TCR_Public/020301.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

             Friday, March 1, 2002, Vol. 6, No. 43     

                          Headlines

360NETWORKS: Obtains Approval to Settle Disputes with Big Pipe
ANC RENTAL: Brings-In Williams & Connolly as Litigation Counsel
AQUIS COMMS: Finova Capital Agrees to Debt Workout Terms
AMERICAN COMM'L LINES: Plans to Sell Assets to Danielson Holding
BETHLEHEM STEEL: Court Nixes Move to Appoint Equity Committee

BIRMINGHAM STEEL: Completes Sale of Steel-Making Facility in GA
CLASSIC COMMS: Court Extends Lease Decision Period to April 11
COMDISCO: UST Appeals Order on Committee's Employment of Lazard
COMMEMORATIVE BRANDS: S&P Ratchets Credit Rating Up a Notch
COMMTOUCH SOFTWARE: Expects to Be Cash Flow Positive by Year-End

COMPUTER LEARNING: Trustee & Tranzon Selling $32M Loan Package
CYGNIFI DERIVATIVES: Has Until May 1 to Propose Chapter 11 Plan
DANA CORP: S&P Assigns BB Rating to New $250MM Note Issue
ENRON: Wants to Continue Susman's Engagement as Defense Counsel
ENRON CORP: Houston Astros Buy-Back Ballpark Name for $2.1MM

ENRON CORP: Severed Employees Get Seat on CA Steering Committee
EXODUS COMMUNICATIONS: Resolves Cure Amounts with Nine Creditors
FEDERAL-MOGUL: Zolfo Cooper Advising New Future Claimants' Rep.
FRUIT OF THE LOOM: Will Close Alabama Facility Due to Weak Sales
GAP INC: Fitch Ratchets $2BB Senior Note Rating Down to BB-

GLOBAL CROSSING: Hearing on Willkie's Employment Set for Today
HEGCO CANADA: Seeks Creditor Protection through Receivership
HI-RISE RECYCLING: Files Prepackaged Chapter 11 to Sell Assets
HI-RISE RECYCLING: Case Summary
IT GROUP: Seeks Approval to Hire Ordinary Course Professionals

INNOVATIVE CLINICAL: Closes Sale of Unit Under CNS Merger Pact
KAISER ALUMINUM: Gets Okay to Continue Intercompany Transactions
KMART CORP: US Trustee Amends Creditors' Committee's Membership
LTV CORP: Copperweld Debtors Will Pay Commitment Fees to GECC
LTV: USWA Says WL Ross Committed to Fair Treatment of Workers

LEINER HEALTH: Files for Prepackaged Chapter 11 Reorganization
LEINER HEALTH: Case Summary & 20 Largest Unsecured Creditors
LIBERTY OIL: Alberta Court Grants CCAA Protection
LODGIAN INC: Sets-Up $1MM Reserve Fund for Utility Companies
MCMS INC: Court Okays Choate Hall as Committee's Counsel

MAIL-WELL: S&P Assigns BB Rating to Planned $300MM Debt Issues
MCLEODUSA INC: Secures Go-Signal to Hire Logan as Claims Agents
METALS USA: Has Until March 8 to File Schedules & Statements
NATIONSRENT: Committee Gets Okay to Hire Bayard as Co-Counsel
NEON COMMS: Taps Credit Suisse to Consider Debt Workout Options

NEXTERA ENTERPRISES: Sells Sibson Assets to Segal Group for $16M
OPTI INC: Sets Annual Shareholders' Meeting for April 9, 2002
OPTICAL DATACOM: Court Stretches Removal Period through May 14
PACIFIC GAS: San Francisco to Commence Rule 2004 Examination
PACIFIC GAS: Shrugs-Off Assem. Keeley's "Flawed" Media Stunt

PAPER WAREHOUSE: Falls Below Nasdaq SmallCap's Listing Criteria
PENN TREATY: S&P Ratchets Junk Ratings Up to Lower-B Level
PILLOWTEX CORP: Delaware Court Approves Disclosure Statement
POLAROID CORP: Judge Walsh Names Robert Troisio as Fee Auditor
PSINET INC: Seeks Approval of Procedures to Vote Foreign Shares

RECOTON: Losses Likely to Trigger Loan Covenant Violations
SAFETY-KLEEN: Asks Court to Approve Clean Harbor Break-Up Fee
SERVICE MERCHANDISE: Court Okays Claim Settlement Protocol
SWEET FACTORY: Court Extends Lease Decision Period to April 15
THERMOVIEW: Intends to Pay Down Debt by $2.5 Million This Year

TRINITY INDUSTRIES: Capital Needs Put Pressure on Debt Covenants
U.S. WIRELESS: Wins Court Approval to Extend Exclusive Periods
USG CORPORATION: Signs-Up Gibbons Del Deo as New Jersey Counsel
VALLEY MEDIA: Wants Lease Decision Period Enlarged to March 20
VIEWCAST CORP: Fails to Comply with Nasdaq Listing Requirements

W.R. GRACE: U.S. Trustee Gripes About How to Pay PwC
WARNACO GROUP: Secures Okay to Amend Alvarez' Employment Pact
WILLIAMS COMPANIES: Working Towards Resolution of Fin'l Issues
WINSLOWHOUSE INT'L: Case Summary & 20 Largest Unsec. Creditors
WORLD ACCESS: Court Sets Confirmation Hearing for May 14, 2002

XO COMMUNICATIONS: Completes Sale of European ISP Business

* BOOK REVIEW: George Eastman: Founder of Kodak and the
               Photography Business

                          *********

360NETWORKS: Obtains Approval to Settle Disputes with Big Pipe
--------------------------------------------------------------
360networks inc., its debtor-affiliates and certain of their
non-debtor Canadian affiliates are parties to three agreements
with Big Pipe Inc.:

    (i) a Fiber Sale Agreement;

   (ii) an Indefeasible Right of Use Agreement; and,

  (iii) a Capacity Lease.

Alan J. Lipkin, Esq., at Willkie Farr & Gallagher, in New York,
relates that in addition to these three agreements, the Debtors
also executed a Fiber Sale Indemnity Agreement and an IRU
Indemnity Agreement, which guaranteed the Debtors' obligations
under the Agreements.

Mr. Lipkin reminds the Court that Big Pipe filed a motion
seeking to compel the Debtors to assume or reject the Fiber Sale
and IRU Agreements.  Big Pipe is primarily concerned about the
quality and timing of the Debtors' deliveries regarding the
Agreements and the Debtors' ability to perform under the
Agreements in the future.  Big Pipe contends that they have no
obligation to pay the $74,000,000 now due to the Debtors and
their Canadian affiliates unless Big Pipe receives absolute
assurance of all future performance by the Debtors as well as
cures of any deficiencies on past deliveries.  However, the
Debtors dispute any allegations of past deficiencies and contend
the payments are now due regardless of the adequate assurance
concerning their future performance.  "The Debtors contend any
determination about the future assurances would be premature,"
Mr. Lipkin adds.

To settle the dispute, the Debtors and Big Pipe entered into a
settlement agreement, which provides that:

  (i) certain segments will be deleted from the FSA and the IRU.
      Specifically, under the IRU, the Seattle to the U.S.
      border segment will be deleted, and under the FSA, the
      U.S. border to Edmonton and the Vancouver to Victoria
      segments will be deleted;

(ii) as to already delivered segments, all outstanding alleged
      defaults will be resolved.  Big Pipe shall pay all
      outstanding invoiced arrears upon in the approximate
      amount of $1,100,000 Canadian dollars and work payments in
      the approximate amount of $8,500,000 Canadian dollars upon
      receipt of certain sublicense and co-location agreements;

(iii) as to to-be-delivered segments:

      (a) the number of fibers would be reduced on the Edmonton
          to Toronto segment and the price to be paid by Big
          Pipe therefore would be adjusted accordingly; and,

      (b) the payments due would be paid at closing except for
          $11,500,000, which will be deferred until September 3,
          2002 and which amount would be escrowed and cash
          collateralized by Big Pipe.

(iv) all amounts due under the IRU will be paid, except for
      approximately $1,500,000 Canadian dollars, the claim for
      which will be released -- this is the only payment
      concession applicable to the Debtors;

  (v) the Agreements would be amended to reflect current
      realities and the parties' future performance obligations
      primarily respecting routes delivered or routes to be
      delivered;

(vi) the Capacity Lease term would be shortened with respect to
      the one of the circuits ordered thereunder and certain
      additional payments would be made by Big Pipe under the
      Capacity Lease;

(vii) the parties would exchange mutual releases from all claims
      arising from outstanding issues relating to the Agreements
      and related documents as of the date of the Settlement
      Agreement.

According to Mr. Lipkin, the allocation payments to be made to
the Debtors and their Canadian affiliates under the Settlement
Agreement are derived from the applicable party entitled to such
payments under the Agreements. The Settlement Agreement is
conditioned upon the occurrence of:

    (i) the approval of the Canadian monitor;

   (ii) the approval of the Canadian Court in the CCAA
        proceedings;

  (iii) the consent of the Debtors' pre-petition lenders;

   (iv) the approval of this Court; and

    (v) the orders of the Canadian and this Court becoming final
        and non-appealable prior to March 8, 2002.

"Except for the last two conditions, each of the conditions have
already been satisfied," Mr. Lipkin reports.

The Debtors asserts that the Settlement Agreement is fair and
equitable.  Mr. Lipkin lists these advantages:

  (i) the Debtors would receive substantial cash payments much
      sooner than would be possible through litigation and
      receive the bulk of the monies now due them under the
      Agreements;

(ii) the Debtors would avoid costly, uncertain, and time
      consuming litigation;

(iii) the Debtors would retain an important customer and fulfill
      important obligations consistent with the Debtors'
      business plan; and,

(iv) the Debtors would be released from certain potentially
      problematic obligations.

                            *   *   *

The Court authorizes the Debtors to enter into the Settlement
Agreement.  Judge Gropper further orders that if:

  (i) a chapter 11 plan for the operating Debtors is confirmed
      and consummated that provides for all or substantially all
      of the Debtors and their Canadian affiliates' North
      American operations, to be restructured and operated as a
      going concern whether by the Debtors and their affiliates
      or through a sale of their assets to a third party;

(ii) the Debtors have not been prevented by third parties from
      maintaining the Underlying Rights relevant to the amended
      and restated Agreements;

(iii) the Debtors' Canadian affiliates have not rejected the
      amended and restated Agreements;

(iv) Big Pipe Inc. and Big Pipe U.S. Inc. are not in default
      under any of the amended and restated Agreements or the
      Settlement Agreement; and

  (v) Big Pipe Inc. and Big Pipe U.S. Inc. agree that the
      Debtors need not take any further steps to provide
      adequate assurance of future performance in the context of
      an assumption concerning the amended and restated
      Agreements,

-- then, the Debtors shall not reject any such amended and
restated Agreements. (360 Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   


ANC RENTAL: Brings-In Williams & Connolly as Litigation Counsel
---------------------------------------------------------------
ANC Rental Corporation and its debtor-affiliates ask the Court
to approve their retention of Williams & Connolly LLP as special
counsel to represent them in litigation that may arise from
their consolidation efforts, nunc pro tunc to February 1, 2002.

Bonnie Glantz Fatell, Esq., at Blank Rome Comisky & McCauley LLP
in Wilmington, Delaware, relates that Williams & Connolly has
been representing the Debtors in connection with ongoing efforts
to consolidate the operations of Alamo and National at various
airports across the United States. In consolidating the
operations of the two brand names, the Debtors have been
involved and will likely become involved in related litigation
in state and federal courts. Successful resolution of the
various litigation matters is extremely important, according to
her, since consolidating Alamo and National is critical to the
Debtors' reorganization efforts.

Ms. Fatell relates that Williams & Connolly is currently being
employed by the Debtors as an ordinary course professional. The
Debtors, however, did not anticipate they would have to utilize
Williams & Connolly's services at a level that would exceed the
$73,330 fee cap provided by the Court in its order in employing
ordinary course professionals.  "Nevertheless, because of the
unjustified and aggressive litigation strategy of Hertz and Avis
in these proceedings, the Debtors have been required to rely on
Williams & Connolly's services to a much greater extent than
originally anticipated," Ms. Fatell states.

The firm will assist the Debtors by:

A. Advising the Debtors and assisting General Bankruptcy Counsel
     in connection with the efforts to consolidate Alamo and
     National;

B. Representing the Debtors in various legal proceedings
     relating to the consolidation efforts;

C. Attending meetings and participating in negotiations with
     respect to the consolidation efforts and related
     proceedings;

D. Appearing before the Bankruptcy Court, any state, district or
     appellate courts and the U.S, Trustee related to the
     consolidation efforts and related litigation proceedings;

E. Performing all other necessary legal service and providing
     all other necessary legal advice to the Debtors in
     connection with the matters referred to above.

Aside from reimbursement of out-of-pocket expenses, Williams
will be compensated by the Debtors based on the hourly rates of
its professionals, which are:

                Partners           $315 to $475
                Counsel            $315 to $475
                Associates         $180 to $285
                Paraprofessionals  $100 to $105

Williams & Connolly in 2001 received from the Debtors
$122,735.18 for professional services performed and
reimbursement of related expenses. The firm also holds $20,000
in pre-petition claim. Meanwhile, for January 2002, the Debtors
owe Williams & Connolly 123,330 for professional services and
related expenses, exceeding the $73,330 cap for the payment of
ordinary course professionals.

William& Connolly member Daniel F. Kantz, meanwhile, assures the
Court the firm will not be involved in the processing or the
negotiation, formulation and confirmation of the Debtors'
reorganization plan. Williams & Connolly, however, will assist
the general bankruptcy counsel in connection with the
consolidation strategy contemplated by any Reorganization Plan.

Mr. Kantz submits that checking Williams & Connolly's conflict
check system and adverse party index, the firm represented or
currently represents these parties-in-interest: Allianz
Insurance Co., American Express, American Trans Air, Arthur
Andersen LLP, BNP Paribas, Capital Bank, Continental Airlines
Inc., Credit Agricole, Equitas, Executive Risk Indemnity Inc.,
Fleet Bank, Federal Express, Federal Express Corp., Federal
Insurance Co, General Motors, Lloyds of London (Chaucer
Syndicate), Massachusetts, National Union Fire Ins. Co., Paul
Hasting Janofsky & Walker LLP, Piper Marbury Rudnick & Wolfe
LLP, Provident Companies, Provident Mutual Life Insurance Co,
Royal Indemnity Insurance Co., Royal Bank of Scotland, Summit
Transportation Co., Textron, Textron Financial Corp., TWA,
United, US Airways and Walt Disney World Co. (ANC Rental
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


AQUIS COMMS: Finova Capital Agrees to Debt Workout Terms
--------------------------------------------------------
Aquis Communications Group, Inc. (OTC Bulletin Board: AQIS),
announced that it has entered into a term sheet with its
principal lender, Finova Capital Corporation, which provides a
proposed framework to restructure Aquis' debt.  Under the
proposal, Finova will exchange approximately $26 million in debt
for a new preferred stock which would convert into 79.99% of the
then fully diluted shares of Aquis.  The remaining debt payable
to Finova, representing approximately $8 million, would be
payable over four years.  Aquis will also have the ability to
have $2.0 million of this debt forgiven if it is successful in
retiring $6.0 million of its debt early.

The term sheet also contemplates that Aquis' subordinated debt
would be reduced from approximately $2 million to $1 million,
and in exchange, the subordinated debt holder would receive
preferred stock which would convert into 10% of the then fully
diluted shares of Aquis.  The term sheet finally provides that
the holders of the existing preferred stock will receive
$300,000 in new non-convertible preferred stock.  Existing
common stockholders would retain 5.01% of the outstanding common
stock of the restructured company.

"This term sheet is an important step in Aquis' reorganization
that will provide a stable financing environment on which our
customers, employees and investors can rely," said John B.
Frieling, Aquis' Chief Executive Officer.

"Having successfully repositioned our operational focus in our
core product and geographic markets, when this debt
restructuring plan is completed, it will allow us to
aggressively take advantage of the opportunities in our market
and to create value for all our shareholders," added Frieling.

The transactions are subject to a number of conditions,
including completion of Finova's due diligence, execution of
definitive documentation by all affected parties, including
Finova, and receipt of requisite FCC approvals.

Aquis Communications Group, Inc. currently offers two-way
interactive messaging as well as national, regional and local
messaging services to customers in the Northeast, and Mid-
Atlantic areas.  The Company also offers cellular, long distance
and data services.  Headquartered in Parsippany, NJ, Aquis
Communications maintains offices in Freehold, NJ; Baltimore, MD;
Richmond and Tyson's Corner, VA.  Ladenburg Thalmann & Co. Inc.
acted as financial advisor to Aquis.  For more information on
Aquis Communications visit: http://www.aquiscommunications.com


AMERICAN COMM'L LINES: Plans to Sell Assets to Danielson Holding
----------------------------------------------------------------
American Commercial Lines LLC and Danielson Holding Corporation
(Amex: DHC) announced the potential acquisition of ACL by
Danielson.  ACL has obtained lock-up, support and voting
agreements from holders of more than two thirds of its
outstanding senior notes and from substantially all the indirect
preferred and common members of ACL who have agreed to support
the proposed comprehensive acquisition and recapitalization
plan.  The proposed transactions are subject to the parties
negotiating and executing definitive agreements in their
discretion.

Under the terms of the proposed transactions, Danielson would
acquire 100% of the membership interests of American Commercial
Lines Holdings LLC, ACL's parent holding company.  ACL's present
equity holders would receive approximately $9 million of
Danielson common stock.  Danielson is also expected to deliver
$25.0 million in cash and approximately $58.5 million of ACL's
existing senior notes to ACL Holdings in connection with the
transaction.  Danielson currently expects to fund the
acquisition through a rights offering to its existing security
holders, upon terms and conditions to be determined.

ACL's President and Chief Executive Officer, Michael C. Hagan,
said, "This recapitalization plan is a major step forward in our
efforts to increase ACL's profitability.  With Danielson's
access to capital markets, we believe we will be better suited
to invest in the company, enhancing our leadership position in
river transportation in both North and South America.  We
believe this recapitalization will be positive for our
customers, employees and vendors. This plan presents the best
approach to recapitalize ACL in a timely and efficient manner."

Danielson's President and Chief Operating Officer, David M.
Barse, said, "Danielson believes that the proposed acquisition
of ACL is in the best interests of our shareholders.  After
expending a great deal of effort looking at numerous potential
deals, we believe that we will be rewarded for our patience in
waiting for this opportunity.  We are extremely excited about
the prospect of acquiring ACL, and we look forward to working
with ACL's strong management team to help lead the continued
growth and success of their business."

The proposed transactions are expected to result in a reduction
of ACL's senior secured bank debt by $25.0 million and the
restructuring of ACL's 10-1/4% senior notes due in 2008 pursuant
to an exchange offer and consent solicitation in which
$236,507,000 of its existing senior notes (all notes held by
parties other than Danielson) would be exchanged for $120.0
million of new 11-1/4% cash pay senior notes due January 1, 2008
and approximately $116.5 million of new 12% pay-in-kind senior
subordinated notes due July 1, 2008.  ACL's notes held by DHC
would be retired in conjunction with the proposed transactions.  
ACL would also issue additional new cash pay senior notes in an
aggregate principal amount equal to the accrued and unpaid
interest on its existing senior notes, other than those held by
Danielson, through the effective date of the transaction up to
$20.0 million, and to the extent that such accrued and unpaid
interest exceeds $20.0 million, additional pay-in-kind senior
subordinated notes in an amount equal to such excess would be
issued.

Additionally, ACL has received forbearance agreements from its
senior secured lenders pending the negotiation and execution of
definitive documentation relating to the amendment and
restatement of ACL's senior secured credit facility satisfactory
to the parties.

There can be no assurance that definitive agreements regarding
the acquisition and the recapitalization will be reached on
terms satisfactory to all the parties.  Also, as the
negotiations are ongoing between the parties, it is possible
that in the event definitive agreements are reached, material
changes could occur to the terms of the proposed transactions as
described herein.

American Commercial Lines LLC is an integrated marine
transportation and service company operating approximately 5,100
barges and 200 towboats on the inland waterways of North and
South America.  ACL transports more than

70 million tons of freight annually.  Additionally, ACL operates
marine construction, repair and service facilities and river
terminals.

Danielson Holding Corporation is an American Stock Exchange
listed company, engaging in the financial services and specialty
insurance business through its subsidiaries.  Danielson's
charter contains restrictions which prohibit parties from
acquiring 5% or more of DHC's common stock without its prior
consent.


BETHLEHEM STEEL: Court Nixes Move to Appoint Equity Committee
-------------------------------------------------------------
Certain shareholders of Bethlehem Steel Corporation asked Judge
Lifland to order the United States Trustee to appoint an
Official Committee of Equity Security Holders.  These
shareholders, who hold about 12% of the common stock of
Bethlehem, are:

   Shareholder                             Number of shares
   -----------                             ----------------
   Dimensional Fund Advisors                  7,882,092
   Frank R. Williams                             27,000
   Greenway Partners, LLP and affiliates      7,000,000

Emilio A. Galvan, Esq., at Berlack, Israels & Liberman, LLP, in
New York, relates that the 3 shareholders were prompted to seek
the appointment of an official committee because of these recent
developments:

  (a) On December, 2001, the International Trade Commission
      recommended imposition of 20%-40% tariffs on foreign steel
      dumped in the US pursuant to section 201 of the 1974 Trade
      Act, and President Bush has until the end of February 2002
      to implement relief in accordance with that
      recommendation;

  (b) Steel executives have recently urged Congress to assign
      legacy costs to existing government agencies, a step
      contemplated in the Steel Revitalization Act introduced in
      the House and Senate in 2001, and which, if taken, could
      relieve Bethlehem of up to $3 billion, or about seventy
      percent (70%) of its balance sheet liabilities;

  (c) Overcapacity in the domestic steel sector has been reduced
      in the past year by the idling of significant facilities,
      including the steel-making operations of LTV, Acme,
      Northwestern Steel, Gulf States, Geneva, Trico and
      Laclede;

  (d) Steel analysts predict a pricing rebound in 2002; and

  (e) Bethlehem has been involved in serious consolidation
      discussions with other domestic producers regarding
      consolidation of the industry, which culminated on January
      15 with a reported agreement between the major producers.

Mr. Galvan asserts that the creation of an Official Committee of
Equity Holders is appropriate and necessary because:

  -- Bethlehem's stock is widely held;

  -- the Chapter 11 case is large and complex;

  -- the equity holders' need for adequate representation is not
     significantly outweighed by the cost of an additional
     committee; and

  -- other factors also indicate that Bethlehem's shareholders
     would not be represented effectively in these proceedings
     absent the appointment of an equity committee.

At present, Mr. Galvan notes, the Board of Directors of
Bethlehem only owns approximately 1% of the outstanding common
shares.  On the other hand, Mr. Galvan points out, the 3
shareholders cannot be expected to shoulder the cost of
representing the other shareholders holding the remaining 88% of
the common stock.

                          Objections

In three separate objections, the Debtors, the United States
Trustee and the Committee of Unsecured Creditors argues that the
motion is unwarranted because the Shareholders failed to meet
their burden for the establishment of an official committee of
equity security holders in these cases.

Tracy Hope Davis, trial attorney for the United States Trustee,
asserts that the Shareholders have also failed to demonstrate:

  (i) that the appointment of an equity committee is necessary
      to adequately represent equity security holders interests,
      and

(ii) that the Court should exercise its discretion and order
      such an appointment.

Furthermore, Ms. Davis points out that the Debtors are insolvent
and so, no equity interest to be protected by an official
committee of equity security holders exist.

The Debtors agree with the U.S. Trustee.

