.  The Company's mature
markets are Chicago, New York, San Francisco, San Jose, Oakland,
Philadelphia, Washington DC, Northern Virginia, Los Angeles,
Orange County, Northern New Jersey, Boston, Detroit and Seattle.

                Update on Reverse Stock Split

On February 25, 2002, the Company's Board of Directors declared
a 35:1 reverse split of Focal's common stock pursuant to
authority granted by the Company's shareholders in connection
with its recapitalization.  The Board of Directors decided upon
this ratio after consultation with management, key stakeholders
and the Company's financial advisors.  The split will have a
record date of March 8, 2002, and will be effective as of March
11, 2002. Focal's common stock will continue to trade under the
FCOM ticker symbol on the Nasdaq National Market.  In Focal's
annual Form 10-K filing with the Securities and Exchange
Commission, due by March 31, 2002, all shares and per share
amounts will be adjusted to reflect the split.

                         Guidance

As expected, in January 2002, the reciprocal compensation rate
in Illinois fell by approximately 75%.  The impact of this rate
change for the first quarter will be a decline in revenue of
approximately $6 million compared to the fourth quarter 2001
run-rate.  Driven by the strength of its enterprise business,
Focal expects its first quarter revenue growth will largely
offset the decline in reciprocal compensation.  The Company is
confident in the fundamentals of its enterprise business.  
However, the uncertainty in its ISP business has made it
difficult to forecast revenue from this business. Accordingly,
Focal is providing guidance for the first quarter of 2002 only
and is withdrawing its previous full year 2002 guidance.  The
guidance is outlined below.

                         Q1 2002

    Revenue (in millions)                     $80-$84
    EBITDA (in millions)                     ($5)-($2)
    Capital Expenditures (in millions)        $15-$20

Focal Communications Corporation -- http://www.focal.com-- is a  
leading national communications provider.  Focal offers a range
of solutions, including local phone and data services, to large
communications-intensive customers.  Nearly half of the Fortune
100 use Focal's services, in 22 top U.S. markets.  Focal's
common stock is traded on the Nasdaq National Market under the
symbol FCOM.


FUTUREONE INC: Industry Slowdown Has Negative Impact on Revenue
---------------------------------------------------------------
FutureOne Inc. (OTC BB: FUTO) -- http://www.futureone.net--  
reported first quarter revenues and results in its 10-QSB filed
with the U.S. Securities and Exchange Commission,
http://www.sec.gov  

Ralph R. Zanck, vice president of finance stated, "We were very
pleased to see the results that efforts to reduce operating
expenses were successful. The company reported net income for
the first time in its history. Operating income for the quarter
was $304,000 compared to an operating loss of $300,000 for the
same quarter last year."

For the quarter ended Dec. 31, 2001, the company reported
revenues from continuing operations of $2,312,000 compared to
$3,259,000 for the corresponding period of fiscal year 2000.
Recent economic slowdown in the telecommunications industry has
negatively impacted revenue. The company anticipates additional
revenue reductions in the quarter ending March 31, 2002.

Considering current economic conditions in the
telecommunications industry, the company can not predict when
revenues will recover. The company is attempting to identify new
revenue sources and more aggressively pursuing additional
projects.

President and chief executive officer, Donald D. Cannella,
commented, "Although our revenues decreased 29 percent compared
to the first quarter of fiscal 2001, I am very pleased with our
cost controls and continued reductions in administrative
expenses. Direct labor, overtime, equipment rental, construction
related travel and contractor expenses were significantly
reduced.

"Due to these cost controls, gross margin increased from 20.1
percent for the three months ended Dec. 31, 2000, to 42.4
percent for the three months ended Dec. 31, 2001."

The company again reported positive EBITDA (earnings before
interest, income taxes, and depreciation and amortization). The
company's EBITDA from continuing operations for the first
quarter was $451,000. Net income for the quarter was $.01 per
share compared to a net loss of $.01 per share for the same
quarter of fiscal year 2001.

On March 29, 2001, FutureOne Inc. filed for protection from its
creditors under Chapter 11 of the U.S. Bankruptcy Code. The
company has divested its unprofitable operations and
consolidated and down-sized its corporate overhead to allow it
to focus on providing telecommunications infrastructure
installation, and related services, through its wholly owned
subsidiary OPEC CORP., http://www.opeccorp.com  

OPEC has not sought protection from its creditors under Chapter
11 and continues to operate unaffected by the bankruptcy filing.

OPEC provides a comprehensive range of telecommunications
services, which include the design, engineering, placement and
maintenance of aerial and underground fiber-optic, coaxial and
copper cable systems for major communications companies, utility
providers, and real estate developers in the western United
States.

OPEC also provides auxiliary services such as copper and fiber
splicing, horizontal drilling and boring, network repair and
maintenance, commercial and residential installations, testing,
line conditioning and construction management services.


GLOBAL CROSSING: Signs-Up Blackstone Group as Financial Advisors
----------------------------------------------------------------
Global Crossing Ltd., and its debtor-affiliates seek to employ
and retain The Blackstone Group L.P. to provide necessary
financial advisory services to the Debtors in these chapter 11
cases pursuant to sections 327(a) and 328(a) of the Bankruptcy
Code and the terms of the Blackstone agreement dated January 28,
2002.

According to Mitchell C. Sussis, the Debtors' Corporate
Secretary, Blackstone is well-qualified to serve as the Debtors'
bankruptcy consultants and special financial advisors as
Blackstone's professionals have assisted and advised, and
provided strategic advice to, debtors, creditors, bondholders,
investors and other entities in numerous chapter 11 cases of
similar size and complexity to the Debtors' cases. Blackstone
also has extensive restructuring, merger and acquisition, and
capital markets expertise.

Mr. Sussis explains that the Debtors have employed Blackstone as
financial advisors in connection with the commencement and
prosecution of these chapter 11 cases and the formulation of
their business plan and plan of reorganization. The Debtors
anticipate during the chapter 11 cases that Blackstone will
render financial advisory services to the Debtors. All of the
services that Blackstone will provide to the Debtors will be:

A. appropriately directed by the Debtors so as to avoid
     duplicative efforts among the professionals retained in the
     case, and

B. performed in accordance with applicable standards of the
     profession.

The services to be provided by Blackstone in this case are
presently anticipated to include the following:

A. Assist in the evaluation of the Debtors' businesses and
     prospects;

B. Assist in the development of the Debtors' long-term business
     plan and related financial projections;

C. Assist in the development of financial data and presentations
     to the Debtors' Board of Directors, various creditors and
     other third parties;

D. Analyze the Debtors' financial liquidity and evaluate
     alternatives to improve such liquidity;

E. Evaluate the Debtors' debt capacity and alternative capital
     structures;

F. Analyze various restructuring scenarios and the potential
     impact of these scenarios on the value of the Debtors and
     the recoveries of those stakeholders impacted by the
     Restructuring;

G. Provide strategic advice with regard to restructuring or
     refinancing the Debtors' Obligations;

H. Participate in negotiations among the Debtor and its
     creditors, suppliers, lessors and other interested parties
     with respect to a Restructuring, Transaction, Financing
     or other matter;

I. Value securities offered by the Debtors in connection with a
     Restructuring;

J. Assist in arranging debtor-in-possession financing, as
     requested;

K. Assist in the arranging of financing including identifying
     potential sources of capital, assisting in the due
     diligence process and negotiating the terms of any proposed
     financing, as requested;

L. Assist the Debtors in executing a transaction including
     identifying potential buyers or parties in interest,
     assisting in the due diligence process and negotiating
     the terms of any proposed transaction, as requested;

M. If required, provide fairness opinions related to
     Transactions, Financings or Restructurings for which
     Blackstone shall have earned a fee;

N. Provide testimony in any Chapter 11 case concerning any of
     the subjects encompassed by the other financial advisory
     services, if appropriate and as required; and

O. Provide such other advisory services as are customarily
     provided in connection with the analysis and negotiation of
     a Restructuring, Transaction or Financing, as requested and
     mutually agreed.

Arthur B. Newman, Senior Managing Director of The Blackstone
Group, informs the Court that the Firm will seek compensation
for its services and reimbursement of its expenses with the
payment of such fees and expenses to be approved in accordance
with the guidelines of this Court. In consideration of the
services provided, the Debtors have agreed to pay Blackstone:

A. a Monthly Fee, commencing March 16, 2002, in the amount of
     $200,000 in cash per month, with the first Monthly Fee
     payable on March 15, 2002 and additional installments of
     such Monthly Fee payable in advance on the 15th of each
     month;

B. a DIP Financing Fee of 0.5% of the total facility size of
     any DIP financing arranged by Blackstone, payable upon
     receipt of a binding commitment letter for such a facility;

C. a Financing Fee upon the raising of new capital in the
     Company calculated by multiplying:

     a. the applicable Financing Fee Percentage and

     b. the gross proceeds to the Company upon the closing of a
          Financing.

     In the event the Financing takes the form of a committed
     facility that is not initially fully drawn, the Financing
     Fee shall be calculated based on the committed amount. To
     the extent the gross proceeds or committed amount falls
     between any two points on the table below, the Financing
     Fee Percentage will be interpolated between the relevant
     intervals shown. Provided, however, that if an investment
     is received from those entities with "codenames" Harp
     and/or Symphony, Blackstone shall earn a fee equal to 50%
     of the amount calculated according to the formula
     referenced above. Provided further, however, that
     Blackstone shall neither have responsibility for nor earn a
     fee with respect to an Accounts Receivable Securitization;

                     Financing Fee Table
           Gross Proceeds        Financing Fee %
           --------------        ---------------
       $  200,000,000 or less       3.000%
       $  500,000,000               2.000%
       $1,000,000,000               1.800%
       $1,500,000,000 or more       1.600%

D. upon the consummation of a Transaction, a Transaction
     Fee payable in cash at the closing of the Transaction.
     The Transaction fee shall be calculated by multiplying
     the applicable Transaction Fee Percentage and the
     Consideration. For Consideration that falls between any
     of the points shown in the table below, the Transaction
     Fee Percentage will be interpolated between the relevant
     intervals of the Consideration shown. Provided, however,
     that Blackstone shall neither be responsible for nor earn a
     fee with respect to a sale of Global Marine. Provided
     further, however, that the same transaction shall not be
     deemed both a Financing and a Transaction; and

                   Transaction Fee Table
          Consideration           Transaction Fee %
          -------------           -----------------
       $  200,000,000 or less      1.500%
       $  500,000,000              1.000%
       $1,000,000,000              0.900%
       $1,500,000,000              0.800%
       $2,000,000,000              0.700%
       $3,000,000,000              0.600%
       $4,000,000,000 or more      0.500%

E. upon the completion of a Restructuring, a Restructuring Fee
     equal to 0.4% of the total face value of any Obligations of
     the Company that is restructured, refinanced, modified or
     amended as part of the Restructuring. Provided, however,
     that the total fees payable to Blackstone shall be capped
     at $25,000,000. Provided further, however, that if
     Blackstone earns a Transaction Fee with respect to a sale
     of a significant interest in all or substantially all of
     the Company, then the Transaction Fee payable to Blackstone
     in respect of such Transaction shall also, together with
     fees payable be subject to the Cap. For the avoidance of
     doubt, fees earned by Blackstone under paragraph (d) which
     are a result of Transactions involving specific assets or
     subsidiaries of the Company shall not be subject to the
     Cap. The Restructuring Fee shall be payable upon the
     effective date of the plan of reorganization.

Prior to the Petition Date, Mr. Newman tells the Court that
Blackstone performed certain professional services for the
Debtors beginning November 16, 2001 and has invoiced for
$950,000 in fees through the period ending March 15, 2002, and
$860.62 in expenses incurred and processed to date. Prior to the
Petition Date, Blackstone has received payments totaling
$950,000 for fees invoiced and a $50,860.62 expense advance to
be first applied against pre-petition expenses. Blackstone will
then credit the unused expense advance against post-petition
expenses incurred thereafter.

Pursuant to the Blackstone Agreement, Mr. Newman relates that
the Debtors have agreed to indemnify Blackstone from and against
any actions or claims brought by any party in connection with
Blackstone's engagement by the Debtors, other than claims
resulting from the bad faith, gross negligence, or willful
misconduct of Blackstone. The Debtors submit that such
indemnification is standard in the specialized financial
advisory industry and that the provision of such indemnification
by the Debtors is fair and reasonable considering Blackstone's
qualifications and the expectations of other special financial
advisors in connection with engagements of this scope and size.

Mr. Newman contends that Blackstone has no connection with, and
holds no interest adverse to, the Debtors, its estates, its
creditors, or any other party in interest, or its respective
attorneys or accountants in the matters for which Blackstone is
proposed to be retained, and that Blackstone is a "disinterested
person," as such term is defined in the Bankruptcy Code.

The Debtors submit that the appointment of Blackstone on the
terms and conditions set forth herein and the Blackstone
Agreement is in the best interest of the Debtors, its creditors,
and all parties in interest. (Global Crossing Bankruptcy News,
Issue No. 3; Bankruptcy Creditors' Service, Inc., 609/392-0900)


GLOBAL CROSSING: Will Delay Release of Q4 and FY 2001 Results
-------------------------------------------------------------
Global Crossing, which provides integrated telecommunications
solutions over the world's most extensive global IP-based fiber
optic network, reported preliminary unaudited estimates of
Revenue for the fourth quarter and full year ended December 31,
2001.  Such estimates are subject to the final review of Arthur
Andersen, Global Crossing's independent public accountants,
which has not completed its audit of Global Crossing's financial
statements for 2001.  Global Crossing had previously announced
that it would release earnings on February 26, but said that it
will release its complete fourth quarter and full year 2001
results when it files its Annual Report on Form 10-K.

On January 28, 2002, certain companies in the Global Crossing
Group (excluding Asia Global Crossing and its subsidiaries)
commenced Chapter 11 cases in the United States Bankruptcy Court
for the Southern District of New York and coordinated
proceedings in the Supreme Court of Bermuda.

Global Crossing noted that it is still evaluating the
appropriate write-down of certain of its tangible assets.  In
addition, the accounting treatment of certain of its capacity
transactions is under investigation by an independent committee
of its board of directors, the U.S. Securities and Exchange
Commission and the U.S. Attorney's Office for the Central
District of California.

For Continuing Operations in the fourth quarter of 2001, Global
Crossing expects to report Revenue of approximately $804
million, which includes Service Revenue of approximately $764
million.  For the full year 2001, Global Crossing expects to
report Revenue from Continuing Operations of approximately $3.2
billion, including approximately $3.1 billion in Service
Revenue.

Global Crossing also announced that it expects to report a
significant Net Loss Applicable to Common Shareholders for the
fourth quarter and the full year 2001.  The 2001 loss will
reflect items previously reported during the first three
quarters, including restructuring charges of $294 million, $545
million related to the impairment of goodwill associated with
its Global Marine unit, and $2,084 million due to the write down
of Global Crossing's equity investment portfolio, including its
investment in Exodus Communications.  In addition, Global
Crossing's net loss for both the fourth quarter and the full
year are expected to reflect the write-off of Global Crossing's
remaining goodwill and other identifiable intangible assets
(approximately $8 billion) as well as a multi-billion dollar
write-down of its tangible assets.  The write-off of goodwill
and other identifiable intangible assets and write-down of
tangible assets will be non-cash charges.  These pending write-
downs were previously discussed in Global Crossing's September
30, 2001 Quarterly Report on Form 10-Q.

Commenting on the quarter's performance, John Legere, CEO of
Global Crossing said, "You can take a company's measure by how
it responds to adversity.  I'm proud of the way Global Crossing
employees have maintained outstanding service to our customers
as we restructure and work through the Chapter 11 process.  In
the fourth quarter, we overcame a number of challenges to show
strength in Service Revenue, which is the vast majority of our
revenue mix and the expected source of our growth for the
future.  We're pleased that customers have continued to choose
our network over many others, demonstrating the appeal of our
service offerings to our targeted customers -- global
enterprises and carriers.  As we look forward to successfully
emerging from Chapter 11, we'll maintain our focus on serving
customers."

