TCR_Public/020321.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

            Thursday, March 21, 2002, Vol. 6, No. 57     


360NETWORKS: Debtors' Exclusive Period Runs to May 28, 2002
ANC RENTAL: Seeks Approval to Consolidate at Pittsburgh Airport
ALLIANCE INV.: Fitch Further Junks Participating Loan Rating
AMERICA WEST: Will Recall Furloughed Flight Attendants & Pilots
AMERICAN AMMUNITION: Reduces Debt in Preferred Stock Conversion

AVIATION DISTRIBUTORS: Grant Thornton Bows-Out as Accountant
BGF INDUSTRIES: Dec. 31 Balance Sheet Upside-Down by $9 Million
BETHLEHEM STEEL: Court Nixes Move to Appoint Retirees' Committee
BION ENVIRONMENTAL: Sets Annual Shareholders' Meeting for Apr. 4
BOISE CASCADE: Annual Shareholders' Meeting Set for April 18

BUCKEYE TECHNOLOGIES: Bank Group Agrees to Amend Credit Facility
BURLINGTON INDUSTRIES: Committee Taps Saul Ewing as Co-Counsel
BURLINGTON MOTOR: Gains Okay to Sell Certain Assets to Celadon
CALHOUN CBO: Fitch Junks $57 Mill. 2nd Priority Fixed Rate Notes  
CHIQUITA BRANDS: Names Cyrus F. Freidheim as Chairman and CEO

COMDISCO INC: Christus Wants Master Agreement Assumption Barred
COVANTA ENERGY: Negotiating Additional Waivers with Bank Lenders
CYPRESS FOODS: Completes Disposition of 1.2 Mil. Hens at 9 Farms
DANKA BUSINESS: Intends to Repay Outstanding 6.75% Conv. Notes
DECORATIVE SURFACES: Case Summary & Largest Unsecured Creditors

DOE RUN: Moody's Hatchets Junk Ratings After Interest Nonpayment
ELIZABETH ARDEN: S&P Maintaining Watch on Low-B Ratings
EMAGIN CORP: Secures Commitment for $15MM Continued Financing
EMAGIN CORP: Raises $2.5 Million from Private Equity Placement
EMAGIN CORP: Dec. 31 Balance Sheet Shows Equity Deficit of $5MM

ENRON CORP: Energy Debtors Propose Contract Bidding Procedures
ENRON INDIA HOLDINGS: Voluntary Chapter 11 Case Summary
ENRON MAURITIUS: Case Summary & Largest Unsecured Creditor
FEDERAL-MOGUL: Hanly & Conroy Replaces C&W as Asbestos Counsel
FLEMING: Strikes Major Supply Pact with Albertson's Stores

GLOBAL CROSSING: Teleglobe Wants Adequate Assurances of Payment
HAYES LEMMERZ: CIBC Balks at Houlihan Lokey's Engagement Terms
HORIZON MEDICAL: Arranges Recap. to Extinguish Senior Bank Debt
ICG COMMUNICATIONS: Court Allows Continued Cash Collateral Use
IT GROUP: Look for Schedules and Statements on Friday

INTEGRATED HEALTH: Obtains Approval of Replacement DIP Facility
KAISER ALUMINUM: Will Be Paying Prepetition Trust Fund Taxes
KMART: Institutional Committee Signs-Up FTI as Fin'l Advisors
LERNOUT & HAUSPIE: Court Okays Asset Sale to SpeechWorks Int'l
MAGNUM HUNTER: S&P Ups Credit Rating to BB- Following Merger

MALAN REALTY: Board of Directors Adopts Plan of Liquidation
MARINER POST-ACUTE: Pangia Seeks Equity Committee Appointment
MEDICALOGIC: GE Medical Systems Pitches Highest Bid for Assets
MONUMENT CAPITAL: Fitch Cuts Class B Notes Rating to Low-B Level
NATIONAL STEEL: Wins Approval to Maintain Existing Bank Accounts