George A. Davis, Esq., at Weil, Gotshal & Manges LLP, in New
York, New York, reminds the Court that the Debtors are patently
insolvent.  Based on the Debtors' schedules of assets and
liabilities, Mr. Davis reports that the book value of the
Debtors' assets is pegged at $3,700,000,000 while the Debtors'
liabilities is almost twice as much at $6,400,000,000 as of the
Petition Date.  "At this juncture, the stockholders simply have
no financial stake in these cases," Mr. Davis asserts.

The Creditors' Committee emphasizes that it does not dispute the
fact that the Debtors' securities are widely held or that the
Debtors' bankruptcy cases are complex.

But Thomas Moers Mayer, Esq., at Kramer, Levin, Naftalis &
Frankel LLP, in New York, New York, reasons that the last thing
the Debtors need is another demand on their time by a
constituency with no observable economic stake in the estate.
"The Shareholders' hope for a government bailout does not
sufficiently rebut the demonstrated worthlessness of their
position," Mr. Mayer maintains.

Thus, the U.S. Trustee, the Debtors, and the Creditors'
Committee ask Judge Lifland to deny the Shareholders' motion.

                     Shareholders Respond

In turn, the Shareholders ask the court to adjourn the hearing
on this issue and set a trial date within 30 to 60 days to
address the evidentiary matters raised in the objections.  The
Shareholders explain that they need time to fully prepare a
witness, and to examine any witnesses and documents that may be
proffered in support of the allegations made in the objections.
According to the Shareholders, the evidentiary hearing will
determine whether Bethlehem's 30,000 public shareholders whose
book equity was worth in excess of $1,000,000,000 at the end of
the 2000, will receive any representation in this proceeding.

                        Motion Denied

After hearing all the arguments, Judge Lifland upholds the
decision of the U.S. Trustee and denies the Shareholders' motion
to create an Official Equity Holders' Committee. (Bethlehem
Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


BIRMINGHAM STEEL: Completes Sale of Steel-Making Facility in GA
---------------------------------------------------------------
Birmingham Steel Corporation recently completed the sale of its
Cartersville, Georgia steel manufacturing facility, which
created certain complexities relating to the restatement of its
financial statements required by the recently released Financial
Accounting Standard 142. Due to the fact that the Company's
quarterly financial statements must reflect this restatement,
the quarterly report could not be filed with the SEC by the
Company without unreasonable effort or expense in the absence of
an extension. The Forms will be filed on or before the 5th
calendar day following the prescribed due date.

Birmingham Steel operates in the mini-mill sector of the
steelindustry and conducts operations at facilities located
acrossthe United States. The common stock of Birmingham Steel
istraded on the New York Stock Exchange under the symbol "BIR."
At September 30, 2001, the company recorded a total
shareholders' equity deficit of $17.5 million, and a working
capital deficiency of $197 million.


CLASSIC COMMS: Court Extends Lease Decision Period to April 11
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approves
the request of Classic Communications and its debtor-affiliates
to extend their time period within which to decide if it will
assume, assume and assign or reject unexpired nonresidential
real property leases.  The Debtors now have until April 11, 2002
to make those decisions.  

The Court added that, pending assumption or rejection of any
Unexpired Lease, the Debtors must timely perform all of their
post-petition obligations as required by the Bankruptcy Code.

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


COMDISCO: UST Appeals Order on Committee's Employment of Lazard
---------------------------------------------------------------
The United States Trustee for the Northern District of Illinois,
Ira Bodenstein, gives notice that her intends to take an appeal
to the U.S. District Court from Judge Barliant's order
authorizing the employment of Lazard Freres & Co. as Investment
Banker to the Official Committee of Unsecured Creditors in the
chapter 11 cases of Comdisco, Inc., and its debtor-affiliates.

Roman L. Sukley, the Trial Attorney from the Office of the
United States Trustee, argues that the Lazard Retention Order is
contrary to the interests of the Debtors' estates because it
is calculated to negate or limit the estates' recovery of
damages for any subsequent wrongdoing by Lazard Freres.

Furthermore, Mr. Sukley says, the Lazard Retention Order imposes
future unknown fees, costs and other administrative expenses on
the estates without any demonstrated benefit in return.  "The
indemnification provisions are also inconsistent with the duty
of care and high degree of professionalism and expertise with
which Lazard Freres performs its investment banking services to
justify the amount of compensation," Mr. Sukley adds.

Mr. Sukley asserts that Lazard Freres should not be allowed to
use these provisions to shield itself from its own negligence or
limit its damages for intentional misconduct or gross
negligence. "Given the high amount of fees that Lazard Freres
will charge the Debtors for its services, it is not unreasonable
to expect the firm to be fully accountable for its work product
and the services it provides," Mr. Sukley states.  Furthermore,
Mr. Sukley contends that Lazard Freres should be perfectly
capable of managing its risk of liability exposure through
appropriate insurance coverage and recouping its insurance costs
from the substantial fees it will be compensated for in these
cases. (Comdisco Bankruptcy News, Issue No. 21; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


COMMEMORATIVE BRANDS: S&P Ratchets Credit Rating Up a Notch
-----------------------------------------------------------
Standard & Poor's said that it raised its corporate credit
rating on class ring and yearbook maker Commemorative Brands
Inc. to single-'B'-plus from single-'B' and removed its ratings
from CreditWatch, where they were placed February 4, 2002,
reflecting its proposed debt refinancing.

At the same time, Standard & Poor's affirmed its single-'B'-plus
corporate credit and other ratings on American Achievement
Corp., its parent company. The rating actions follow the
completion of Commemorative Brands' debt refinancing, which has
increased the company's financial flexibility.

The outlook is stable.

The total rated debt for American Achievement is now
approximately $255 million.

"The ratings reflect American Achievement's high leverage and
narrow business focus, partially offset by the company's well
recognized brand names, broad distribution network, and the
nondeferrable nature of demand in the mature domestic class ring
and yearbook market," commented Standard & Poor's credit analyst
Jean Stout.

Austin, Texas-based American Achievement, through Commemorative
Brands, is a leading manufacturer of class rings, yearbooks,
graduation products, and affinity jewelry. Approximately 40% of
the company's total sales are generated from the estimated $500
million North American high school and college class ring
market, sold under the ArtCarved and Balfour brand names.

The company's financial flexibility continues to be constrained
by its heavy debt burden, incurred largely in connection with
the company's 1996 buyout of ArtCarved and LG Balfour Co., and
the acquisitions of Taylor Publishing Co. and Educational
Communications Inc.

However, these acquisitions have broadened American
Achievement's product offerings and enabled the company to
compete within about $1.3 billion of the scholastic products
market. The July 2000 acquisition of Taylor Publishing provided
the company with a competitive position in the estimated $500
million high school and college yearbook market. The company has
an estimated 20% share of this market.


COMMTOUCH SOFTWARE: Expects to Be Cash Flow Positive by Year-End
----------------------------------------------------------------
Commtouch Software Ltd. (Nasdaq: CTCH), a leading vendor of
highly scalable messaging solutions to service providers,
announced results for the fourth quarter and fiscal year ended
December 31, 2001. Revenues for the fourth quarter of 2001 were
$3.0M compared with $5.3M for the same period last year and
$4.0M in the third quarter of 2001. Net loss for the fourth
quarter of 2001 was $2.0M, excluding a total of $5.5M of
amortization of prepaid marketing expense, amortization of
stock-based employee deferred compensation, in-process research
and development, amortization of goodwill and other purchased
intangibles, write-off of impaired investments and write-off of
impaired intangibles and other assets. This represents an 88%
reduction from the comparable period last years net loss of
$16.9M, and a 65% reduction from the third quarter of 2001 net
loss of $5.7M. Total loss for the fourth quarter of 2001 was
$7.5M compared with $24.1M in the same period last year
and $27.8M in the third quarter of 2001. Headcount as at
December 31, 2001 was at 92 employees.

Revenues for the year ended December 31, 2001 were $15.3M,
compared with $19.1M in fiscal 2000. Excluding amortization of
prepaid marketing expense, amortization of stock-based employee
deferred compensation, in-process research and development,
amortization of goodwill and other purchased intangibles, write-
off of impaired investments and write-off of impaired
intangibles and other assets of $30.4M, net loss for the fiscal
year was $30.6M, a 24% reduction from the previous fiscal year's
net loss of $40.4M. Total loss for the fiscal year was $61.0M,
compared with $54.2M, in the previous year. Included in the
$61.0M loss are impairment charges to write-off intangibles from
an acquisition and economically impaired and/or unused assets.
Also included are charges to exit the messaging services
business and renegotiate contractual obligations for the
services business.

In regards to the company's present situation, Gideon Mantel,
CEO of Commtouch, noted, "[Wednes]day we announced the sale of
Wingra to its current senior management. We have implemented the
sale of the consumer business unit to CPSG - Mail Centro, and we
will be entitled to future royalties. Currently, we are
expanding this agreement to also include our enterprise
customers. Upon successful execution of these transactions we
will continue to minimize our cash burn and expenses and our
target is to become cash flow positive by the end of 2002. Based
on today's cash balance, the current projection of
revenues and expenses, and the private placement that we have
announced [Wednes]day, we expect to have sufficient cash to
continue operations until we become cash positive."

Commtouch Software Ltd., is the developer and provider of
comprehensive and highly scalable messaging solutions through
its Commtouch Messaging Platform (CMP) for service providers
such as ISPs, ASPs, Data Centers, Telcos and Wireless Operators.
The CMP offers service providers an opportunity to increase
revenue from their business and residential subscribers
utilizing CMP's advanced messaging services, which can be
deployed and managed easily and quickly. The Company's core
competencies come from its vast experience in hosted messaging
as a global ASP and its established reputation as a leading
vendor for email software applications. Commtouch is
headquartered in Netanya, Israel and its subsidiary company,
Commtouch Inc., operates out of Mountain View, CA. The Company
was founded in 1991 and has been a publicly traded company since
1999 (Nasdaq: CTCH). As at December 31, 2001, the company's
balance sheet showed that its total current liabilities exceeded
total current assets by about $600,000.

To learn how Commtouch solutions are designed to meet service
providers' messaging and collaboration needs, visit its Web site
at http://www.commtouch.com


COMPUTER LEARNING: Trustee & Tranzon Selling $32M Loan Package
--------------------------------------------------------------
One year from its successful nationwide Chapter 7 bankruptcy
liquidation of the real estate leases, furniture, fixtures, and
equipment of Computer Learning Centers, Inc., Tranzon Fox has
been retained by Chapter 7 Trustee H. Jason Gold, pursuant to
U.S. Bankruptcy Court Authority, to sell the Student Accounts
Receivable with an approximate face value of $32 million.  (Case
number 01-80096-RGM). The receivables will be sold Absolute to
the Highest Bidder, subject only to bankruptcy court
confirmation.

The receivables include a portfolio of 13,492 student loans
divided into 8 pools, and all non-leased equipment at the
Computer Learning Center's Collection Office in Plymouth
Meeting, PA.   All inquirers are required to complete a
Confidentiality Agreement, available on-line at
http://www.tranzon.comprior to receiving information on the  
student accounts receivable.  Documents will also be available
for inspection at the Computer Learning Centers Collection
Office in Plymouth Meeting, PA, by appointment only on
March 6th - 8th and 11th - 14th.  Sealed bids are due March 19,
2002 at 5 pm.

"It is especially rewarding to be retained to sell the Student
Accounts Receivable in light of our recent success in generating
funds for the creditors of the Computer Learning Centers
bankruptcy case," said Stephen Karbelk, Executive Vice President
of Tranzon Fox.  "The sale of these remaining receivable assets
presents a unique opportunity for debt buyers to acquire a
significant portfolio through the bankruptcy auction process."

Virginia Beach-based Tranzon Fox, formerly Fox & Associates, has
been a leading provider of auction marketing services since
1990.  Having become in November 2000 a founding member of
Tranzon, LLC, the nation's first truly national real estate
auction firm, Tranzon Fox has further extended its ability to
provide comprehensive, business-savvy, technologically-advanced
auction solutions that transform sellers' assets into energy.


CYGNIFI DERIVATIVES: Has Until May 1 to Propose Chapter 11 Plan
---------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the Southern District
of New York, the exclusive periods during which Cygnifi
Derivatives Services LLC may file a plan of reorganization and
solicit acceptances of that plan are extended.  The exclusive
period during which only the Debtor may file a plan is extended
through May 1, 2002 and the exclusive period to solicit
acceptances of that plan now runs through July 1, 2002.

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.


DANA CORP: S&P Assigns BB Rating to New $250MM Note Issue
---------------------------------------------------------
On February 27, 2002, Standard & Poor's assigned its BB rating
to Dana Corp.'s proposed $250 million senior unsecured notes
issue due 2010, offered under Rule 144a. Proceeds from the debt
offering will be used to repay existing debt and for general
corporate purposes, and will satisfy a liquidity requirement
under the company's recently renewed 364-day credit facility. At
the same time, Standard & Poor's affirmed its BB corporate
credit rating on Toledo, Ohio-based Dana, a supplier of
components, modules, and systems to vehicle manufacturers and
related aftermarkets.

The ratings on Dana reflect its leading market positions, offset
by exposure to cyclical and competitive industries and the
challenges associated with the implementation of a major
restructuring program.

Despite the significant market position many of its products
hold, a diversified customer base, a solid aftermarket
distribution network, and good global diversification, Dana has
faced significant challenges during the past year. Sharp
declines in heavy-duty truck production; decreasing production
schedules in the passenger car/light-truck market; increasing
pricing pressures; and continuing softness in the aftermarket
have led to a significant deterioration in the company's
financial profile.

In 2001, Dana reported a net loss of $298 million (after $390
million in restructuring charges). This compares with $334
million in net income in 2000 (after $173 million in
restructuring and integration charges) and $513 million in net
income in 1999 (after $181 million in restructuring and
integration charges).

In response to the earnings pressures, Dana has cut its
dividend, put the businesses of Dana Credit, its subsidiary, up
for sale, and accelerated restructuring actions. The company
intends to close or consolidate more than 30 facilities
worldwide and reduce headcount by at least 15%. These actions
should help the company gradually improve its financial profile
and position itself to better deal with future periods of
industry stress. However, they will likely also put additional
pressure on cash flow and financial flexibility over the near
term.

Dana recently renegotiated its bank lines, and current ratings
are based on the assumption that the company will remain in
compliance with the revised bank covenants and retain a sizeable
level of unused borrowing capacity under these lines. However,
because of the challenging near-term outlook for Dana's end
markets and the significant restructuring taking place this
year, Standard & Poor's believes that covenant compliance will
remain tight.

The current ratings are based on the expectation that the
company will remain committed to debt reduction and that this
obligation, combined with benefits from restructuring actions,
will help Dana generate improved credit protection measures
during the next two years, with funds from operations to debt
improving to the mid- to upper-teen percentage area and debt to
capital (adjusted for operating leases) averaging about 60%.

                      Outlook

Upside rating potential is limited by difficult industry
fundamentals and the challenges associated with the significant
restructuring program underway at the company. Benefits from
restructuring actions and ongoing efforts to improve financial
flexibility should limit downside risk.


ENRON: Wants to Continue Susman's Engagement as Defense Counsel
---------------------------------------------------------------
At the Petition Date, Enron Corporation and its debtor-
affiliates employed Susman Godfrey LLP as class action defense
counsel in connection with putative securities class actions and
putative employee benefit plan class actions commenced against
the Debtors, as well as certain shareholder derivative actions
filed on behalf of Enron Corporation.

By this application, the Debtors seek the Bankruptcy Court's
permission to continue Susman's employment, nunc pro tunc to the
Petition Date.

Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, in New
York, explains that the Debtors selected Susman as their class
action defense counsel because of the firm's extensive
experience and knowledge with respect to complex commercial
transactions and litigation matters.  According to Mr. Rosen,
Susman will work closely with the Debtors' general bankruptcy
counsel to avoid duplication of services.

Aside from performing legal services necessary in the Class
Actions, including negotiations with plaintiffs' counsel and
appearances at court hearings -- Susman has also agreed to
perform other legal services that the Debtors' general
bankruptcy counsel determine to be necessary and appropriate,
after advice and consultation.

The Debtors propose to compensate Susman its customary hourly
rates for services and to reimburse Susman according to its
standard reimbursement policies.  Mr. Rosen lists Susman's
regular hourly rates:

              Partners                $900 - 325
              Associates               275 - 175
              Paraprofessionals        150 - 75

Moreover, Mr. Rosen adds, Susman regularly charges for
reimbursement of out-of-pocket expenses including secretarial
overtime, travel, copying, outgoing facsimiles, document
processing, court fees, transcript fees, long distance phone
calls, postage, messengers, overtime meals and transportation.

Mr. Rosen informs Judge Gonzalez that that the Debtors paid
Susman approximately $2,650,000 on November 1, 2001 for
professional services performed and to be performed and for
reimbursement of related expenses relating to a variety of
litigation matters.

Kenneth Marks, a partner of Susman Godfrey LLP, assures the
Court that Susman is a "disinterested person" as that term is
defined in section 101(14) of the Bankruptcy Code.  Mr. Mark
states that Susman has in the past represented, currently
represents, and may in the future represent entities that may be
claimants or interest holders of the Debtors, but only in
matters unrelated to the Debtors' pending Chapter 11 cases.
(Enron Bankruptcy News, Issue No. 14; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


ENRON CORP: Houston Astros Buy-Back Ballpark Name for $2.1MM
------------------------------------------------------------
Enron Corp. (OTC: ENRNQ), announced that it has reached an
agreement on the terms of a settlement regarding the naming
rights contract between Enron and the Houston Astros Baseball
Club.

"We are pleased to have resolved this issue with the Astros with
a deal that is beneficial to all parties, including Enron's
creditors and the City of Houston," said Jeff McMahon, president
and chief operating officer. "Additionally, this agreement
allows the Astros to move forward in securing a new sponsor for
their state-of-the-art ballpark and world-class baseball
organization."

Under the terms of the settlement, the Astros have agreed to pay
the estate the sum of $2.1 million and release Enron from all
obligations under the contract.  As a result, the Astros have
the right to immediately negotiate a naming rights agreement
with a new partner.

While both parties have agreed to the terms of the settlement,
the United States Bankruptcy Court for the Southern District of
New York must review and approve the terms of the settlement
before it becomes final.

Enron Corp., delivers energy, physical commodities and other
energy services to customers around the world.  Enron's Internet
address is http://www.enron.com

DebtTraders reports that Enron Corp.'s 9.125% bonds due 2003
(ENRON2) are trading between 13 and 14.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ENRON2for  
real-time bond pricing.


ENRON CORP: Severed Employees Get Seat on CA Steering Committee
---------------------------------------------------------------
United States District Judge Melinda Harmon has signed an order
that grants the Severed Enron Employee Coalition (SEEC) a
substantial role in the mammoth Enron class action litigation,
on behalf of former Enron Corp. workers.

Lawyers for SEEC will help set the direction of the many Enron-
related lawsuits as part of a five law firm steering committee.
The Order formally appoints McClanahan & Clearman, L.L.P. of
Houston as a member of the Steering Committee. Other SEEC
counsel working on behalf of the former Enron employees in the
Houston class action include:

     --  George Whittenburg, Whittenburg Whittenburg &
         Schachter, P.C.

     --  Martin Dies, III and Richard Hile, Dies & Hile, L.L.P.

     --  Broadus Spivey, Spivey & Ainsworth, P.C.

According to Joseph Collins, Chairman of the SEEC Legal
Interface Committee, "This appointment gives SEEC a place at the
table where the important decisions concerning the conduct of
the litigation and any possible settlement will be made."

Judge Harmon's order marks the third recent, significant legal
victory for severed Enron employees. On Feb. 20, a New York
bankruptcy judge ordered that lawsuits pending against Enron in
federal court in Houston may move forward later this year. On
Feb. 14, U.S. Trustee Carolyn Schwartz informed SEEC that she
had decided to appoint an "official committee to focus on the
issues relating to (Enron) employees." Her decision came just 16
days after SEEC first requested the appointment of such a
committee. The Trustee is still contemplating the final makeup
of this Official Employees' Committee.

"We have come a long way in the last few weeks," says Rod
Jordan, SEEC co-chair, "We are now more than 600 members and
counting."

Attorney Randy McClanahan, who will sit on the steering
committee, cautions that there is still a long way to go. "Being
appointed to the class action Steering Committee will allow SEEC
to have an impact on the legal proceedings in Texas," says
McClanahan. "However, this in no way diverts SEEC's attention
away from the very important bankruptcy proceedings in New York
in which SEEC hopes to play a major role."

The Severed Enron Employees Coalition (SEEC) is the largest
independent, volunteer organization representing former Enron
employees. The purpose of SEEC is to identify and articulate the
issues of most interest to these former employees. Currently,
these issues include, but are not limited to, asserting the
rights of former employees who have incurred significant losses
in their 401(k) accounts and who have been denied adequate
severance, vacation and bonus compensation. Former Enron
employees wishing to join SEEC may do so by visiting
http://www.theseec.org  


EXODUS COMMUNICATIONS: Resolves Cure Amounts with Nine Creditors
----------------------------------------------------------------
Exodus Communications, Inc., its debtor-affiliates and creditors
International Gateway West LLC, StorageWay Inc, MCI WorldCom
Communications Inc., MFS Telecom Inc and UUNet Technologies
Inc., Cupertino Electric Inc., Devcon Construction, Main Street
LLC and Payments Technologies Inc., along with Cable & Wireless
and Digital Island, sought and obtained Judge Robinson's
approval of a Stipulation memorializing the parties' agreements
about cure amounts due in connection with the Debtors'
assumption of various executory contracts.  The Multi-Party
Stipulation provides that:

A. With respect to International Gateway West's disputed cure
     amount, the Debtors will escrow the disputed claims reserve
     the amount of $50,904.49;

B. With respect to StorageWay's disputed cure amount, the
     Debtors will escrow the disputed claims reserve the sum of
     $3,570,000 provided that StorageWay's objection may be
     resolved pursuant to a stipulation and order providing for
     a specific resolution of StorageWay's setoff recoupment and
     other issues. A draft of that stipulation and order has
     been provided to the Debtors and may be added to the record
     of the hearing on the motion. Any promissory note shall not
     be assumed and assigned to C&W or the Purchaser;

C. With respect to Main Street's disputed cure amount, the
     Debtors will escrow the disputed claims reserve the sum of
     $29,710.84. As part of the assumption and assignment of the
     lease concerning the real property and improvements located
     at 17832 Gillette Avenue in Irvine, California, the Debtors
     shall satisfy all mechanics' liens filed against such real
     property and the improvements thereon and neither C&W, the
     Purchaser nor any of their affiliates, shall have any
     liabilities or obligations to Main Street or any other
     party with respect to such other mechanics' liens;

D. With respect to Cupertino Electric's mechanics' liens, the
     Debtors will escrow in the disputed claims reserve the sum
     of $3,467,503 which is equal to fifty percent of Cupertino
     Electric's mechanic's liens. Cupertino Electric shall not
     be required to release its mechanic's liens and the Debtors
     shall not be permitted to release such mechanics' liens,
     until that sum is escrowed. The escrowed funds shall be
     available to Cupertino Electric's mechanics' liens with
     respect to the leasehold, ownership or fee or other
     interest subject to mechanics' liens and neither Cable &
     Wireless, the Purchaser nor any of their affiliates shall
     have any liabilities or obligations to Cupertino Electric
     or any other party with respect to such mechanics' liens;

E. With respect to Devcon's mechanics' liens, the Debtors will
     escrow in the disputed claims reserve the sum of
     $11,334,301.50 which equals 150% of Devcon's mechanics'
     liens. Devon shall not be required to release such
     mechanics' liens until that sum is escrowed. The escrowed
     funds shall be available to pay Devcon's mechanics' liens
     with respect to the leasehold, ownership or fee or other
     interests subject to the mechanic's liens and neither C&W,
     the Purchaser nor any of their affiliates shall have any
     liabilities or obligations to Devcon or any other party
     with respect to such mechanics' liens;

F. With respect to Payments Technologies, the Debtors shall not
     assume and assign the Master Services Agreement or the
     Order Form. (Exodus Bankruptcy News, Issue No. 14;
     Bankruptcy Creditors' Service, Inc., 609/392-0900)


FEDERAL-MOGUL: Zolfo Cooper Advising New Future Claimants' Rep.
---------------------------------------------------------------
Eric D. Green, the Legal Representative for the Future Asbestos-
Related Claimants in the chapter 11 cases of Federal-Mogul
Corporation and its debtor-affiliates, seeks an order from the
Court authorizing his employment and retention of Zolfo Cooper
LLC as bankruptcy consultants and special financial advisors,
nunc pro tunc to February 4, 2002.