                         Cash Position

Global Crossing reported that it holds approximately $1,520
million of cash in its bank accounts on a consolidated basis as
of February 25, 2002. Included in that amount is approximately
$492 million of cash in Asia Global Crossing bank accounts and
approximately $327 million in other bank accounts that are
restricted.  These amounts do not represent Generally Accepted
Accounting Principles (GAAP) cash balances as of February 25,
2002.

                  Board Of Directors Update

Global Crossing announced that it is actively recruiting
additional outside directors to join its board.  Global Crossing
also announced that Mark Attanasio has submitted his resignation
as a member of the board, due to the requirements of his other
professional responsibilities.

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

On January 28, 2002, certain companies in the Global Crossing
Group (excluding Asia Global Crossing and its subsidiaries)
commenced Chapter 11 cases in the United States Bankruptcy Court
for the Southern District of New York and coordinated
proceedings in the Supreme Court of Bermuda.

Please visit http://www.globalcrossing.comor  
http://www.asiaglobalcrossing.comfor more information about  
Global Crossing and Asia Global Crossing.

DebtTraders reports that Global Crossing Holdings Ltd.'s 9.125%
bonds due 2006 (GBLX1) are trading between 1.75 and 2.25. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=GBLX1for  
real-time bond pricing.


GLOBAL FRANCHISE: Loss Expectation Prompts Fitch to Cut Ratings
---------------------------------------------------------------
Fitch Ratings downgrades the class A-1 and A-2 notes and class X
certificates of Global Franchise Trust 1998-1 to 'A' from 'AA-'.
In addition, Fitch downgrades the class A-3 notes to 'A-' from
'AA-'; class B notes to 'BB' from 'BBB-'; class C notes to 'CCC'
from 'B+', and class D notes to 'D' from 'CCC'.

All classes issued under Global Franchise Trust 1998-1 were
downgraded on June 2, 2000, pending the outcome of the loss
expectation of a large loan held by Olojuwon Holdings. At that
time, Fitch anticipated that a loss of $23 to $25 million would
result in the pool. However, due to on-going bankruptcy hearings
and legal issues, this write-down for $24.3 million did not take
effect until February 2002.

Furthermore, the downgrade is also due to Fitch's loss
expectations on a second loan totaling $1.7 million held by the
same borrower in addition to loss expectations on an additional
$5.8 million in impaired collateral, which can result in further
deterioration in credit enhancement to all remaining classes.


HCC INDUSTRIES: Feeble Financials Force Moody's Junks Ratings
-------------------------------------------------------------
Moody's Investor Service downgraded the ratings of HCC
Industries and its senior subordinated notes. Outlook is
negative.

   Rating Actions                                From   To

   * $80 Million of 10.75% Sr. Subordinated       B2    Caa2
     notes due 2007

   * senior implied rating                        B3    Caa3

   * senior unsecured issuer rating               B3    Caa2

The overall slump in the market and company's failure to renew
the contract with SDI (its largest customer which makes up for
25% of its sales) hampered its financial flexibility. This will
put HCC in greater equity deficit and in turn make it harder for
it to support its high debt level.

The negative outlook given by Moody's predicts the likelihood of
the further deterioration of the company's financials.

HCC Industries Inc., based in Rosemead, California, is a major
custom manufacturer of hermetically sealed electronic connection
devices.


HUMPHREY HOSPITALITY: Negotiates Extended Loan Covenant Waivers
---------------------------------------------------------------
Humphrey Hospitality Trust, Inc. (HUMP), a real estate
investment trust (REIT) with 90 limited service hotel
properties, announced the sale of its Macomb, Illinois Super 8
hotel for $1,200,000.

The Company realized a net loss of approximately $7,000, and
utilized the net proceeds of $1,118,000 to pay down existing
debt. "Buyer interest in the various properties we have for sale
has increased, and further hotel sales are expected to be
announced in the coming months," commented George R. Whittemore,
President and Chief Executive Officer of the REIT. "The
continued sale of selected hotels will help strengthen the
Company's balance sheet, and ultimately permit our full
compliance with existing loan covenants."

In its third quarter 2001 Form 10-Q filing, the Company
disclosed non-compliance with the loan covenant requirements of
certain of its lenders. The Company has since negotiated
extended loan covenant waivers allowing the Company to
temporarily maintain higher loan to value ratios and lower debt
service coverage ratios through September 2002. The loan
covenant waivers are subject to specific lender conditions,
including a mandatory cap on capital expenditures for fiscal
year 2002, and restrictions prohibiting dividend payments to
shareholders at any time during 2002.

Accordingly, the Company does not expect to declare quarterly
dividends in 2002. At the end of 2002, the Company may declare
an annual dividend for the year 2002, which if declared, would
be paid in January 2003. The Board of Directors will review the
Company's actual results of operations, economic conditions,
capital expenditure requirements and any other factors that the
Board of Directors deems relevant, including the Company's
compliance with loan covenants, in considering any such
dividend.

Mr. Whittemore stated, "We appreciate the cooperation shown by
our lenders as they work with us through the current, industry-
wide downturn in lodging demand. As we reduce our outstanding
debt through the sale of selected hotels, and hopefully see an
improvement in the performance of our remaining hotels during
the later part of this year, we are cautiously optimistic that
we will return to full compliance under our permanent loan
covenants. Nevertheless, we will work closely with our lenders
to maintain their confidence and support, and take whatever
steps necessary to do so."

Humphrey Hospitality Trust, Inc., is a real estate investment
trust specializing in limited-service lodging. The company owns
90 hotels in 19 mid-western and eastern states.


HURRY INC: Intends to Close Remaining Stores by March 4, 2002
-------------------------------------------------------------
Hurry, Inc. (formerly known as Harry's Farmers Market, Inc.)
(OTCBB:HURY) reported that it plans to close the Harry's In A
Hurry store located on Akers Mill Road on or about March 4,
2002.

In addition, the Company is currently working toward closing the
final Harry's In A Hurry store on Powers Ferry Road within the
same timeframe.

The Company previously sold its mega-stores and related assets
to Whole Foods Market Group, Inc. as well as the assets of the
Harry's In A Hurry store located on Ponce de Leon Avenue to MKT
1, Inc. It also has previously closed its other three Harry's In
A Hurry stores. As a result, and in accordance with Georgia law,
the Company expects to present a plan of liquidation to
shareholders for approval. While no assurances can be given
regarding the timing and amount of any further distributions, if
at all, as the Company continues to satisfy all debts,
liabilities and obligations, the Board intends to distribute any
remaining assets to shareholders through one or more
distributions as promptly as practical. In no event would a
final distribution occur prior to October 31, 2002, the date of
termination of the Whole Foods related escrow, provided that no
claims are pending under the escrow at that time.

The Company's Board of Directors will call a shareholders
meeting for some time in the future to vote on the anticipated
plan of liquidation, and prior to such meeting the Company will
deliver a proxy statement to shareholders.


ICG COMMS: Files First Amended Joint Plan & Disclosure Statement
----------------------------------------------------------------
ICG Communication, Inc., and its subsidiary debtors delivered
their First Amended Joint Plan of Reorganization to the U.S.
Bankruptcy Court in Wilmington Monday afternoon.

The First Amended Plan works like two plans in one:

     * one plan to restructure the Holdings Debtors -- ICG
       Communications, Inc., ICG Holdings, Inc., and ICG Telecom
       Group, Inc., and

     * one plan to restructure the Services Debtors -- ICG
       Equipment, Inc., ICG Mountain View, Inc., ICG NetAhead,
       Inc., and ICG Services, Inc.

While ownership of the Reorganized Company will still shift to
prepetition unsecured creditors and ICG will emerge from
bankruptcy as an on-going Internet access provider, the First
Amended Plan reflects the reality that ICG's value has declined
in the past few months.

                       The Business Plan

The Chapter 11 Plan is premised upon a Revised Strategic
Business Plan for the Debtors going forward prepared by ICG's
management and financial advisors.  The Revised Strategic
Business Plan projects lower revenues and lower earnings:

                    ICG Communications, Inc.
                Projected Statement of Operations

                   2002         2003         2004         2005
                   ----         ----         ----         ----
Revenue     $502,747,000 $622,805,000 $739,618,000 $890,063,000

Operating
Costs        298,813,000  384,882,000  455,741,000  524,567,000
             ------------ ------------ ------------ ------------
Gross Profit 203,934,000  237,923,000  283,877,000  365,496,000
   SG&A      108,855,000  130,188,000  152,206,000  175,413,000
             ------------ ------------ ------------ ------------
EBITDA        95,079,000  107,735,000  131,671,000  190,083,000
Depreciation  75,956,000   82,107,000  102,646,000  125,971,000
Interest      23,272,000   26,072,000   29,013,000   30,134,000
Other Income  18,171,000
             ------------ ------------ ------------ ------------
Net Income   ($22,320,000)   ($434,000)     $12,000  $33,978,000
             ============ ============ ============ ============

                           Valuation

Dresdner Kleinwort & Wasserstein, Inc., based, in part, on
information provided to it by the Debtors, has continued to
evaluate the ICG's enterprise value.  DrKW's professionals are
still prepared to testify at confirmation that Reorganized ICG
is worth, as a going-concern, between $350,000,000 and
$500,000,000, assuming an April 30, 2002 Effective Date -- and
will explain to Judge Walsh that the New Convertible Note issue
under the revised plan implies a $408,000,000 total enterprise
value.

The Reorganized Company will take on approximately $208,000,000
of new debt as it emerges from chapter 11.

DrKW concludes that the value of the equity in Reorganized ICG,
in the aggregate, falls between $142,000,000 and $292,000,000,
(which is derived by subtracting from the Debtors' enterprise
value the projected funded debt on the pro forma balance sheet
for the Debtors on the Effective Date) -- with $217,000,000
being the midpoint.

               Classification & Treatment of Claims

The Plan groups holders of claims against the Holdings Debtors
in five classes:

                     Estimated
Class  Description   Claims           Treatment
-----  -----------   --------------   ---------
N/A   Administrative $__________  100% recovery, in cash, as and
        Claims                            when due.

N/A   Priority Tax   $_________   100% recovery, in cash, as and
        Claims                            when due.

H-1   Non-Tax Priority $300,000   100% recovery, in cash, as and
        Claims                            when due.

H-2   Non-Bank Debt  $1,100,000   100% as claims are Reinstated.
      Secured Claims

H-3   Convenience
      Claims (under  $1,600,000   50% recovery, in cash, on the
        $5,000 or                         Effective Date.
        voluntarily
        reduced to $5,000)

H-4   Unsecured Claims $1,400,000,000  Pro rata share of
                                       8,000,000 shares of New
                                       Common Stock
                                       plus ____ New Common
                                       Shares plus, if Class H-4
                                       votes to accept the Plan,
                                       its pro rata share of
                                       100% the New Holdings
                                       Creditor Warrants

H-5   ICG Interests                No recovery and Old Equity
        and                               Securities are
                                          cancelled.
      Subordinated
       Claims

The Plan groups holders of claims against the Services Debtors
in six classes:

                       Estimated
Class  Description     Claims           Treatment
-----  -----------     --------------   ---------
N/A   Administrative   $__________    100% recovery, in cash, as
      Claims                          and when due.
                                

N/A   Priority Tax     $_________     100% recovery, in cash, as
      Claims                          as and when due.

S-1   Non-Tax Priority           $0   100% recovery, in cash,    
      Claims                          as and when due.

S-2   Non-Bank Debt              $0   100% as claims are
Reinstated.
      Secured Claims

S-3   Convenience
      Claims (under        $600,000   50% recovery, in cash, on
      $5,000 or                       the Effective Date.
      voluntarily
      reduced to $5,000)

S-4   Unsecured Claims $1,100,000,000   Pro rata share of
                                        8,000,000 shares of New
                                        Common Stock
                                        minus ____ New Common
                                        Shares.

S-5   Secured Lenders'    $84,573,935   $25,000,000 in Cash plus
      Claims under the                  the balance in the form
                                        of New
      Pre-Petition                      Secured Notes that
                                        mature in
      Credit Agreement                  3 years


S-6   ICG Interests                     No recovery and Old
      and                               Equity Securities are
      Subordinated                      cancelled.
      Claims

The Rights Offering described in the Debtors' Original Plan is
history.

Reorganized ICG will borrow the $25,000,000 being paid to the
Secured Lenders under a New Senior Subordinated Term Loan
facility arranged by Cerberus Capital Management, L.P., maturing
four years after the Effective Date.  That Subordinated Loan
will carry a 14% interest rate, is subordinated to the New
Secured Notes and secured by a junior lien on all unencumbered
property.  The New Senior Subordinated Term Loan facility
requires that confirmation occur by May 30, 2002.

Reorganized ICG will also issue New Convertible Notes to:

       Cerberus Capital Management, L.P.        $20,000,000
       W.R. Huff Asset Management L.P.            5,000,000
       Stonehill Capital Management LLC           5,000,000
       CSFB Global Opportunities Adviser LLC      5,000,000
       Morgan Stanley & Co., Inc.                 5,000,000

raising $40,000,000 to fund future working capital needs.

The New Convertible Notes:

  (a) are unsecured;

  (b) are subordinated to the New Senior Subordinated Term Loan;

  (c) convert into 2,000,000 shares (20%) of the New Common
      Stock;

  (d) come with non-detachable shares of preferred stock with a
      $10,000 liquidation preference and voting rights equal to
      the New Common shares into which the New Convertible Notes
      can convert;

  (e) pay 11% interest per year payable-in-kind with additional
      Convertible Unsecured Notes; and

  (f) pay the lenders a 3% Funding Fee at Closing.

                   Control of Reorganized ICG's
                        Board of Directors

Cerberus will appoint five directors to Reorganized ICG's Board
of Directors.  Huff will appoint two and the Creditors'
Committee will appoint one.  Reorganized ICG's CEO will fill the
ninth slot.  Certain actions and transactions following the
Effective Date of the Plan will require approval by a
supermajority of Board Members.

                        Senior Officers

The Debtors existing senior officers will continue to manage
Reorganized ICG:

          Name                                Title
          ----                                -----
    Randall E. Curran                            CEO
    Richard E. Fish, Jr.                    EVP and CFO
    Bernard L. Zuroff                       EVP, General
                                            Counsel & Secretary
    Michael D. Kallet                       EVP -- Operations
    John V. Colgan                          Senior VP, Finance
                                               and Controller

                     Liquidation Analysis
                   And Best Interests Test

The Debtors are convinced that the Plan delivers greater value
to creditors than they would receive if the Company were
liquidated under chapter 7.  At the Confirmation Hearing, Zolfo
Cooper's professionals will testify, to comply with the so-
called best interests of creditors test under 11 U.S.C. Sec.
1129(a)(7), that a liquidation of the estate would generate, at
most, $246,4000 of gross liquidation proceeds. After payment of
the Senior Lenders' Secured Claims, chapter 7 and 11
administrative expenses, and priority claims, $9,700,000 would
be left to satisfy unsecured creditors' claims, yielding a 0.4%
dividend -- and, more likely than not, unsecured creditors would
get nothing.

                   Substantive Consolidation

The First Amended Plan provides for substantive consolidation of
the Holdings Debtors as if they were one entity and for a
substantive consolidation of the Services Debtors as if they
were one entity -- but only for purposes of the Plan; that is,
for voting, confirmation and distribution purposes.  The Plan
does not contemplate the merger of any Debtor entity or the
transfer or commingling of any asset of any Debtor.  Substantive
consolidation under the Plan will not effect a transfer or
commingling of any assets of any Debtors, and all assets
(whether tangible or intangible) will continue to be owned by
the respective Debtors.  Specifically, under the Plan, on the
Effective Date, (a) all assets and liabilities of the Debtors
shall be deemed merged or treated as though they were merged
into and with the assets and liabilities of ICG.; (b) no
distributions shall made under the Plan on account of
Intercompany Claims among the Debtors; (c) no distributions
shall be made under the Plan on account of Subsidiary
Interests; and (d) all guarantees of the Debtors of the
obligations of any other Debtor shall be deemed eliminated so
that any claim against any Debtor and any guarantee thereof
executed by any other Debtor and any joint or several liability
of any of the Debtors shall be deemed to the one obligation of
the consolidated Debtors.