NABI: Changes Name to Nabi Biopharmaceuticals Following Merger
NATIONSRENT INC: CIT Group Seeks Stay Relief to Recover Property
NAVISTAR FINANCIAL: S&P Rates $200MM Exchangeable Notes at BB-
NETIA HOLDINGS: Resumes Trading on Nasdaq Beginning March 20
NEXTEL COMMS: Fitch Revises Outlook on Low-B Ratings to Negative

OHIO CASUALTY: Closes $201MM Convertible Note Private Offering
PACIFICARE HEALTH: S&P Affirms BB- Counterparty Credit Rating
PENTON MEDIA: Amends Sr. Credit Facility after Private Placement
PICKUPS PLUS: Closes Initial Stage of Refinancing with Pups Inv.
POTLATCH CORP: Fitch Affirms BB+ Sr. Subordinated Notes Rating

PREMIER LASER: Tranzon Auctioning Laser & IP Inventory
PROVANT INC: IIR Intends to Purchase $47MM Outstanding Bank Debt
PSINET INC: Selling TX Real Property to Steam Realty for $10.5MM
SAMSONITE CORP: Fourth Quarter Operating Loss Doubles to $14MM
SERVICE MERCHANDISE: Selling Store Fixtures in Bulk for $3.3MM

SOFTWARE LOGISTICS: Zomax Inc. Bolts Asset Purchase Agreement
TRI-NATIONAL DEV'T: Court Extends Exclusive Period to July 31
TRICORD SYSTEMS: Fails to Meet Nasdaq Listing Requirements
W.R. GRACE: Court Okays HR&A as PD Committee's Claims Expert
WARNACO GROUP: Seeks Approval of Settlement with HIS Equipment

* DebtTraders' Real-Time Bond Pricing


360NETWORKS: Debtors' Exclusive Period Runs to May 28, 2002
Judge Gropper grants 360networks inc., and its debtor-
affiliates' extensions of their exclusive periods to:

    (a) May 28, 2002 --  to file a plan or plans of
                         reorganization; and

    (b) July 26, 2002 -- to solicit acceptances to a plan or
                         plans of reorganization.
(360 Bankruptcy News, Issue No. 20; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   

ANC RENTAL: Seeks Approval to Consolidate at Pittsburgh Airport
ANC Rental Corporation and its debtor-affiliates ask the Court
for permission to reject the Alamo Concession Agreement and
Lease and to assume the National Concession Agreement and Lease
and assign it to ANC, both of which are with the Pittsburgh
International Airport.

Mark J. Packel, Esq., at Blank Rome Comisky & McCauley LLP in
Wilmington, Delaware, states that proposed actions will result
in cost savings for the Debtors of over $1,000,000 per year in
fixed facility costs and other operational cost savings. In
addition, much benefit can be gained by the increase in
efficiency from operating two brands out of a single location.

                       Avis Objects

Herbert W. Mondros, Esq., Rosenthal, Monhait, Gross & Goddess,
P.A., in Wilmington, Delaware asks the Court to deny the
Debtors' motion for the same reasons that Avis has consistently
objected to the Debtors' motions for the consolidation of
operations of Alamo and National at the other airports.

Mr. Mondros points out that the agreements at hand are with a
governmental entity that are subject to competitive bidding
requirements as well as federal and state constitutional
requirements. The National Agreement, he continues, was a
competitively bid agreement by which the Airport Authority was
to consider many items to determine whether the proposed
concessionaire had the requisite skill, ability and experience
to obtain one of the competitively bid concessions. Since the
competitive bidding requirements did not require the Airport
Authority to accept performance from anyone, he states that the
Airport Authority cannot be forced to accept the proposed

In addition, Pennsylvania law requires that airport
concessionaires, like Avis, National and Alamo, be treated
substantially the same. Mr. Mondros, however, points out that
the new agreement would enable Alamo and ANC, which do not have
airport concessions, to obtain concessions without complying
with competitive bidding requirements. The National Agreement,
in addition, does not permit a concessionaire to operate two
brands from one location. Thus, permitting modification and
assignment of the National Agreement would violate Pennsylvania
law and is contrary to 11 U.S.C. Sec. 365(c)(1)(B).