Mr. Green tells the Court that selected Zolfo because of its
experience at a national level in matters of this character and
its exemplary qualifications to perform the services required in
this case. Zolfo is well-qualified to serve as bankruptcy
consultants and special financial advisors to the Futures
Representative as it specializes in assisting and advising the
Debtors, creditors, investors and court-appointed officials in
bankruptcy proceedings and out-of-court workouts. Its services
have included assistance in developing/analyzing and evaluating,
negotiating and confirming plans of reorganization and
testifying regarding debt restructuring, feasibility and other
relevant issues.

Mr. Green will look to Zolfo to:

A. monitor the Debtors' cash flow and operating performance,
     including:

     a. comparing actual financial results to plans;

     b. evaluating the adequacy of financial and operating
          controls;

     c. tracking the status of the Debtors' professionals'
          progress relative to developing and implementing
          programs such as preparation of a business plan,
          identifying and disposing of non-productive assets,
          and other such activities;

     d. preparing periodic presentations to the Futures
          Representative summarizing findings and observations
          resulting from Zolfo Cooper's monitoring activities;

B. analyze and comment on operating and cash flow projections,
     business plans, operating results, financial statement,
     other documents and information provided by the Debtors and
     data pursuant to the Future Representative's request;

C. advise the Future Representative in connection with and in
     preparation for meetings with Debtors, other constituencies
     and their respective professionals;

D. perform an enterprise valuation of the Debtors' estate which
     are pertinent to the Futures Asbestos-Related Claimants;

E. prepare for and attend meeting with the Future
     Representative;

F. analyze claims and perform investigations of potential
     preferential transfers, fraudulent conveyances, related-
     party transactions, and such other transactions as may be
     requested by the Futures Representative;

G. analyze and advise the Futures Representative about any plan
     of reorganization proposed by the Debtors, the underlying
     business plan, including relates assumptions and rationale,
     and the related disclosure statement;

H. provide such other services as requested by the Futures
     Representative.

Zolfo member Steven E. Panagos believes that none of his fellow
members or any Zolfo employee is related to the Debtors, their
creditors, and other parties in interests except that:

A. Zolfo is connected with the Futures Representative by virtue
     of this engagement;

B. Zolfo has been retained by the Futures Representative in the
     case of Babcock & Wilcox, in the U.S. Bankruptcy Court for
     the Eastern District of Louisiana; and

C. Zolfo may have represented certain of the Debtors' creditors
     or other parties-in-interests in matters unrelated to these
     cases, including:

     a. Lenders: ABN Amro, Banco Espirito, Bank of Montreal,
          Bank of America/Nations Bank, Bank of Tokyo-
          Mitsubishi, Bank of New York, Bank of Nova Scotia,
          Bank One, Bayerische Vereinsbank AG, Bear Sterns, BNP,
          Citibank/Citicorp, Citizens Bank, Comerica Bank,
          Credit Agricole Indosuez, Credit Suisse Asset
          Management, Credit Lyonnais, Dai-Ichi Kangyo Bank,
          Dresdner Kleinwort Wasserstein, Deutsche Bank, Eaton
          Vance, Erste Bank, Foothill Capital, First Union
          National Bank, Fleet National Bank, Fuji Bank, Goldman
          Sachs, HSBC Bank, IBJ Witehall, Indosuez Capital, JP
          Morgan Chase, KBC Bank, Key Bank National, KZH
          Sterling LLC, Mellon Bank, National Westminster Bank,
          Pilgrim Investments Inc., Royal Bank of Scotland,
          Societe Generale, Travelers Insurance Group, and
          Wachovia Securities;

     b. Insurance Carrier: Aon Risk Service;

     c. Indenture Trustee: Bank of New York, and US Bank;

     d. Equity Holder: Dimensional Fund Advisors;

     e. Professionals: Ernst & Young, PricewaterhouseCoopers,
          and Sidley & Austin, Sitrick & Co.;

     f. Unsecured Creditor: General Electric Capital Corp., and
          National City Bank.

Mr. Panagos informs the Court that Zolfo will bill for services
at its customary hourly rates:

      Principals               $500-$675
      Professional Staff       $225-$495
      Support Personnel        $ 75-$200

Mr. Panagos states that Zolfo traditionally and routinely
receives success or consummation fees for work of the nature
contemplated by this engagement.  Both Zolfo and the Futures
Representative recognize, however, that it is difficult to
define success at the inception of an engagement by an entity in
the position of the Futures Representative and that the Court
will not approve any part of an engagement that compels the
award of a consummation fee. Accordingly, in connection with a
plan of reorganization supported by the Futures Representative,
pursuant to which a trust is created, Zolfo will seek upon the
consent of the Futures Representative an order directing the
Debtors to pay Zolfo a $1,000,000 Consummation Fee. (Federal-
Mogul Bankruptcy News, Issue No. 12; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


FRUIT OF THE LOOM: Will Close Alabama Facility Due to Weak Sales
----------------------------------------------------------------
Fruit of the Loom, Inc. announced, as a result of the continued
weakness in textile and apparel sales, that it would close an
additional manufacturing facility located in Fayette, Alabama,
affecting 290 employees.  Phase down of the facility will begin
immediately with a permanent closure completed by April 28,
2002.

The Company will provide employees a separation package that
includes pay and benefits in accordance with the Worker
Adjustment and Retraining Notification Act.  The Company has
also contacted the State of Alabama Rapid Response Team to
provide outplacement assistance and other services to employees.

Since filing for Chapter 11 Bankruptcy in December 1999, Fruit
of the Loom has been in the process of restructuring operations
and realigning its business strategies to focus on its core
product lines.

Fruit of the Loom is a leading international vertically
integrated basic apparel company, emphasizing branded products
for consumers of all ages.  The Company is one of the world's
largest manufacturers and marketers of men's and boys'
underwear, women's and girls' underwear, printable T-shirts and
fleece for the activewear industry, casualwear and
childrenswear.  Fruit of the Loom employs approximately 23,000
people in over 50 locations worldwide.  The Company sells its
products principally under the FRUIT OF THE LOOM(R) and BVD(R)
brands.  For more information about the Company and its
products, visit http://www.fruit.com

DebtTraders reports that Fruit of the Loom's 7% bonds due 2011
(FRUIT3) are trading between 48 and 53. See
http://www.debttraders.com/price.cfm?DT_SEC_TICKER=fruit3for  
real-time bond pricing.


GAP INC: Fitch Ratchets $2BB Senior Note Rating Down to BB-
-----------------------------------------------------------
Fitch Ratings has lowered its rating of Gap, Inc.'s $2 billion
of senior unsecured notes to 'BB-' from 'BB' and assigned a
'BB-' rating to the company's expected $1 billion convertible
note to be issued under Rule 144A.

The downgrade reflects the significant addition to the company's
debt burden, which further weakens its credit profile as well as
somewhat weaker than anticipated year-end results. The Rating
Outlook remains Negative. This rating was initiated by Fitch as
a service to users of its ratings. The rating is based on public
information.

Gap Inc.'s credit profile has deteriorated considerably, due
primarily to weak sales and lower operating cash flow. For the
fiscal year ended February 2, 2002, leverage (total debt plus
eight times rents to EBITDAR) weakened to approximately 5.2
times from 3.0x in the same period last year and EBITDAR
coverage of interest and rents decreased to 1.8x from 3.0x over
the same period. The pending $1 billion convertible note
offering is expected to increase the company's total debt to
approximately $3 billion, which will further weaken bondholder
protection measures from year-end levels. However, this
offering, coupled with the $1 billion in cash on hand at year
end and the anticipated $1.3 billion secured bank facility
should provide the company with sufficient liquidity for 2002.

Weak sales coupled with a more promotional retail environment
continue to pressure the company's operating performance. For
fiscal 2001, profitability, measured by EBITDAR to sales,
weakened to 13.7% from 21% in the prior year. In order to
address its difficulties and preserve cash flow, Gap Inc. has
significantly slowed its expansion plans, cutting capital
expenditures to around $400 million in 2002 from about $1
billion in 2001. In addition, Gap Inc., has curtailed share
repurchase activity.

Nevertheless, the Negative Rating Outlook will remain in place
until the company can demonstrate its ability to appropriately
merchandise and manage its store base, and restore positive
sales momentum. While the company's merchandising strategy has
been revised to broaden its appeal, an estimated nine month lead
time on new merchandise postpones the beginning of a recovery
until the second half of 2002, at the earliest.

Gap Inc., based in San Francisco, operates over 4,100 retail
stores under its Gap, Old Navy and Banana Republic divisions. Of
that total, about 2,300 were domestic Gap stores, 440 Banana
Republic, 800 Old Navy and 630 international Gap stores located
in Canada, Japan, the U.K., France, and Germany.

DebtTraders reports that Gap Inc.'s 5.625% bonds due 2003 (GPS1)
are trading between 94.5 and 96. For real-time bond pricing, see
http://www.debttraders.com/price.cfm?dt_sec_ticker=GPS1


GLOBAL CROSSING: Hearing on Willkie's Employment Set for Today
--------------------------------------------------------------
Global Crossing Ltd., and its debtor-affiliates seek court
approval pursuant to Bankruptcy Code section 327(e) to employ
Willkie Farr & Gallagher as special counsel to advise the Board
of Directors of Global Crossing with respect to certain matters
in these chapter 11 cases under a general retainer in accordance
with the firm's normal hourly rates in effect when services are
rendered and normal reimbursement policies.

Mitchell C. Sussis, the Debtors' Corporate Secretary, tells the
Court that the Debtors have selected Willkie as special counsel
because of the firm's prepetition representation of the Debtors
and the Board of Directors of Global Crossing. As a consequence
of Willkie's prepetition representation of the Debtors and the
Board of Directors of Global Crossing, the Debtors believe that
the firm is both well qualified and uniquely able to represent
them in their chapter 11 cases in a most efficient and timely
manner in connection with the particular matters for which the
firm is proposed to be retained. Were the Debtors required to
retain attorneys other than Willkie in connection with the
prosecution of these particular matters, the Debtors, their
estates, and all parties in interest would be unduly prejudiced
by the time and expense necessarily attendant to such attorneys'
familiarization with the intricacies and history of such
matters.

Mr. Sussis contends that the employment of Willkie under a
general retainer is appropriate and necessary to enable the
Debtors to execute faithfully their duties as debtors and
debtors in possession and to implement their restructuring and
reorganization. Subject to further order of this Court, it is
proposed that Willkie be employed to:

A. advise the Board of Directors of Global Crossing with respect
     to certain issues relating to Global Crossing's various
     relationships with its debtor and non-debtor affiliates and
     subsidiaries, including Asia Global Crossing Ltd. and
     related matters of corporate governance that may arise in
     connection with the Debtors' chapter 11 cases, and

B. provide bankruptcy and real estate advice and assistance in
     connection with the chapter 11 case of Exodus
     Communications, Inc. and its affiliates currently pending
     before the United States Bankruptcy Court for the District
     of Delaware.

Myron Trepper, a member of the firm of Willkie Farr & Gallagher
LLP, submits that the members and associates of the firm do not
have any connection with or any interest adverse to the Debtors,
their creditors, or any other party in interest, or their
respective attorneys and accountants, except that it currently
represents in unrelated matters several parties-in-interest
including 360networks, John Legere, Level 3 Communications,
Inc., Telia International Carrier, and McLeodUSA, Inc.

Subject to Court approval, Mr. Trepper relates that compensation
will be payable to Willkie on an hourly basis, plus
reimbursement of actual and necessary expenses incurred. At
present, the Firm's standard hourly rates range from:

           Partners          $490 to $695
           Associates        $205 to $475
           Legal Assistants  $ 95 to $160

Since its initial retention by Global Crossing in September
2001, Mr. Trepper informs the Court that Willkie has received
payment of approximately $470,000 for services rendered to the
Debtors and is also in possession of a retainer from the Debtors
in the amount of approximately $150,000.

                          *  *  *

Judge Gerber entered an interim order approving Willkie's
employment, with a hearing scheduled for today, March 1, 2002.
If no objections are filed, Judge Gerber orders that this
interim order shall be deemed a final order. (Global Crossing
Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


HEGCO CANADA: Seeks Creditor Protection through Receivership
------------------------------------------------------------
The Board of Directors of Hegco Canada, Inc., has voluntarily
appointed Ricter, Allan & Taylor Inc. as receiver to oversee the
restructuring of the Company. The purpose of the appointment is
to provide creditor protection to the Company allowing time for
the sale of some of the Company assets during the restructuring
process.

The Company's next material event will be the announcement of
the sale of assets after a period of evaluation.


HI-RISE RECYCLING: Files Prepackaged Chapter 11 to Sell Assets
--------------------------------------------------------------
Hi-Rise Recycling Systems, Inc. (OTCBB:HIRI), announced that it
has initiated a Chapter 11 bankruptcy case for the purpose of
implementing a pre-negotiated restructuring plan with its senior
lender.

The Company also announced that, in connection with this Chapter
11 case, it has signed a Letter of Intent to sell the business
of its Solid Waste Equipment Division to HRS Acquisition
Company, an affiliate of a privately owned investment management
firm managing a number of private equity funds with capital
under management in excess of $200 million.

The sale will be for an aggregate purchase price equal to $31
million in cash plus the assumption of specified Company
liabilities. The transaction will consist of the sale of
substantially all of the assets and assignment of specified
liabilities and contracts of DeVivo Industries, Inc., Hesco
Sales, Inc., United Truck and Body Corporation, BesPac Inc., DII
Acquisition Corp., and American Gooseneck Inc.

The Solid Waste Equipment Division is engaged primarily in the
business of manufacturing solid waste metal containers, balers,
compactors, roll-off containers, transfer trailers, roll-off
hoists, and other specialized equipment used for the collection
and transportation of solid waste.

The sale is contingent upon and pursuant to authorization by the
Bankruptcy Court under the Company's plan of reorganization and
other customary closing conditions and has the support of the
Company's senior lender.

The Company's senior lender is providing the Company with a
debtor-in-possession credit facility in an amount not to exceed
$4 million which will allow the Company to continue operations
during the bankruptcy proceedings. The Company's reorganization
plan is on file with the Bankruptcy Court.  Linda Worton
Jackson, Esq., at Greenberg Traurig, P.A. is serving as legal
counsel to the Company.

"The Chapter 11 reorganization and the pending sale of the Solid
Waste Division Assets is the best solution to a difficult
problem," said Dr. James Ashton, Acting Chief Executive Officer.
"Hesco, DeVivo, BesPac, United Truck and Body Corporation and AG
Products will continue as independent operating entities with an
enhanced ability to service their customers, jobs will be
preserved and debt will be restructured."


HI-RISE RECYCLING: Case Summary
-------------------------------
Lead Debtor: Hi-Rise Recycling Systems, Inc.
             8505 NW 74 St
             Miami, Fl 33166

Bankruptcy Case No.: 02-11813

Chapter 11 Petition Date: February 27, 2002

Court: Southern District of Florida

Judge: A. Jay Cristol

Debtors' Counsel: Linda G Worton, Esq
                  1221 Brickell Ave
                  Miami, FL 33131
                  305-579-0500


IT GROUP: Seeks Approval to Hire Ordinary Course Professionals
--------------------------------------------------------------
The IT Group, Inc., and its debtor-affiliates seek authorization
to retain Ordinary Course Professionals without the necessity of
filing a separate, formal retention application for each
Ordinary Course Professional, and to compensate the Ordinary
Course Professionals for postpetition services rendered, subject
to certain limits, and subject to the Debtors' budget for these
cases, without the necessity of additional Court approval.

Gregg M. Galardi, Esq., at Skadden Arps Slate Meagher & Flom LLP
in Wilmington, Delaware, assures the Court that the Debtors will
file individual retention applications for any professionals
that the Debtors seek to employ in connection with the conduct
of their chapter 11 cases. Although the Debtors believe that
many of the Ordinary Course Professionals may not be
"professional persons" as contemplated by section 327 of the
Bankruptcy Code, and thus that no retention of such persons is
necessary, out of an abundance of caution the Debtors are
seeking the Court's authorization to retain all ordinary Course
Professionals.

Mr. Galardi tells the Court that the Debtors desire to continue
to employ and retain the Ordinary Course Professionals to render
services to their estates that are similar to those rendered
before the commencement of these chapter 11 cases. Although the
automatic stay and other issues in these cases may decrease the
Debtors' need for certain Ordinary Course Professionals'
services, the Debtors cannot now quantify or qualify that need.
Moreover, the number of Ordinary Course Professionals renders it
impractical and inefficient for the Debtors and this Court to
address the proposed retention of ordinary Course Professionals
on an individual basis.

The Debtors propose that they be permitted to pay, without
formal application to the Court by any ordinary Course
Professional, 100% of the interim fees and disbursements to each
of the ordinary Course Professionals upon the submission to the
Debtors of an appropriate invoice setting forth in reasonable
detail the nature of the services rendered after the Petition
Date so long as such interim fees and disbursements do not
exceed a total of $30,000 per month per ordinary Course
Professional, and no more than $300,000 per ordinary Course
Professional for the duration of these chapter 11 cases;
provided, however, that with respect to Reed, Smith, Shaw &
McClay, interim fees and disbursements shall not exceed a total
of $60,000 per month, and that with respect to Ernst & Young,
interim fees and expenses shall not exceed a total of $150,000
during the entire duration of these chapter 11 cases, but shall
not be subject to monthly limits. The Debtors propose that
payments to a particular Ordinary Course Professional would
become subject to Court approval pursuant to an application for
an allowance of compensation and reimbursement of expenses under
sections 330 and 331 of the Bankruptcy Code if such payments
exceed $30,000 per month (or $60,000 per month in the case of
Reed), or $300,000 ($150,000 in the case of Ernst & Young) for
the entire chapter 11 case for that Ordinary Course
Professional.

The Debtors also request that all ordinary Course Professionals
be excused from submitting separate applications for proposed
retention. The Debtors recognize, however, the importance of
providing the Court and the United States Trustee information
about each ordinary Course Professional who is an attorney. The
Debtors thus propose that while they be permitted to continue to
employ, retain, and compensate all ordinary Course
Professionals, each Ordinary Course Professional who is an
attorney be required to file with the Court and serve upon the
United States Trustee, counsel to the Creditors' Committee,
counsel to any other official committee(s) appointed in these
cases, counsel to the Debtors' prepetition and postpetition
lenders, and the undersigned counsel to the Debtors, an
Affidavit of Proposed Professional within 30 days of the date of
service of an order granting this Motion.

The Debtors further request that the United States Trustee, the
Creditors' Committee and any other official committee(s), and
the Lenders be given 20 days from the date of service of a
Professional's affidavit to object to the retention of such
Professional. Objections, if any, shall be served upon:

     A. the Ordinary Course Professional,

     B. the United States Trustee,

     C. counsel to the Creditors' Committee and counsel to any
        other official committee(s),

     D. counsel to the Lenders, and

     E. undersigned counsel to the Debtors on or before the
        Objection Deadline.

If any such objection cannot be resolved within 20 days of
service, Mr. Galardi states that the matter will be scheduled
for hearing before the Court at the next regularly-scheduled
omnibus hearing or other date otherwise agreeable to the
Ordinary Course Professional, the Debtors, and the party which
objected to the retention of the Ordinary Course Professional.
If no objection is submitted on or before the Objection
Deadline, or if any objection submitted is timely resolved as
set forth above, the Debtors request that, without further order
of the Court, the employment, retention, and compensation of the
Ordinary Course Professional be deemed approved.

The Debtors also request that they be authorized to employ and
retain additional ordinary Course Professionals as necessary, in
the ordinary course of their business, without the need to file
individual retention applications and without the need for any
further hearing or notice to any other party. The Debtors
propose that, as with the Ordinary Course Professionals, the
United States Trustee, the Creditors' Committee and any other
official committee(s), and the Lenders be given 20 days after
service of each Additional Ordinary Course Professional's
affidavit to object to the retention of such Professional. If no
objection is submitted pursuant to the objection procedures
described above, Mr. Galardi submits that the Debtors shall be
authorized to retain such Professional as a final matter.

The Debtors submit that the retention of the Ordinary Course
Professionals and the payment of interim compensation on the
basis set forth herein is in the best interests of the Debtors'
estates. While generally the Ordinary Course Professionals with
whom the Debtors have previously dealt wish to provide services
to the Debtors on an ongoing basis, Mr. Galardi believes that
many might be unwilling to do so if they are able to be paid on
a regular basis only through a cumbersome, formal application
process. If the Debtors lose the expertise, experience and
institutional knowledge of these Ordinary Course Professionals,
the estates will incur significant and unnecessary expenses, as
the Debtors will be forced to retain other professionals without
similar background and expertise.

Because the Ordinary Course Professionals' employment relates
only indirectly to the Debtors' conduct of their businesses,
because the Ordinary Course Professionals are afforded only
marginal discretion in performing their work, and because the
ordinary Course Professionals will not be involved in
administering these chapter 11 cases, the Debtors do not believe
that the Ordinary Course Professionals are "professionals"
within the meaning of section 327 of the Bankruptcy Code, whose
retention must be approved by the Court. Nevertheless, out of an
abundance of caution, the Debtors seek the relief requested in
this Motion to avoid any later controversy about the Debtors'
employing and paying the Ordinary Course Professionals during
the pendency of these chapter 11 cases.

Although certain of the Ordinary Course Professionals may hold
unsecured claims against the Debtors, the Debtors do not believe
that any of the Ordinary Course Professionals have an interest
materially adverse to the Debtors, their estates, creditors or
shareholders. (IT Group Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 609/392-0900)  


INNOVATIVE CLINICAL: Closes Sale of Unit Under CNS Merger Pact
--------------------------------------------------------------
On February 7, 2002, Innovative Clinical Solutions, Ltd.
consummated the sale of its wholly owned subsidiary, Clinical
Studies, Ltd., under an Agreement and Plan of Merger dated
October 31, 2001 between the Company, CSL, Comprehensive
Neuroscience, Inc., a Delaware corporation and CNS Acquisition,
Inc., a Delaware corporation and wholly owned subsidiary of CNS,
as amended by the First Amendment to Agreement and Plan of
Merger dated December 31, 2001 between the Merger Parties and as
further amended by the Second Amendment to Agreement and Plan of
Merger dated February 6, 2002.

The sale of CSL was completed by a merger of CNS Acquisition
with and into CSL with CSL surviving as a wholly owned
subsidiary of CNS.  In exchange for its shares of CSL stock,
ICSL received 22,374,060 shares of the common stock of CNS.  In
addition, 1,630,735 shares of CNS common stock have been
reserved for issuance upon exercise of options held by employees
of CSL and former employees of ICSSL who have been hired by CNS.  
In connection with the Merger, 776,775 shares of CNS common
stock were issued in satisfaction of $500,000 of CSL
indebtedness.