               Summary of Releases Under the Plan

      1. Releases by the Debtors

Pursuant to the Plan, as of the Effective Date, the Debtors and
Reorganized Debtors will be deemed to forever release, waive and
discharge all claims, obligations, suits, judgments, damages,
demands, debts, rights, causes of action and liabilities
whatsoever in connection with or related to the Debtors and the
Subsidiaries, the Chapter 11 cases or the Plan (other than the
rights of the Debtors or Reorganized Debtors to enforce the Plan
and the contracts, instruments, releases, indentures, and other
agreements or documents delivered thereunder) whether liquidated
or unliquidated, fixed or contingent, matured or unmatured,
known or unknown, foreseen or unforeseen, then existing or
thereafter arising, in law, equity or otherwise that are
based in whole or part on any act, omission, transaction, event
or other occurrence taking place on or prior to the Effective
Date in any way relating to the Debtors, the Reorganized Debtors
or their Subsidiaries, the Chapter 11 Cases or the Plan, and
that may be asserted by or on behalf of the Debtors or their
Estates or the Reorganized Debtors against (i) the Debtors' or
Subsidiaries' present and former directors, officers, employees,
agents and professionals as of the Petition Date or thereafter
and (ii) the Creditors' Committee and its members; PROVIDED THAT
this release EXCLUDES Mr. Shelby Bryan unless Mr. Bryan gives
the Debtors a full release of all claims.

      2. Release by Holders of Claims and Interests

Under the Plan, as of the Effective Date, for good and valuable
consideration, the adequacy of which is hereby confirmed, each
holder of a Claim or Interest that affirmatively votes in favor
of the Plan shall have agreed to forever release, waive and
discharge all claims, obligations, suits, judgments, damages,
demands, debts, rights, causes of action and liabilities
whatsoever in connection with or related to the Debtors and the
Subsidiaries, the Chapter 11 Case or the Plan (other than the
rights of the Debtors or Reorganized Debtors to enforce
the Plan and the contracts, instruments, releases, indentures,
and other agreements or documents delivered thereunder) whether
liquidated or unliquidated, fixed or contingent, matured or
unmatured, known or unknown, foreseen or unforeseen, then
existing or thereafter arising, in law, equity or otherwise that
are based in whole or part on any act, omission, transaction,
event or other occurrence taking place on or prior to the
Effective Date in any way relating to the Debtors, the
Reorganized Debtors or their Subsidiaries, the Chapter 11 Case
or the Plan, against (i) the Debtors and their Subsidiaries,
(ii) the Debtors' and their Subsidiaries' present and former
directors, officers, employees, agents and professionals as of
the Petition Date or thereafter and (iii) the Creditors'
Committee and its members.

      3. Injunction Related to Releases

The Confirmation Order will enjoin the prosecution, whether
directly, derivatively or otherwise, of any claim, obligation,
suit, judgment, damage, demand, debt, right, cause of action,
liability or interest released, discharged or terminated
pursuant to the Plan.

               Management Stock Option Plan

The Management Option Plan authorizes the grant of stock options
related to an aggregate of approximately 13% percent of the New
Common Shares outstanding on a fully diluted basis.  Options to
purchase approximately 5% of New Common Stock shall be reserved
for future awards by the Board of Reorganized ICG. (ICG
Communications Bankruptcy News, Issue No. 18; Bankruptcy
Creditors' Service, Inc., 609/392-0900)  


IT GROUP: Taps UBS Warburg & Lehman Brothers as Fin'l Advisors
--------------------------------------------------------------
The IT Group, Inc., and its debtor-affiliates ask the Court for
authorization to employ and retain UBS Warburg, LLC, and Lehman
Brothers to provide financial advisory services during these
chapter 11 cases.

James Redwine, the Debtors' Vice President and Corporate General
Counsel, relates that, under the terms of an Engagement Letter,
UBS Warburg and Lehman Brothers will assist the IT Group in
analyzing and considering one or more transactions, including
the possible sale or merger of The IT Group or one or more of
its material subsidiaries and/or the restructuring of the
Debtors.

UBS Warburg is an international M&A and strategic advisory,
corporate finance and merchant banking firm that provides
financial advice to leading companies such as the Fortune 500
and other top companies and investors worldwide.  Mr. Redwine
submits that UBS Warburg and its professionals are renowned for
the reputation as advisors to financially troubled companies and
have served in several financing and restructuring deals,
involving Iridium LLC, NextWave Telecom Inc., Viatel, Inc.,
MCIWorldcom, Seminis, Inc., Candescent Technologies Corporation,
American Telecasting, Grupo Simec, Compass Aerospace and Phase
Metrics, Inc. Their resources, capabilities and expertise in
advising are crucial in the Debtors' restructuring, and their
experience in financial advisory performs critical services that
complements the services offered by the Debtors' other
restructuring professionals.

Lehman is one of the world's leading full-service investment
banks with $9,200,000,000 in equity and $248,000,000,000 in
assets and is a leader in M&A advisory, fixed income, equity,
private equity and research.  Lehman has extensive experience in
assisting companies with in-court and out-of-court
restructuring, and advising companies in making acquisitions of
distressed companies, having participated in restructuring of
Federated Department Stores, Sears, Long John Silvers, Iridium,
Planet Hollywood, and Boston Chicken. Lehman and UBS Warburg are
set to concentrate in formulating tactical alternatives and
assisting the Debtors in their intention with regards to sale or
restructuring.

Specifically, the Financial Advisors will:

A. render a general business and financial analysis of the
     Company including transactions feasibility analysis;

B. aid in the preparation of descriptive materials concerning
     the Company;

C. develop, and evaluate with the Company on an ongoing basis a
     list of parties which might possibly be interested in
     purchasing or investing in the Company.

D. consult with and advise the Company regarding opportunities
     for the sale of the Company as identified by Lehman, being
     the sale advisor, or others and, if requested by the
     Company, represent the company in negotiations for such
     sales;

E. aid in the study and formulation and execution of various
     capitalization techniques which the company is considering
     including the issuance of equity, debt or any related
     securities for the Company in public or private placements;
     and,

F. take part in the Company's preparation  for any public
     disclosures regarding a transaction.

Mr. Redwine states that as compensation for their services, the
Advisors were paid a non-refundable monthly retainer fee of
$150,000 a month for November and December 2001 for services
given prior to Petition Date.  UBS received 70% of the initial
monthly retainer fee while Lehman got the remaining 30%.  Going
forward, the Debtors agree to pay the Financial Advisors:

A. a monthly advisory fee of $125,000 a month starting January
     2002 with such fee apportioned 70% to UBS Warburg and 30%
     to Lehman. Should one Advisor decides to terminate the
     engagement, the portion of the Monthly Advisory fee to
     which that party is entitled shall be payable pro rata
     based on the number of days it has accorded its service in
     the month of termination;

B. related to the Sale, when the Company enters into a
     definitive deal resulting into a Sale, in either case,

     a. within the term of Lehman or UBS Warburg's engagement or

     b. during the a 12-month period following the effective
          termination of either of the Advisors' engagement, a
          Sale Transaction Fee of that Sale is payable in cash
          at the closing thereof, in a sum equal to 1.5% of the
          consideration involved in each such Sale apportioned
          70% to Lehman and 30% to UBS Warburg;

C. related to Restructuring, or a reorganization through the
     approval of the creditors, filing of such plan or entering
     into a deal which ultimately results into the consummation
     of the Restructuring, in any case,

     a. during the term of either Lehman's or UBS Warburg's
          engagement or

     b. at any time within a 24-month period following the
          effective date of termination of either Advisors'
          engagement, a Restructuring Transaction Fee in
          connection with such is accorded in a sum equal to 1%
          of the face value of the outstanding indebtedness of
          the Company, payable to cash on the consummation of
          their Restructuring apportioned 30% to Lehman and 70%
          to UBS Warburg;

D. related to Financing, a Financing Transaction Fee payable on
     the date that the Company first receives funds made
     available under such agreement, equal to:

     a. 5% of the actual gross amount of cash proceeds raised in
          such in case of equity of equally-linked financing,

     b. 3% in the case of debt-financing of the actual gross
          amount of cash proceeds raised in such, apportioned
          70% to UBS Warburg and 30% to Lehman; and

     c. refund upon request for UBS Warburg's reasonable
          expenses including professional and legal fees and
          disbursements incurred related to UBS Warburg's deal,
          which does not exceed $50,000 without prior approval
          of the Company.

In addition to the structured compensation described, the
agreement provides that the Debtors will indemnify the Financial
Advisors except for gross negligence or willful misconduct.

Warren Woo, Managing Director of UBS Warburg, informs the Court
that UBS Warburg has not been paid for the January 2002 services
and expenses that amount to $43,750 and an estimated $1,500
worth of reimbursements for prepetition expenses has not been
awarded. As described in the Woo declaration, UBS agreed to
waive its claims to such amounts. He adds that the monetary
provisions in the deal is both fair and reasonable under the
standards set forth in section 328(a) of the Bankruptcy Code
considering the types of services provided not mention the fact
that most top caliber financial advisory services do not bill in
an hourly basis. Also considered were the firm's experience in
reorganizations, the scope of the work, market rates and
industry practice. The Sale, Restructuring and Financing
transaction Fees reflects the balance between a fixed monthly
fee and contingency fund attached to these the deals.

Mr. Woo assures the Court that the firm does not hold or
represent interest adverse to the estate and is a "disinterested
person" in these cases. The firm, however, currently represents
or in the past has represented several parties-in-interests in
matters unrelated to these cases including:

A. Bank Lenders: BankBoston NA, ING Capital, Citibank NA,
     SunAmerica, Eaton Vance, Merill Lynch, Highland, Credit
     Lyonnais, Societe Generale, Mitsubishi Trust & Banking
     Corp., Stanfield/RMF Transatlantic CDO, Bank of Nova
     Scotia, Union Bank of Florida, Angelo Gordon, Van Kampen,
     Comerica Bank, Royal Bank of Canada, and American Express.

B. Largest Bondholders: JPM/CCSG, SSB&T Co., Bank of New York,
     Boston Safe, Bankers Trust, Northern Trust, SSB Trust, JP
     Morgan Chase, First Union Bank, Brown Bros., CS First
     Boston, Bear Sterns, Investors Bank, Deutsche Bank Alex
     Brown, Comerica Bank, ABN Amro, BT/CTG, Bank One Trust,
     CIBC World, M&I Marshall & Ilsley Bank, and Salomon SM.

C. Sureties: AIG Environmental, Kemper Environmental,
     Traveler's, Crum & Forster, and Greenwich.

D. Other Professionals: Skadden Arps Slate Meagher & Flom LLP,
     Lehman Bros., Gibson Dunn & Crutcher LLP, Zolfo Cooper LLP,
     and PriceWaterhouseCoopers.

Mark Pytosh, Managing Director of Lehman Brothers, relates that
Lehman has not been compensated for services rendered and
expenses incurred in January 2002 amounting to $18,145 and
$23,087, respectively, but agrees to waive all claims or
interests in such amounts. The firm also received a total of
$90,000 for prepetition monthly advisory services pursuant to
the engagement letter. (IT Group Bankruptcy News, Issue No. 5;
Bankruptcy Creditors' Service, Inc., 609/392-0900)  


INTEGRATED HEALTH: Highland Partners to Acquire 52-Acre Property
----------------------------------------------------------------
Other than the offer of HCCLLC, Integrated Health Services,
Inc., and its debtor-affiliates received one offer to purchase
the Property of 52 acres in Baltimore north. Therefore, an
auction was held on February 6, 2002.

Following an offer of bids and counter-bids, Highland Partners,
LLC, the third-party bidder, submitted the highest and best
offer for the Property and was authorized by the Court as the
Purchaser of the Property.

The Purchase Price under the Agreement as authorized by the
Court is $4,850,000.00.

The Court directed that the Closing Date under the Purchase
Agreement shall occur on the 21st business day after February 7,
2002, the date upon which the Order is entered. (Integrated
Health Bankruptcy News, Issue No. 29; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   


KAISER ALUMINUM: Court Allows Use of Cash Management System
-----------------------------------------------------------
Kaiser Aluminum Corporation, and its debtor-affiliates sought
and obtained entry of an order from the Court approving the
Debtors' continued use of their current cash management system,
as such system may be modified pursuant to the requirements of
the Debtors' proposed debtor in possession financing facility.

According to Joseph Bonn, the Debtors' Executive Vice President,
to manage the flow of cash through the Prepetition Bank
Accounts, the Debtors utilized their integrated Cash Management
System that provides for the collection and disbursement of
funds used throughout the Debtors' businesses, as well as the
businesses of the Debtors' nondebtor affiliates. The Cash
Management System covers all the Debtors, certain nondebtors,
including Kaiser Aluminum & Chemical of Canada Limited and four
foreign joint ventures in which the Debtors directly or
indirectly, through nondebtor affiliates, hold interests. The
principal components of the Cash Management System and the flow
of funds through the Prepetition Bank Accounts in connection
with that system are described below:

A. Cash Collection and Concentration: In connection with their
     Cash Management System, the Debtors maintain a collection
     account at Bank of America, N.A. in Concord, California.
     Virtually all the Debtors' cash receipts flow into the
     Collection Account, which are then transferred to the
     Debtors' concentration account at Bank of America in
     Concord, California, and the funds for the disbursements
     originate from the Concentration Account.

B. Disbursements: The Debtors' disbursements are made from 29
     disbursements accounts maintained at Bank of America that
     cover different payment obligations of the Debtors, such as
     payroll, duty taxes, employee medical and dental payments,
     and general operating accounts for the Debtors. The
     Disbursement Accounts are funded from the Concentration
     Account.

C. Kaiser Canada: Kaiser Canada maintains its own disbursement
     accounts for payroll and accounts payable with financial
     institutions in Canada utilizing both U.S. and Canadian
     currency based accounts. These accounts are funded as
     needed from the Concentration Account.

In light of the substantial size and complexity of the Debtors'
operations, Daniel J. DeFranceschi, Esq., at Richards Layton &
Finger in Wilmington, Delaware, believes that a successful
reorganization of the Debtors' businesses, as well as the
preservation and enhancement of the Debtors' respective values
as going concerns, simply cannot be achieved if the Debtors'
cash management procedures are substantially disrupted.
Therefore, it is essential that the Debtors be permitted to
continue to consolidate the management of their cash and
transfer monies from entity to entity as needed, in the amounts
necessary to continue the operation of their businesses, in
accordance with their existing cash management procedures.

Mr. DeFranceschi submits that the Cash Management System
described above has been utilized by the Debtors for the past 3
years and is similar to cash management systems commonly
employed by corporate enterprises comparable to the Debtors in
size and complexity. The widespread use of this system,
moreover, is attributable to the numerous benefits it provides,
including the ability to control and monitor corporate funds,
invest idle cash, ensure cash availability and reduce
administrative expenses by facilitating the movement of funds
and the development of timely and accurate account balance and
presentment information. These controls are especially important
here, given the significant volume of cash transactions,
aggregating approximately $2,000,000,000 annually, managed
through the Debtors' Cash Management System.

Mr. DeFranceschi adds that given the Debtors' corporate and
financial structure and the number of affiliated entities
participating in the Debtors' Cash Management System, it would
be difficult and unduly burdensome for the Debtors to establish
an entirely new system of accounts and a new cash management and
disbursement system for each separate legal entity. Thus, under
the circumstances, the maintenance of the Cash Management
System, as it may be modified pursuant to the requirements of
the DIP Facility, not only is essential, but also is in the best
interests of the Debtors' estates. In addition, preserving a
"business as usual" atmosphere and avoiding the unnecessary
distractions that inevitably would be associated with any
substantial disruption of the Cash Management System will
facilitate the Debtors' stabilization of their postpetition
business operations and thus will assist the Debtors in their
reorganization.

In order to prevent prepetition checks from being paid from the
Debtors' Disbursement Accounts postpetition, Mr. DeFranceschi
informs the Court that the Debtors will request Bank of America
to delete all "positive pay" check files from their system. As a
result, any prepetition check presented to Bank of America will
not be honored, unless otherwise authorized by order of the
Court. (Kaiser Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


KMART: Wants to Honor Letter of Credit Reimbursement Obligations
----------------------------------------------------------------
Kmart Corporation, and its debtor-affiliates seek the Court's
authority to honor reimbursement obligations to institutions
that have issued letters of credit prior to the Petition Date
for the benefit of the Debtors' foreign vendors.