In addition, Mr. Mondros states that National, Alamo and ANC are
separate Debtors with separate constituencies. With the motion,
he goes on to say, the Debtors are seeking to substantively
consolidate their cases without providing notice to creditors,
and without considering the potential conflicts of interest.
This, he tells the Court, should not be done in the context of a
motion to assume and assign. (ANC Rental Bankruptcy News, Issue
No. 10; Bankruptcy Creditors' Service, Inc., 609/392-0900)

ALLIANCE INV.: Fitch Further Junks Participating Loan Rating
Fitch Ratings downgrades the participating loan issued by
Alliance Investment Opportunities Fund, L.L.C., a market value
collateralized debt obligation. The following rating action is
effective immediately:

    --$30,000,000 participating loan to 'CC' from 'CCC+'.

Alliance originally failed its senior minimum net worth test on
Dec. 31, 1999. To remedy the failure, the fund redeemed rated
debt in an amount to correct the minimum net worth test on Jan.
25, 2000. To date, Alliance has successfully paid down four
rated classes of debt leaving the $30 million Participating Loan
the only rated tranche outstanding. The participating loan was
originally downgraded from its initial rating of 'B' to 'CCC+'
in January 2000.

This additional rating action results from the further decline
of the market value of the fund's assets. Alliance is currently
failing its Participating Loan over-collateralization test by
roughly 30%. Taken at current market value the portfolio assets
are worth approximately $23 million which is less than the $30
million of par that is due to the holders of the Participating
Loan. Moreover, the current portfolio investments are nearly all
semi-liquid and illiquid investments. The large percentage of
semi-liquid and illiquid assets in the portfolio is a result of
the significantly delevered capital structure. Due to the
uncertainty of the liquidity and the price volatility of the
portfolio, Fitch believes that rating action is necessary to
reflect the current risk to the remaining holders of the
Participating Loan.

AMERICA WEST: Will Recall Furloughed Flight Attendants & Pilots
America West Airlines (NYSE: AWA) announced it plans to recall
from furlough 170 flight attendants and an additional 38 pilots
by June to support a projected increase in travel demand.  The
company anticipates the recall of all furloughed flight
attendants by year end.  America West previously recalled 75
pilots in February.

"As demand for air travel continues to increase, we are
responding by adding flights back to our schedule," said Jeff
McClelland, executive vice president, operations.  "To support
this additional service to our customers, we're very happy to be
returning our furloughed flight attendants and pilots to the
America West team.  Our goal, as demand improves, is to return
all remaining furloughed employees to active status as soon as

America West furloughed 179 pilots and 244 flight attendants due
to the downturn in travel demand that resulted from the
September 11 terrorist attacks, while reducing its flight
schedule by approximately 20 percent. Since then, the airline
has reinstated nearly half of the flights that had been affected
and plans to reinstate additional flights next month.

America West has brought back more than 1,500 employees since
the reductions in force last October.

America West Airlines, the nation's eighth-largest carrier,
serves 88 destinations in the U.S., Canada and Mexico.  Along
with its codeshare partners, America West serves more than 170
destinations worldwide.  For the second consecutive month,
America West ranks number one in on-time performance among all
major carriers as recorded in the Air Travel Consumer Report
published by the U.S. Department of Transportation.  America
West Airlines is a wholly owned subsidiary of America West
Holdings Corporation, an aviation and travel services company
with 2001 sales of $2.1 billion.

AMERICAN AMMUNITION: Reduces Debt in Preferred Stock Conversion
American Ammunition (OTCBB:AAMI) announced that five
shareholders voluntarily converted 1,749,600 shares of $5.00
Series A Convertible Preferred Stock into common stock of the
Company. This represents an investment in the Company of
$8,748,000.00 in cash and debt conversion.

The Series A Convertible Preferred Stock provides for cumulative
dividends at the rate of 8% per year, payable quarterly, in cash
or shares of common stock. The conversion eliminates the 8%
dividend payments incurred by the Company.