Following the Merger, ICSL owned approximately 42.4% of the
voting securities of CNS.  Holders of all of the voting
securities of CNS prior to the Merger held approximately 46.4%
of its voting securities following the Merger.  Approximately
9.8% of the voting securities of CNS following the Merger are
owned by purchasers of CNS's Convertible Subordinated Notes in
the original principal amount of approximately $3.3 million.  Of
the 22,374,060 shares of CNS common stock received by ICSL in
the Merger, 17,129,707 shares are being held in escrow to
satisfy ICSL indemnification obligations, if any, pursuant to
the Merger Agreement, or to satisfy certain adjustments to the
merger consideration based on reductions in CSL's working
capital.  In addition, CNS has reserved 10% of its outstanding
fully-diluted common stock for issuance upon exercise of
options, which may be granted to existing and future employees,
directors, and consultants of CNS.  The delivery of shares to
CNS from the escrow and the exercise of any existing or newly
granted options would dilute ICSL's ownership percentage of CNS.  
Such dilution may be material.

Effective at once, Marvin Moser, M.D. resigned from the Board of
Directors of Innovative Clinical Solutions following the
consummation of the sale.

Innovative Clinical Solutions, Ltd., headquartered in
Providence, Rhode Island, provides services that support the
needs of the pharmaceutical and managed care industries. *
Innovative Clinical Solutions is trying to reposition itself
after filing for Chapter 11 bankruptcy protection and
restructuring. The company has sold its physician practices and
medical service businesses; it also sold its clinical trial
support division, which served pharmaceutical and biotechnology
companies, to IMPATH. The company is now focused on its network
management services, which include managed care contracting and
disease management, although it may sell this division as well.
Investment firm EQSF Advisers owns almost half of the company.


KAISER ALUMINUM: Gets Okay to Continue Intercompany Transactions
----------------------------------------------------------------
Kaiser Aluminum Corporation, and its debtor-affiliates sought
and obtained entry of an order from the Court approving the
continuation of certain ordinary course intercompany
transactions with certain nondebtor affiliates of the Debtors.

Prior to the Petition Date, Joseph Bonn, the Debtors' Executive
Vice President, informs the Court that the Debtors and the
nondebtor affiliates engaged in intercompany financial
transactions and asset transfers in the ordinary course of their
respective businesses. Transfers of cash to and from appropriate
bank accounts are made on account of the intercompany
transactions, which typically are in the nature of payment of
costs related to the production of goods and services provided
to the Debtors from these nondebtor affiliates. The intercompany
transactions also include payments for:

A. the funding, if necessary, of the nondebtor affiliates'
     working capital and capital expenditure requirements;

B. goods purchased by Debtors and nondebtor affiliates from one
     of more of the Debtors, or vice versa; and

C. ordinary course asset transfers from one company to another.

Daniel J. DeFranceschi, Esq., at Richards Layton & Finger in
Wilmington, Delaware, submits that the continuation of these
ordinary course transactions and related transfers is critical
to the Debtors' ongoing operations because it will permit the
Debtors to continue business as usual and meet its ongoing
obligations to customers and suppliers. By contrast, if these
transactions were to be discontinued, the Debtors' Cash
Management System and related administrative controls would be
disrupted to the detriment of the Debtors and their nondebtor
affiliates.

Mr. DeFranceschi relates that in the ordinary course of their
businesses, certain of the Debtors and MAXXAM Inc., the Debtors'
principal equity holder, engage in intercompany transactions
related to the rendering of services by employees of these
affiliated companies and allocation of certain shared office
overhead costs relating to the joint corporate headquarters. The
Debtors and MAXXAM settle up the amounts owing for these
intercompany services and overhead costs on a monthly basis,
using budgeted amounts. Periodically throughout the year, the
Debtors and MAXXAM "true up" the billed amounts to, among other
things, reflect actual amounts owed based on the time records
gathered from the constituent service groups and on an annual
basis, the Debtors are typically in a net payor position.

Pursuant to the provisions of the prepetition Credit Agreement
between certain of the Debtors and Bank of America, however, Mr.
DeFranceschi states that the Debtors were not permitted to pay
MAXXAM annually in excess of $2,250,000 for services actually
rendered by MAXXAM employees plus allocable overhead amounts.
These intercompany arrangements with MAXXAM are beneficial to
the Debtors because they reduce certain administrative costs
incurred by the Debtors and their nondebtor affiliates. By
sharing resources and allocating certain office overhead costs,
the Debtors and their nondebtor affiliates have access to
services, skillsets and other resources at costs below that
which would be incurred under third-party arrangements or
independent contracts.   Mr. DeFranceschi informs the Court that
at any given time, there may be balances due and owing from one
Debtor to another Debtor and between certain Debtors and their
nondebtor affiliates, representing extensions of intercompany
credit. As indicated, the Debtors maintain strict records of all
transfers of cash and can readily ascertain, trace and account
for all intercompany transactions. The Debtors, moreover, will
continue to maintain such records, including records of all
current intercompany accounts receivable and accounts payable.

To ensure that each individual Debtor will not, at the expense
of its creditors, fund the operations of another entity, the
Court orders that all intercompany claims against a Debtor by
another Debtor or a nondebtor foreign affiliate arising after
the Petition Date as a result of intercompany transactions
through the Debtors' Cash Management System be accorded
superpriority status, with priority over any and all
administrative expenses subject and subordinate only to:

A. the priorities, liens, claims and security interests granted
     under the DIP Facility and the orders of the Court
     approving the DIP Facility and

B. other valid liens.

By according the intercompany claims superpriority status, Mr.
DeFranceschi asserts that each individual Debtor utilizing funds
flowing through the Cash Management System will continue to bear
ultimate repayment responsibility, thereby maximizing the
protection afforded by the system to each such Debtor's
creditors. (Kaiser Bankruptcy News, Issue No. 2; Bankruptcy
Creditors' Service, Inc., 609/392-0900)   


KMART CORP: US Trustee Amends Creditors' Committee's Membership
---------------------------------------------------------------
On behalf of United States Trustee for Region 11 Ira Bodenstein,
Kathryn Gleason informs the Court that Nintendo of America was
not appointed to the Committee in Kmart Corporation's chapter 11
cases.  Rather, Ms. Gleason clarifies, Euler ACI is the correct
committee member.  The members of the Creditors' Committee are:

               Euler ACI
               100 East Pratt Street
               Baltimore, Maryland 21202-1008
               Attn: Gary H. Shapiro

               Fuji Photo Film U.S.A., Inc.
               555 Texter Road
               Elmsford, New York 10523
               Attn: Martin Barash

               American Greetings
               One American Road
               Cleveland, Ohio 44144-2398
               Attn: Art Tuttle

               Bridgeford Foods of Illinois
               170 North Green Street
               Chicago, Illinois 60607
               Attn: Richard G. Klaczynski

               20th Century Fox Home Entertainment
               Legal Department
               PO Box 900
               Beverly Hills, California 90213-0900
               Attn: UnJu Paik

               GMAC Commercial Credit
               1290 Avenue of Americas
               New York, New York 10104
               Attn: Esther D. Miller

               Newell Rubbermaid
               29 East Stephenson Street
               Freeport, Illinois 61032
               Attn: Mark Rapp

               Kimco Realty Corporation
               3333 New Hyde Park Road
               Suite 100
               New Hyde Park, New York 11042
               Attn: Milton Cooper

               Sara Lee Corporation
               475 Corporate Square Drive
               Winston-Salem, North Carolina 27105
               Attn: David S. Peoples

               PepsiCo
               3501 Algonquin Road
               Rolling Meadows, Illinois 60008
               Attn: Scott Nehs

               Buena Vista Home Video
               500 South Buena Vista Street
               Burbank, California 91521-9750
               Attn: Kenneth E. Newman

               Mattel, Inc.
               333 Continental Boulevard
               El Segundo, California 90245
               Attn: Kathleen Simpson-Taylor

               Pension Benefit Guaranty Corporation
               1200 K Street, N.W.
               Washington, D.C. 20005-4026
               Attn: James J. Keightley

Kathryn Gleason, Esq., is the trial attorney for the U.S.
Trustee's office assigned to Kmart's chapter 11 cases. (Kmart
Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   


LTV CORP: Copperweld Debtors Will Pay Commitment Fees to GECC
-------------------------------------------------------------
The Copperweld Corporation and Welded Tube Holdings, Inc., and
each of their subsidiaries that are debtors, ask Judge Bodoh to
authorize them to:

  (a) pay General Electric Capital Corporation a Commitment Fee,
      Deposit and Ratings Fees; and to

  (b) agree to pay and/or incur Indemnification Obligations and
      Expenses in connection with the negotiation, preparation,
      documentation of a DIP financing facility.

In order to obtain much-needed financing, the Copperweld Debtors
retained The Blackstone Group, which has had contact with
potential lenders concerning the possibility of extending
postpetition credit for the Copperweld Debtors.  One such lender
is GE Capital, a lender under a prepetition term loan secured by
a first-priority lien on the Copperweld Debtors' inventory,
property, plant and equipment.  Because of this, the Debtors
believe that GE Capital has added incentive to provide the
Copperweld Debtors with a postpetition DIP Facility.

Blackstone conducted extensive negotiations with GE Capital,
which has resulted in a commitment letter dated January 30,
2002, which identifies a schedule of fees which the Copperweld
Debtors must pay. The Commitment letter provides for a
commitment to fund up to $300 million to provide working capital
and capital expenditures, and to rollover and refinance existing
loans facilities.  GE Capital retains the right to form a
syndicate of lenders to provide a portion of that Facility.

The proposed terms of the Copperweld DIP Facility will be
presented in a separate, yet-to-be filed motion.  At present the
Copperweld Debtors seek only approval to pay certain fees and
incur certain obligations. These obligations and fees include:

       (1) Indemnification:  The Commitment Letter requires the
Copperweld Debtors to agree to indemnify and hold harmless GE
Capital and the other agents, the other lenders, and each of
their assignees, affiliates, directors, officers, employees, or
agents from any and all losses, claims, damages, liabilities, or
other expenses arising out of or in any way related to or
resulting from the commitment letter, the extension of the
Copperweld DIP Facility, or the use of the proceeds of the
Copperweld Facility.

The Indemnification Obligations also include reimbursement of
any indemnified party's counsel's fees and expenses.  In
addition, the Debtors agree to reimburse GE Capital under the
Copperweld DIP Facility for all fees and expenses incurred by or
on behalf of GE Capital, including counsels' fees and expenses,
incurred in connection with the negotiation, preparation,
execution and delivery of the Commitment Letter, the definitive
documentation for the Copperweld DIP Facility, and the
syndication of the Copperweld DIP Facility, including due
diligence, collateral reviews, and field examination costs.

       (2) Commitment Fee:  The Commitment Letter requires the
Copperweld Debtors to agree to the payment of a non-refundable
commitment fee equal to $530,000 which shall be earned in full
on the date the Copperweld Debtors accept the Commitment Letter
and the Commitment Fee Letter.

       (3) Additional Deposit:  The Commitment Letter requires
the Debtors to agree to the payment of a deposit in the amount
of $100,000 which shall be in addition to a previous deposit in
the amount of $500,000 to fund expenses incurred by or on behalf
of GE Capital and the other agents.  The deposit has been paid
by Copperweld Canada, Inc., a non-debtor Canadian affiliate of
the Copperweld Debtors, which is a proposed borrower under the
Copperweld DIP Facility.  The unused portion of the Deposit will
be applied to the Closing Fee for the Copperweld DIP Facility.

       (4) Credit Rating Fee.  In order to syndicate the
Copperweld DIP Facility, GE Capital requires that the
independent credit ratings review and provide a credit rating
for the Copperweld DIP Facility. The Copperweld Debtors propose
to use three different credit rating agencies: Standard &
Poor's; Fitch, IBCA, Duff & Phelps; and Moody's Investors
Service.  The S&P agreement contains a fee in the amount of
$85,000, the Fitch agreement a fee of $25,000, and the Moody's
agreement contains an aggregate fee of $138,000, for total fees
of $273,000.

The Copperweld Debtors tell Judge Bodoh that the payment of
these fees and the incurrence of the Indemnification Obligations
and expenses are all reasonably necessary to obtain the
Copperweld DIP Facility, which is in the best interests of the
estates.

                      Judge Bodoh Agrees

Moving very quickly, Judge Bodoh authorizes the Copperweld
Debtors to pay the fees, to sign the commitment letter, and to
incur the indemnity obligations, as outlined in the Motion. (LTV
Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service,
Inc., 609/392-00900)


LTV: USWA Says WL Ross Committed to Fair Treatment of Workers
-------------------------------------------------------------
The United Steelworkers of America (USWA) welcomed what it
called "a new ally in the fight to win strong federal action to
save the American steel industry," with the announcement that WL
Ross & Co. LLC has agreed to acquire all the facilities of LTV's
steel division.

"This deal, if the President follows through on his commitments
to the steel industry, will save the jobs of many steelworkers
at LTV," said USWA President Leo W. Gerard.

"We're pleased to have gained a new ally," he added, "that's
totally committed to winning maximum tariffs on steel imports
and federal legislation to protect the health care benefits of
thousands of retirees who will have lost their coverage as a
result of LTV's liquidation.  We all know that for this company
and the industry to compete on a level playing field, President
Bush needs to impose 40% tariffs to break the cycle of unfair
trade that is devastating American steel communities.

"I look forward to working with a management that believes in a
world class steel industry," Gerard said.

In announcing an agreement to acquire LTV's steel division
facilities, Mr. Ross urged President Bush to impose strong
tariffs on imports by March 6 and has told the Steelworkers that
he will lobby for the federal legacy cost relief essential for
the restructuring and consolidation of the American steel
industry.

LTV has announced that retiree health care benefits currently
being paid with Voluntary Employee Benefit Association (VEBA)
funds will be exhausted by March 31.

USWA District 1 Director David McCall, who played an
instrumental role in identifying the new company, said that WL
Ross' agreement to purchase LTV's steel assets "promises a
positive new labor relationship with a company that recognizes
the value of workers who have operated the LTV facilities at
world class levels of productivity."

McCall said that discussions with the new buyer have led to an
agreement by the company "to hire our members from LTV at all
steel division facilities, and have included discussions about
new capital investments."

The new company, he said, "is committed to engaging in
collective bargaining with the Union for wages and benefits
competitive with the steel industry."

The announcement comes just two days before the Steelworkers
"Countdown to Justice" rally scheduled for Thursday at the
Ellipse outside the White House, where as many as 10,000
steelworkers and members of steel communities from throughout
the nation's industrial heartland will gather to urge President
Bush to impose 40% tariffs on imported steel.

DebtTraders reports that LTV Corporation's 11.750% bonds due
2009 (LTV2) are trading between 0.5 and 1.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=LTV2for  
real-time bond pricing.


LEINER HEALTH: Files for Prepackaged Chapter 11 Reorganization
--------------------------------------------------------------
Leiner Health Products Inc., filed a Chapter 11 petition in the
U.S. Bankruptcy Court with the overwhelming support of its Bank
lenders and Senior Subordinated Noteholders seeking court
approval of its consensual prepackaged plan of reorganization.

Prior to the filing in Delaware, the Company negotiated a
prepackaged plan of reorganization with its Bank lenders and its
Senior Subordinated Noteholders. The prepackaged plan was
overwhelmingly accepted by those voting in the prefiling
solicitation filing regarding the plan, with 100% of Bank Group
claims and 98% of Noteholder claims voting to accept the
prepackaged plan. The Chapter 11 filing is intended to obtain
Court approval of the prepackaged plan and thereby bind all
creditors to the plan, even if they did not vote or voted to
reject the plan. Leiner expects to obtain Court approval of its
prepackaged plan and emerge from Chapter 11 within 45 to 60
days.

"Thanks to the continuing support from our bondholders and bank
lenders, Leiner is able to implement one of the final pieces of
its restructuring plan," said Robert Kaminski, chief executive
officer of Leiner. "We expect to emerge from this process
strengthened with a more appropriate capital structure and
reengineered business well positioned to build on our industry
leading track record of quality and service."

As announced in January, the Company has entered into definitive
documentation with its primary investors on the terms of a new
equity investment. Under the definitive documents, a group of
investors led by North Castle Partners will invest $20 million
in the Company. Under the proposed plan of reorganization,
holders of Leiner's 9.625% Senior Subordinated Notes due June
30, 2007, will receive a combination of $15 million in cash and
newly created preferred stock in exchange for the current Notes,
an exchange that will reduce Leiner's indebtedness by $85
million. Under the plan, Leiner's existing senior indebtedness
will be restructured and remain outstanding. In addition,
Leiner's bank lenders will extend the Company an additional
revolving credit facility of up to $20 million.

During the proceeding, vendors will not be impaired and will
continue to be paid in the normal course of business. The
Company also expects to continue to pay employee salaries, wages
and benefits without interruption, and to serve all customers
throughout the reorganization. Also, Leiner's Canadian business,
Vita Health, is not filing for bankruptcy, and therefore its
business will continue as usual and Vita Health's creditors will
remain unimpaired.

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


LEINER HEALTH: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Lead Debtor: Leiner Health Products, Inc.
             901 E. 233rd Street
             Carson, CA 90745        

Bankruptcy Case No.: 02-10617

Debtor affiliates filing separate chapter 11 petitions:

     Entity                                     Case No.
     ------                                     --------
     Leiner Health Products Group Inc.          02-10619
     PLI Holdings, Inc.                         02-10618

Type of Business: The Debtor is a manufacturer of vitamins,
                  minerals and nutritional supplements.

Chapter 11 Petition Date: February 28, 2002

Court: District of Delaware

Judge: Peter J. Walsh

Debtors' Counsel: Mark D. Collins, Esq.
                  Richards, Layton & Finger, P.A.
                  One Rodney Square, P.O. Box 551
                  Wilmington, Delaware 19899
                  (302) 651-7700

                  David W. Levene, Esq.
                  Levene, Neale, Bender, Rankin & Brill L.L.P
                  1801 Avenue of the Stars, Suite 1120
                  Los Angeles, California 90067
                  (310) 229-1234

Total Assets: $353,139,000

Total Debts: $493,594,000

Debtor's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Bank of New York             Bondholder           $36,430,000
Cecille Lamarco
225 Patterson Plank Road
Secaucus, NJ 07094
(201) 310-3066

Citibank, NA                 Bondholder           $25,765,000     
David Leslie
3808 Citicorp Center Tampa
Building B, Floor 1
Tampa, FL 38610-8122
(613) 604-1193

Roche Vitamins Inc.          Trade Debt           $11,062,807
Guy Dubois
VP Finance & Administration
45 Waterview Blvd
Parsippany, NJ 07054-1298

Banner Pharmacas Inc         Trade Debt            $8,583,337
John Barbee
Sr. VP Nutritional Sales
& Marketing
PO Box 79330
City of Industry,
CA 91718-8330

JP Morgan Chase Bank CCSG    Bondholder            $7,500,000
Patel Sushil
One Chase Manhattan Plaza 4-B
New York, NY 10051
(212) 552-7522

Dr. Reddy's Laboratories     Trade Debt            $5,299,017
C. Swaminathan
One park WY Upper
Saddle River, NJ 07458
(201) 760-2550

Boston Safe Deposit          Bondholder            $3,750,000
& Trust Co
Constance Holloway            
c/o Mellon Bank, NA
Three Mellon Bank Center,
RM 153-3015
Pittsburgh, PA 15259
(412) 234-2929

Wells Fargo Bank             Bondholder            $3,750,000
Minnesota, NA
Janet Buechler
733 Marquette Avenue
Minneapolis, MN 55479
(612) 667-0390

BASF Corporation             Trade Debt            $2,972,861
Hans Loose
Group VP
300 Continental, Drive-North
Mount Olive, NJ 07628-1234
(714) 777-5103

ComerzBank Capital Markets   Bondholder            $2,500,000
Corporation
Thomas Celen
1251 Avenue of the Americas
New York, NY 10021
(212) 703-1810

Vita Tech International,     Trade Debt            $2,326,803
Inc.  
Greg Williford
VP Sales & Client Services
2832 Dow Avenue
Tustin, CA 92780
(714) 832-9700

JWS Delavau Co., Inc.        Trade Debt            $2,056,764   
Al D. Faraldo
VP Sales & Marketing
10101 Roosevelt Blvd.
Philadelphia, PA 19154-2105
(215) 671-1400

Mizuho Trust & Banking Co     Bondholder           $2,000,000
(USA)
Takeshi Kozu
665 Fifth Avenue
Suite 302
New York, NY 10103
(212) 373-5903

Setco Inc.                    Trade Debt           $1,968,581
Lois Stevens
Controller
4875 E. Hunter Ave
Anaheim, CA 92607
(714) 777-5216

State Street Bank & Trust     Bondholder           $1,530,000
Co.
Joseph J. Callahan
1776 Heritage Drive
Global Corporate Action Unit
JA 5NW
North Quincy, MA 02171  

Soft Gel Technologies, Inc.   Trade Debt           $1,358,028
Ronald G. Udell
President
5082 Bandini Blvd.
Los Angeles, CA 90040
(325) 726-0700

Naturegen Inc.                Trade Debt           $1,213,038
Dr. Lee Zhong
President
7340-A Trade St
San Diego, CA 02121
(856) 578-5560

Accucaps Industries Ltd.      Trade Debt           $1,000,821
Gordon C. Moore
President
2125 Ambassador Dr.
Windsor, Ontario N9C 3RS
Canada
(5191) 989-5404

Adam Nutrition                Trade Debt             $931,190
Rick Kashenberg
President
11010 Hopkins St
Unit B
Mira Loma, CA 91752
(808) 361-1128

Colorcon Inc.                 Trade Debt             $808,848  
Dennis Cummings
President North Amrica
415 Meyer Blvd.
West Point, PA 19486-0024
(215) 651-2851


LIBERTY OIL: Alberta Court Grants CCAA Protection
-------------------------------------------------
Liberty Oil & Gas Ltd. announced that an Order had been granted
by the Court of Queen's Bench of Alberta on February 25, 2002,
which provides creditor protection to Liberty and permits
Liberty to develop a financial restructuring Plan to present to
its creditors. The Order was granted under the Companies'
Creditors Arrangement Act. The Court granted a stay of
proceedings which prevents creditors from taking any legal
actions against Liberty or its assets. Liberty's Banker, which
is its primary secured creditor, supported the application to
the Court and restructuring discussions are ongoing between
Liberty and its Banker.

Liberty's shares have been halted pending review by The Canadian
Venture Exchange. Before re-instatement will occur an additional
press release will be issued.


LODGIAN INC: Sets-Up $1MM Reserve Fund for Utility Companies
------------------------------------------------------------
Adam C. Rogoff, Esq., at Cadwalader Wickersham & Taft in New
York, representing Lodgian, Inc., and its debtor-affiliates,
suggests that the Objecting Utilities are seeking to bypass the
procedures established by this Court in the Utility Procedures
Order for addressing issues concerning adequate assurance of
future performance under Section 366(b) of the Bankruptcy Code.
By ignoring controlling precedent from the Untied States Court
of Appeals for the Second Circuit and mischaracterizing the
procedures established in the Utility Procedures Order, the
Utilities are urging this Court to reconsider the procedures
that it established on the first day of these cases to deal with
the hundreds of utilities involved in these cases. Although
utilizing the facade of reconsideration, the Motions are
facially defective because they completely fail to address the
requirements for invoking the extraordinary remedy of
reconsideration. Mr. Rogoff submits that the primary issue
raised in the Motions is the allegations that the Utilities
should be accorded further adequate assurance of payment. As
such, the Motions should be treated for what they are -- as
requests for further adequate assurance -- and considered in
accordance with the procedures established by this Court in the
Utility Procedures Order for considering such requests.
Accordingly, the Motions for reconsideration should be denied in
their entirety.

Although the Debtors believe that the protections previously
granted to the Utility Companies satisfied the adequate
assurance of payment requirements under section 366 of the
Bankruptcy Code, the Debtors are hereby proposing numerous
additional protections for the Utility Companies, including the:

A. establishment of a $1,000,000 reserve fund for the pro rata
       benefit of the Requesting Utilities for the provision of
       post-petition services,

B. the creation of expedited remedy procedures before this
       Court, and

C. the implementation of centralized invoicing for post-petition
       utility services.

In accordance with the Utility Procedures Order, the Debtors are
hereby cross-moving for a determination that these supplemental
protections and procedures satisfy the requirements of section
366 of the Bankruptcy Code and requests that this Court set the
Cross Motion for a hearing.