J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom,
explains that the Debtors purchase merchandise and other goods
from numerous vendors and suppliers located outside the United
States.  When the Debtors sought and obtained the Court's
permission to pay its obligations Foreign Vendors, Mr. Ivester
relates that the Debtors arranged for the issuance of
documentary letters of credit in favor of the Foreign Vendors.  
As of the Petition Date, Mr. Ivester reports that six financial
institutions had issued $190,000,000 in letters of credit, which
were utilized to finance the Debtors' purchase of the imported
goods.

According to Mr. Ivester, Foreign Vendors customarily present
invoices to the Issuers and obtained payment on the invoices
through draws on the Letters of Credit.  "Once the invoices are
paid in this fashion, the Debtors reimburse the Issuers for the
draws in the ordinary course of their business," Mr. Ivester
tells the Court.  Sometimes, Mr. Ivester notes, the Issuers are
presented with invoices that may not comply with the
requirements under the Letters of Credit.  In such cases, Mr.
Ivester explains, the Debtors retain the authority to request
the Issuers to pay the invoices anyway based on the Debtors'
agreement to reimburse the Issuer in the ordinary course.

As of the Petition Date, the Debtors estimate that its total
reimbursement obligations -- including those that may have been
paid in respect of discrepant documentation -- reached
approximately $8,000,000.

Mr. Ivester informs Judge Sonderby that once an Issuer pays an
invoice via a draw on a Letter of Credit, the Issuer obtains
title to the merchandise that the Debtors' purchased.  Thus, Mr.
Ivester asserts, the Debtors must satisfy its reimbursement
obligations in order to obtain the titled from the Issuer.
Without the Court's approval, the Debtors fear that their
business operations would be disrupted.

In sum, Mr. Ivester insists that the Debtors must be authorized
to honor reimbursement obligations to their Issuers under the
Letters of Credit in the ordinary course of business.  "The
Letters of Credit provide the Debtors a comprehensive source of
international financing that is essential to the uninterrupted
importation of foreign merchandise," Mr. Ivester emphasizes.

Since the Court has already authorized the payment to the
Foreign Vendors, Mr. Ivester points out there is no reason why
the Debtors should be prohibited from paying the claims of the
Issuers who assisted the Debtors in financing the foreign
purchases. (Kmart Bankruptcy News, Issue No. 4; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


LTV CORP: Copperweld Debtors' Cash Collateral Use Expires Today
---------------------------------------------------------------
The Copperweld Corporation and Welded Tube Holdings, Inc., and
each of their debtor-subsidiaries, ask Judge Bodoh to enter an
order modifying his prior orders and the Copperweld DIP Order to
the extent necessary to allow the Copperweld Debtors continued
access to their Lenders' cash collateral to fund their
operations.

In November 1999, LTV Corporation completed its acquisition of
the Copperweld Companies utilizing a $225 million term loan
under a Credit Agreement of November 1999 among LTV Corporation,
Credit Suisse First Boston as Collateral Agent, and the lenders
participating.  The obligations under the Copperweld term loan
were secured with liens on and security interests in the
inventory, property, plant and equipment owned by the Copperweld
Debtors.  As additional security, the Copperweld Debtors pledged
to the Collateral Agent an intercompany note from Copperweld
Canada, Inc., to Welded Tube Co. of America, secured by
Copperweld Canada's account receivable.  After the Petition
Date, the LTV Debtors entered into a stipulation with the
Copperweld Terms Lenders, the Noteholders' Committee, and the
Creditors' Committee, whereby the LTV Debtors granted the Term
Lenders replacement liens in the inventory of the Copperweld
Debtors and superpriority claims against each of the LTV
Debtors' estates as adequate protection for the Copperweld
Debtors' continued use of the collateral for the Copperweld
Term Loan.

Since the Petition Date, the LTV Debtors have obtained several
postpetition financing facilities, each secured by different
liens against various assets owned by different LTV Debtors.  
The lenders, which were also parties to the prepetition
inventory and accounts receivable financing transactions,
provided one such postpetition financing facility in the
aggregate maximum amount of approximately $582 million.  The
existing DIP Financing is governed by a Revolving Credit and
Guaranty Agreement in March 2001 among the Debtors, The Chase
Manhattan Bank, and Abbey National Treasury Services plc, and
Judge Bodoh's prior order authorizing the Debtors to obtain
postpetition financing and repurchase inventory, as modified by
the Order approving the APP.  Currently, JP Morgan Chase Bank,
formerly known as The Chase Manhattan Bank, serves as the Agent
and Abbey National Treasury Services, plc serves as Co-Agent to
the existing DIP Lenders.  The existing DIP Financing is secured
with, among other things, first priority senior liens on the
accounts receivable and cash of the Copperweld Debtors and liens
on all other assets of the Copperweld Debtors junior to the
liens held by the Copperweld Term Lenders on the Copperweld
Debtors' inventory, property, plant and equipment.

Because of continued declines in the performance of the
integrated steel business and the inability to obtain additional
financing, the LTV Debtors sought and obtained approval of the
APP under which the Debtors shut down the integrated steel
businesses.  Because the LTV Debtors believe that they can
obtain maximum value for the Copperweld Debtors' businesses by
selling them as a going concern, the LTV Debtors excluded the
Metal Fabrication Business, including all operations of the
Copperweld Debtors, from the APA.

The Copperweld Debtors require independent financing to fund
operations until a completion of the sale of these businesses or
a plan. Additional financing was necessary because the
Copperweld Debtors' financial projections indicated that they
could not finance their operations and capital expenditures
solely through the use of internally generated cash collateral.  
Accordingly, before approval of the APP the Copperweld Debtors
began negotiations for a long-term financing facility from
General Electric Capital Corporation to fund operations until a
successful sale or reorganization could take place. In addition,
the Copperweld Debtors sought to use borrowings under the
New Copperweld Facility to repay the existing DIP Lenders in
exchange for a release of their first-priority lien on the
Copperweld cash collateral.  The Copperweld Debtors hoped to
reach an agreement with GE Capital on the terms of a commitment;
however, due in large part to the holiday season they were
unable to deliver such a commitment before the expiration of the
original usage period and have been existing on periodic
extensions of the existing lending since then.

Since the last extension of the usage period, the Copperweld
Debtors and GE Capital have nearly reached an agreement in
principle on the terms for the New Copperweld Facility.  
However, the Copperweld Debtors require additional time to
complete the necessary documentation.  In light of this
progress, the Copperweld Debtors once against requested an
extension of the usage period to allow them to finalize
documentation for the New Copperweld Facility.  This time,
however, the existing DIP Lenders refused to consent to any
further extension of the usage period.  Because the Copperweld
Debtors are dependent upon the Copperweld cash collateral and
the Bridge Loan requires the continued use of the Copperweld
cash collateral, and because the interests of the existing DIP
Lenders will be adequately protected, the Copperweld Debtors
bring this Motion.

                    The Noteholders Comment

The Official Committee of Noteholders of LTV Steel announces its
support of the Copperweld Debtors' Motion.  Pointing out that
the existing DIP Lenders lose nothing by a grant of the
requested use of the Copperweld cash collateral, since their
interests are adequately protected, and there has been no
diminution in value, the Noteholders urge Judge Bodoh to grant
this Motion posthaste.

                        Judge Bodoh Acts

Judge Bodoh grants an interim extension of the usage period
through February 28, 2002, and urges the Copperweld Debtors and
the existing DIP Lenders to extend the period further by
agreement. (LTV Bankruptcy News, Issue No. 25; Bankruptcy
Creditors' Service, Inc., 609/392-00900)


LTV CORP: Picks WL Ross Best Bidder for Integrated Steel Assets
---------------------------------------------------------------
The LTV Corporation announced that it has selected WL Ross &
Co., LLC as the best and highest bidder for LTV's integrated
steel assets.  The selection was made during an auction held
Wednesday in Cleveland.  WL Ross has agreed to purchase the
integrated steelmaking assets of LTV's Cleveland East, Cleveland
West and Indiana Harbor Works.  It also has agreed to purchase
the Hennepin (Illinois) finishing plant, the Grand River (Ohio)
Lime Plant, the Lorain (Ohio) Pellet Terminal, the Warren (Ohio)
Coke Plant, and the assets of the Chicago Short Line, River
Terminal and Cuyahoga Valley Railroads.   WL Ross also will
purchase the LTV Steel Technology Center (Independence, Ohio)
and LTV's interest in L-S Electrogalvanizing, Inc. (Cleveland).

"We are very pleased that WL Ross has emerged as the successful
bidder for our steel assets," said Glenn J. Moran, chairman and
chief executive officer of The LTV Corporation.  "WL Ross has
the financial resources and has assembled a strong managerial
team to return LTV's excellent facilities to operation, and
create opportunities for our former employees and plant
communities," he said.

LTV said that the transaction included about $125 million in
cash for plant, property and equipment and agreed-to inventory,
plus the assumption of environmental and other obligations.  
Under the agreement, WL Ross also will assume the costs of
maintaining the hot idle status of the integrated steel
facilities as of March 1, 2002.

LTV will submit the WL Ross agreement to the U.S. Bankruptcy
Court for approval.  A bankruptcy court hearing is scheduled at
11:00 a.m. in Youngstown, Ohio today, February 28.  The
transaction is expected to close within 45 days and is subject
to customary closing conditions.  LTV was assisted in its sale
efforts by The Blackstone Group and by the law firm of Jones,
Day, Reavis & Pogue.

LTV also said that the anticipated cash proceeds from the sale
of the integrated steel and related assets will not be
sufficient to provide any recovery to shareholders and again
cautioned the public against speculative trading in LTV common
stock which the Company regards as worthless.

The LTV Corporation, along with 48 subsidiaries, filed voluntary
petitions for relief under Chapter 11 of the U.S. Bankruptcy
Code on December 29, 2000. The cases were filed in the U.S.
Bankruptcy Court, Northern District of Ohio, Eastern Division
and jointly administered as Case No. 00-43866.  On

December 7, 2001, the U.S. Bankruptcy Court issued an order
authorizing the implementation of an Asset Protection Plan.  The
APP includes the shutdown and sale of all integrated steel
assets.  The Plan also provides for the continued operation and
sale of Copperweld and LTV's tubular products business.

The LTV Corporation believes the shares of its common stock are
worthless because the value expected to be generated by the sale
of assets would be insufficient to provide a recovery for common
shareholders in the reorganization process.

DebtTraders reports that LTV Corporation's 11.750% bonds due
2009 (LTV2) (an issue in default) are trading between 0.5 and
1.5. See http://www.debttraders.com/price.cfm?dt_sec_ticker=LTV2
for real-time bond pricing.


LASON INC: VIP Litho Employees Acquire Assets with Sequoia Loan
---------------------------------------------------------------
Sequoia National Bank (Nasdaq:SQNB) announced its successful
funding of a loan to VIP Litho that saved 60 jobs. VIP Litho was
a 30-year-old San Francisco printing company that was bought by
an East Coast firm, Lason, in 1997. Lason filed for bankruptcy
last year, and its assets were about to be sold and the
employees laid off.

At that point, the employees decided to seek financing to buy
the assets and re-constitute VIP Litho. The employees were led
by Sharli Kessecker, and in a race against the bankruptcy
court's timeframe, they came to Sequoia National Bank to finance
their purchase. The Bank was able to make a loan backed by the
Small Business Administration. With this financing, the
employees purchased all the equipment and assets, and were able
to continue in business. VIP President Kessecker made it clear
that all 60 employees would have lost their jobs had they not
gotten financing to buy the business and keep it alive.

Bank President Joe Garrett stated, "While Sequoia is a small
bank, this loan is an example of what a valuable partner and
bank we are for small business owners. We had faith in the new
management, and we had faith in their business plan. And while
the bigger banks would still be discussing the loan, we were
able to make a sound decision quickly, and meet some onerous
deadlines. This is the strength of our bank, and it is the
strength of the SBA program."

Sequoia National Bank is a community bank headquartered in San
Francisco. It offers commercial and consumer loans to businesses
and individuals in the San Francisco Bay Area through its two-
branch network.

Lason Inc., is a leading provider of integrated information
management services, transforming data into effective business
communication, through capturing, transforming and activating
critical documents. Lason has operations in the United States,
Canada, Mexico, India and the Caribbean.


LODGIAN: Court Approves & Appoints Joint Fee Review Committee
-------------------------------------------------------------
Lodgian, Inc., and its debtor-affiliates obtained Court approval
to appoint a joint fee review committee, to be composed of:

A. Brian Masumoto, Esq., a representative of the Office of
     the United States Trustee for this District or his
     designee;

B. Dan Ellis, Esq., Vice President of Legal Affairs and Risk
     Management of the Debtors; and

C. a designated member of the Official Committee of Unsecured
     Creditors.

The duties of the Joint Fee Review Committee will be to review
all billing statements and applications filed by Covered
Professionals for compliance with the applicable provisions of
the Bankruptcy Code, the Federal Rules of Bankruptcy Procedures,
the Local Rules of the United States Bankruptcy Court for the
Southern District of New York, the Fee Guidelines promulgated by
the Executive Office of the United States Trustee, and any
applicable orders of this Court and make such reports to the
Court as may be appropriate.

With respect to interim or final fee applications filed by
Covered Professionals, the Joint Fee Review Committee may serve
and file an appropriate statement with the Court setting forth
the results of its review of such applications and whether the
application filed by each Covered Professional complies with the
Compensation Requirements and any other relevant comments that
it deems necessary for consideration of the application.
(Lodgian Bankruptcy News, Issue No. 5; Bankruptcy Creditors'
Service, Inc., 609/392-0900)  


MCLEODUSA: Seeks Approval of Proposed Compensation Procedures
-------------------------------------------------------------
McLeodUSA Inc., requests that the Court establish procedures for
the compensation and reimbursement of Court-approved
professionals on a monthly basis, on terms comparable to those
procedures recently established in other large Chapter 11 cases
in the District of Delaware.

The Debtor has retained the services of:

    (a) Skadden, Arps, Slate, Meagher & Flom (Illinois) and its
        affiliated law practice entities as bankruptcy counsel,
        and

    (b) Houlihan, Lokey, Howard & Zukin Capital as crisis
        managers

Randall Rings, McLeodUSA's Group Vice President, Secretary and
General Counsel, says the Debtor anticipates retaining other
professionals or special counsel. He requests the establishment
of procedures for paying compensation and reimbursement to the
Professionals on a monthly, interim and final basis.

Mr. Rings says such a payment schedule will permit the Court and
other parties to more effectively monitor the fees and expenses
incurred by the Professionals, will enable the Debtor to
maintain a more level cash flow availability, and will diminish
undue financial constraints on the Professionals.

Under Bankruptcy Code section 331, a Court may permit the
Professionals to submit applications for interim compensation
and reimbursement more frequently than the prescribed period of
every 120 days.

The Debtor proposes:

  (a) No earlier than the 25th day of each calendar month, each
      Professional seeking interim compensation will file a
      Monthly Fee Application for interim approval and allowance
      of compensation for services rendered and reimbursement of
      expenses incurred during the immediately preceding month.
      The first Monthly Fee Application shall be filed no
      earlier than March 25, 2002 and shall cover all fees and
      expenses incurred during the period from the Petition Date
      through February 28, 2002.

  (b) Each Monthly Fee Application will comply with the
      Bankruptcy Code, the Federal Rules of Bankruptcy
      Procedure, applicable Third Circuit law and the Local
      Rules of the presiding Court and will be served upon the
      following parties:

           b.1. McLeodUSA Incorporated,
                6400 C Street, Cedar Rapids, IA 52404
                (Attn: Randall Rings, Esq.)

           b.2. Counsel for the Debtor
                Skadden, Arps, Slate, Meagher & Flom (Illinois)
                333 West Wacker Drive, Chicago, IL 60606
                (Attn: David Kurtz, Esq.)

           b.3. Skadden, Arps, Slate, Meagher & Flom LLP,
                One Rodney Square
                P. O. Box 636
                Wilmington, DE 19899
                (Attn: Gregg Galardi, Esq.)

           b.4. The United States Trustee
                844 King Street
                Wilmington, DE 19801
                (Attn: Maria Giannirakis, Esq.)

           b.5. Counsel to the Agent for the Pre-Petition
                Secured Lenders
                Davis, Polk & Wardell
                450 Lexington Avenue
                New York, NY 10017
                (Attn: Donald S. Bernstein)

           b.6. Richards, Layton & Finger
                One Rodney Square
                P. O. Box 551
                Wilmington, DE 19899
                (Attn: Mark D. Collins, Esq.)

           b.7. Counsel to any statutory committee appointed in
                connection with the Chapter 11 case.