"This significant amount of dividend/debt reduction further
strengthens the Company's balance sheet, and increases the
equity in the corporation, further enabling the Company to
attract additional investment and remain competitive in the
marketplace", said Andres Fernandez, President of American

American Ammunition is an autonomous manufacturer of ammunition,
with the technology and equipment to take advantage of the
growing market. It has an excellent reputation within the
industry. The ammunition industry has experienced a 28% average
increase in revenues annually between 1991 through 1998, and the
trend is expected to continue through the year 2005 and beyond.
For further product information, please call 1-305-835-7400 or
visit the Web site at: For Investor  
Relations information, please call toll free: 1-800-288-7499 or

AVIATION DISTRIBUTORS: Grant Thornton Bows-Out as Accountant
Grant Thornton LLP resigned as the independent accountant of
Aviation Distributors, Inc. effective February 26, 2002.

Grant Thornton's reports on the Company's financial statements
for the years ended December 31, 2000 and 1999 contained an
unqualified opinion with a emphasis paragraph describing an
uncertainty as to the Company's ability to continue as a going

The Company's dominant shareholder pled guilty in February 2002
to criminal charges of deceiving its prior bank and previous
auditors in 1997. Grant Thornton has determined that this
shareholder was active in management of significant aspects of
the Company's operations in the year ended December 31, 2001.
Accordingly, Grant Thornton concluded that they could not render
a report or otherwise complete an audit of the Company's 2001
financial statements in accordance with Generally Accepted
Auditing Standards.

On February 26, 2002, the Company engaged Squar, Milner, Reehl &
Williamson, LLP as its principal accountant. Aviation
Distributors' Board of Directors has approved the decision to
engage Squar Milner.

ADI sells new and used airplane parts, primarily to commercial
passenger airlines. The company offers a variety of parts,
including those classified as rotable (extensively repaired and
reused), repairable (repaired a limited number of times), and
expendable (used only once). ADI handles parts made by Airbus,
Boeing, General Electric, Lockheed Martin, Pratt & Whitney, and
Rolls Royce. It sells parts from its own inventory, on
consignment, and through marketing agreements with airlines,
manufacturers, and distributors. About half of ADI is held by
founder Osamah Bakhit.

BGF INDUSTRIES: Dec. 31 Balance Sheet Upside-Down by $9 Million
BGF Industries, Inc. (BGF) announced that net sales for the
quarter ended December 31, 2001 decreased $24.3 million, or
44.2%, to $30.7 million as compared to $55.0 million for the
quarter ended December 31, 2000, and net sales for the year
ended December 31, 2001 decreased $54.6 million, or 27.1%, to
$146.8 million as compared to $201.4 million for the year ended
December 31, 2000.

This decrease was due primarily to a decrease in sales of
electronics fabrics and sales of filtration fabrics.

The decrease in sales of electronics fabrics was primarily a
result of significant inventory adjustments in the electronics
industry that began during the first quarter of 2001. In
addition, the decrease in capital spending in the information
technology and telecommunications industry led fabricators of
printed circuit boards to reduce production which negatively
impacted our sales to these customers.

The decrease in sales of filtration fabrics was due to fewer
large utility projects that have replaced filter bags as well as
a downturn in the steel and foundry industries. Our second
largest market, fabrics used in composite materials, held up
well prior to September 11, 2001. We now expect to confront a
decline in orders from customers in the aerospace industry due
to uncertainty over airline traffic recovery. It is unknown if
this decrease will be fully or partially offset by the market
for refurbishing existing aircraft or increased purchases by the

In response to these market conditions, we reduced production
schedules and focused on operating cost reductions and working
capital management. In the third and fourth quarters of 2001, we
furloughed production employees thereby reducing our production
workforce by approximately 25% since January 1, 2001. In
addition to the furlough of production employees, we reduced a
number of salaried positions in order to cut costs in future
periods. The reduction of production schedules resulted in an
$8.1 million decrease in inventories as of the end of the fourth
quarter compared to the end of the third quarter.

EBITDA for the quarter ended December 31, 2001 decreased $10.3
million, or 92.8%, to $0.8 million from $11.1 million for the
quarter ended December 31, 2000, and for the year ended December
31, 2001 decreased by $18.9 million, or 51.4%, to $17.9 million
from $36.8 million for the year ended December 31, 2000. EBITDA
is defined as net income before interest expense, income taxes,
depreciation, amortization expense and non-recurring, non-cash

Gross profit margins decreased to 10.4% in the year ended
December 31, 2001 from 17.7% in the year ended December 31, 2000
due primarily to shifts in product mix as well as lower sales
and production volumes which resulted in less absorption of
fixed costs.