Finally, Mr. Rogoff states that certain of the Utilities are
seeking to obtain discovery with respect to their motions for
reconsideration. As a preliminary matter, Lodgian believes that
such discovery is unnecessary for this Court to determine that
the procedures provided for herein provide more than adequate
assurance of payment under section 366 -- and certainly far more
than is required under the standard established in Caldor
Corporation's chapter 11 cases, irrespective of the Debtors'
pre-petition payment history. Further, having approved
yesterday, on a final basis, the Debtors' post-petition
financing facility and their use of cash collateral, the Court
is well aware of the Debtors' immediate access to post-petition
financing and cash collateral in amount sufficient to meet their
on-going utility expenses.

For example, Mr. Rogoff points out that the "Final Order
Authorizing Debtors To Use Cash Collateral In Which Certain
Mortgage Lenders Claim An Interest," dated February 14, 2002
specifically authorizes the Debtors to use cash to pay
"Designated Expenses" which includes "property level operating
expenses".  The Final Cash Collateral Order also authorizes the
establishment of the Utility Reserve contemplated by this Motion
and subordinates any lenders' liens to the utilities' claims.
Accordingly, the Debtors believe that the requested discovery is
not relevant or necessary for the Court to rule on the issues
before it. However, were the Court to determine that discovery
is appropriate, the Debtors request that the Court establish an
appropriate discovery schedule by both the Debtors and the
applicable utilities.

With respect to procedure, Mr. Rogoff states that it is the
Debtors' understanding that the sole purpose of the hearing on
February 19, 2002 will be to address any discovery disputes.
However, the substantive issues underlying the various
reconsideration motions and this Cross-Motion shall be heard on
March 7, 2002. (Lodgian Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 609/392-0900)  


MCMS INC: Court Okays Choate Hall as Committee's Counsel
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approves
the application of the Official Committee of Unsecured Creditors
appointed in MCMS' chapter 11 cases, to employ and retain
Choate, Hall & Stewart as its counsel, nunc pro tunc to October
31, 2001.

Because of the expertise of CHS and the absence of any conflict
of interest, the Committee believes that CHS is qualified to
represent the Committee in the Debtors' Chapter 11 cases.

Specifically, CHS will be assisting the Committee by:

    a) providing legal advice with respect to its powers and
       duties as the Committee;

    b) providing legal advice with respect to any disclosure
       statement and plan filed in the case and with respect to
       the process for approving or disapproving a disclosure
       statement and confirming or denying confirmation of a
       plan;

    c) preparing on behalf of the Committee necessary    
       application, motions, complains, answers, orders,
       agreements and other legal papers;

    d) appearing in court to present necessary motions,
       applications and pleadings and to otherwise protect the
       interest of the Committee;

    e) reviewing and evaluating claims against insiders,  
       lenders, and others;

    f) reviewing and responding to sale motions and bids; and

    g) performing all other legal services for the Committee
       which may be necessary and proper in these proceedings.

CHS will bill for legal services at its customary hourly rates:

             Charles L. Glerum             $440
             Laura C. Glynn                $450
             Douglas R. Gooding            $380
             Timothy W. Arant              $310
             David R. Cooper               $210
             Paul E. Bonnano               $195

MCMS, Inc., a global leading provider of advanced electronics
manufacturing services to original equipment manufacturers filed
for Chapter 11 protection on September 18, 2001. Eric D.
Schwartz, Esq. and Donna L. Harris, Esq. at Morris, Nichols,
Arsht & Tunnell represent the Debtors in their restructuring
effort.  When the company filed for protection from its
creditors, it listed $173,406,000 in assets and $343,511,000 in
debt.


MAIL-WELL: S&P Assigns BB Rating to Planned $300MM Debt Issues
--------------------------------------------------------------
On February 27, 2002, Standard & Poor's assigned its double-'B'
rating to the proposed $300 million senior unsecured notes due
2012 to be issued by Mail-Well I Corp., and guaranteed by its
holding company, Mail-Well Inc., whose ratings were also
affirmed.

Ratings reflect Englewood, Colorado-based Mail-Well's narrow
business focus, competitive business conditions, and weak credit
measures. These factors are tempered by leading market positions
in the envelope and commercial print segments. The company is
the world's largest manufacturer of envelopes and one of the
largest regional commercial printers in the United States.

While Mail-Well has grown aggressively through acquisition in
the past, its focus over the past 18 months has been on
improving operating efficiencies and enhancing margins in its
core envelope and commercial print segments. This renewed focus
has resulted in plant consolidations, headcount rationalization,
and working capital improvements. While these initiatives have
proceeded relatively smoothly, the weak economy created
difficult business conditions, which negatively affected
operating results throughout 2001. Specifically, commercial
print was hurt by the decline in advertising spending and
intense pricing pressures.

The ongoing disposition of Mail-Well's labels and printed office
products divisions, and certain assets within envelopes and
commercial print, are expected to produce net proceeds of about
$300 million, which will be used for debt reduction. While the
net proceeds are lower than previous expectations because of the
difficult operating environment, management remains confident
that all divestitures will be completed. The company recently
announced its first sale, Curtis 1000 Inc. for $40 million. The
divestitures are also aimed at simplifying the overall business
structure and enabling Mail-Well to concentrate on its core
businesses.

EBITDA (pro forma for the asset sales) during 2001 declined more
than 25%, to $118 million from $161 million, in the prior year.
The decrease was attributable to lower volumes due to the weak
economy and the resulting lower levels of advertising spending.
In addition, pricing remained competitive in both envelopes and
commercial print. Despite this decline in EBITDA, the cost-
efficiency programs implemented helped the company generate more
than $140 million in free cash flow, which was used to reduce
debt balances. Pro forma for the planned divestitures and the
proposed notes issue, EBITDA coverage of interest expense is
more than 2 times, and total debt to EBITDA more than 5x.
Financial flexibility is adequate, with $150 million available
under a revolving credit facility and moderate maintenance
capital expenditures.

                        Outlook

Although Mail-Well's operating performance will benefit from its
cost-efficiency initiatives, ratings may be lowered if the
company's overall financial profile does not meaningfully
strengthen in coming periods.


MCLEODUSA INC: Secures Go-Signal to Hire Logan as Claims Agents
---------------------------------------------------------------
McLeodUSA Inc., sought and obtained from Judge Katz authority to
employ Logan & Company, Inc. as its Claims, Noticing and
Balloting Agent to, among other things:

    (i)    serve as the Court's notice agent to mail notices to
           the estate's creditors and parties in interest,
    (ii)   provide computerized claims, objection and balloting
           database services, and
    (iii)  provide expertise and consultation and assistance in
           claim and ballot processing and with other
           administrative information with respect to the
           Debtor's bankruptcy case.

As Claims, Noticing and Balloting Agent, Logan will render these
services:

  (a) Prepare and serve required notices in the Chapter 11 case,
      including:

         (1) A notice of commencement of the Chapter 11 case and
             the initial meeting of creditors under Bankruptcy
             Code section 341(a);

         (2) A notice of the claims bar date;

         (3) Notices of objections to claims;

         (4) Notices of any hearings on a disclosure statement
             and confirmation of a plan of reorganization; and

         (5) Such other miscellaneous notices as the Debtor or
             the Court may deem necessary or appropriate for an
             orderly administration of the Chapter 11 case;

  (b) Within five business days after the service of a
      particular notice, file with the Clerk's office an
      affidavit of service that includes (i) a copy of the
      notice served, (ii) an alphabetical list of persons on
      whom the notice was served, along with their addresses,
      and (iii) the date and manner of service;

  (c) Maintain copies of all proofs of claim and proofs of
      interest filed in this case;

  (d) Maintain official claims registers in this case by
      docketing all proofs of claim and proofs of interest in a
      claims database that includes the following information
      for each such claim or interest asserted:

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

         (2) The date the proof of claim or proof of interest
             was received by Logan and/or the Court;

         (3) The claim number assigned to the proof of claim or
             proof of interest; and

         (4) The asserted amount and classification of the
             claim;

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

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

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

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

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

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

  (k) Provide temporary employees to process claims, as
      necessary;

  (1) Promptly comply with such further office or the Court may
      at any time prescribe; and

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

In addition, Mr. Rings says the Debtor also seeks to employ
Logan to assist it with, among other things: (a) the preparation
of its schedules, statements of financial affairs and master
creditor lists, if necessary, and any amendments thereto; and
(b) if necessary, the reconciliation and resolution of claims.

                        Compensation

Kathleen Logan, president of Logan & Company, Inc., advises that
her firm will bill for services at its customary hourly rates:

        Principal (Kate Logan)             $250 Per Hour
        Account Executive Support          $165 Per Hour
        Court Depositions (if required)    $200 Per Hour
        Statement & Schedule Preparation   $200 Per Hour
        Programming Support                $100 Per Hour
        Project Coordinator                $105 Per Hour
        Data Entry                         $55  Per Hour
        Clerical                           $35  Per Hour

Logan is a data processing firm that specializes in noticing,
claims processing, voting and other administrative tasks in
Chapter 11 cases.

Randall Rings, McLeodUSA's Group Vice President, Secretary and
General Counsel, says the Debtor will engage Logan to send out
notices and maintain claims files and a claims and voting
register. Mr. Rings says such assistance will expedite service
of notices, streamline the claims administration process and
permit the Debtor to focus on its reorganization efforts.

Mr. Rings says the Debtor has numerous creditors, potential
creditors and parties in interest to whom Court papers must be
sent, and considering the size of the Debtor's creditor body,
the most efficient manner to reach them is to engage an
independent third party to act as an agent of the Court.  
(McLeodUSA Bankruptcy News, Issue No. 3; Bankruptcy Creditors'
Service, Inc., 609/392-0900)  


METALS USA: Has Until March 8 to File Schedules & Statements
------------------------------------------------------------
At a hearing on February 20, 2002, the U.S. Bankruptcy Court for
the Southern District of Texas (Houston) further extended the
deadline by which Metals USA, Inc., and its debtor-affiliates
must file their Schedules of Assets and Liabilities and
Statements of Financial Affairs.

Metals USA operates in four sectors: heavy carbon (wide-flange
beams, plate, and structural steel), flat-rolled steel (alloyed
steel and steel-processing services), specialty metals
(stainless steel, brass, and copper), and aluminum building
products (finished products such as awnings). Clients include
aerospace manufacturers, furniture makers, and the electrical
equipment industry. Metals USA maintains operations primarily in
the US mid-Atlantic and Southeast. The company filed for Chapter
11 Reorganization under the U.S. Bankruptcy Code on November 14,
2001.


NATIONSRENT: Committee Gets Okay to Hire Bayard as Co-Counsel
-------------------------------------------------------------
The Official Committee of Unsecured Creditors obtained Court
authority to employ and retain The Bayard Firm as co-counsel in
NationsRent Inc.'s Chapter 11 cases, nunc pro tunc to January 4,
2002.

The Bayard Firm will render these services:

A. Providing legal advice with respect to the Committee's powers
       and duties;

B. Assisting in the investigation of the Debtors' acts, conduct,
       assets, liabilities and financial condition, the
       operation of the Debtors' business and any other matters
       relevant to these cases or to the formulation of a plan
       of reorganization or liquidation;

C. Preparing, in behalf of the Committee, necessary
       applications, motions, complaints, answers, orders
       agreements and other legal papers;

D. Reviewing, analyzing and responding to all pleadings filed by
       the Debtors and appearing in Court to present necessary
       motion, applications and pleadings and otherwise protect
       the Committee's interests; and

E. Performing all other legal services for the Committee may be
       necessary.

Aside from reimbursing it for reasonable out-of-pocket expenses,
The Bayard Firm will bill for services at these rates:

           Directors         $350 to $440
           Associates        $190 to $300
           Paralegals         $75 to $125
           Assistants         $75 to $125
(NationsRent Bankruptcy News, Issue No. 6; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


NEON COMMS: Taps Credit Suisse to Consider Debt Workout Options
---------------------------------------------------------------
NEON(R) Communications, Inc. (NASDAQ:NOPT), a leading provider
of advanced optical networking solutions and services in the
northeast and mid-Atlantic markets, announced financial results
for the three months and twelve months ended December 31, 2001
and provided guidance for 2002.

Stephen Courter, NEON Chairman and CEO, said: "We are pleased
with our strong operating performance for 2001. During a year
that will be remembered as one of the most difficult for the
telecommunications industry, we grew annual revenues by 101%,
improved gross margins, added to our backlog and extended our
network coverage to Albany, New York and Brattleboro, Vermont.
These improvements are a result of our dense and unique network
coverage in the northeast as well as our ability to provide end-
to-end solutions to our customers." Courter went on to say:
"Much of the turmoil in telecommunications is creating increased
demand for NEON's regional network capillarity at a time when
there are no new competitive entrants and less established
carriers are folding. Cash constraints across the sector also
mean that carriers prefer to lease lit services from existing
networks as opposed to building their own. In addition, we are
seeing demand from new markets such as the wholesale video
transport industry, which is transitioning from analog to a
digital format. For example, the Winter Olympics were broadcast
live in some areas by leveraging NEON's network in the
northeast. As we continue to explore financing and restructuring
alternatives, NEON's operations remain strong and growing."

Revenues for the three months and twelve months ended December
31, 2001, increased 69% and 101%, to approximately $7.7 million
and $26.6 million, respectively, compared with revenues of $4.5
million and $13.2 million for the same periods in 2000. Lit
services represented approximately 79% of the fourth quarter's
recurring lease revenues. These increases reflect continued
growth in booking and provisioning of customer orders for
additional network services. Cash revenues for the fourth
quarter (revenues plus changes in deferred revenue) totaled
approximately $8.8 million. New business bookings for the year
reached $80.5 million and revenue backlog as of December 31,
2001 totaled approximately $207 million, of which more than 50%
is with Fortune 500 companies.

As a result of revenue growth and improving network utilization,
gross margin improved to 40% and 36% for the three months and
twelve months ended December 31, 2001, respectively, compared to
23% and 17% for the comparable periods in 2000. EBITDA (earnings
before interest, taxes, depreciation and amortization) losses
for the fourth quarter of 2001 decreased by 23% from the third
quarter of 2001 to $2.2 million and by 53% from the fourth
quarter of 2000. EBITDA losses for the twelve months ended
December 31, 2001 totaled approximately $15.6 million, compared
to $13.9 million for 2000. The improving trends in EBITDA
reflect the increased margins discussed above, the cost-cutting
measures taken during 2001 and a continued focus on overall cost
management.

Net loss for the three months and twelve months ended December
31, 2001, including a one time, non-cash, third quarter charge
of $60 million affecting the twelve month period, amounted to
approximately $15.8 million, and $116.7 million compared to a
net loss of approximately $14.0 million, and $43.5 million for
the same periods in 2000.

Bill Marshall, NEON CFO and Treasurer said: "We continue to
focus on managing our operating costs and network expansion, and
we remain on track to reach EBITDA breakeven by mid 2002. New
business bookings of approximately $80.5 million for 2001
reflect continued demand for our existing services. We are also
developing new services to further leverage our network
infrastructure, including our recently announced SONET-VPN
service."

Marshall went on to say: "We are in the process of evaluating
financing and debt restructuring alternatives with our advisor,
Credit Suisse First Boston, and announced earlier this week that
we are in discussions with a group of Senior Note holders
regarding a potential restructuring of such notes. Our goal
during this process is to fully fund our business plan and
position the Company for future long-term growth. Although we
are pleased by the initial support that we have received from
our Senior Note holders, there can be no assurance that we will
successfully complete the restructuring. The Company's inability
to successfully complete a restructuring or to raise sufficient
additional capital to fund its operations in a timely manner
would have a material adverse effect on the Company. Regarding
guidance for 2002, assuming that we are able to successfully
restructure our debt and fund our business plan, the Company is
forecasting revenues of approximately $40 million, EBITDA losses
of approximately $1 million and capital expenditures of
approximately $26 million. Although we are forecasting an EBITDA
loss for 2002, we expect to reach EBITDA breakeven by mid-year
and expect to be EBITDA positive for the remainder of 2002."

Finally, Marshall said: "In January 2002, we settled the Fiber
Optek Interconnect, Corp. litigation previously disclosed by the
Company. The details of this settlement are confidential,
however, it was not material to our operations. We will also be
impacted in the first quarter of 2002 by the required adoption
of Statement of Financial Accounting Standards No. 142 "Goodwill
and Other Intangible Assets." In accordance with this statement,
the Company will take a one time, non-cash charge of
approximately $73.4 million in the first quarter to write off
all of its goodwill and other intangible assets."

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.


NEXTERA ENTERPRISES: Sells Sibson Assets to Segal Group for $16M
----------------------------------------------------------------
On January 30, 2002, Nextera Enterprises, Inc., sold
substantially all of the assets (except for certain accounts
receivable), certain liabilities and business operations of
Sibson & Company, LLC and direct and indirect subsidiaries of
Sibson & Company, LLC to The Segal Group, Inc.

Sibson is engaged in providing executive compensation and
benefits, human resource consulting and other services in the
United States and certain foreign countries. The aggregate
purchase price was $16 million, plus up to an additional $13.3
million (approximately) based on operating results of the Sibson
business over the next two years. The purchase price was reduced
on the Closing Date by a holdback of approximately $1.3 million,
which amount (or a portion thereof) may be released to the
Company subject to verification of a minimum working capital
requirement of $4.0 million. Under the terms of the Asset
Purchase Agreement, the Company will provide the buyer with
indemnifications for a period ranging through three years from
the Closing Date for certain items; and through 30 days after
the expiration of the applicable statute of limitations for
matters relating to title, real property and governmental
compliance and authorizations.

Substantially all of the employees of Sibson were retained by
the buyer. Additionally, the Chief Operating Officer of Nextera
joined the buyer in a management capacity relating to the Sibson
business.

The Company used approximately $8.0 million of the aggregate
proceeds to repay amounts owing under the Company's senior
credit facility with Fleet National Bank and Bank of America.
The remaining proceeds were used to fund working capital
requirements.

Nextera Enterprises Inc. is a leading management-consulting firm
providing integrated solutions for today's most complex business
issues. Through its Lexecon Consulting Group, Strategic Services
Group, Sibson Consulting Group and Technology Solutions Group,
Nextera provides clients with extensive knowledge and experience
in economics, strategy, human capital and technology solutions.
Nextera has provided consulting services to more than half of
the Fortune 500 companies. The firm has offices in Boston,
Cambridge, Chicago, Los Angeles, New York, Princeton, Raleigh,
Rochester, San Francisco, London, Sydney and Toronto. At
September 30, 2001, the company had a working capital deficit of
about $60 million.


OPTI INC: Sets Annual Shareholders' Meeting for April 9, 2002
-------------------------------------------------------------
OPTi Inc., (Nasdaq:OPTI) announced its fourth quarter financial
results for 2001. Revenues for the quarter ended December 31,
2001 were $2,522,000 as compared with $2,105,000 for the
comparable quarter of 2000. Net income for the fourth quarter of
2001 was $381,000 as compared to net income of $65,000 for the
fourth quarter of 2000. Total operating expenses were $1,458,000
for the fourth quarter of 2001 as compared to $906,000 for the
fourth quarter of 2000.

Net sales for the fiscal year ended December 31, 2001 were
$7,566,000, as compared to $23,198,000, which included
$13,311,000 from a one time fully paid license, for the
comparable period in 2000. Net income in fiscal year 2001 was
$878,000 as compared to net income of $11,044,000 in fiscal year
2000.

Bernard Marren, CEO and president of OPTi, stated, "During the
quarter ending December 31, 2001, we increased our revenue by
98% from the prior quarter. This increase in revenue is mainly
attributable to an increase in last time buys of our embedded
core logic products and increased volume of our USB host
controller products. Gross margins for the quarter also
increased significantly due to the sale of older core logic
product that had previously been written off. We anticipate that
revenue and gross margin as a percentage of sales during the
first three months of 2002 will be significantly lower than the
fourth quarter of 2001. During the year the Company continued to
downsize its operation in an attempt to minimize the effect of
the reduced revenues that the Company has been generating."

Marren also added, "The Company has just completed a
distribution of $1.50 per share to our shareholders on February
15, 2002. The Company also intends to shortly announce the plans
for the distribution of the Tripath Technology shares to our
shareholders. Our plan of voluntary liquidation and dissolution
remains on hold while we continue to evaluate our intellectual
property position, including the means by which we will pursue
claims for the potential infringement of certain of our
patents."

OPTi also announced that it will hold its annual shareholders'
meeting on April 9, 2002. Shareholders will be asked to elect
the Company's board of directors and ratify the appointment of
its independent auditors. The postponed plan of liquidation will
not be on the agenda. If the Company decides to proceed with the
plan, it will call a special meeting of shareholders later in
2002 to consider the plan.


OPTICAL DATACOM: Court Stretches Removal Period through May 14
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approves
the extension of the time period within which Optical Datacomm
LLC and its debtor-affiliates must file notices of removal with
respect to any pending Pre-Petition lawsuits it wants
transferred from remote courts to the District of Delaware for
continued litigation.  The Court gives the Debtors until May 14,
2002 to determine which, if any, cases should be removed.

Optical Datacomm, LLC's filed for chapter 11 protection on
November 17, 2001. H. Jeffrey Schwartz, Esq. at Benesch,
Friedlander, Coplan & Aronoff, LLP and Joel A. Waite, Esq. at
Young Conaway Stargatt & Taylor represent the Debtors in their
restructuring efforts. In its petition, the Company listed
estimated assets of $10 million to $50 million and estimated
debts of $50 million to $100 million.


PACIFIC GAS: San Francisco to Commence Rule 2004 Examination
------------------------------------------------------------
Judge Montali partially granted and partially denied an ex parte
application presented by the City and County of San Francisco
for directing Pacific Gas and Electric Company to produce
documents and witnesses pursuant to Bankruptcy Rule 2004.

The Court directs PG&E to produce for deposition the corporate
officer or employee most qualified to testify on:

(a) the basis for the assumption of the Interconnection
    Agreement between PG&E and San Francisco to Reorganized
    PG&E,

(b) the manner in which the Reorganized Debtor will satisfy its
    obligations to CCSF under the Interconnection Agreement as
    assumed and

(c) whether assumption of the contract and/or the manner in
    which the Reorganized Debtor will satisfy its obligations
    thereunder will result in increased charges or the loss of
    any services provided under the contract.

The Court also directed PG&E to produce all non-privileged
documents, including but not limited to any documents in
electronic format, that describe or relate to Reorganized PG&E's
future provision of transmission services to San Francisco under
the 1987 Interconnection Agreement, including but not limited to
Documents describing or relating to the consideration of any
alternatives to this arrangement and documents describing or
relating to any increased charges or loss of any services
provided under this contract.

According to the Court's order, PG&E shall also produce a
privilege log for all documents within the referenced categories
that PG&E contends are subject to any applicable privilege.
Should PG&E contend that any of the documents within the scope
for examination contain confidential information, it shall
notify San Francisco in writing and the parties shall meet and
confer with respect to entry of an appropriate protective order.
If the parties are unable to agree upon the terms of the
protective order prior to the date of production specified in
the order, PG&E may at its option mark all the documents
asserted to contain confidential information with an appropriate
legend prior to production of the documents. San Francisco will
treat any such marked documents as "attorneys' eyes only" until
such time as the parties are able to reach agreement with
respect to a Protective Order or a Court Order resolves the
dispute.