  (c) Each Notice Party will have 20 days after service of a
      Monthly Fee Application to object. Upon the expiration of
      the Objection Deadline, each Professional may file a
      certificate of no objection or a certificate of partial
      objection with the Court, whichever is applicable, after
      which the Debtor would be authorized to pay each
      Professional the Actual Interim Payment equal to the
      lesser of: (i) 80 percent of the fees and 100 percent of
      the expenses requested in the Monthly Fee Application or
      (ii) 80 percent of the fees and 100 percent of the
      expenses not subject to an objection.

  (d) If any Notice Party objects to a Professionals Monthly Fee
      Application, it would file a written objection with the
      Court and serve it on the Professional and each of the
      Notice Parties so that it is received on or before the
      objection Deadline. Thereafter, the objecting party and
      the Professional may attempt to resolve the objection on a
      consensual basis. If the parties are unable to reach a
      resolution of the objection within 20 days after service
      of the objection, then the Professional may either (i)
      file a response to the objection with the Court, together
      with a request for payment of the difference, if any,
      between the Maximum Payment and the Actual Interim Payment
      made to the affected Professional; or (ii) forego payment
      of the Incremental Amount until the next interim or final
      fee application hearing, at which time the Court would
      consider and dispose of the objection, if requested by the
      parties.

  (e) Beginning with the period ending on May 31, 2002, and at
      three-month intervals or such other intervals convenient
      to the Court, each Professional will file with the Court
      and serve upon the Notice Parties an interim application
      for allowance of compensation and reimbursement of
      expenses of the total amounts sought in the Monthly Fee
      Applications (including any holdback) filed during such
      period. The Interim Fee Application would include a
      summary of the Monthly Fee Applications that are the
      subject of the request and any other information requested
      by the Court or required by the Local Rules. An Interim
      Fee Application would be filed and served within 45 days
      of the conclusion of the Interim Period. The first Interim
      Fee Application would cover the time between the
      commencement of the case through and including April 30,
      2002. Any Professional who fails to file an Interim Fee
      Application when due would be ineligible to receive
      further interim payments of fees or expenses under the
      compensation procedures until such time as the Interim Fee
      Application is submitted.

  (f) The Debtor will request that the Court schedule a hearing
      on the Interim Fee Applications at least once every six
      months or at such other intervals as the Court deems
      appropriate.

  (g) The pendency of an objection to payment of compensation or
      reimbursement of expenses would not disqualify a
      Professional from future payment of compensation or
      reimbursement of expenses, unless the Court orders
      otherwise.

  (h) Neither the payment of or the failure to pay, in whole or
      in part, monthly interim compensation and reimbursement of
      expenses, nor the filing of or failure to file an
      objection, would bind any party in interest or the Court
      with respect to the allowance of interim or final
      applications for compensation and reimbursement of
      expenses of Professionals.

  (i) All fees and expenses paid to Professionals would be
      subject to disgorgement until final allowance by the
      Court. (McLeodUSA Bankruptcy News, Issue No. 3; Bankruptcy
      Creditors' Service, Inc., 609/392-0900)  


MEDCOMSOFT INC: Has Working Capital Deficit of About $500,000
-------------------------------------------------------------
MedcomSoft Inc. (TSE:MSF), announced financial and operating
results for its second quarter ended December 31, 2001.

               Highlights for the second quarter

Following the tragic events of September 11, the official launch
of MedcomSoft's US application Record, and the expected market
penetration was shifted back by approximately one quarter. This
combined with the default of Lamsak on its $4 million payment in
July 2001 has prompted the Company to reduce its burn rate by
slowing its activity in Research and Development while
increasing its focus on Sales and Marketing. In that regard,
during the second quarter MedcomSoft reduced its Research and
Development team through attrition and lay offs from 91 to 38
and grew its direct sales teams while maintaining a core group
of Value Added Resellers for distribution in the United States.
MedcomSoft grew its United States sales and marketing group from
22 to 40 employees for its direct sales teams and moved its
United States headquarters to Boca Raton, Florida. As a result
of the reorganization the total headcount was reduced from 149
as at September 30, 2001 to 111 as at January 31, 2002 a
reduction of 25.5%.

MedcomSoft refined its new Value-Added Reseller (MVAR) Program
to better promote referrals and create value-added opportunities
for their best-of-breed, high-end VARs and resellers. These
high-end partners will provide users of the MedcomSoft solution
with local presence and support across the US, and will help
promulgate new usage models by developing and adding customized,
value-added solutions on top of the MedcomSoft platform.

The Company re-organized the senior management team to focus on
the accelerated penetration of MedcomSoft Record in the United
States. Further, the company announced the election of Dr. Ross
R. Black, a prominent medical professional with vast experience
and knowledge of the U.S. family physicians community, to the
Company's Board of Directors.

MedcomSoft entered into a strategic alliance agreement with
Cybear Inc., whereby MedcomSoft sends geographically targeted
communication and advertising for MedcomSoft products on
Cybear's Physicians' Online website. Cybear Inc., a member of
Andrx Corporation - Cybear Group (Nasdaq:CYBA), is the parent
company of Physicians' Online (POL). Subsequent Events Financing

On February 7, 2002, the company announced that it had closed
approximately $2 million in Private Placement Equity financing.
The Private Placement consisted of the issue of common shares
and warrants in the capital of MedcomSoft Inc. Each common share
was issued at $0.92 per common share and each warrant is
exercisable at $1.02 per warrant. The warrants expire ten months
from the closing date. The common shares have a four-month hold
period from the closing date after which they are freely
tradable.

                           Marketing

In January, with its new U.S. headquarters fully operational,
MedcomSoft initiated a substantial marketing campaign backed up
by intensive telemarketing and fax broadcast and includes a
large number of professional seminars to be conducted in over
100 U.S. cities over the subsequent 12-week period. Results of
Operations

Revenue for the second quarter was $65 thousand compared to $6.8
million for the second quarter last year. For the second quarter
the gross margin was $57 thousand or 88% of revenue compared to
$5.7 million or 84% of revenue for the second quarter of the
prior year. Included in the $6.8 million of revenue recorded
during the second quarter last year was $6.6 million recorded in
connection with software license and service fees on its
Australian contract with Lamsak.

Loss from operations in the second quarter was $4.4 million
compared to an income of $3.8 million for the same period last
year. The net loss after tax in the second quarter was $4.4
million compared to an income of $2.4 million.

The majority of the impact on the Company's second quarter
profitability compared to that of the second quarter of last
year reflects the following three factors:

     --  Recognition of $6.6 million in contracted software
license fees under the Lamsak Software License Agreement during
the second quarter of last year with no corresponding license
fees during the second quarter of this year.

     --  Research and development expenditures amounting to $1.6
million in connection with the development of its United States
software products, including MedcomSoft Record, MedcomSoft
Disease Management, and MedcomSoft Claims.

         During the second quarter of last year, the majority of
the research and development activities were focused on the
development of the Australian product under contract with Lamsak
with $262 thousand expended on the United States products.

     --  Significant spending in sales and marketing compared to
the second quarter last year continuing the trend from the first
quarter of this year. In connection with the execution of its
sales and achieving its product distribution readiness, the head
office for the company's wholly owned United States subsidiary,
MedcomSoft Corporation, was moved from Saratoga Springs, New
York to Boca Raton, Florida, and 28 sales and marketing staff
were added to the direct sales team in order to execute the
Company's United States market penetration strategy.

At December 31, 2001 cash was $1.2 million compared to $9.4
million at the June 30, 2001 year-end, a decrease of $8.2
million. Accounts receivable increased to $259 thousand compared
to $172 thousand at the year-end due to VAR Startup Kits billed
to our Value Added Resellers and timing of receipts in respect
of goods and services tax. MedcomSoft continues to have no long-
term debt and capital lease obligations were $100 thousand
compared to $134 thousand at the year-end. Deferred income
increased to $822 thousand compared to $496 thousand at the
year-end. This increase was wholly attributable to customer
payments received on account of license sales sold by the direct
sales team for which the company did not recorded revenue in the
second quarter as the software installations were still in
progress. As at December 31, 2001 the shareholders' equity fell
to $760 thousand, compared to a shareholders' equity at the
year-end of $10.3 million.

At December 31, 2001, the company's balance sheet showed that
its total current liabilities exceeded total current assets by
close to $500,000.

                           Outlook

Subsequent to its intensive marketing campaign started in
January 2002, MedcomSoft has generated over 1,900 active sales
leads, which are being followed up.

Profitability and positive cash flow for MedcomSoft can be
achieved by the sale of between 50 and 100 MedcomSoft Record
licenses per month depending on the level of volume discounts
and rebates provided to our distributors and by our direct sales
teams.

The Company is continuing its arbitration proceedings to recover
the $4 million final payment, which was due and payable under
the terms of the Software License Agreement. To date, claims and
counterclaims have been filed and discoveries are ongoing. The
arbitration proceedings have been scheduled for early June 2002.

Research and Development activity continued with the release on
February 22, 2002 of MedcomSoft Record version 1.2. Included in
that release is MedcomSoft's new Disease Management System and
Billing software that was recently certified for direct
electronic transmission with Medicare.

MedcomSoft Inc., designs software solutions that are changing
the way the healthcare industry captures, manages and exchanges
patient information. Through its powerful suite of products,
MedcomSoft provides important tools that enable healthcare
professionals to fully automate their practices at the point of
care and more efficiently and effectively connect with patients,
researchers, pharmacies, medical equipment suppliers, insurance
and pharmaceutical companies. As a result of MedcomSoft
innovations, physicians and managed care organizations can now:
easily and securely build and exchange complete, structured,
codified electronic patient medical records powered by the
world's largest medical vocabulary; rapidly analyze all clinical
and practice management data, for a patient or a population;
build their own electronic protocols of care and dynamically
connect these protocols to best practice guidelines and built-in
clinical decision support systems; electronically track outcomes
of care and trends in disease; reduce practice management costs;
and, comply with emerging healthcare legislation. With a growing
network of customers and resellers, and strong competitive
advantages, MedcomSoft is positioned to play an important role
in improving the quality and delivery of patient care worldwide.

MedcomSoft has offices in Boca Raton, Florida, Buffalo, New York
and Toronto, Ontario.


NATIONSRENT: Secures Okay to Hire Ordinary Course Professionals
---------------------------------------------------------------
NationsRent Inc., and its debtor-affiliates sought and obtained
Court approval to employ professionals, including accountants,
lawyers, actuaries, consultants and other professionals, that
are called upon by the Debtors' employees in the day-to-day
performance of their duties.

The Debtors are thus authorized to employ and retain ordinary
course professionals without further order from the Court on
conditions that:

A. No ordinary course professional shall have any material
     involvement in the administration of a Debtor's estate
     without such Debtor first receiving an order of the  Court
     authorizing the retention and employment of the
     professional;

B. No ordinary course professional with monthly fees averaging
     in excess of $50,000 for services rendered to a Debtors
     during the preceding four-month period ending at the
     conclusion of the prior calendar month shall receive any
     future payment from the Debtors until the Debtors first
     obtain a Court order authorizing the retention and
     employment of the professional;

C. Notwithstanding the foregoing, the Debtors may pay, without
     prior review or approval of the Court, all fees and
     expenses incurred by an ordinary course professional (a)
     through and including the end of the reporting period in
     which the professional's fees first exceeded the average
     monthly fee limit established  for the particular
     professional by this order or (b) prior to the professional
     having a material involvement in the administration of a
     Debtor's estate, provided however, that once and ordinary
     course professional is retained in these cases, all of its
     fees and expenses incurred from and after the Petition Date
     shall be subject to the review and approval of the Court in
     connection with the professional's final fee application;

D. No ordinary course professional shall receive payment for
     postpetition services rendered until such professional
     files and affidavit with the Court, pursuant to Section 327
     of the Bankruptcy Code as applicable, setting forth that
     such professional does not represent or hold any interest
     adverse to the Debtors or their estates with respect to
     matters for which the professional seeks the retention;

E. The Debtors shall each serve a Retention Affidavit, by first-
     class mail, to the U.S. Trustee, counsel to the DIP Lender
     and counsel to any statutory committee appointed in these
     cases;

F. Payments made to each Ordinary Course Professional may not
     exceed the aggregate case cap of $3,000,000. (Case caps are
     based on the projected budget for each ordinary course
     professional for 2002 and 2003. The aggregate case cap,
     meanwhile, is larger than the sum of the case caps detailed
     to allow the Debtors to employ additional ordinary course
     professionals in accordance with the procedures);

G. Payments made to all Ordinary Course Professionals for the
     duration of these chapter 11 cases shall not exceed
     $53,000,000;

H. Notwithstanding subsections E and F above, the Debtors may
     apply to the Court for authority to increase the Caps if
     circumstances change or if the Debtors' have not emerged
     from Chapter 11 by December 31, 2003;

I. The Debtors may employ Ordinary Course Professionals in
     addition to those listed on the attached Exhibit A by
     serving a notice upon the U.S. Trustee, counsel to the DIP
     Lenders and counsel to any statutory committee appointed in
     these cases. The Notice shall include the Retention
     Affidavit and the Caps applicable to such Additional
     Ordinary Course Professional. The Notice Parties shall have
     20 days in which to serve an objection to such employment
     on the Debtors' counsel. If none of the Notice Parties
     objects to the employment of the Additional Ordinary Course
     Professional, such employment is authorized in accordance
     with this Order. If an objection is served, the parties
     shall attempt to resolve their differences or submit the
     proposed employment to the Court far consideration; and

J. Commencing with the last day of the calendar month that is at
     least 90 days after the Petition Date, and every three
     months thereafter, the Debtors shall file a statement with
     the Court, and serve that statement on the U.S. Trustee,
     counsel to the DIP Lenders and counsel to any statutory
     committee appointed in these cases, that includes the
     following information:

       a. any Ordinary Course Professionals employed by the
            Debtors during the previous 90 days; and

       b. for each Ordinary Course Professional, its name, the
            aggregate amounts paid as compensation for services
            rendered and reimbursement of expenses incurred by
            such professional during the Reporting Period and a
            general description of the services rendered by such
            professional.

The Debtors submit that the uninterrupted service of the
ordinary course professionals is vital to the Debtors'
continuing operations and their ability to reorganize.
(NationsRent Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


NEON COMMS: Pursuing Talks to Restructure Optica's Senior Notes
---------------------------------------------------------------
NEON(R) Communications, Inc., (NASDAQ:NOPT) a leading provider
of advanced optical networking solutions and services in the
northeast and mid-Atlantic markets, announced that it is in
discussions with a group of note holders regarding a possible
restructuring of Senior Notes issued by its wholly-owned
operating subsidiary, NEON Optica. The note holders, in the
aggregate, own more than two-thirds of the outstanding principal
amount of NEON Optica's $180 million Senior Notes due in 2008.

As part of these discussions, the group of note holders
requested that NEON Optica defer the February 15, 2002 interest
payment due on the senior notes for an initial period of 30 days
while the restructuring discussions continue. This request,
however, is not binding on the note holders as a whole. As
previously announced, NEON is working with Credit Suisse First
Boston to assist the Company with evaluating its strategic
alternatives in connection with a potential debt restructuring
and refinancing.

NEON Communications is a wholesale provider of high bandwidth,
advanced optical networking solutions and services to
communications carriers on intercity, regional and metro
networks in the twelve-state northeast and mid-Atlantic markets.


NOVO NETWORKS: Has Until Today to Make Lease-Related Decisions
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extends
the time period within which Novo Networks and its debtor-
affiliates must seek to assume, assume and assign or reject
unexpired leases of nonresidential real property. The Court
gives the Debtors until February 28, 2002 to decide on leases.