Selling, general and administrative expenses were 4.8% and 4.6%
of net sales in the years ended December 31, 2001 and 2000,
respectively. The increase was primarily due to lower sales
volumes for 2001, offset by decreased accruals for profit
sharing and management fees and bonuses.

As a result of the aforementioned factors and charges of
$502,000 incurred in 2001 due to the restructuring plan that
eliminated several salaried positions across the company,
operating income decreased $18.6 million to $7.7 million, or
5.3% of net sales, in the year ended December 31, 2001, from
$26.3 million, or 13.1% of net sales, in 2000.

Interest expense decreased $0.2 million, to $14.0 million in
2001 from $14.2 million in 2000, primarily due to lower interest
rates offset by a write-off of $0.6 million of deferred
financing fees relating to our senior credit facility.

As a result of the aforementioned factors, net income decreased
$11.4 million to a loss of $(3.0) million in the year ended
December 31, 2001 from $8.4 million in the year ended December
31, 2000.

BGF, headquartered in Greensboro, NC, manufactures specialty
woven and non-woven fabrics made from glass, carbon and aramid
yarns for use in a variety of electronic, filtration, composite,
insulation, construction, and commercial products.

At December 31, 2001, the company's balance sheet showed that
its total liabilities eclipsed its total assets by $9,011,000.

BETHLEHEM STEEL: Court Nixes Move to Appoint Retirees' Committee
The Retired Employees' Benefits Coalition, Inc. was formed in
1987 as a result of reports that Bethlehem Steel Corporation and
its debtor-affiliates would probably file a voluntary petition
for reorganization.  The organization is made up of the Debtors
retired salaried employees, their spouses and dependents.

Dennis Terrell, Esq., at Drinker Biddle & Reath, in New York,
relates that the organization seeks to appoint an official
statutory committee to serve as the authorized representative of
the Debtors' non-union retirees.

Mr. Terrell explains that as a result of a Settlement Agreement,
a Benefit Plan for non-union retirees and their dependents was
established.  However, in an effort to ease the financial burden
placed upon the Debtors from various employee benefit plans, the
Debtors commenced negotiations with the United Steel Workers of
America to modify the existing collective bargaining agreement.

The Debtors have alleged that any plan of reorganization must
include a solution to their approximate $3,000,000,000 retiree
healthcare obligation.  Mr. Terrell reports that despite nearly
$300,000,000 in net costs deductions, the Debtors have not been
able to overcome the injury caused by record levels of unfairly
traded steel imports that reduced revenues by approximately
$1,300,000,000 annually.  Furthermore, Mr. Terrell states that
the resulting operating losses of approximately $500,000,000 and
negative cash flow have severely impaired the Debtors' financial
condition.  "As such, the Debtors claim that the Benefit Plans
impose significant financial obligations on the Debtors'
estates," Mr. Terrell says.

In light of the ongoing negotiations, Mr. Terrell explains that
many are questioning how the non-union salaried retirees' views
could be heard.  Thus, the organization sought to have an
official committee of nonunion retirees appointed by the United
States Trustee.  However, the United States Trustee responded
that only the Court has the authority to appoint a committee of
nonunion retirees.  The organization proposes the appointment of
a committee that will accurately reflect the interest of all
nonunion retirees.  The proposed Official Nonunion Retirees'
Committee will have a total of five members, composed of
participants of both Benefit Plans, three members of the
organization and two individuals that served in the Debtors'
benefits department:

Proposed Committee     Background Description
------------------     ----------------------
Walter Buckley         A participant under the Benefit Plans and
                        former chief trustee of the Bethlehem
                        Pension Trust Fund

Robert Lohr            Former senior member of Bethlehem's
                        employee benefits department

Bruce Davis            General counsel to the organization and
                        former member of Bethlehem's General
                        Counsel's office

Fred Harvey            The organization director and former
                        General Manager of the Bethlehem Steel
                        plant in Bethlehem, Pennsylvania

James Van Vliet        The organization president and formerly
                        vice president of marketing for

Mr. Terrell asserts that these individuals' experience and
knowledge of non-union benefit plans will ensure the appropriate
representation for all nonunion retirees.