The Court denies San Francisco's Ex Parte Application to the
extent it requests additional discovery beyond that set out in
the Court's order without prejudice to seeking such discovery at
a later date. (Pacific Gas Bankruptcy News, Issue No. 24;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   


PACIFIC GAS: Shrugs-Off Assem. Keeley's "Flawed" Media Stunt
------------------------------------------------------------
Pacific Gas and Electric Company issued the following statement
after Assemblyman Fred Keeley and The Utility Reform Network
(TURN) made a filing at the California Public Utilities
Commission (CPUC) demanding that PG&E's electric rates be
lowered:

     "This announcement is nothing more than a rehash of the
discredited TURN proposal from last month.  The structure of
this proposal has already been rejected by the CPUC, when TURN
challenged similar rates charged by Southern California Edison.  
The numbers used this time around seem to be an unfathomable
collection of imaginary figures aimed at misleading the public.

     "The premise of the Assemblyman's media stunt is directly
contradicted by the California Assembly's own legal filing on
his and other legislators' behalf, which concluded that it is
reasonable for Southern California Edison to use existing CPUC-
established rates to pay down their procurement costs.

     "Despite their rhetoric blaming PG&E for the current rates,
Assemblyman Keeley and TURN know that it is the CPUC which
establishes retail electric rates in California.  They also know
that PG&E's rates are lower than those paid by Southern
California Edison's customers.

     "This flawed and irresponsible scheme is unrealistic and
would only serve to prolong PG&E's bankruptcy case."


PAPER WAREHOUSE: Falls Below Nasdaq SmallCap's Listing Criteria
---------------------------------------------------------------
Paper Warehouse, Inc., (Nasdaq: PWHS) reported that it received
notification from The Nasdaq Stock Market that it is not in
compliance with two of the Nasdaq SmallCap Market's maintenance
standards. One standard requires that the company maintain a
minimum value of $1,000,000 of public float. The other standard
requires that the company maintain a minimum bid price of $1.00
per share. The company has until May 15, 2002 to comply with
minimum value of public float maintenance requirement, and has
until August 13, 2002 to comply with the minimum bid price of
$1.00 maintenance requirement.

In order to comply with the minimum market value of public float
standard, Paper Warehouse's common stock must trade above $1.11
for at least 10 consecutive trading days prior to May 15, 2002.
If Paper Warehouse does not trade at this level for the required
time period, Nasdaq could delist Paper Warehouse's common stock
as early as the opening of business on May 16, 2002. Meeting the
minimum value of public float standard would put the company in
compliance with the minimum bid price standard of $1.00 per
share.

If Paper Warehouse does not satisfy the maintenance
requirements, the company may decide to apply for quotation of
its common stock on the Nasdaq Bulletin Board, or any other
organized market on which its shares may be eligible for
trading, or it may decide to appeal the decision by Nasdaq to
delist its common stock.

Paper Warehouse specializes in party supplies and paper goods
and operates under the names Paper Warehouse, Party Universe,
and PartySmart.com, which can be accessed at
http://www.PartySmart.com. Paper Warehouse stores offer an
extensive assortment of special occasion, seasonal and everyday
party and entertainment supplies, including paper supplies, gift
wrap, greeting cards and catering supplies at everyday low
prices. As of February 1, 2002, the company had 152 retail
locations (100 company-owned stores and 52 franchise
stores) conveniently located in major retail trade areas to
provide customers with easy access to its stores. The company's
headquarters is in Minneapolis.


PENN TREATY: S&P Ratchets Junk Ratings Up to Lower-B Level
----------------------------------------------------------
Standard & Poor's said it raised its counterparty credit and
financial strength ratings on long-term care insurer Penn Treaty
Network America Insurance Co., to single-'B'-minus from triple-
'C' and removed them from CreditWatch due to the company's
increased capital adequacy resulting from a reinsurance
agreement with Centre Solutions Limited (Centre). It also said
it affirmed its triple-'C'-minus counterparty credit and double-
'C' subordinated debt ratings on Penn Treaty American Corp.
(PTAC) and removed them from CreditWatch.

The outlook for both Allentown, Pennsylvania-based companies is
stable. The ratings had been placed on CreditWatch on April 2,
2001.

"Despite improved capitalization, PTAC's subsidiaries will
continue to face considerable challenges as they attempt to
reestablish their position in the long-term care insurance
market," said credit analyst Neal Freedman. He added, "Standard
& Poor's believes PTAC will be challenged to refinance its
existing debt given its current levels of earnings, capital, and
cash flow."

According to the reinsurance agreement, effective December 31,
2001, Centre will reinsure 100% of the long-term care current
in-force insurance of PTNA and American Network Insurance Co.,
another PTAC subsidiary. Although PTNA's capital adequacy
improved significantly as a result of the agreement, the
agreement includes an aggregate limit of liability that is a
function of certain factors and that may be reduced in the event
that the subsidiaries do not obtain rate increases as the
agreement may require.

Standard & Poor's will continue to monitor PTAC and its
subsidiaries' business plans.


PILLOWTEX CORP: Delaware Court Approves Disclosure Statement
------------------------------------------------------------
Pillowtex Corporation (OTC Bulletin Board: PTEXQ) and its
domestic subsidiaries announced that the U.S. Bankruptcy Court
for the District of Delaware approved the Disclosure Statement
to be distributed to creditors in connection with the Company's
proposed Plan of Reorganization.  With this approval, which was
received at a hearing held late Wednesday, Pillowtex can now
solicit votes from its creditors on the Plan of Reorganization.

The Disclosure Statement will be mailed to creditors on or about
March 11, 2002.

"The Court's approval represents a major step toward completing
our reorganization process," said Tony Williams, president and
chief operating officer.  "While our work is not yet done, we
believe the intensive efforts we have devoted to the process
over the last 16 months have resulted in a Plan that preserves
the future of the Company and is in the best interest of our
stakeholders.  Both the senior bank lenders and the general
unsecured creditors committee support our Plan.  This support is
particularly encouraging and keeps us on schedule to emerge from
bankruptcy mid-year."

Pillowtex filed for reorganization protection in November 2000,
and since that time the Company has been working to implement a
business strategy that creates a strong operational foundation
and provides for the Company's long- term financial stability.  
To date, this effort has generated annual savings of more than
$40 million.  Now that the Disclosure Statement has been
approved, the Company will take immediate steps to implement the
remaining restructuring activities that are included in the
Plan.  These activities are expected to generate additional
annual savings in excess of $20 million.

"Our restructuring efforts will place our Company in a much
healthier operational and financial condition," Williams said.  
"Ultimately, with more than $60 million anticipated in annual
savings from the operational initiatives and another $90 million
in annual savings expected from lower interest expenses as a
result of the debt reduction process, we are well positioned to
move our Company forward."

Pillowtex Corporation, with corporate offices in Kannapolis,
N.C., is one of America's leading producers and marketers of
household textiles including towels, sheets, rugs, blankets,
pillows, mattress pads, feather beds, comforters and decorative
bedroom and bath accessories.  The Company's brands include
Cannon, Fieldcrest, Royal Velvet, Charisma and private labels.  
The Company filed a voluntary petition for reorganization under
Chapter 11 of the U.S. Bankruptcy Code on November 14, 2000, and
has filed its Plan of Reorganization with the U.S. Bankruptcy
Court.  Pillowtex currently employs approximately 9,200 people
in its network of manufacturing and distribution facilities in
the United States and Canada.


DebtTraders reports that Pillowtex Corp.'s 10% bonds due 2006
(PTX2) are trading between 0.5 and 0.75. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=PTX2for  
real-time bond pricing.


POLAROID CORP: Judge Walsh Names Robert Troisio as Fee Auditor
--------------------------------------------------------------
The filing of numerous interim applications for payment of
professional fees and reimbursement of expenses in significant
amounts has taken its toll on the Court.  To lessen the workload
on the Court and the parties responsible for reviewing the fee
applications, Judge Walsh is appointing a fee auditor in
Polaroid Corporation's chapter 11 cases.

Specifically, Judge Walsh appoints Robert F. Troisio of the
McShane Group to serve in this new role.

Mr. Troisio is currently on the Board of Directors of TST
Impreso. In 1995, Mr. Troisio has participated in the public
offering of TST. As part of the McShane Group, Mr. Troisio has
engaged with several law firms who represent creditors and other
interested parties in Bankruptcy cases.

As Fee Auditor, Mr. Troisio will:

    (a) review in detail all fee applications filed by
        professionals in the Chapter 11 cases of the Debtors;

    (b) consult, as it deems appropriate, with each professional
        concerning such professional's fee application for
        reasonable, actual and necessary fees and expenses;

    (c) review any filed document in these cases.  Mr. Troisio
        will file a request for notice of all papers filed in
        these cases pursuant to Bankruptcy Rule 2002;

    (d) prepare an initial report, summarizing findings for
        each such fee applications. Each initial report shall
        quantify and present factual data relevant to whether
        the requested fees, disbursements and expenses meet the
        applicable standards of the Court;

    (e) contact each professional, within 15 days after the
        initial report is served. Accordingly, each professional
        may provide the Fee Auditor with verbal or written
        supplemental information relevant to the initial report;

    (f) engage in an informal response process with each
        professional to resolve matters raised in the initial
        report. Mr. Troisio shall endeavor to reach consensual
        resolutions with each professional with respect to that
        professional's requested fees and expenses. Mr. Troisio
        may also use the informal response process to revise
        findings contained in the initial report;

    (g) conclude the informal response period by filing with the
        Court a report with respect to each fee application ;

    (h) serve each Final Report upon the US Trustee, counsel for
        any official committee, the Debtors' counsel, counsel
        for the Debtors' secured lenders and each professional
        subject to the fee audit procedure. The Final Report
        shall inform the Court of all proposed consensual
        resolution of either the fee or expense request for each
        professional, and the basis for each such consensual
        resolution.

Within 20 days after the Fee Auditor files a certificate of
service of the Final Report, the subject professional may file
with the Court a response to such Final Report. The response may
include any additional information that the professional desires
the Court to consider. The Court shall schedule hearings on fee
applications after the filing of any response.

Mr. Troisio shall be compensated for his work at the rate of
$250 per hour. Payment shall come from the Debtors' estate as an
administrative expense.

Mr. Troisio swears that neither he nor McShane is affiliated
with or representing the Debtors or any person or entity with
claims againstthe Debtors' estates.  "I do not believe that
serving as the Fee Auditor in this case presents any conflict of
interest," Mr. Troisio asserts. (Polaroid Bankruptcy News, Issue
No. 11; Bankruptcy Creditors' Service, Inc., 609/392-0900)


PSINET INC: Seeks Approval of Procedures to Vote Foreign Shares
---------------------------------------------------------------
While PSINet, Inc., and its debtor-affiliates have successfully
marketed and sold their equity interests in certain of these
Foreign Subsidiaries, the Debtors have been unable to attract
willing buyers for certain other Foreign Subsidiaries. In these
circumstances, filing certain Foreign Subsidiaries into
bankruptcy proceeding under local law is necessary to allow the
orderly wind-down of certain foreign operations, and is
therefore in the best interests of the Debtors' estates. Indeed,
in certain circumstances such filings may be required under
applicable law.

The applicable foreign jurisdictions under which certain Foreign
Subsidiaries are organized require shareholder approval to
initiate a bankruptcy proceeding, unlike in most (if not all)
United States jurisdictions, where a corporation's board has the
authority to make such decision and Shareholder approval is not
required.

When a Debtor, as a Shareholder, votes in favor of a bankruptcy
filing, such votes may be seen as a use of estate property
(i.e., the shares of the Foreign Subsidiary) outside the
ordinary course of business.

By this Motion, the Debtors ask the Court to grant omnibus
authority for any debtor in the PSINet chapter 11 cases to vote
its shares of any Foreign Subsidiary in favor of filing such
Foreign Subsidiary into bankruptcy, insolvency, administration,
or similar proceedings under applicable local law, upon the
following Notice Procedures and without further notice or
hearing:

   Before voting their shares in a Foreign Subsidiary in favor
   of a bankruptcy filing, the Debtors shall provide notice of
   the proposed filing to the US Trustee and counsel for the
   Committee (the Notice Parties). The notice shall identify the
   Foreign Subsidiary and the jurisdiction of its incorporation.
   If neither Notice Party objects to the proposed voting of the
   shares within 10 days of the date of such notice, the Debtors
   may vote the shares in favor of a bankruptcy filing without
   further notice or hearing. If a Notice Party objects to the
   proposed vote, the Debtors may file a motion with the
   Bankruptcy Court seeking approval to vote the shares in favor
   of a bankruptcy filing.

The Debtors believe that the expedited procedures proposed will
limit the legal expense to the estate and the administrative
burdens in the Court in connection with the filing of various
Foreign Subsidiaries into local insolvency proceedings. It may
also allow such proceedings to be initiated on a more
expeditious schedule, the Debtors represent. The Debtors submit
that the relief sought is in the best interests of their
estates, as well as their creditors and all other parties in
interest.

Debtors therefore request the Court to enter the Order, granting
omnibus authority for any Debtor to vote its shares of a Foreign
Subsidiary in favor of a bankruptcy filing, subject to the
Notice Procedures, where the Debtors, in their reasonable
business and legal judgment, deem such a filing to be advisable.
(PSINet Bankruptcy News, Issue No. 15; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   


RECOTON: Losses Likely to Trigger Loan Covenant Violations
----------------------------------------------------------
Recoton Corporation (Nasdaq National Market: RCOT), a leading
global consumer electronics Company, announced that it
anticipates reporting an approximate net loss of $2,300,000 for
the fourth quarter ended December 31, 2001 and a net loss of
approximately $7,500,000 for the year ended December 31, 2001.
As a result, the Company will have breached financial covenants
under its senior credit facility. The Company is in negotiations
with its lenders regarding modifications of these covenants and
waivers of any defaults. The Company is optimistic that these
negotiations will conclude satisfactorily. The Company will
formally report its earnings for the fourth quarter and calendar
year 2001 upon the conclusion of its negotiations with its
lending group.

Despite the losses sustained in the fourth quarter and for the
fiscal year ended December 31, 2001, the Company maintains its
optimism about its performance in 2002. The Company's accessory
and audio segments continued to generate strong operating
performance in fiscal 2001 and all indications are that in
fiscal 2002 these two segments should surpass the prior year.
The primary causes for the Company's losses were attributable to
the video game segment. These losses were the result of the
conclusion of the recent industry transition and the sell-
through of legacy platform inventories. Losses, primarily
attributable to the video game segment, additionally resulted
from the provisions taken as a result of the K-Mart Chapter 11
filing. As the installed base of all the new platforms expands
in 2002, we believe that this segment should return to
profitability this year.

Recoton Corporation is a global leader in the development and
marketing of consumer electronic accessories, audio products and
gaming products. Recoton's more than 4,000 products include
highly functional accessories for audio, video, car audio,
camcorder, multi-media/computer, home office and cellular and
standard telephone products, as well as 900MHz wireless
technology products including headphones and speakers;
loudspeakers and car and marine audio products including high
fidelity loudspeakers, home theater speakers and car audio
speakers and components; and accessories for video and computer
games. The Company products are marketed under three business
segments: Accessory, Audio and Gaming. Accessory products are
offered under the AAMP(R), Ambico(R), Ampersand(R),
AR(R)/Acoustic Research(R), Discwasher(R), InterAct(R),
Jensen(R), Parsec(R), Peripheral(R), Recoton(R), Rembrandt(R),
Ross(TM), SoleControl(R), SoundQuest and Stinger brand names.
Audio products are offered under the Advent(R), AR(R)/Acoustic
Research(R), HECO(TM), Jensen(R), MacAudio(R), Magnat(R), NHT(R)
(Now Hear This), Phase Linear(R), Recoton(R), brand names.
Gaming products are offered under the Game Shark(R), InterAct(R)
and Performance(TM) brand names.


SAFETY-KLEEN: Asks Court to Approve Clean Harbor Break-Up Fee
-------------------------------------------------------------
Safety-Kleen Corp., and its debtor-affiliates recognize that
Clean Harbor, Inc., has invested significant time, effort, money
and energy to present its offer to purchase the Chemical
Services Division.  Clean Harbor is willing to participate in a
competitive bidding process, but not without economic assurance
that its due diligence costs will be covered in the event a
competing bidder prevails.

The Purchase Agreement provides that, in the event Clean
Harbor's bid is topped by another bidder, Clean Harbor will
receive a Break-Up Fee equal to:

    $1,500,000 if the Purchase Agreement is terminated before
               April 30, 2002;

    $3,500,000 if consummation of an Alternative Transaction
               occurs after April 30, 2002, but before Clean
               Harbor secures a Refinancing Commitment from its
               lenders; or

    $7,000,000 if consummation of an Alternative Transaction
               occurs after Clean Harbor secures a Refinancing
               Commitment from its lenders.

David S. Kurtz, Esq., at Skadden, Arps, Slate, Meagher & Flom,
tells Judge Walsh that the Clean Harbor Bidding Protections and
Break-Up Fee were material inducements that got Clean Harbor to
sign the Purchase Agreement.  The Debtors see considerable value
in having Clean Harbor as their Stalking Horse Bidder because it
establishes a floor from which bidding can only go upward.
(Safety-Kleen Bankruptcy News, Issue No. 27; Bankruptcy
Creditors' Service, Inc., 609/392-0900)    


SERVICE MERCHANDISE: Court Okays Claim Settlement Protocol
----------------------------------------------------------
Service Merchandise Company, Inc., and its debtor-affiliates
obtained Judge Paine's discretionary authority for a compromise
and allowance of certain claims pursuant to certain procedures.

Beth A. Dunning, Esq., at Bass, Berry & Sims, in Nashville,
Tennessee, states that such discretionary authority will
maximize efficiency and value in the allowance of claims.  Thus,
it will enable the Debtors to efficiently administer their
estates.

Thus, the Court approved the implementation of these procedures:

(i) for administrative, priority or secured claims where the
     allowed amount is $50,000 or less, the Debtors request
     authority to allow such claims in amounts that the Debtors
     determine in their business judgment to be in the best
     interests of their estates without further notice;

(ii) for administrative, priority or secured claims where the
     allowed amount is between $50,000 and $100,000, the
     Debtors request authority to allow such claims in amounts
     that the Debtors determine in their business judgment to
     be in the best interests of their estates, provided that
     prior  to making such a compromise, the Debtors will
     review such compromise in advance with the Committee, and
     if the Committee disagree with the Debtors as to such
     compromise the Debtors will file a motion to approve the
     proposed compromise;

(iii) for unsecured claims where the allowed amount is under
     $300,000, the Debtors request authority to allow such
     claims in amounts that the Debtors determine in their
     business judgment to be in the best interests of their
     estates, without further notice;

(iv) for unsecured claims where the allowed amount is between
     $300,000 and $1,000,000, the Debtors request authority to
     allow such claims in amounts that the Debtors determine in
     their business judgment to be in the best interests of
     their estates, provided that prior to making such a
     compromise, the Debtors will review such compromise in
     advance with the Committee, and if the Committee disagree
     with the Debtors as to such compromise, the Debtors will
     file a motion to approve the proposed compromise; and,

(v) for any claims where the discrepancy between the allowed
     amount and the Debtors' books and records does not exceed
     10%, the Debtors request authority to allow such claims in
     amounts that the Debtors determine in their business
     judgment to be in the best interests of their estates,
     provided, however, that were such 10% or less discrepancy
     exceeds $50,000, prior to making such a compromise, the
     Debtors will review such compromise in advance with the
     Committee, and if the Committee disagrees with the Debtors
     to such compromise, the Debtors will file a motion to
     approve the proposed compromise.

Furthermore, for allowance of administrative, priority or
secured claims where the proposed allowed amount is more than
$100,000, the Debtors will file a motion to approve the proposed
compromise.  Accordingly, if the proposed allowed amount of any
unsecured claim is more than $1,000,000, the Debtors will file a
motion to approve such compromise.  For claims that the Debtors
will allow without further Court order, the Debtors will
periodically file with the Clerk of the Court a notice
identifying the claims and serve such notice to the Debtors'
claims agent and the applicable claimants. (Service Merchandise
Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


SWEET FACTORY: Court Extends Lease Decision Period to April 15
--------------------------------------------------------------
Sweet Factory Group, Inc. and its debtor-affiliates sought and
obtained an extension from the U.S. Bankruptcy Court for the
District of Delaware of the time period within which they must
decide if they want to assume, assume and assign, or reject
unexpired nonresidential real property leases.  The Debtors has
until April 15, 2002 to make those decisions.  

The Court also orders that the Debtors shall continue to perform
all post-petition obligations under the terms of any unexpired
leases that have not been rejected.  

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


THERMOVIEW: Intends to Pay Down Debt by $2.5 Million This Year
--------------------------------------------------------------
ThermoView Industries, Inc. (Amex: THV), one of the nation's
largest home improvement remodeling companies, reported improved
fourth quarter and fiscal 2001 financial results.

ThermoView, headquartered in Louisville, sells and installs
replacement windows, doors and other home improvements to
residential consumers in 16 states.  The company reported a
fourth quarter 2001 net loss attributable to common stockholders
of $154,219.  In the year-earlier fourth quarter, the company
reported net income attributable to common stockholders of $3.3
million, which included a one-time benefit of $6.9 million from
restructuring preferred stock.

Fourth quarter 2001 revenues were $22.1 million, compared with
$23.4 million in the year-ago period.

President and CEO Charles L. Smith said fourth quarter sales
were helped by mild winter weather throughout most of
ThermoView's markets.  The recession and the aftermath of the
September 11 attacks temporarily slowed new orders, but didn't
substantially change the level of business activity.

"ThermoView is leaner and stronger because of the streamlining
and efficiency programs that have been embraced throughout the
company," Smith said.  "We're better positioned to pursue
strategic growth objectives and serve customers with the best
home improvement products and services we can provide."

Fourth quarter 2001 cash flow, as measured by EBITDA (earnings
before interest, taxes, depreciation and amortization),
highlights ThermoView's continuing turnaround progress.  EBITDA
was $1.7 million during the last three months of 2001, compared
with negative EBITDA for the year-earlier period of $689,000
before unusual charges.

For the full year, EBITDA was $4.8 million, exceeding internal
budget expectations by $800,000.  The improvement in EBITDA
reflected the success of cost-cutting and streamlining efforts
throughout 2001.  The company achieved $3.4 million of overhead
savings during the year, or 13 percent more than anticipated.

For 2001, net income attributable to common stockholders was
$5.1 million.  Those results include a $7.2 million
extraordinary gain from forgiveness of debt, as well as a
$400,000 benefit from a negotiated redemption of 99,470 shares
of 12 percent Series D preferred stock.

That compares with a fiscal 2000 loss attributable to common
stockholders of $18.3 million, or a loss of $2.28 per share.  
Fiscal 2000 results reflected the impact of an $11.2 million
charge to close unprofitable operations, offset somewhat by the
$6.9 million benefit from restructuring preferred stock.

Revenues were $90.3 million in 2001, compared with $98.5 million
in 2000.

Smith said the company remains focused on serving its customers
with innovative products.  In 2001, ThermoView expanded
production capabilities with a joint venture operation to
extrude highly weather resistant Compozit thermoplastic
components.  It also announced plans to introduce a "smart
window" in the third quarter of 2002, assuming all production
and cost requirements are met.

For 2002, the company plans to continue cost-cutting efforts.  
The goal for 2002 is an additional reduction of $1 million in
overhead costs, and to generate between $5.5 million and $6.5
million in EBITDA.

The company seeks to pay down debt by approximately $2.5 million
in 2002, and refinance the remaining balance under more
favorable terms.  Regarding new FASB rules covering impaired
goodwill, the company has hired a firm to evaluate the company's
goodwill position, and any charge related to impairment will be
reflected in the first quarter 2002 financials.

The company plans to expand beyond its 16-state sales footprint
by working toward establishing offices in the South, Southwest
and Midwest.

"This has been a year filled with remarkable achievements, and
we believe ThermoView is on the right track to become one of the
largest -- and best -- home improvement remodeling companies in
the U.S.," Smith said.