Novo Networks International Services, Inc., a developer of
facilities-based broadband network offering voice and data
transport targeted to communications carriers, ISPs, and large
corporate and government clients, filed for chapter 11
protection on July 30, 2001. Jeffrey M. Schlerf, Esq., at The
Bayard Firm represents the Debtors in their restructuring
effort. When the Company filed for protection from its
creditors, it listed an estimated debts and assets of between
$10 million to $50 million.


NUEVO ENERGY: Fitch Affirms Senior Subordinated Rating at B
-----------------------------------------------------------
Fitch Ratings has affirmed Nuevo Energy Company's senior
subordinated rating at 'B' and changed the Rating Outlook to
Stable from Positive. The affirmation is based on Nuevo's modest
credit profile and the size and scope of its operations. The
change in Rating Outlook is due to Nuevo's limited credit
improvement following two very strong years in terms of
commodity prices.

At year-end 2001, EBITDAX/interest, was 2.7 times and total
debt/EBITDAX was approximately 3.4x. An ill-timed hedging policy
negatively impacted revenue and EBITDAX by more than $50 million
in 2001. This follows the $150 million in lost revenue in 1999 &
2000. As a result, Nuevo did not improve its balance sheet like
many of its peers did in the past two years.

Year-end 2001 reserves were approximately 233 million boe with
production split 88% oil and 12% gas. Its proved reserves are
predominantly oil (92%), mostly proved developed (86%), and are
based primarily in California (90%). Its onshore properties in
California represent approximately 58% of the company's total
reserves and its offshore properties in California make up
approximately 32% of Nuevo's total reserves. Nuevo also has
reserves located onshore in the Gulf Coast region and offshore
West Africa.

A positive development for Nuevo was the recent hiring of its
new CEO, Jim Payne. Payne's technical background combined with
his industry knowledge, experience, and results oriented
management style will serve him well in building upon Nuevo's
California asset base and directing the company's next stage of
growth. Payne brings to Nuevo more than 40 years of experience
in the oil and gas industry. Furthermore, he spent 25 years
working in the California oil fields adjacent to much of Nuevo's
current acreage so he is familiar with the makeup of its
reserves.

Additionally, Payne has made a number of changes in how Nuevo
does business currently and how it will grow in the future. Most
importantly, he has gained more flexibility in constructing
Nuevo's hedge policy. This will alleviate the problem the
company had during the past two years. Secondly, Nuevo's cost
structure should improve due to the cancellation of the Torch
outsourcing agreement. Nuevo would also like to find a long-term
natural gas source, which would help control the cost volatility
associated with steam heating many of its Californian wells.
Some items that will reduce capital expenditures and preserve
the company's free cash flow include the elimination of EVA-
based projects and the termination of the California exploration
program.

Using Fitch's 2002 price assumptions of $2.15/mcf for natural
gas and $19.50/bbl for oil, Nuevo's credit profile will remain
modest with EBITDAX approaching $120 million, providing interest
coverage between 2.5x and 3.5x and debt/EBITDAX between 3.5x and
4.0x. Debt-to-capital will likely remain above 60% throughout
2002. While Fitch expects Nuevo to improve financially and
operationally under this new management team, it is likely to be
an intermediate term event.

DebtTraders reports that Nuevo Energy Co.'s 9.5% bonds due 2008
(NEV1) are trading between 94 and 96. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NEV1for  
real-time bond pricing.


O2WIRELESS: Likely Loss Could Speed-Up Default on Loan Covenants
----------------------------------------------------------------
o2wireless Solutions (Nasdaq/NM: OTWO), a leading provider of
outsourced network services to the global wireless
telecommunications industry, reported its financial results for
the fourth quarter and year ended December 31, 2001.  
Separately, the Company reported that it has entered into a non-
binding letter of intent to merge with Baran Group, Ltd., a
world-class provider of engineering and telecommunications
infrastructure services headquartered in Israel.

               Fourth Quarter 2001 Results

Revenues from continuing operations in the fourth quarter were
$31.0 million, $2.8 million or 10.0% over the $28.2 million
reported in the 3rd quarter of 2001 and in line with guidance
provided by the Company on November 8, 2001, but below the $45.4
million posted during 4th Quarter 2000.

The Company reported a loss from continuing operations for the
4th Quarter 2001 of $4.9 million, an improvement over the $9.4
million loss posted in 3rd Quarter 2001.  This compares to a 4th
quarter 2000 income from continuing operations of $1.8 million.

On a pro forma basis, the Company reported a 4th Quarter 2001
net loss of $550,000.  This compares to a pro forma net profit
of $2.1 million from continuing operations in the same period a
year ago.

Pro forma net (loss) income excludes preferred stock dividends
and accretion, goodwill amortization, goodwill write-down,
deferred stock compensation amortization, loss on extinguishment
of indebtedness, restructuring charges, changes in the value of
the interest rate swap agreement, costs associated with an
anticipated resolution of a warrant dispute, (gain)/loss on
discontinued operations, loss on disposal of discontinued
operations, increase in the fair value of put warrants,
elimination of previously recognized deferred income tax asset,
and income tax expense or benefit and assumes an effective tax
rate of 40%, assuming tax benefits are recognizable.

                    Full-Year 2001 Results

Revenues from continuing operations for 2001 totaled $117.3
million, versus $139.1 million for 2000.  Net loss from
continuing operations for the year 2001 was $24.8 million. Net
loss from continuing operations for the year 2000 was $21.4
million.

On a pro forma basis, the Company reported a net loss for 2001
of $5.2 million compared to a pro forma net income of $5.4
million in 2000.

Murray Swanson, President and CEO of o2wireless Solutions
commented, "We are very pleased that we have been able to
sharply reduce overhead costs and improve the quality of our
services as we move back toward profitability. We are working
hard to improve and upgrade our capabilities as we continue to
drive out unproductive activities and costs.  The planned merger
with Baran Group, Ltd., that we announced today will position
o2wireless to take advantage of additional growth opportunities
as they arrive later in the year."

Mr. Swanson also noted, "Given anticipated improvement in the
environment in which we operate, we plan for o2wireless to
return to profitability during 2002."  In light of the planned
merger, Mr. Swanson declined to provide additional guidance
regarding the Company's goals for 2002.

Mr. Swanson cautioned that, "The Company has receivables
aggregating $2.4 million from a customer whose liquidity and
financial condition have deteriorated over the past year to the
point where there is concern regarding the customer's ability to
pay its obligations to the Company.  The Company is actively
working with this customer to effect payment, and management
currently anticipates a favorable resolution and collection of
substantially all of these receivables.  However, should the
customer fail to pay these obligations, the Company could
recognize a loss in 4th Quarter 2001 for these receivables.  In
the absence of a waiver from certain credit facility covenants,
this loss could precipitate a default under the Company's credit
agreement."

o2wireless Solutions(SM) provides a full range of integrated
network infrastructure solutions to the wireless telecom
industry, including design, deployment, maintenance and
technical consulting services.  Headquartered in Atlanta,
Georgia, the Company currently employs approximately 570 people.
o2wireless is customer driven and believes that functional
excellence, teamwork and superb execution are essential to
delivering high value services that delight each customer.


OZ.COM: Primary Revenue Source -- Ericsson -- Evaporates
--------------------------------------------------------
On November 28, 2001, OZ.COM, changed its name to OZ
Communications, Inc.

On January 24, 2002 OZ entered into an agreement with Ericsson
Radio Systems AB, Ericsson Telecom AB, Ericsson Inc., and
Ericsson Canada Inc., ending more than three years of
cooperation between OZ and Ericsson to develop and market the
iPulse software. Under the terms of the agreement Ericsson
agreed to pay OZ an aggregate of $6 million prior to the end of
the quarter ending March 31, 2002 and irrevocably (a) assigned
to OZ an equal and undivided share of its right, title and
interest in and to (i) the iPulse software, including source and
object code, (ii)the iPulse trademark, and (b)granted to OZ a
worldwide and perpetual license for all purposes to all other
intellectual property rights contained in and related to the
iPulse software, including any patent rights, copyrights, rights
to photographs, design rights, technical documentation and any
other industrial and intellectual property rights contained in
the source and object code. OZ and Ericsson each have the right
to exploit the iPulse software in any way that it sees fit. The
agreement expressly terminates all other contracts between OZ
and Ericsson except for that certain shareholder rights
agreement made and entered into February 4, 1999 between OZ,
Ericsson Inc. and certain shareholders of OZ. Under the
terminated agreements, only Ericsson was entitled to accept
orders for the iPulse software, which is a presence and
communication platform for wireless operators. OZ intends to
integrate the iPulse technology with the group communication
technologies that OZ has been developing at its Montreal
development center and bring it to market as OZ Instant
Communication Solution 2.0, which it will market directly to
wireless network operators. There can be no assurance that OZ
will be successful in developing and marketing this product.

As a result of the termination of the agreements, OZ will
recognize contract termination fees, revenues from the Ericsson
Canada, Inc., development agreement, and an impairment loss on
the related intangibles that OZ recorded in connection with the
acquisition of the shares of MCE Holdings Inc., in November
2000. In accordance with the Financial Accounting Standards
Boards SFAS No. 142, OZ will record an $8.9 million non-cash
impairment loss as an operating expense in the quarter ending
December 31, 2001. In the quarter ending March 31, 2002, OZ will
recognize a portion of the $6 million to be paid by Ericsson in
contract termination fees as "other revenue", and $3.75 million
in revenues from the development agreement with Ericsson Canada
Inc., that is currently reflected on the balance sheet as
"deferred revenue".

Ericsson has been OZ' primary source of revenues for the last
three years. Consequently, termination of the agreements with
Ericsson will result in the loss of the main source of OZ'
historical revenues. If OZ is unable to secure additional
sources of revenue, the termination of the agreements between OZ
and Ericsson would have a material, adverse affect on OZ'
business and results of operations. OZ believes that the
proceeds from the Ericsson agreement, plus its current cash,
cash equivalents and short-term investments, will be sufficient
to meet its anticipated cash needs for working capital and
capital expenditures for at least the next nine months. While OZ
intends to seek additional financing, there can be no assurance
that it will be successful.

OZ.COM was founded in 1995 in Iceland -- home of co-founders CEO
Skuli Mogensen and "chief visionary" Guojon Mar Guojonsson, who
together own 60% of the company -- OZ.COM develops technologies
that merge the Internet and wireless communication. In 2000 the
company launched its mPresence hosted software, which enables
wireless service providers to offer mobile Internet services.
mPresence is based on OZ.COM's iPulse platform, a routing
application for bridging Internet and telecom protocols that was
co-developed with partner and investor Ericsson, which owns 23%
of the company and accounts for 94% of its sales. Subsidiary
SmartVR offers Web-based visual communications software. At June
30, 2001, the company had a working capital deficit of $2
million.


PACIFIC GAS: Parent Delays 4th Quarter Earnings Release
-------------------------------------------------------
PG&E Corp., parent of bankrupt utility Pacific Gas & Electric,
on Thursday delayed the release of its fourth-quarter earnings
after it discovered accounting problems relating to leases
signed on power plant projects, according to a report by
Reuters.

According to a report, the controversial lease arrangements in
question relate to its La Paloma power plant in California, its
Lake Road plant in Connecticut and other projects. By requiring
that third-parties own at least 3 percent of the projects, the
so-called synthetic leases allowed PG&E to keep plants off its
balance sheet. However, before filing documents with the
Securities and Exchange Commission the company found that
ownership by the third parties had fallen below the 3 percent
threshold, which could require the reclassification of the deals
from off-balance-sheet to on-balance-sheet. That would raise
PG&E's total assets and liabilities by about $1 billion from the
$33.7 billion it listed last autumn.

The synthetic leases were previously reviewed by both internal
auditors and the company's outside accountant, Deloitte &
Touche. The company is investigating why the discrepancy, which
it said was first caught on Wednesday, was not uncovered
earlier.

"One of the biggest differences between this transaction and
type of transactions Enron conducted was these were designed for
a specific purpose," said spokesman Greg Pruett. "They were
designed to build a bricks and mortar power plant project."

The company said the issue should not have "material impact" on
its income.

Carol Coale, an analyst with Prudential Securities, said the
decision to delay the earnings "is consistent with the trend we
see among nervous management" to quickly clean up balance sheets
after the collapse of Enron Corp. , which used dubious
accounting and financial partnerships to hide debt, the report
says. (Pacific Gas Bankruptcy News, Issue No. 24; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


PACIFIC GAS: Will Pay $333MM Mortgage Bonds Maturing Tomorrow
-------------------------------------------------------------
Pacific Gas and Electric Company has received approval from the
U.S. Bankruptcy Court to pay $333 million of 7-7/8% Series 92A
First and Refunding Mortgage Bonds maturing March 1, 2002.

Bondholders who hold the bonds in a brokerage account will have
principal and interest paid to their account.  Certificate
holders will need to deliver their certificates to the trustee,
The Bank of New York, to receive payment for the principal.  
Interest checks to certificate holders will be mailed
separately.

The $333 million mortgage bond series was recently included by
the California Public Utilities Commission in the debt it
proposed to reinstate as part of its term sheet.  However, as
PG&E noted in its response to the CPUC term sheet, this debt
cannot be reinstated because the debt matures on March 1, 2002,
long before the proposed effective date of the CPUC's term
sheet.

With this Court approval, PG&E will pay the bondholders from its
current available cash.


POLAROID CORP: Committee Has Until March 7 to Challenge Liens
-------------------------------------------------------------
The Pre-petition Agent and the Official Committee of Unsecured
Creditors of Polaroid Corporation, and its debtor-affiliates
stipulate and agree that:

  (a) the Committee is no longer entitled to:

      -- challenge the validity, enforceability, priority or
         extent of the Pre-petition Debt or the Pre-petition
         Agent's or the Pre-petition Secured Lenders' liens on
         the Pre-petition Collateral, or

      -- otherwise assert any claims or causes of action against
         the Pre-petition Agent or the Pre-petition Secured
         Lenders on behalf of the Debtors' estates.

  (b) The Committee has until March 7, 2002 at 4:00 p.m.
      to file an adversary proceeding or contested matter
      challenging the validity, enforceability, priority or
      extent of the Pre-petition Agent's or the Pre-petition
      Secured Lenders' liens on:

      -- the Debtors' real properties commonly known as the
         "Principal Properties";

      -- any of the Debtors' assets, properties, and interests
         located in the State of Louisiana;

      -- any of the Debtors' assets, properties and interests
         located in the State of Oklahoma; and

      -- any of the assets, properties and rights under the name
         "Polaroid Asia Pacific". (Polaroid Bankruptcy News,
         Issue No. 11; Bankruptcy Creditors' Service, Inc.,
         609/392-0900)


PRIMIX SOLUTIONS: Completes Winding Down of European Operations
---------------------------------------------------------------
Primix Solutions Inc., announced that its Board of Directors has
determined that is in the best interests of the company to
terminate the registration of its shares of common stock under
federal securities laws. Primix intends to file a Form 15
Certification and Notice of Termination of Registration to
effect such deregistration. As a result of the filing, Primix
will no longer be required under the federal securities laws to
file reports with the Securities Exchange Commission and its
common stock will no longer be publicly traded on the NASDAQ OTC
Bulletin Board. The Board of Directors cited the low stock
price, the low volume of trading of the stock and the high costs
and administrative burdens associated with being a pubic company
as being the main reasons for the decision.

Primix also announced that on February 21, 2002, it consummated
the sale of certain assets and liabilities of 21st.dk A/S, a
Danish corporation and wholly-owned subsidiary of Primix, to T-
Systems Danmark A/S, a Danish corporation and wholly-owned
subsidiary of Deutsche Telekom AG. T-Systems acquired the
21st.dk business for a cash payment of approximately DKK
2,000,000. In addition, on February 25, 2002, Primix Sweden AB
(f/k/a Primant AB), a Swedish corporation and wholly-owned
subsidiary of Primix, initiated voluntary bankruptcy
proceedings.


PROVIDIAN FINANCIAL: Jan. Net Credit Loss Rate Pegged at 13.33%
---------------------------------------------------------------
Providian Financial Corporation's managed net credit loss rate
for the month ended January 31, 2002 and its 30+ day managed
delinquency rate as of January 31, 2002 are presented in the
table below.