Therefore, the Retired Employees' Benefits Coalition asks the
Court to grant them authority to appoint an Official Non-union
Retirees' Committee as the representative of the Debtors' non-
union retirees.

                      Debtors Object

According to George A. Davis, Esq., at Weil, Gotshal & Manges,
in New York, the relief requested by the Retired Employees'
Benefits Coalition is premature.  "The Debtors are in full
compliance with their obligations to all retirees and the
payment of Retiree Benefits.  No modification of Retiree
Benefits has been proposed to date," Mr. Davis adds.

Mr. Davis states that at this time, the appointment of a Retiree
Committee is inappropriate.  It would only add to already
significant administrative expenses being incurred by the
Debtors.  The Debtors are still in the process of stabilizing
their business operations and attempting to improve productivity
and reduce costs, particularly healthcare and employment costs.
Mr. Davis reports that specifically, the Debtors have been:

  (i) responding to many exigencies and other matters which are
      incidental to the commencement of any chapter 11 case, but
      which are compounded given the size and complexity of
      these cases;

(ii) responding to a multitude of inquiries and information
      requests made by the statutory committee of unsecured
      creditors appointed in these cases, the pre-petition and
      post-petition lenders, the USWA, vendors, customers and

                          *   *   *

"Motion denied," Judge Lifland rules.  If and when Bethlehem
believes it needs to negotiate retiree benefit modifications,
Judge Lifland is certain that the Debtors' lawyers know what's
required under section 1113 of the Bankruptcy Code and will
follow those procedures. (Bethlehem Bankruptcy News, Issue No.
12; Bankruptcy Creditors' Service, Inc., 609/392-0900)

BION ENVIRONMENTAL: Sets Annual Shareholders' Meeting for Apr. 4
The Annual Meeting of Shareholders of Bion Environmental
Technologies, Inc., a Colorado corporation,  will be held at the
Company's headquarters at 18 East 50th Street, 10th Floor, New
York, New York, on Thursday, April 4, 2002, at 10:00 a.m.,
Eastern Time, and at any and all adjournments thereof, for the
purpose of considering and acting upon the following matters.

     1.   The election of five (5) Directors of the Company to
serve until the next Annual Meeting of Shareholders and until
their successors have been duly elected and qualified;

     2.   The ratification of the appointment of BDO Seidman,
LLP as the Company's independent auditors;

     3.   The approval of the Company's 2002 Incentive Plan;

     4.   The approval of a proposed 1 for 3.5 reverse split of
the outstanding shares of the Company's common stock; and

     5.   The transaction of such other business as may properly
come before the meeting or any adjournment thereof.

Only holders of the no par value common stock of the Company of
record at the close of business on February 25, 2002, will be
entitled to notice of and to vote at the Meeting or at any
adjournment or adjournments thereof.   

Bion designs and operates advanced waste and wastewater
treatment systems for a variety of industrial and agricultural
applications. At March 31, 2001, Bion reported a total
shareholders' equity deficit of close to $9 million.

BOISE CASCADE: Annual Shareholders' Meeting Set for April 18
The 2002 annual meeting of shareholders of Boise Cascade
Corporation, will be held on Thursday, April 18, 2002, at 12
noon, Mountain Daylight Time, at Powerhouse Event Center, 621
South 17th Street, Boise, Idaho to consider and act upon the

     To elect four directors to serve three-year terms;

     To approve the appointment of the Company's independent
       auditors for 2002;

     To consider and act upon two shareholder proposals; and

     To conduct other business properly brought before the

Shareholders who owned stock at the close of business on
February 25, 2002, can vote at the meeting.

Boise Cascade is a major distributor of office products and
building materials, manufactures paper and wood products, and
owns more than 2 million acres of timberland. At September 30,
2001, the company recorded a working capital deficit of about
$160 million.