Headquartered in Louisville, ThermoView Industries, Inc. reaches
consumers in 16 states and major metropolitan areas including
Los Angeles, Chicago and St. Louis.  The company designs,
manufactures, markets, and installs home improvements in the
nearly $200 billion home improvement/renovation industry, and it
is the fifth-largest remodeler in the country, according to the
September 2001 issue of Qualified Remodeler Magazine.  
ThermoView Industries' common stock is listed on the American
Stock Exchange under the ticker symbol "THV."  Additional
information on ThermoView Industries is available at
http://www.thermoviewinc.com


TRINITY INDUSTRIES: Capital Needs Put Pressure on Debt Covenants
----------------------------------------------------------------
Trinity Industries (NYSE: TRN) reported financial results for
the three months and nine months ended December 31, 2001.

For the nine months ended December 31, 2001, the company
reported a net loss (including unusual charges discussed below)
of $34.7 million on revenues of $1.35 billion.  This compares
with a net loss of $34.7 million on revenues of $1.49 billion in
the nine months ended December 31, 2000.

For the quarter ended December 31, 2001, the company reported a
net loss of $52.2 million on revenues of $507.3 million.  This
compares with a net loss of $42.4 million on revenues of $401.2
million in the same quarter of the prior fiscal year.

In the quarter and nine month period ended December 31, 2001,
the company recorded pre-tax charges of $66.4 million related to
restructuring the Rail Group in connection with the Thrall
merger and the down cycle in the railcar industry and other
matters, as previously announced.  The charges related to the
Rail Group amounted to $50.3 million and relate to plant
closures in Europe and North America, write-down of excess
machinery and equipment, and related costs.  Non-railcar related
charges were $16.1 million, $10 million of which related to the
company's wind tower business which has been affected by the
Enron bankruptcy.  The balance of the $16.1 million related to
the write-off of certain wholly owned and equity investments,
including the last of the company's technology ventures.  In the
prior year, unusual pre-tax charges related to plant closures,
investment write-downs, and other matters of $65.6 million were
recorded in the quarter ended December 31, 2000 and $117.5
million were recorded in the nine month period ended December
31, 2000.

Results include the operations of Thrall since October 26, 2001,
the closing date of the merger.  Revenues from Thrall for the
period were approximately $47.3 million and pre-tax operating
loss was $5.6 million.

"Long term we will be stronger and more competitive by having
taken action quickly after our merger to restructure our rail
business.  This allows us to focus our resources on the positive
aspects of the merger.  With the railcar market in a deep down
cycle, we are fortunate to have the year over year improvement
in other areas of our business," said Timothy R. Wallace,
Trinity's Chairman, President and CEO.  "Our Construction
Products Group experienced much better weather conditions this
quarter than last year and our Inland Barge business had
improved margins due to an improved product mix between barge
construction and some special work they performed this quarter,"
added Wallace.

"Due to our year-end change from March to December, we will be
filing our annual report in March.  Our annual report will
reflect the new business segment grouping presented in this
release.  The new groupings are aligned with our new internal
management and reporting structure.  Our appetite for capital
for additions to the lease fleet may put pressure on our
financial debt covenants as presently structured in the second
half of the year.  We expect to renegotiate our credit lines
before the end of June and consider other sources of capital.  
While we do not intend to give specific earnings guidance, our
present profit outlook for the year is around breakeven on a
consolidated basis and a loss for the Rail Group," said Wallace.

Trinity Industries, Inc., with headquarters in Dallas, Texas, is
one of the nation's leading diversified industrial companies.  
Trinity reports five principal business segments: the Trinity
Rail Group, Trinity Railcar Leasing and Management Services
Group, the Inland Barge Group, the Construction Products Group,
and the Industrial Products Group.  Trinity's Web site may be
accessed at http://www.trin.net


U.S. WIRELESS: Wins Court Approval to Extend Exclusive Periods
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extends
U.S. Wireless Corporation and debtor-affiliates' exclusive plan
filing and solicitation periods.  The Debtors now have the
exclusive right, until March 28, 2002, to propose and file a
plan of liquidation and they have the exclusive right, until May
28, 2002, to solicit acceptances of that plan.

U.S. Wireless Corporation is a research and development company
on wireless location technologies. The Company filed for chapter
11 protection on August 29, 2001.  David M. Fournier, Esq., at
Pepper Hamilton LLP represents the Debtor in their restructuring
effort. When the Company filed for protection from its
creditors, it listed $17,688,708 in assets and $22,239,832 in
liabilities.


USG CORPORATION: Signs-Up Gibbons Del Deo as New Jersey Counsel
---------------------------------------------------------------
USG Corporation, and its debtor-affiliates wish to employ
Gibbons, Del Deo, Dolan, Griffinger & Vecchione, P.C., as local
New Jersey Counsel in connection with the prosecution of their
chapter 11 cases, nunc pro tunc to December 20, 2001.

Gibbons, Del Deo originally attended the December 20, 2001
meeting ordered by Judge Wolin, even though the firm was still
subject to extensive conflict checks. The firm has continued to
perform services at the Debtors' request since then while
continuing to obtain creditor identification to perform a
thorough conflict check, which it completed mid-January, 2002.

The Debtors have chosen Gibbons, Del Deo as their local New
Jersey Counsel because of the firm's expertise, experience and
knowledge practicing before the New Jersey Court, and its
ability to respond quickly to emergency hearings and other
emergency matters in the New Jersey Court. The Debtors believe
that Gibbons, Del Deo is both well qualified and uniquely able
to represent them in these chapter 11 cases in a most efficient
and timely manner.

Paul R. DeFilippo, Esq., at Gibbons, Del Deo, says the firm's
services, under a general retainer are necessary to enable the
Debtors to execute faithfully their duties as debtors in
possession and to develop, propose and consummate a chapter 11
plan.

Specifically, Gibbons, Del Deo will:

   -- take necessary action to protect and preserve the Debtors'
estates, including the prosecution of actions on the Debtors'
behalf, the defense of any actions commenced against the
Debtors, the negotiation of disputes in which the Debtors are
involved, and the preparation of objections to claims filed
against the Debtors' estates, as may be requested by the
Debtors;

   -- prepare on behalf of the Debtors, as debtors in
possession, the necessary motions, applications, answers,
orders, reports and papers in connection with the administration
of the Debtors' estates, as may be requested by the Debtors in
consultation with its other counsel in these cases; and

   -- perform all other necessary legal services in connection
with the Debtors' chapter 11 cases, as may be requested by the
Debtors in consultation with its other counsel in these cases.

Gibbons, Del Deo will bill for its professional services at it's
customary hourly rates, subject to periodic adjustments to
reflect economic and other conditions:

      Paul R. DeFilippo (Director)     $450/hour
      Elizabeth S. Kardos (Director)   $300/hour
      Brendan P. Langendorfer (Assoc.) $165/hour

In addition, other professionals and paraprofessionals may
perform services for the Debtors at their current standard
hourly rates.

Mr. DeFillippo, assures Judge Newsome that Gibbons, Del Deo,
maintains and systematically updates its computerized conflict
check system in the regular course of its business. In an
abundance of caution, he discloses these relationships in the
event that any of these entities may turn out to be creditors.

Gibbons, Del Deo represents, in unrelated matters:

      -- Bank of America
      -- Wells Fargo
      -- Citibank, N.A.
      -- Sherwin-Williams Company
      -- Deutsche Bank
      -- Air Products & Chemical, Inc.
      -- McDonald's Corporation
      -- CSX Transport
      -- Duke Weeks Realty
      -- Center For Claims Resolution
      -- Meridian Capital Associates, LLC
      -- James Anderson
      -- Robert Brown
      -- Michael Jones

Mr. DeFilippo asserts that none of these entities or individuals
have been represented, with regard to their claims, if any,
against the Debtors. The firm will not represent the Debtors
against any of these entities or individuals.

Mr. DeFillippo states that he believes that Gibbons, Del Deo is
a "disinterested person" as defined in 11 U.S.C. Section 101(4)
and is confident that he and the firm hold no interest adverse
to the Debtors. (USG Bankruptcy News, Issue No. 19; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


VALLEY MEDIA: Wants Lease Decision Period Enlarged to March 20
--------------------------------------------------------------
Valley Media, Inc., asks for more time from the U.S. Bankruptcy
Court for the District of Delaware to assume, assume and assign,
or reject its remaining unexpired nonresidential real property
leases through March 20, 2002.  A hearing is scheduled for
February 26, 2002.

The Debtor was a party to eleven unexpired leases and filed
motions seeking to reject seven of these leases.  The Debtor has
not sought to reject the four remaining unexpired nonresidential
real property leases.

Two of the Remaining Leases cover warehouses in Woodland,
California and Louisville, Kentucky, utilized to store and stage
for auction in excess of nine million units of inventory with an
estimated book value of more than $104 million.  The other two
Remaining Leases are office spaces in Woodland, California, the
bases of operations from which the Debtor's management,
remaining employees and professionals are seeing to the Debtor's
wind-down efforts and other administrative matters.

The Debtor believe that its ability to maintain its leasehold
interest in the Warehouses and the Offices is critical to the
success of the its liquidation of the assets, including the
Auction.

The Debtor makes it clear to the Court that it needs additional
time to adequately evaluate whether any of the Remaining Leases
are marketable, and if so, whether an assignment of such
Remaining Leases would realize value for the Debtor's estate and
creditors.

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.


VIEWCAST CORP: Fails to Comply with Nasdaq Listing Requirements
---------------------------------------------------------------
ViewCast Corporation (Nasdaq:VCST) announced that it received a
Nasdaq Staff Determination on February 20, 2002, indicating that
ViewCast fails to comply with the minimum net tangible assets or
minimum stockholders' equity requirements for continued listing,
set forth in Marketplace Rule 4310(C)(2)(B) and that its common
stock is therefore subject to delisting from The Nasdaq SmallCap
Market.

Marketplace Rule 4310c(2)(B) states that "For continued
inclusion, the issuer shall maintain: (i) stockholders' equity
of $2.5 million; (ii) market capitalization of $35 million; or
(iii) net income of $500,000 in the most recently completed
fiscal year or two of the last three most recently completed
fiscal years."

ViewCast has requested a hearing before a Nasdaq Listing
Qualifications Panel to review the Staff Determination. There
can be no assurance the Panel will grant the company's request
for continued listing. The stock will continue to be listed on
The Nasdaq SmallCap Market pending the panel's decision.

"We are working with Nasdaq to fully comply with listing
requirements," said Laurie Latham, ViewCast CFO. "Management
intends to pursue and implement a plan to meet requirements in
the near future. Although there can be no guarantee to persuade
Nasdaq, we will continue with initiatives to further grow the
company and ultimately fulfill the criteria."

ViewCast develops products and services that provide video
networked solutions. ViewCast maximizes the value of video
through its core businesses: Osprey(R) Video provides the
streaming media industry's de facto standard capture cards and
ViewCast Systems integrates turnkey streaming and video
distribution systems and software. From streaming digital video
on the Internet to distribution of broadcast-quality video
throughout the corporate enterprise, plus comprehensive video
software applications, ViewCast provides the complete range of
video solutions. Visit the company's Web site
http://www.viewcast.comfor more information.


W.R. GRACE: U.S. Trustee Gripes About How to Pay PwC
----------------------------------------------------
W. R. Grace & Co., and its debtor-affiliates ask Judge Judith
Fitzgerald for her approval and authorization to employ and
compensate PricewaterhouseCoopers LLP as their independent
auditors and accountants.

Since the Petition Date, PwC has been actively involved aiding
the Debtors with the administration of their estates, including
aiding the Debtors' compliance with their reporting requirements
under the United States securities laws, the Bankruptcy Code,
the Federal Rules of Bankruptcy Procedure and the Local
Bankruptcy Rules of this Court. As examples of PwC's
contributions, the Debtor cites to Judge Fitzgerald's attention

       (1) review by PwC of the Debtors' interim consolidated
           financial statements filed in connection with the
           Debtors' Forms 10-Q;

       (2) audit of the Debtors' employee benefit plans;

       (3) preparation of the creditor matrix used to notify
           each potential party-in-interest of the commencement
           of these Chapter 11 cases;

       (4) aiding in the mailing of the notice of commencement
           of, and the temporary restraining order issued in,
           these Chapter 11 cases;

       (5) aiding in the Debtors' organization and preparation
           of their initial monthly operating reports; and

       (6) preparation of the Debtors' voluminous Schedules of
           Assets and Liabilities and Statements of Financial
           Affairs.

                   Conflict Without Resolution

The Debtors explain that PwC performed this work prior to being
retained by the Debtors due to a potential conflict of interest
relating to PwC's overseas representation of one of the Debtors'
foreign subsidiaries. Although negotiations between PwC and the
Debtors have been ongoing to resolve this potential conflict, an
acceptable resolution to both parties has not been found.

                    The Proposed Resolution

Therefore, the Debtors and PwC have agreed that PwC will not
perform any additional bankruptcy related services during these
Chapter 11 cases, but will remain engaged as the Debtors' long
standing, ordinary course, independent accountants and auditors.

Due to the Debtors' and PwC's diligent work to resolve this
potential conflict, each party believed a workable resolution
would expeditiously be reached. Therefore, in an effort to
protect the Debtors' estates from potential damage, and because
the parties were actively pursuing a resolution, PwC continued
to work and provide the Debtors' estates with significant value
by aiding the Debtors' compliance with their reporting
requirements under the Securities Laws, the Bankruptcy Code, the
Bankruptcy Rules and the Local Rules. Further, PwC's substantial
experience working as the Debtors' independent accountants and
auditors since 1906, nearly 100 years, has been invaluable
throughout these Chapter 11 cases, as well as with respect to
the Debtors' compliance with the securities laws and various tax
planning and compliance matters. The Debtors anticipate that
PwC's retention in these Chapter 11 cases with respect to such
accounting and audit matters will also continue to be important
in the future as the Debtors require the services of independent
accountants and auditors in the ordinary course of their
businesses. Therefore, the Debtors are filing this application
requesting (i) that PwC be reimbursed for its postpetition fees
and expenses incurred to date as a substantial contribution to
the Debtors' estates and (ii) that the Court approve PwC's
retention in the ordinary course as the Debtors' independent
accountants and auditors.

                       Compensation

By this Application, the Debtors seek authority to compensate
PwC for its substantial contribution to the Debtors' estates of:

     (A) $574,743 related to PwC's bankruptcy related services;

     (B) $324,OO0 related to PwC's audit services;

     (C) $200,000 for PwC's tax services for the period from the
         Petition Date through the date of the Application; and

     (D) $39,893.54 for PwC's actual, and necessary expenses
         incurred while rendering such services during the Fee
         Period.

By this application, the Debtors also seek authority to employ
and retain PwC in the ordinary course of business as independent
accountants and auditors during these Chapter 11 cases.

                 PwC's Substantial Contribution

The Debtors insist that PwC's fees and expenses incurred to date
satisfy the tenets of the Bankruptcy Code and qualify as a
substantial contribution to the Debtors' estates.  Under section
503(b)(3)(D) of the Bankruptcy Code, the actual, necessary
expenses incurred by a creditor in making a substantial
contribution in a case under chapter 11 shall be allowed as
administrative expenses.

The applicable test to determine whether a party has made a
"substantial contribution" entitling it to administrative
expenses is whether the efforts of the applicant resulted in an
actual and demonstrable benefit to the debtor's estate and the
creditors." Under the standard of the Third Circuit set forth in
Lebron, "services which substantially contribute to the case are
those which foster and enhance . . . the progress of
reorganization."

In addition to qualifying for administrative priority under
section 503(b)(3)(D), PwC's fees and expenses also qualify wider
section 503(b)(1)(A) of the Bankruptcy Code. Under section
503(b)(1)(A) of the Bankruptcy Code, the actual, necessary costs
and expenses of preserving the estate shall be allowed as
administrative expenses.  This section is designed to grant
administrative priority for expenses that arise out of
postpetition transactions with the debtor in possession and that
directly and substantially benefit the estate.

The professional fees and expenses requested in this Application
directly arose out of the postpetition work performed by PwC.
Furthermore, the work performed by PwC provided a clear and
substantial benefit to the Debtors and. their estates. Without
PwC's efforts, the Debtors would not have been able to mail the
notice of commencement of these Chapter 11 cases or the notice
of the statutory temporary restraining order issued on the
Petition Date. Without PwC's efforts, the Debtors would not have
been able to complete their initial monthly operating report in
accordance with the Local Rules. In fact, the 14,000 plus pages
of the Schedules prepared by the Debtors could not have been
completed without PwC's extensive work in these Chapter 11
cases. Clearly, without PwC's support, the Debtors would not
have been able to comply with their reporting requirements under
the Bankruptcy Code, the Bankruptcy Rules and the Local Rules.
The amount of the fees requested, therefore, is fair and
reasonable considering: (a) the complexity of these Chapter 11
cases, (b) the time PwC expended, (c) the nature and extent of
the services rendered, (d) the value of such services, and (e)
the costs of comparable services other than in a case under the
Bankruptcy Code.

Furthermore, in accordance with section 503(b)(3)(D) and the
Third Circuit's holding in Lebron, PwC and its professionals
have helped foster and enhance the progress of reorganization by
aiding the Debtors' (i) mailing of the notice of commencement of
these Chapter 11 cases, (ii) filing of the initial monthly
operating report and (iii) filing of the Schedules.  Therefore,
pursuant to Third Circuit law, PwC's fees and expenses merit
administrative expense priority.

In addition, considering PwC's past experience working as the
Debtors' independent accountants and auditors for nearly 100
years, its knowledge and understanding of the Debtors'
operations allowed it to provide a significant benefit to the
Debtors' compilation and preparation of the information
necessary to complete the creditor matrix and the Schedules.
PwC's services were also required in order for the Debtors to
comply with the securities laws and timely file their Forms 10-
Q. Thus, by using the services of PwC, the Debtors avoided the
strategic business interruption and the duplicative costs
associated with obtaining substitute professionals to replace
PwC. This, in turn, increased the funds available for the
Debtors' creditors. Accordingly, PwC's fees and expenses
incurred to date warrant administrative expense priority in
accordance with section 503(b)(1)(A) of the Bankruptcy Code.
Consequently, the Debtors respectfully request that Judge
Fitzgerald order that PwC's reasonable postpetition fees and
expenses are entitled to administrative expense priority
under the Bankruptcy Code.

             The Debtors Explain Why An Application
                   For Employment Is Needed

A person's status as a "professional" is not determinative on
the issue of whether an application for employment is necessary;
the inquiry of whether they are a "professional person" must
focus on that person's duties. Accordingly, "if the duties
involved are central to the administration of the estate such
duties are professional in nature." Various duties have been
judicially recognized as being central. to the administration of
the estate including: assisting in the negotiation of the
debtor's plan of reorganization; assisting in the adjustment of
the debtor/creditor relationship; and disposing of assets of the
estate and acquiring assets on behalf of the estate.  Factors to
be considered in determining whether an employee is a
professional within the meaning of section 327 "include the
following: (1) whether the employee controls, manages,
administers invests purchases or sells assets that are
significant to the debtors' reorganization, (2) whether the
employee is involved in negotiating the terms of a plan of
reorganization, (3) whether the employee is directly related to
the type of work carried out by the debtor or to the routine
maintenance of the debtor's business operations; (4) whether the
employee is given discretion or autonomy to exercise his or her
own professional judgment in some part of the debtor's estate,
i.e. the qualitative approach, (5) to the extent of the
employee's involvement in the administration of the debtor's
estate, i.e. the quantitative approach; and (6) whether the
employee's services involve some degree of special knowledge or
skill, such that the employee can be considered a "professional"
within the ordinary meaning of the term." No one factor above is
dispositive and each should be weighed against the others.

Although accountants are commonly considered professionals under
section 327 of the Bankruptcy Code, it is an accountant's role
in bankruptcy, rather than its status as an accountant, that
controls. Thus, the Debtors are not required to retain PwC
simply because of its status as an accountant.  PwC will only
provide the Debtors with those accounting, audit and tax
services PwC has traditionally provided to the Debtors in the
ordinary course. PwC will not provide the Debtors will any
bankruptcy or business recovery services, and PwC will not play
a central role in the Debtors' reorganization, Indeed, PwC will
not have any input with respect to the Debtors' disposition or
acquisition of assets, the operation of their business or the
negotiation of the ultimate plan of reorganization proposed in
these Chapter 11 Cases. Clearly, PwC is a "professional" within
the ordinary meaning of the word, but PwC is not a professional
within the meaning of section 327(a) of the Bankruptcy Code.
Therefore, PwC's retention, in the ordinary course, as the
Debtors' longstanding independent accountants and auditors
should be approved, as in the best interests of the Debtors,
their estates and creditors.

                      Scope of Services

PwC will provide such accounting, audit, tax and other business
services as PwC and the Debtors shall deem appropriate and
feasible in order to advise the Debtors in the course of these
Chapter 11 Cases, including:

A. Accounting and Auditing Services.

       (1) Audit the financial statements of the Debtors as may
be required from time to time, and advise and assist in the
preparation and filing of financial statements and disclosure
documents required by the Securities and Exchange Commission
including Forms 10-Q as required by applicable law or as
requested by the Debtors;

       (2) Audit any benefit plans as may be required by the
Department of Labor or the Employee Retirement Income Security
Act, as amended;

       (3) Review the unaudited quarterly financial statements
of the Debtors as required by applicable law or as requested by
the Debtors; and

       (4) Perform other audit related services for the Debtors
as may be necessary or desirable.

B. Tax Services.

       (1) Review and assist in preparing and filing tax
returns;

       (2) Advise and assist the Debtors regarding tax planning
issues, including calculating net operating loss carry forwards
and the tax consequences of any proposed plans of
reorganization, and assist in preparing any Internal Revenue
Service ruling requests regarding the future tax consequences of
alternative reorganization structures;

       (3) Assist the Debtors in preparing for and undergoing
existing and future IRS examinations; and

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

PwC, at the request of the Debtors, also may render additional
general business consulting and other related accounting and
support deemed appropriate and necessary by the Debtors. PwC
will not, however, provide any bankruptcy or business recovery
services to the Debtors during these Chapter 11 cases. The
accounting and business services enumerated above are necessary
to enable the Debtors to comply with the Securities Laws. The
Debtors believe that PwC's accounting, audit, tax and related
services will not duplicate the services that, subject to this
Court entering or having entered appropriate orders, other
professionals may provide to the Debtors during these Chapter 11
cases. PwC will use reasonable efforts to coordinate with the
Debtors' other retained professionals to avoid the unnecessary
duplication of services.

                     Terms of Retention

PwC has agreed to represent the Debtors pursuant to a fixed fee
arrangement.  PwC's fees in connection with this engagement will
be based upon the estimated time that PWC will necessarily spend
in providing its accounting, audit, tax and business services to
the Debtors.

A.  The Audit Fixed Fee.

     The fixed fee for the audit of the Debtors' financial
statements is $700,000, which was reviewed with the Audit
Committee of the Debtors' Board of Directors, and approved in
July of 2001. In addition, PwC audits certain benefit plans
sponsored by the Debtors. The fixed fees associated with such
audits, in the aggregate, are $100,000, but the Debtors are
reimbursed for such fees by the specific benefit plan trust.

B.  The Tax Compliance Fixed Fee.

     PwC had also agreed to provide the Debtors with tax
compliance services for a fixed fee of $25,000 per month under
an agreement which expired in October of 2001. These compliance
services included assistance with any reviews of the Debtors'
tax return instituted by the Internal Revenue Service. Although
the Debtors' management now performs most tax compliance matters
in-house, the Debtors may request that PwC perform certain tax
compliance matters in the future. In the event the Debtors
request PwC perform any tax related services, it is anticipated
by the parties that such services would be performed upon terms
similar to those set forth in the October, 2001 agreement, or
upon such other terms as the parties may agree. These fees are
adjusted from time to time.