Managed Net Credit Loss Rate   30+Day Managed Delinquency Rate
----------------------------   ---------------------------------
(Annualized) (Unaudited)                  (Unaudited)

   13.33%                                    9.20%

The company that has been synonymous with subprime credit cards
has been kicked out of the business. One of the top US credit
card outfits, Providian Financial issues mainly secured credit
cards to more than 16 million customers, most with spotty credit
histories; it also issues credit cards to those with better
credit. Providian solicits new customers via direct mail, phone,
and online advertising. The company also offers money market
accounts, CDs, and home equity loans; its GetSmart.com is an
online lender and deposit institution. High charge-offs have led
to a management shake-up, job cuts, and talk of putting the
company up for sale; meanwhile, regulators ordered the company
to stop issuing new subprime cards.


PROVIDIAN FINANCIAL: Sells Assets to Chase Manhattan for $2.87BB
----------------------------------------------------------------
Effective February 5, 2002, Providian Financial Corporation,
through its subsidiary, Providian National Bank, sold
Providian's interests in the credit card receivables and other
assets of the Providian Master Trust, and in the related credit
card accounts, to Chase Manhattan Bank USA, National
Association. The amount of consideration received by Providian
for the sale was approximately $2.87 billion, and is subject to
certain post-closing adjustments. The amount of consideration
was established in negotiations between Providian and Chase USA
and was paid in cash.


PROXITY DIGITAL: Sectec Cancels Letter of Intent to Acquire CSA
---------------------------------------------------------------
Billy Robinson, Chairman of Proxity Digital Networks, Inc. (OTC
Pink Sheets: PDNW), announced that the Letter of Intent to sell
Computer Support Associates, Inc., for $2.5 million has been
canceled.

Sectec, Inc. security software and VPN Software notified the
Company that it is canceling the Letter of Intent to purchase
CSA. CSA is currently in Chapter 11. PDNW currently feels that
the value in the $380,000,000 GSA 1 contract is far greater than
the $2.5 million that it would have received for the sale of the
company. PDNW plans to present a reorganization plan to the
bankruptcy court sometime in the next several weeks. The court
must approve a reorganization plan that settles the claims with
creditors. About the transaction, Robinson commented, "by not
selling CSA some additional funding options are now available to
us and a substantially greater revenue stream that would have
been limited by the canceled Letter of Intent is now available
to us."

Proxity Digital Networks, Inc., (OTC PINKSHEETS: PDNW) is a New
Orleans based integrated entertainment and Technology Company.
PDNW's recent acquisitions now include Proxity, Inc., --
http://www.proxity.com-- a leading global provider of end-to-
end online solutions for the small-to-midsize e-business market
and Neighborhood Access Corp owner of -- http://www.goez.net
Proxity and Neighborhood are headquartered in Costa Mesa, CA.
PDNW also owns Trivia Group, Inc. owner of
http://www.triviaspot.com and http://www.funtrivia.com  
Computer Support Associates, Inc. --
http://www.csa-solutions.comin New Orleans and dotNow.com, Inc.  
http://www.dotnow.com an ISP based in Des Moines, Iowa.


PSINET INC: Sues to Recover $23MM Preference Payment from FLAG
--------------------------------------------------------------
In their complaint against defendants FLAG Atlantic Limited and
FLAG Atlantic USA Limited, PSINet, Inc., and its debtor-
affiliates seek to avoid $23,380,000 of prepetition transfers
made during the period from March 2, 2001 through May 31, 2001
-- the ninety-day preference period preceding PSINet's chapter
11 Petition Date -- in relation to a Capacity Right of Use
Agreement, and to recover the value of property transferred
during such period. The Debtors seek to avoid the transfer
pursuant to 11 U.S.C. Sec. 547 and to recover the value of
property transferred pursuant to 11 U.S.C. Sec. 550.

On information and belief, Defendant FLAG is a company organized
under the laws of Bermuda with its principal place of business
in Bermuda and Defendant FLAG-USA is a Delaware corporation with
its principal place of business in New York.

The Capacity Right of Use Agreement was entered by the
Defendants and certain PSINet subsidiaries (including Debtors
PSINetworks Company and PSINet Telecom Limited) in November,
1999 and amended in October 26, 2000. Under the Agreement as
amended, the PSINet Entities agreed to pay $278,530,000.00 (the
Debt) in exchange for certain capacity in trans-Atlantic fiber-
optic cable.

Prior to the Preference Period, the Debtors made payments to
FLAG, on account of this antecedent Debt, totaling
$115,760,000.00.

On or about March 20, 2001, the parties entered into a Restated
Capacity Right of Use Agreement pursuant to which the Debtors
transferred back to Defendants certain of the rights in the
trans-Atlantic fiberoptic cable and the PSINet Entities'
indebtedness was reduced by $116,010,000.00 to $162,520,000.00
of which, as $115,760,000.00 had been paid. Accordingly,
$46,760,000.00 in antecedent Debt remained outstanding. The
Restated Capacity Agreement required the PSINet Entities to pay
the remaining outstanding Debt of $46,760,000.00 in two
installments: $23,380,000.00 payable by March 20, 2001, and
$23,380,000.00 payable by December 17, 2001.

On March 20, 2001, PSINet made a payment of $23,800,000.00 to
FLAG on account of the Debt (together with the transfer of
rights in trans-Atlantic fiber-optic cable described).

On December 31, 2001, PSINet made a written demand of the
Defendants for the return of the value of the Transfers. The
Defendants have not complied with PSINet's demand.

Therefore, Plaintiffs filed the Complaint seeking Avoidance of
Preferential Transfers made while the Debtors were insolvent -
transfer by wire of the sum of $23,800,000.00 and transfer of
certain rights in trans-Atlantic fiber-optic cable.

Plaintiffs request that the Court enter judgment granting them
the following relief against the Defendants:

(1) avoiding all transfers identified in the Complaint as
    avoidable transfers under 11 U.S.C. Sec. 547;

(2) granting judgment in favor of Plaintiffs and against
    Defendants in an amount equal to the transfers received by
    the Defendants and ordering the Defendants to immediately
    pay to the Plaintiffs an amount equal to the avoided
    transfers, pursuant to 11 U.S.C. Sec. 550;

(3) disallowing any claims of the Defendants if the Defendants
    fail or refuse to turn over any avoided preferential
    transfers to the Plaintiffs;

(4) awarding Plaintiffs post-demand interest until paid;

(5) awarding Plaintiffs costs of suit;

(6) awarding Plaintiffs reasonable and necessary attorneys fees
    through trial and for any subsequent appeals; and

(7) granting Plaintiffs such other and further relief, at law or
    equity, to which the Plaintiffs are entitled.

By way of Stipulation entered by Plaintiffs and Defendants, so
ordered by the Court, the time to respond to the Complaint is
extended through and including March 11, 2002. (PSINet
Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   


PSINET INC: Inks Definite Deal to Sell Key U.S. Assets to Cogent
----------------------------------------------------------------
Cogent Communications Group, Inc. (Amex: COI), a Tier One, next-
generation optical Internet Service Provider and PSINet Inc., a
provider of Internet access, web-hosting and related services,
announced that they have entered into a definitive agreement for
Cogent to purchase the major U.S. operating assets of PSINet,
including portions of its U.S. customer base and network,
certain equipment, and three hosting centers.

The agreement is subject to a number of conditions, including
approval by the U.S. Bankruptcy Court of certain bidding and
auction procedures, and approval of the sale itself.  Dresdner
Kleinwort Wasserstein, Inc., provided financial advice to PSINet
on the transaction.

Headquartered in Ashburn, Virginia, PSINet Inc., was founded in
1989 and was the first company to provide commercial Internet
access.  Today, PSINet is a leading provider of Internet and
web-hosting services, offering flex hosting, and a full suite of
retail and wholesale Internet services through wholly- owned
PSINet subsidiaries.  Services are provided on PSINet's owned
and operated network built by some of the leading engineers and
technicians in the industry.

Cogent Communications (Amex: COI) is a next generation optical
ISP focused on delivering ultra-high speed Internet access and
transport services to businesses in the multi-tenant marketplace
and to service providers located in major metropolitan areas
across the United States.  Cogent's signature service offered to
commercial end-users of 100 Mbps for $1,000 per month, offers
100 times the observed bandwidth of a T-1 connection at up to
two-thirds of the cost.  The Cogent solution makes ultra-high
speed Internet access an affordable reality for small and
medium-sized businesses, as well as large enterprises and
service providers.  Cogent's facilities-based, all-optical end-
to-end IP network enables non-oversubscribed 100 Mbps and 1000
Mbps connectivity for radically low, unmetered pricing levels.

Cogent's network consists of a dedicated nationwide multiple OC-
192 fiber backbone, multiple intra-city OC-48 fiber rings, and
optically-interfaced high-speed routers.  Cogent has been
recognized as the first IP+Optical Cisco Powered Network (CPN).  
Cogent is currently servicing 20 metropolitan markets. Cogent
Communications is headquartered at 1015 31st Street, NW,
Washington, D.C. 20007.  For more information, visit
http://www.cogentco.com  Cogent Communications can be reached  
at 202-295-4200 or via email at info@cogentco.com.

DebtTraders reports that PSINet Inc.'s 11% bonds due 2009
(PSINET2) currently trade between 8.75 and 9.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=PSINET2for  
real-time bond pricing.


REVLON INC: Fourth Quarter Results Show Net Loss Narrows to $28M
----------------------------------------------------------------
DebtTraders reports that Revlon Inc.'s a fourth quarter net loss
is down to $28.3 million from a loss of $51.3 million in the
same period a year ago. Revenue in the quarter jumps to $332.5
million from $313.6 million. The Company reported fourth quarter
EBITDA of $57.4 million, up by 35.3%. Full year 2001 EBITDA rose
to $200.2 million from $184.4 million. The Company anticipate
2002 EBITDA of between $210 to $220 million, but warned of lower
EBITDA in the first quarter.

In addition, DebtTraders reports that Revlon Consumer Products
Corporation's 8.125% bonds due 2006 was last quoted at a price
of 61.0. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=REVLON1  


SAFETY-KLEEN CORP: Sets-Up Chemical Services Bidding Procedures
---------------------------------------------------------------
Safety-Kleen Corp., and its debtor-affiliates' goal is to
maximize the value to their estates for the Chemical Services
Division.  While the Debtors think that the Clean Harbor, Inc.'s
$311,270,000 offer is the highest and best offer, they want to
be certain.  Accordingly, the Debtors (with Clean Harbor's
consent) propose to test Clean Harbor's bid in a competitive
auction process.

To avoid chaos, the Debtors ask Judge Walsh to approve a set of
uniform bidding procedures providing that:

  * Bidding be limited to Qualified Bidders.

  * A Qualified Bidder must deliver to the Debtors:

    (1) an executed confidentiality agreement;

    (2) current audited financial statements;

    (3) a preliminary non-binding acquisition proposal detailing
        what will be purchased, the price to be paid, the
        funding source, regulatory hurdles, closing conditions,
        and the nature and extent of any due diligence
        activities;

        and the Debtors will decide whether the Bidder is
        capable of completing the transaction.

  * All bids must be delivered by May 20, 2002, to Ronald A.
    Rittenmeyer at Safety-Kleen; David S. Kurtz, Esq., at
    Skadden Arps; Terry Savage at Lazard; Harvey R. Miller,
    Esq., at Weil, Gotshal & Manges; Pamela Zilly at The
    Blackstone Group; Susheel Kirpalani, Esq., at Milbank Tweed;
    and Steve Strom at Chanin Capital.

  * Bids must be accompanied by certified check payable to
    Lazard for 10% of the cash component of the bid.

  * The bid must exceed Clean Harbor's bid by $250,000 (after
    accounting for any Break-Up Fee).

  * The Debtors will hold an Auction, if necessary, on or before
    May 30, 2002, at Skadden Arps' New York offices.

  * Bidding at the Auction will be in $1,000,000 increments.

  * The Debtors will ask the Court to approve a sale to the
    highest bidder at a Sale Hearing on June 6 or 20, 2002.

The Debtors tell the Court that they will publish notice of
these bidding procedures and circulate them to the 100 potential
buyers Lazard initially contacted.

Judge Walsh will consider approval of these Bidding Procedures
at a hearing on March 8, 2002. (Safety-Kleen Bankruptcy News,
Issue No. 27; Bankruptcy Creditors' Service, Inc., 609/392-0900)    


SIMON TRANSPORTATION: Receives Approval of 'First Day Orders'
-------------------------------------------------------------
Simon Transportation Services Inc. (Nasdaq: SIMN), which
previously announced that it and its subsidiary, Dick Simon
Trucking, Inc., filed voluntary petitions for reorganization
under Chapter 11 of the United States Bankruptcy Code, announced
that the U.S. Bankruptcy Court for the District of Utah, Central
Division approved certain of the Company's first day motions,
which are intended to support its employees, customers, and
other stakeholders and to affirm the Company's liability
insurance coverage.

Simon Transportation's financial and operational stability going
forward were enhanced through the granting of the following
motions:  affirmation of the Company's insurance coverage at
least through the next hearing on March 6, 2002; retention of
legal and financial professionals to support the Company's
reorganization cases; payment of pre-petition employee wages,
salaries, business expenses and benefits, including medical, for
current employees, during the Company's voluntary restructuring
under Chapter 11; and to authorize the existing use of cash
management systems and accounts.

Chief Executive Officer, Jon Isaacson, said, "We are pleased
with the Court's prompt approval of our 'first day orders.'  
These first day orders will enable the Company to continue
operating and take care of our customers and remaining employees
as we commence what we expect will be an orderly and intensive
strategic restructuring process."

Simon Transportation is a truckload carrier providing
nationwide, predominantly temperature-controlled transportation
services for major shippers.  The Company's Class A Common Stock
trades on the Nasdaq National Market under the symbol "SIMN."


SWEET FACTORY: Committee Retains Kronish Lieb as Lead Counsel
-------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in Sweet
Factory Group, Inc.'s chapter 11 cases obtained approval from
the U.S. Bankruptcy Court for the District of Delaware to retain
and employ Kronish Lieb Weiner & Hellman LLP as its lead
counsel, nunc pro tunc to November 28, 2001.

Specifically, Kronish Lieb will:

    a) attend meetings of the Committee;

    b) review financial information furnished by the Debtors to
       the Committee;

    c) confer with Debtors' management and counsel;

    d) review the Debtors' schedules and statement of affairs;

    e) advise the Committee as to the ramifications regarding
       all of the Debtor's activities and motions before this
       Court;

    f) file appropriate pleadings on behalf of the Committee;

    g) analyze and review accountant's work product and reports
       to the Committee;

    h) provide the Committee with legal expertise in relation to
       the case;

    i) prepare various applications and memoranda of law
       submitted to the Court for consideration and handle all
       other matters relating to the representation of the
       Committee that may arise;

    j) Negotiate offers to sell the leases and other assets;

    k) assist the Committee in negotiations with the Debtors and
       other parties-in-interest on a plan of reorganization;
       and

    l) perform such other legal services for the Committee as
       may be necessary or proper in these proceedings.

Kronish Lieb will bill for services at its customary hourly
rates:

              Lawrence C. Gottlieb      $550
              Jay R. Indyke             $460
              Ronald R. Sussman         $450
              Cathy Hershcopf           $375
              Robert A. Boghosian       $375
              Eric J. Haber             $360
              Charles J. Shaw           $370
              Richard S. Kanowitz       $335
              Christopher A. Jarvinen   $210
              Gregory Plotko            $210
              Bethanie D. Haft          $195
              Rebecca Goldstein         $160
              Novica Petrovski          $160

Sweet Factory Group Inc. filed for chapter 11 protection on
November 15, 2001 in the U.S. Bankruptcy Court for the District
of Delaware. Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl
Young & Jones represents the Debtors in their restructuring
efforts.


TRM CORP: Bank of America Grants Extension of Loan Facility
-----------------------------------------------------------
TRM Corporation (Nasdaq: TRMM), announced results for the fourth
quarter and annual results for the periods ended December 31,
2001.  The Company also announced the disposal, via a
restructuring, of its e-Commerce unit.