BUCKEYE TECHNOLOGIES: Bank Group Agrees to Amend Credit Facility
Buckeye Technologies Inc. (NYSE:BKI) announced that it has
reached agreement with its bank group on amendments to the
Company's existing $215 million revolving credit facility. The
Company also commented on current business conditions.

Buckeye indicated that the amended agreement with its bank group
loosens financial covenants through June 2003, but increases its
interest rate by 50 basis points to a current rate of 5.8%. The
Company regards the terms of the agreement as satisfactory.

Buckeye Chairman Robert E. Cannon commented that "We are pleased
to have reached agreement with our banks and are comfortable
with the revised covenants. We enjoy a strong relationship with
an outstanding group of banks, including Fleet, Wachovia, Bank
of America, and Toronto Dominion. They understand our business
and have been supportive during a difficult economic period."

With regard to the Company's current quarter, Mr. Cannon stated,
"We are in the process of significantly reducing our finished
product inventories. This generates cash, but hurts earnings in
the current weak wood pulp market. We are taking a one-time
restructuring charge of about $1 million which will also
adversely impact the current quarter. Consequently, we expect to
experience a net loss of about $4 million in the January-March

"There are, however, some signs that the pulp market may be
turning around. Industry shipments were brisk in February and we
are now moving into the usually stronger spring months. We
believe that the worst is behind us and that our business
results will start improving in the April-June quarter."

Buckeye, a leading manufacturer and marketer of specialty
cellulose and absorbent products, is headquartered in Memphis,
Tennessee, USA. The Company currently has facilities in the
United States, Germany, Canada, Ireland and Brazil. Its products
are sold worldwide to makers of consumer and industrial goods.

BURLINGTON INDUSTRIES: Committee Taps Saul Ewing as Co-Counsel
The Official Committee of Unsecured Creditors, in the chapter 11
cases of Burlington Industries, Inc., and its debtor-affiliates,
seeks the Court's authority to retain Saul Ewing as its
co-counsel, nunc pro tunc to February 27, 2002.

Committee Chair Pamela K. Wilson, from WLR Recovery Fund, states
that it is essential to employ Akin Gump and Saul Ewing as their
counsel to perform the legal services for their chapter 11
cases.  Ms. Wilson explains that Akin Gump is employed as the
Committee's attorneys because of the firm's extensive knowledge
and expertise in the areas of law relevant to these cases.  
"However, because the counsel and associates of Akin Gump are
not Delaware lawyers, the retention of Saul Ewing as Delaware
counsel is necessary," Ms. Wilson adds.

Furthermore, Ms. Wilson explains that the Committee seeks to
retain Saul Ewing because of the firm's experience and knowledge
in the field of creditors' rights. In addition, Ms. Wilson
notes, Saul Ewing also possesses expertise and knowledge in
practicing before this Court.  Since the firm is close to the
Court, Ms. Wilson says, it has the ability to respond quickly to
emergency hearings and related matters.  "Saul Ewing's
appearance before this Court will be more efficient and cost
effective," Ms. Wilson insists.

As co-counsel, Saul Ewing will:

  (i) provide legal advice with respect to the Committee's
      rights, powers and duties in these cases;

(ii) prepare on behalf of the Committee all necessary
      applications, answers, responses, objections, forms of
      orders, reports and other legal papers;

(iii) represent the Committee in all matters involving contests
      with the Debtors, alleged secured creditors and other
      third parties;

(iv) assist the Committee in its investigation and analysis of
      the Debtors and the operations of the Debtors' businesses;

  (v) perform all other legal services for the Committee which
      may be necessary and proper in these proceedings.

Accordingly, Ms. Wilson states that compensation will be payable
to Saul Ewing on an hourly basis, plus reimbursement of actual,
necessary expenses incurred by the law firm.  The attorneys and
paralegals designated to represent the Committee and their
standard hourly rates are:

    Norman L. Pernick                          $425
    Mark Minuti (Partner)                      $345
    Donald J. Detweiler (Special counsel)      $260
    Tara Lattomus (Associate)                  $245
    Jeremy W. Ryan (Associate)                 $235
    Annmarie Stergakos (Law clerk)             $125
    Pauline Z. Ratkowiak (Paralegal)           $125
    Veronica Parker (Case management clerk)     $50

"Other attorneys and paralegals may from time to time serve the
Committee," Ms. Wilson reports.