C.  Expenses.

     In addition to the fees outlined above, PwC will bill the
Debtors for reasonable expenses which are likely to include long
distance telephone charges, hand delivery and other delivery
charges, travel expenses, computerized research, transcription
costs, and third-party photocopying charges.

As a professional employed by the Debtors in the ordinary
course, PwC will not seek compensation and reimbursement of
expenses in accordance with the Bankruptcy Code.

PwC will, however, maintain reasonably detailed records of its
fees and any actual and necessary costs and expenses incurred in
connection with the aforementioned services.

The Debtors disclose that PwC received $250,000 in retainers for
services related to the Chapter 11 cases and was paid
$506,029.56 for prepetition bankruptcy related services
rendered.  The payments have been applied to outstanding
balances for prepetition services related to the filing of the
bankruptcy petitions. The Debtors have agreed that any portion
of the retainer not used to compensate PwC for its prepetition
services and expenses ultimately will be used by PwC to apply
against its postpetition billings and will not be placed in a
separate account.

                  THE U.S. TRUSTEE OBJECTS

             UST Challenges PwC's Disinterestness

Donald F. Walton, Acting United States Trustee for Region 3,
appearing through Frank W. Perch, III, Esq., Trial Attorney,
objects to the Application.  He begins by reminding Judge
Fitzgerald that this case is now nearly ten months old, and that
PwC is said to have been rendering services during this time
without any application being filed or disclosure made.  The
Debtors and PwC admit in the Application that PwC has a
conflict, and offer that as the reason for the delayed
application.  PwC therefore does not meet the statutory standard
of a "disinterested" person.

Notwithstanding the unresolved conflict and the lack of any
application, PwC now asks to be employed anyway -- and paid
anyway.  The reasons given in the Application are said by the
Trustee to be "wholly contrary to the plain language of the Code
and settled law in this Circuit and elsewhere."  PwC's arguments
are not supported by any authority and border on the frivolous.

                 PwC's Arguments Are Frivolous

As to compensation, PwC is the debtors' accountant and auditor,
not a creditor, indenture trustee, equity security holder or
unofficial committee.  Therefore under the Code PwC facially
fails the basic test for eligibility to seek compensation as a
professional retained by the estates.

As to "substantial benefit", PwC cites no authority supporting
the proposition that a professional rendering services to the
debtor which is ineligible to be retained under the Code, and in
fact is not so retained, can be compensated under any portion of
this statute.  Courts in the Third Circuit and elsewhere have
ruled squarely against the position taken by PwC in the
application, and PwC has advanced no reason why Judge Fitzgerald
should overturn this "overwhelming weight of authority" on this
issue.

                 PwC Is A Professional Who Must
                   Be Retained Before Payment

Under the plain language of the Bankruptcy Code the issue of
whether a person is or is not a "professional" arises only with
respect to the statutorily enumerated categories of attorneys,
accountants, appraisers and auctioneers.  The Code, in the
Trustee's view, does not give Judge Fitzgerald any discretion to
find that PwC is anything but a professional person whose
retention is governed by the need to make application, be
"disinterested" and apply for compensation.

PwC's sole argument against these statutory requirements is that
its employment is in the ordinary course of business, and that
it is not participating in the reorganization process.  However,
the Trustee notes that on the face of the Application, PwC's
description of the services it proposes to render include
reorganization-related tax advice and analysis.

More generally, any claim that auditing, SEC reporting and tax
planning have no role in the Debtors' reorganization is
frivolous.  The Debtors' financial statements, SEC reports and
tax returns must accurately report and characterize events that
are taking place in the case that would not exist outside of
bankruptcy.  PwC could not do this work if the chapter 11 cases
did not exist.  Additionally, the Debtors' financial statements
are the necessary starting place of the reorganization analysis
and will be key in the determination of reorganization-related
value issues such as what value is properly allocated to
asbestos claims.

Furthermore, PwC's arguments are based on a false premise.  A
debtor-in-possession must operate in accord with applicable law
and file tax returns.  The Debtor must comply with other federal
and state laws governing securities.  Therefore, the services
which PwC proposes to render are services essential to assisting
the Debtors carry out their duties as debtors-in-possession and
are thus without doubt within the scope of the Bankruptcy Code
governing professional persons' employment.

The most obvious example of this problem is one in which PwC's
predecessor, Price Waterhouse, was involved.  In that and other
similar cases, the accountant or auditor was disqualified and
lost every dollar of its fee.  PwC's argument is particularly
disingenuous in light of the applications it has made in every
other application for employment it has made in this district.

The same equitable arguments advanced by PwC were also made by
its predecessor, Price Waterhouse, and were ineffective and
rejected by the Court, including arguments that it will be
expensive and take an extraordinary length of time for a new
accounting firm to become familiar with the Debtors' needs, and
the argument that failure to appoint PwC would jeopardize any
hope the Debtors have of presenting a business plan
demonstrating a chance at reorganization.

Any alleged "emergency" is of the parties' own making.  Instead
of recognizing the disabling conflict and presenting it to the
Court and the Trustee, and making contingency plans to assure a
smooth transition to a successor firm, PwC and the Debtors
instead delayed their filing so as to increase the potential
adverse consequences of denying retention, thereby seeking to
leverage Judge Fitzgerald into ignoring the Code.

While the implication of PwC's and the Debtors' arguments is
that it is simply unthinkable that the Debtors might be required
to engage new accountants if PwC cannot, or chooses not, to
eliminate the conflict, in fact a change of auditors is not an
unusual or infrequent event.  A quick search reveals 13 such
announcements in January 2002 alone, some of them involving PwC.
Moreover, in light of the implications of the Enron case, some
scholars are suggesting that public companies should be required
to change auditors periodically as a matter of course.

In any event, Judge Fitzgerald has the tools to protect the
Debtors and these estates from the costs of retaining new
accountants.  Simply put, disallowing PwC's fees in this case
should more than cover the "getting up to speed" costs of a new
firm.

                    Request for Disgorgement

To the extent PwC has been paid anything for postpetition
services, the Trustee asks that the firm be compelled to
disgorge that amount.  This includes the $250,000 retainer.
(W.R. Grace Bankruptcy News, Issue No. 19; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


WARNACO GROUP: Secures Okay to Amend Alvarez' Employment Pact
-------------------------------------------------------------
The Warnaco Group, Inc., and its debtor-affiliates seek the
Court's approval to amend their Employment Agreement with
Antonio Alvarez, who serves as Warnaco's Chief Executive
Officer.

Kelly A. Cornish, Esq., at Sidley Austin Brown & Wood LLP, in
New York, relates that the Debtors' Restructuring Committee has
determined to amend the employment agreement of Mr. Alvarez to
appropriately incentivize Mr. Alvarez for the challenges he
faces in light of the continued weakening of the economy, the
apparel industry and the retail environment.

The proposed amendments provide:

  (a) The "Hurdle Amount" to be used in calculating Mr.
      Alvarez's Incentive Bonus should be decreased from
      $1,000,000,000 to $625,000,000;

  (b) The "Discount Rate" to be used in calculating Mr.
      Alvarez's Incentive Bonus should be increased from 10% to
      20%; and

  (c) The maximum Incentive Bonus payable to Mr. Alvarez should
      be decreased from $38,000,000 to $10,000,000.

Stanley P. Silverstein, Warnaco's Vice President, General
Counsel and Secretary, explains that the amendment will have an
"overall effect of enabling Mr. Alvarez to earn an Incremental
Bonus", aside from the $2,250,000 Minimum Bonus, at "different
levels of enterprise value realized by the Company in a sale,
reorganization or combination of the two."

                        *     *     *

Judge Bohanon authorizes the Debtors to amend the employment
agreement with Mr. Alvarez and further orders that:

  (a) all compensation and benefits due to Mr. Alvarez shall be
      treated in the Debtors' chapter 11 cases as allowed
      administrative expenses;

  (b) to the extent that it is determined by final order of the
      Bankruptcy Code that there are insufficient unencumbered
      assets of the Debtors available to pay the compensation
      due to Mr. Alvarez under the Amended Employment Agreement,
      such compensation shall be deemed an allowed reasonable
      and necessary cost and expense, chargeable and recoverable
      against the property securing the pre-petition secured
      lenders' claims, as well as a charge against, and
      recoverable from, the property securing the Debtors' post-
      petition financing;

  (c) in the event that the Debtors receive any written notice
      from Mr. Alvarez, the Debtors shall deliver a copy of any
      such Notice to be received within 5 days of the Debtors'
      receipt by counsel to:

           (i) the Debt Coordinators for the pre-petition bank
               lenders, and

          (ii) the Official Committee of Unsecured Creditors;

  (d) in the event that Mr. Alvarez and the Debtors intend to
      extend the Employment Period, the Debtors shall provide
      written notice of such intention to extend to counsel for
      the Debt Coordinators and the Committee no less than 30
      days prior to the date that Mr. Alvarez and the Debtors
      intend to enter into the written agreement extending the
      Employment Period. If the Debt Coordinators or the
      Committee provide written notice of an objection to such
      extension to Mr. Alvarez and the Debtors, within five days
      of receipt of the Extension Notice, then the Debtors shall
      be required to obtain Bankruptcy Court approval of such
      extension of the Employment Period as a condition to the
      effectiveness of such extension; (Warnaco Bankruptcy News,
      Issue No. 20; Bankruptcy Creditors' Service, Inc.,
      609/392-0900)  


WILLIAMS COMPANIES: Working Towards Resolution of Fin'l Issues
--------------------------------------------------------------
Moody's Investors Service and Standard & Poor's each released
statements about Williams (NYSE: WMB) in response to financial
issues raised this week by its former telecommunications
subsidiary.  The agencies also acknowledged Williams' progress
toward resolution of certain issues necessary to maintain its
current investment-grade credit rating.

In addition, Moody's confirmed Williams' current investment-
grade credit rating, but changed its outlook to negative from
stable.  S&P maintained Williams' investment-grade rating with
CreditWatch with negative implications. Moody's and S&P in their
statements also acknowledged that Williams' ongoing efforts
should enable it to maintain its investment-grade credit rating.

In its statement, Moody's said: "Despite its near-term
challenges, WMB has a substantial and diverse asset base that
provides strong support for its credit."

The credit-rating agencies issued their statements Wednesday on
the heels of Williams Communications Group's (NYSE: WCG)
announcement earlier this week that it is considering a Chapter
11 bankruptcy filing as it restructures its balance sheet.  As a
part of the WCG spinoff last year, Williams has contingent
obligations of up to $2.2 billion -- $1.4 billion in unsecured
debt and $750 million in lease guarantees -- in the event of a
WCG bankruptcy.

Both Moody's and S&P have stated that the full, worst-case
amount of those contingent obligations already is factored into
Williams' current investment- grade credit ratings.

"While we acknowledge the credit-rating agencies' need to issue
statements given the nature of WCG's announcement on Monday, we
were pleased that they fully understand the progress that
Williams is making on many fronts to address these issues," said
Steve Malcolm, Williams president and CEO.  "We are moving
toward a quick and successful resolution of these issues to the
benefit of all Williams stakeholders in a way that allows us to
strengthen an already investment-grade balance sheet.

"As we've stated before, we believe we have a number of options
available to us to constructively address the agencies' concerns
surrounding WCG.  We did not believe it was prudent to pursue
any of those options prior to having a clear picture of what
restructuring plans WCG was considering.  We now have that and
are proceeding accordingly," Malcolm said.

"Among steps we are taking is to renegotiate terms with holders
of the $1.4 billion in notes in the WCG Share Note Trust.  Our
goal is to get their consent to restructure the terms of that
potential obligation in a way that significantly reduces near-
term cash requirements from Williams in the event of a WCG
bankruptcy.  The negotiations also are designed to remove
credit- rating triggers.

"Williams also is well down the road toward implementing other
measures in the balance-sheet strengthening plan, which we
announced in December after credit-rating agencies changed the
acceptable debt-to-equity ratio required to maintain an
investment-grade credit rating in our sector of the energy
industry.  Williams' plan includes removing ratings triggers
from financings, including the WCG Share Note Trust; selling
assets; cutting capital expenditures by $1 billion; and reducing
expenses by more than $50 million annually," Malcolm said.

"Williams continues to believe that these and other steps it
will take will fully support an investment-grade credit rating
on an ongoing basis. With Monday's announcement by WCG, Williams
is now in the position to complete its financial statements for
2001 and plans to issue audited earnings prior to a scheduled
March 8 meeting with investors and analysts."

Williams, through its subsidiaries, connects businesses to
energy, delivering innovative, reliable products and services.  
Williams information is available at http://www.williams.com

DebtTraders reports that Williams Communications Group Inc.'s
10.875% bonds due 2009 (WCG2) are trading between 12 and 14. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=WCG2for  
real-time bond pricing.


WINSLOWHOUSE INT'L: Case Summary & 20 Largest Unsec. Creditors
--------------------------------------------------------------
Debtor: WinslowHouse International, Inc.
        115 East 23rd Street-10th Floor
        New York, New York 10010

Bankruptcy Case No.: 02-10853

Type of Business: The Debtor is a publishing company which -
                  through a patented technology -- integrates
                  the printed word product with the virtually
                  unlimited resources of the Internet. The
                  Debtor's unique product allows each book to
                  have its own interactive home page for
                  further exploration on and expansion of, its
                  theme.

Chapter 11 Petition Date: February 26, 2002

Court: Southern District of New York

Judge: Prudence Carter Beatty

Debtors' Counsel: Gabriel Del Virginia, Esq.
                  Law Offices of Gabriel Del Virginia
                  18 East 50th Street 7th Floor
                  New York, NY 10022
                  (212) 371-5478

Estimated Assets: $1 million to $10 million

Estimated Debts: $1 million to $10 million

Debtor's 20 Largest Unsecured Creditors:

Entity                                            Claim Amount
------                                            ------------
Diane F. Kessenich                                 $2,315,000
2423 North Ocean Blvd
Gulf Stream, FL 33483

Proost N.V.                                          $143,405
                  
Hadley Exhibits, Inc.                                $120,917

Dewey Ballantine LLP                                 $104,580

Mr. Iain MacFarlane                                   $80,600

Aenigma Design, Inc.                                  $34,026

Innovation Printing/Lithograph                        $29,183

Urbach Kahn & Werlin Advisors                         $26,928

TWP America, Inc.                                     $25,188

Palace Press International                            $22,685

Vanguard Direct                                       $22,288

Andersen LLP                                          $22,000

Milbank Tweed Hadley McClo                            $18,000

Waltox Corporation N.V.                               $17,400

Ahearn Jasco & Company                                $17,223

Agency.com                                            $17,172

Berryville Graphics, Inc.                             $16,680

Temporary Alternatives                                $16,610

Photogravure De Schutter                              $13,738

American Express Gold                                 $11,916


WORLD ACCESS: Court Sets Confirmation Hearing for May 14, 2002
--------------------------------------------------------------
              UNITED STATES BANKRUPTCY COURT
              NORTHERN DISTRICT OF ILLINOIS
                     EASTERN DIVISION

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


                   NOTICE TO HOLDERS OF
             PREFERRED OR CAPITAL STOCK OF
                    WORLD ACCESS, INC.
       OF HEARING TO CONSIDER CONFIRMATION OF PLAN

   PLEASE TAKE NOTICE that:

   On February 14, 2002, World Access, Inc. and its affiliated
Debtors in the above-captioned cases (the "Debtors") and the
Official committee of Unsecured Creditors (the "Committee")
filed their Amended Join Plan of Liquidation (as it may be
subsequently amended, the "Plan") and a related Amended
Disclosure Statement (as it may be subsequently amended, the
"Disclosure Statement") under Bankruptcy Section 1125.  

   After a hearing (the "Disclosure Statement Hearing"), on
February 14, 2002, the Bankruptcy for the Northern District of
Illinois Court entered an order approving the Disclosure
Statement (the "Disclosure Statement Order").

   The Plan is a Plan of Liquidation.  The proceeds from the
disposition of all the Debtors' assets and the proceeds of all
causes of action will be distributed to holders of Claims
against the Debtors pursuant to the provisions of the Plan.

   You are receiving this notice because you are believed to be
a holder of a World Access Class 6 Equity Interest, i.e., a
holder of preferred or capital stock in World Access, Inc.,
which stock is to be cancelled under the Plan.  If you are
holding such stock as a nominee for the benefit of another
party, you should forward this Notice to such other party.  The
Debtors do not believe that there is any realistic scenario that
will result in cash being available for distribution to holders
of World Access Class 6 Equity Interests because there are
insufficient assets to pay creditor Classes in full.

   Holders of world Access Class 6 Equity Interest do, however,
have the right to review the Plan and Disclosure Statement and
to object to confirmation of the plan.  You may obtain copied of
the Plan and Disclosure Statement by directing a written request
to the Debtors' Claims Agent (Poorman-Douglas Corporation, 10300
Allen Blvd., Beaverton, OR 97005, Attn:  Thomas Hoffman).  This
Notice is qualified, in its entirety, by the information
contained in the Plan and Disclosure Statement.  Upon your
request, copied of the plan and Disclosure Statement will be
sent to you at the Debtors' expense.

   A hearing (the "Confirmation Hearing") to consider the
confirmation of the plan will commence before the Honorable
Chief Judge Susan Pierson Sonderby in the United Stats
Bankruptcy Court, 219 South Dearborn Street, Room 642, Chicago,
Illinois at 11:00 a.m. on May 14, 2002.

   Objections, if any, to the confirmation of the Plan must: (a)
be n writing; (b) state the name and address of the objecting
party and the nature of the claim or interest of such party; (c)
state with particularity the basis and nature of any objection
and (d) be filed, together with proof of service, with the Court
(with a copy to chambers) and served so that they are received
no later than 4:00 p.m., Central Time, on April 10, 2002, on
counsel for the Debtors (Katten Muchin Zavis, 525 West Monroe
Street, Suite 1600, Chicago, IL 60661, Attn:  Mark K. Thomas),
counsel for the committee (Cadwalader Wickersham & Taft, 100
Maiden Lane, Suite 3400, Chicago, IL 60610, Attn:  Jeffrey
Schwartz), and the Office of the United States Trustee (227 West
Monroe Street, Suite 3350, Chicago, IL 60606, Attn:  Kathryn M.
Gleason, Esq.).

   The Confirmation Hearing may be continued from time to time
without further notice other than the announcement of the
adjourned date(s) at the Confirmation Hearing or any continued
hearing.

                 Dated:  Chicago, Illinois
                         February 14, 2002

                         Mark K. Thomas, Esq.
                         John P. Sieger, Esq.
                         KATTEN MUCHIN ZAVIS
                         525 West Monroe Street, suite 1600
                         Chicago, IL 60661
                         (312) 902-5200
                         Counsel to the Debtors
                         and Debtors-in-Possession


XO COMMUNICATIONS: Completes Sale of European ISP Business
----------------------------------------------------------
XO Communications, Inc. (OTCBB:XOXO) announced that it has
completed the sale of its European Internet Service Provider
(ISP) business.

Terms of the transaction were not disclosed, but were consistent
with the assumptions used in determining the restructuring
charges relating to the decision by XO to exit its European
operations. The restructuring charges were described in XO's
quarterly results press release and accompanying attachments for
the fourth quarter of 2001 issued on February 14, 2002.

XO Communications is one of the nation's fastest growing
providers of broadband communications services offering a
complete set of communications services, including: local and
long distance voice, Internet access, Virtual Private Networking
(VPN), Ethernet, Wavelength, Web Hosting and Integrated voice
and data services.

XO has assembled an unrivaled set of facilities-based broadband
networks and Tier One Internet peering relationships in the
United States.

XO currently offers facilities-based broadband communications
services in 63 markets throughout the United States. The Company
is also one of North America's largest holders of fixed
broadband wireless spectrum, with licenses covering 95 percent
of the population of the 30 largest U.S. cities.

On January 16, 2002, XO also announced that it had reached a
forbearance agreement with the lenders under its secured credit
facility in which the lenders have agreed, subject to certain
conditions, not to exercise their remedies under the credit
facility with respect to certain cross default events and to the
covenant in the credit facility relating to XO's fourth quarter
minimum revenues.

The agreement contemplates that the lenders' forbearance will
continue until April 15, 2002 in order to provide the company
with an opportunity to reach agreement with its creditors
regarding the terms of the proposed balance sheet restructuring.

DebtTraders reports that XO Communications Inc.'s 10.750% bonds
due 2009 (XOXO7) are trading between 12 and 14. See
http://www.debttraders.com/price.cfm?DT_SEC_TICKER=xoxo7for  
real-time bond pricing.


* BOOK REVIEW: George Eastman: Founder of Kodak and the
               Photography Business
-------------------------------------------------------
Author:  Carl W. Ackerman
Publisher:  Beard Books
Softcover:  522 Pages
List Price:  $34.95
Review by Gail Owens Hoelscher
Buy a copy for yourself and one for a colleague on-line at
http://amazon.com/exec/obidos/ASIN/1893122832/internetbankrupt  

George Eastman was a Bill Gates of his time. This biography of
Eastman (1854-1932) provides a fascinating look at the
inventions, management style, interests, causes, and
philanthropies of one of America's finest scientist-
entrepreneurs. Eastman's inventions transformed photography into
a relatively inexpensive and enormously popular leisure
activity. His company, Eastman Kodak, was one of the first U.S.
firms to mass-produce a standardized product. Along with Thomas
Edison, he ushered in the age of cinematography.

Eastman was born in Waterville, New York. At the age of 23,
while working as a bank clerk, Eastman bought a camera and set
in motion a revolution in photography. At the time,
photographers themselves mixed chemicals to make light-sensitive
emulsions and covered glass plates (called "wet plates") with
the emulsions, taking photographs before the emulsions dried. It
was an awkward, messy and time-sensitive undertaking. Eastman
developed a process using dry plates and in 1884 patented a
machine to produce coated dry plates. He began selling
photographic plates made using his machines, as well as leasing
his patent to foreign manufacturers.

With the goal of reducing the size and weight of photographic
equipment, Eastman then began investigating possibilities for a
flexible firm. He and William E. Walker developed the first such
film, cut in narrow strips and wound on a roller device patented
by Eastman. The Eastman Dry Plate and Film Co. began producing
the film commercially in 1885. In 1888, Eastman patented the
hand-held Kodak camera, designed specifically for roll film and
initially priced at $25. (He made up the word "Kodak" using the
first letter of his mother's maiden name, Kilbourne.)

In 1889, Eastman began working with Thomas Edison, inventor of
the motion picture camera. Edison's increasingly sophisticated
models required a stronger, more flexible transparent film,
which Eastman was able to deliver. He founded Eastman Kodak Co.,
in 1892 and began mass-producing a range of photographic
equipment.

Eastman was an astute businessman. He dealt shrewdly with
competitors and sometimes fell out with former collaborators.
Indeed, some of them filed and won patent infringement lawsuits
against him. He was tireless in his inventing and
entrepreneurial endeavors. In the early days, he often slept in
a hammock at the factory and cooked his own food there. His
mother regularly showed up and insisted that he go home for a
good meal and full night's sleep! Eastman demanded much of his
employees, but no more than de demanded of himself. "An
organization," he said, "cannot be sound unless its spirit is.
That is the lesson the man on top must learn. He must be a man
of vision and progress who can understand that one can muddle
along on a basis in which the human factor takes no part, but
eventually there comes a fall."

This book draws on the contents of 100,000 letters to and from
Eastman's friends, family, investors, competitors, employees,
and fellow inventors, along with Eastman's records and notes on
his various inventions. The result is a meticulously detailed
account of Eastman's myriad interests and hands-on management
style, as well as the evolution of photography and a major 20th-
century corporation.

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

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Bond pricing, appearing in each Thursday's edition of the TCR,
is provided by DebtTraders in New York. DebtTraders is a
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sourcing of attractive high yield debt investments. For more
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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
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.  Information
contained herein is obtained from sources believed to be
reliable, but is not guaranteed.

The TCR subscription rate is $625 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
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are $25 each.  For subscription information, contact Christopher
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