Revenue for the quarter increased to $19.9 million up 2% from
$19.5 million in the fourth quarter of 2000.  Annual revenue was
$79.0 million, or 4% above the $76.1 million recorded last year.  
Consistent with recent quarters, the revenue increase comes from
the Company's expanding ATM deployment business, with the
increase offset in part by declines in the revenue of the
photocopy business.

The Company reported a net loss of $4.2 million in the fourth
quarter of 2001 and a net loss of $6.5 million for the full
year.

"Since October of 2001, we have accomplished significant changes
to our business with the goal of improving operating results
going forward," said Daniel L. Spalding, President.  "In October
we sold 81% of our French photocopy business and in February
2002 completed a significant restructuring of our e-Commerce
business segment.  Both of these operations negatively affected
earnings in 2001."

TRM disposed of its interest in iATMglobal.net via a
reorganization agreement completed on February 14, 2002.  This
entity comprised a substantial portion of the Company's e-
Commerce segment and contributed most of the operating loss of
the Company for 2001.

Restructuring of the Company's French subsidiary occurred in
October 2001, via sale of substantially all of the assets of
this entity.  The Company's loss for 2001 included a $0.6
million loss from operations of the French subsidiary, $1.5
million loss from the disposal of the subsidiary's assets and
nearly $1.0 million of tax expense related to the reversal of
deferred tax assets associated with the French operations.

TRM also announced completion of an amendment to its loan
agreement with Bank of America.  The amendment extends its
existing $22.5 million credit facility through June 2003.

"With these changes and improvements to our business, we enter
2002 a stronger and more focused organization," said Spalding.  
"In the year ahead we look to further improve and strengthen our
already profitable photocopy business, further expand our ATM
Deployment business, and return the Company to profitability."

At December 31, 2001, the company recorded a working capital
deficiency of $3.4 million.


TANDYCRAFTS: Court Extends Removal Period Until April 11, 2002
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extends
the time period by which Tandycrafts, Inc. and its debtor-
affiliates must elect to file notices of removal with regard to
any prepetition civil actions and similar proceedings pending in
courts outside of Delaware as of the Petition Date.  According
to the Order signed by Judge Mary F. Walrath, the Debtors have
until April 11, 2002 to remove actions.

Tandycrafts, a leading manufacturer and marketer of picture
frames, mirrors and other wall decor products, filed for chapter
11 protection on May 15, 2001 in the U.S. Bankruptcy Court for
the District of Delaware.  Mark E. Felger, Esq., at Cozen and
O'Connor, represents the company in its restructuring efforts.
When the Company filed for protection from its creditors, it
listed assets of $64,559,000 and debts of $56,370,000.


USG CORP: Seeks Approval of Streamlined Acquisition Procedures
--------------------------------------------------------------
USG Corporation, and its debtor-affiliates ask the Court to
authorize and approve uniform acquisition procedures that will
allow them to consummate certain business acquisitions of
limited size without the need for further Court approval.

The building products manufacturing and distribution industries
are highly competitive, Paul N. Heath, Esq., at Richards, Layton
& Finger, explains.  The controlled expansion of the Debtors'
businesses is not merely beneficial to, but is in fact necessary
for, the maximization of value for the Debtors' estates and
creditors. Failure to capitalize on these opportunities in
particular geographic areas may result in the Debtors'
preeminent position in the marketplace and a corresponding
decline in the Debtors' revenues.

L& W Supply Corporation periodically determines that the
acquisition of an ongoing business would be instrumental in
capturing a new market or fortifying L&W's existing market.
L&W's acquisition targets often include distribution businesses
that sell products manufactured by other USG companies. The
strengthening of L&W's position in a particular geographic area
not only benefits L&W, but also benefits each of the other USG
Companies for which L&W conducts distribution activities, he
adds. Furthermore, when L&W acquires businesses that
historically have not distributed USG products, such
acquisitions lead to expansion into markets previously untapped
by the USG Companies.

Most of the Debtors acquisitions are of relatively small size
compared to the Debtors' total asset base. He states that,
historically, L&W has engaged in between three and five such
transactions each year, and such transactions typically involve
$7.5 million or less in total consideration. The Debtors submit
that their acquisitions involving $7.5 million or less in total
consideration are arguably "ordinary course" transactions. The
Debtors' do understand, however, that these transactions could
be considered transactions outside the ordinary course of the
Debtors' businesses that would require individual Court approval
pursuant to Section 363(b)(1) of the Bankruptcy Code. Mr. Heath
asserts that requiring Court approval of each acquisition would
be administratively burdensome to the Court and costly to the
Debtors' estates.

Mr. Heath states that, to lessen these burdens and the
consummation of the Debtors' acquisitions, the Debtors would
like Judge Newsome to approve certain procedures to complete
acquisitions of existing businesses of limited size, involving
$7.5 million or less, in order to obtain more expeditious and
cost-effective review by interested parties, in lieu of
individual Court approval. They also suggest that all other
acquisitions would remain subject to individual Court approval
pursuant to Section 363(b)(1) of the Bankruptcy Code.

When a Debtor enters into a contract or contracts contemplating
a transaction that is subject to the Acquisition Procedures, the
Debtors will serve an Acquisition Notice on:

   -- The U.S. Trustee
   -- counsel to each of the Committees, and
   -- counsel for the Debtors' post-petition lenders.

The potentially confidential nature of the proposed acquisition
would dictate that the parties served with or who otherwise
receive an Acquisition Notice shall be required to hold the
notice's information in confidence. As it is the Debtors'
experience that sellers may not agree to enter into sale
transactions if the seller's identity is publicly known prior to
the consummation of the transaction, counsel to the Committees
and counsel to the DIP lenders will not be permitted to share
with their constituents any information regarding the Proposed
Acquisition that would enable such constituents to identify the
particular acquisition target, including, without limitation,
the name of the seller and the business location.

The Acquisition Notice will include this information:

   -- a description of the business that is subject to the
Proposed Acquisition and its location;

   -- the identity of the non-debtor party or parties to the
Proposed Acquisition and any relationship of the party or
parties to the Debtors;

   -- the major economic terms of the Proposed Acquisition;

   -- instructions consistent with the terms described below
regarding the procedures to assert objections to the Proposed
Acquisition.

Interested Parties will have through 5:00 p.m., Wilmington time
on the tenth day after the Acquisition Notice's date to object
to the Proposed Acquisition pursuant to the objection procedures
described below. If no Objections are asserted prior to the
expiration of the Notice Period, the Debtors will be authorized,
without further notice and without Court approval, to consummate
the Proposed Acquisition in accordance with the contract's terms
and conditions. The Debtors may also consummate a Proposed
Acquisition prior to the expiration of the Notice Period if each
Interested Party consents in writing to the Proposed
Acquisition. In either of these cases, the Proposed Acquisition
will be deemed final and fully authorized by the Court.

If any significant economic terms of the Proposed Acquisition
are amended after transmittal of an Acquisition Notice, he
continues, the Debtors must send a revised Notice and the Notice
Period will be extended for an additional five business days.

Any objections to a Proposed Acquisition must be in writing,
filed with the Court and served on the Interested Parties and
counsel to the Debtors, so as to be received by all such parties
prior to the expiration of the Notice Period. Each objection
must state specific grounds for objection. If an objection is
properly filed and served, the Proposed Acquisition may not
proceed without:

   -- written withdrawal of the objection;

   -- entry of a Court order specifically approving the Proposed
      Acquisition; or

   -- the submission of a Consent Order.

Any objection may be resolved without a hearing by a Court order
submitted on a consensual basis on the Debtors and the objecting
party, provided that if any significant economic terms of the
Proposed Acquisition are modified by Consent Order, the Debtors
must:

   -- prior to submission to the Court of the Consent Order and
an opportunity to object to the terms thereof by transmitting a
written statement of objection to the Debtors' counsel; and

   -- with the Consent Order provide the Court with a written
certification that notice was given and no objection was
received.

If an Objection is not resolved on a consensual basis, the
Debtors may schedule the Proposed Acquisition and the Objection
for hearing the next available omnibus hearing date by giving at
least 10 days' written notice of the hearing on the Proposed
Acquisition on an objecting party.

Mr. Heath offers that it is likely that any of these
acquisitions arguably fall under ordinary course transactions
and therefore the Debtors may not be required to give any notice
of the Proposed Acquisitions. If they are not, then the limited
notice provided by the Acquisition Procedures are proper and
justified pursuant to Section 363(b) of the Bankruptcy Code.

The Debtors are asking for approval of the Acquisition
Procedures to strengthen and expand their businesses, ultimately
bestowing value on their respective estates and creditors in an
efficient and cost-effective manner. The Debtors wish to avoid
costly administrative burdens to the Court and unnecessarily
utilize valuable Court time at omnibus hearings. They also don't
want to undermine the economic benefits of the underlying
transactions or hinder their ability to take advantage of
business opportunities that are only available for a short time.
(USG Bankruptcy News, Issue No. 19; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


UCAR INT'L: Names Ferrell P. McClean to Board of Directors
----------------------------------------------------------
UCAR International Inc., (NYSE:UCR) announced that Ferrell P.
McClean has been named to the Company's Board of Directors,
expanding the board to seven members.

Ms. McClean recently retired as a senior advisor to the head of
the Global Oil & Gas Group in Investment Banking at JPMorgan.
Prior to JPMorgan's merger with Chase, Ms. McClean co-headed
Global Energy in Investment Banking including both oil and gas
and power from 1991 to 2000. She founded the Leveraged Buyout
Group at JPMorgan, in 1986. Ms. McClean also founded and led the
Restructuring Group within Mergers & Acquisitions working with
over-leveraged companies to restructure and reduce their debt
and negotiate with all levels of creditors.

"We are very pleased to welcome Ferrell P. McClean to our
board," commented Gil Playford, Chairman of UCAR. "I have known
Ferrell for many years and her extensive financial experience
and proven leadership skills will add value to our Board of
Directors, the Company and our shareholders."

Ms. McClean received her Bachelor of Arts degree from Radcliffe
College with honors. She is currently a member of the National
Petroleum Council and was previously a Trustee of the National
YWCA Retirement Fund, a member of the Finance and Investment
Committee of Radcliffe College, a trustee of the Foxcroft School
and a member of the Board of Directors of Health-Tex, now a
division of VF Corporation.

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. It has 13
manufacturing facilities in 7 countries and are the leading
manufacturer in all of our major product lines. It produces
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. It also produces carbon electrodes that are
consumed in the manufacture of silicon metal and cathodes that
are used in the production of aluminum. Its 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 September
30, 2001, the company's balance sheet showed a total
shareholders' equity deficit of about $300 million.

For additional visit its Web site at http://www.ucar.com


VALLEY MEDIA: Looks to Stretch Removal Period through June 20
-------------------------------------------------------------
Valley Media, Inc., asks the U.S. Bankruptcy Court for the
District of Delaware to extend its time period during which to
file notices of removal of prepetition lawsuits from remote
courts to Delaware for continued litigation.  The Debtor asks
that its decision period run through June 20, 2002.  Objections
to the motion are due by March 4, 2002.

The Debtor has focused its attention on asset liquidation to
maximize value for its estate and creditors. A substantial time
has also been devoted in surrendering its numerous leases and
executory contracts to facilitate orderly wind-down of its
affairs. Due to these time-robbing activities, the Debtor tells
the Court that it will not be able to make an informed decision
regarding the removal of any claims, proceedings or civil causes
of action until June 20, 2002.

Valley Media Inc, a distributor of music and video entertainment
products, filed for chapter 11 protection on November 20, 2002.
Neil B. Glassman, Esq., Steven M. Yoder, Esq., and Christopher
A. Ward, Esq. at The Bayard Firm represent the Debtor in its
restructuring efforts. When the Company filed for protection
from its creditors, it listed $241,547,000 in total assets and
$259,206,000 in total debts.


W.R. GRACE: Engages Carella Byrnes for Honeywell Litigation
-----------------------------------------------------------
W. R. Grace & Co., and its debtor-affiliates ask Judge Judith
Fitzgerald for permission to employ Carella Byrnes Bain
Gilfillan Cecchi Stewart & Olstein as their special litigation
and environmental counsel, nunc pro tunc to February 1, 2002.  
In matters described as unrelated to these chapter 11 cases,
Carella Byrne, together with Wallace King Marraro & Branson
PLLC, represents the Debtors in connection with actions pending
in the United States District Court of New Jersey styled
"Interfaith Community Organization v. Honeywell International,
Inc. et al.," and "Hackensack Riverkeeper, Inc. v. Honeywell
International, Inc."   These two actions have been consolidated
by order of the Honorable Dennis M. Cavanaugh, United States
District Judge.

These two litigation actions concern claims regarding costs and
damages incurred in connection with a valuable 32-acre
waterfront parcel owned by ECARG, Inc., in Jersey City, New
Jersey.  W.R. Grace & Co., W.R. Grace, Ltd., and ECARG, Inc.
intend to pursue their cross-claims against Honeywell
International, Inc., postpetition in order to obtain injunctive
relief and recover substantial costs and damages arising out of
environmental contamination of the property that the Debtors
allege is the responsibility of Honeywell.  The Debtors and
Honeywell have entered into a stipulation that provides for the
lifting of the automatic stay in connection with these actions,
which has been approved by prior order in November 2001.

At the onset of these cases, Carella Byrnes was employed as an
ordinary-course professional for the services in connection with
this litigation.  However, in light of the work necessary to
prepare the pre-trial order and conduct the trial of these
actions, it is clear that the legal services to be rendered by
Carella Byrnes will exceed $50,000 per month, or more than
$300,000 per year, so that the Debtors now seek to retain
Carella Byrnes by separate application and order.  Any
interruption of Carella Byrnes' services by delay in approval of
their employment, or by its denial, would be "extremely harmful"
to the Debtors' position in the litigation.

The Debtors disclose that Carella Byrnes is owed $43,443.05 for
prepetition services.

Carella Byrnes' hourly rates are $75 for paralegals, $150 to
$240 for associates, $235 to $300 for counsel, and $220 to $400
for partners.

John M. Agnello, Esq., is the principal attorney at Carella
Byrnes responsible for the Honeywell litigation.  His current
hourly rate is $325.  Other attorneys or paralegals may from
time to time provide services to the Debtors in connection with
the Honeywell litigation.

Mr. Agnello discloses that Carlla Byrnes has rendered, provides,
or may render in the future services to parties in interest in
these cases, but not in connection with any matter affecting the
Debtors or these estates.  While the firm is "disinterested", it
has relationships with such parties as A. O. Smith Water
Products, BV, AIG/AIG Capital Corporation, Amoco Chemical
Company, Amoco Corporation, and Amoco Oil Company, B. F.
Goodrich, Bank of America, Bank of Boston Corporation, Bank of
New York, Bank of Nova Scotia, Banc One Corporation, BASF
Corporation, Blue Circle North America, Borg Warner Corporation,
BP Amoco Chemical Corporation, CBS, Inc., Chase Manhattan Bank,
Charles H. Erhart, Jr., Citibank, Inc., Citigroup, CGC, Inc.,
Credit Lyonnais, Credit Suisse First Boston Corporation, Dana
Corporation, Kaye Scholer Fierman Hay & Handler, Marine Midland
Bank, NA, and others. (W.R. Grace Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


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

Issuer               Coupon   Maturity   Bid - Ask Weekly change
------               ------   --------   --------- -------------
Crown Cork & Seal     7.125%  due 2002    82 - 84     +4.5
Federal-Mogul         7.5%    due 2004  12.5 - 14.5   -1.5
Finova Group          7.5%    due 2009    34 - 35       -2
Freeport-McMoran      7.5%    due 2006    80 - 83        0
Global Crossing Hldgs 9.5%    due 2009     2 - 3     -0.75
Globalstar            11.375% due 2004   4.5 - 6.5    -1.5
Lucent Technologies   6.45%   due 2029  61.5 - 63.5   -5.5
Polaroid Corporation  6.75%   due 2002     6 - 8        -1
Terra Industries      10.5%   due 2005    84 - 87        0
Westpoint Stevens     7.875%  due 2005    35 - 38        0
Xerox Corporation     8.0%    due 2027    54 - 56       -3

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

                          *********


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

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

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

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

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

                          *********

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

Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard
Group, Inc., Washington, DC USA. Yvonne L. Metzler, Bernadette
C. de Roda, Donnabel Salcedo, 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
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