Mr. Detweiler explains that these are Saul Ewing's standard
rates for work of this nature.  "The rates are set at a level
designed to fairly compensate the firm for the work of its
attorneys and paralegals and to cover fixed and routine overhead
expenses," Mr. Detweiler says.  Moreover, Mr. Detweiler adds,
the firm will seek reimbursement of out-of-pocket expenses such
as: telephone and telecopier toll and other charges, mail and
express mail charges, special or hand delivery charges,
photocopying charges at the rate of $.15 per page, travel
expenses, expenses for "working meals", computerized research,
transcription costs, as well as non-ordinary overhead expenses
such as secretarial and other overtime.

"To the best of my knowledge, Saul Ewing has not represented the
Debtors, its professionals, members of the Committee or their
professionals, noteholders, creditors, customers or any other
parties in interest," Mr. Detweiler asserts.  Furthermore, Mr.
Detweiler assures the Court that Saul Ewing does not hold or
represent any interest adverse to the Committee.  Thus, Mr.
Detweiler contends, Saul Ewing is a "disinterested person" as
defined in Section 101(14) of the Bankruptcy Code. (Burlington
Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   

BURLINGTON MOTOR: Gains Okay to Sell Certain Assets to Celadon
Celadon Group, Inc. (Nasdaq: CLDN) announced that a Federal
bankruptcy court has approved Celadon's previously announced
agreement to acquire certain assets of Burlington Motor
Carriers. The ruling in U.S. Bankruptcy Court for the Southern
District of Indiana permits Celadon to acquire assets including
customer contracts and lists, tractors and trailers, office
equipment and general intangibles from Foothill Corporation, a
secured lender to BMC. BMC, a truckload carrier based in
Daleville, Indiana, has operated since July 2001 in a
reorganization proceeding. Financial terms of the transaction
were not disclosed.

Celadon Group Inc., a trucking company headquartered in
Indianapolis, operates approximately 2,500 line haul tractors
and 7,000 trailers. Celadon Group also is majority owner of
TruckersB2B, a business-to-business provider of pre-negotiated
savings on fuel, tires, trailers and other products and services
purchased by small and medium-sized trucking companies and
private fleets. The company's Web sites are

CALHOUN CBO: Fitch Junks $57 Mill. 2nd Priority Fixed Rate Notes  
Fitch Ratings downgrades two classes of notes issued by Calhoun
CBO Ltd./Calhoun CBO Corp. In conjunction, Fitch Ratings removes
the Second Priority Senior Secured Fixed Rate Notes from Rating
Watch Negative. The following rating actions are effective

     -- $227,070,729 Senior Secured Floating Rate Notes, Due
2010 downgraded from 'AA' to 'BB-';

     -- $57,963,579 Second Priority Senior Secured Fixed Rate
Notes, Due 2010 downgraded from 'BBB-' to 'C'.

Calhoun CBO, a collateralized bond obligation managed by
American Express Asset Management Group Inc. was established in
July 1998 and currently maintains approximately 78.4% of its
invested note proceeds in non-emerging markets high yield assets
and 21.6% in emerging markets assets. After reviewing the
portfolio performance, discussions with the portfolio manager,
and conducting different cash flow scenarios amidst increasing
levels of defaults and deteriorating credit quality of the
underlying assets, Fitch Ratings has determined that the
original ratings assigned to the Senior notes and Second
Priority notes no longer reflect the current risk to
noteholders. Calhoun CBO continues to fail its senior and second
priority overcollateralization tests since March 2001 and its
second priority interest coverage test since January 2002.
Moreover, Calhoun CBO also continues to fail its required
average portfolio rating test, its maturity profile test as well
as some other collateral requirements. In addition, Calhoun CBO
maintains 7.9% of its portfolio in assets rated 'CCC+' or worse
excluding defaults. Currently, the portfolio contains
approximately 11% in defaulted assets.

CHIQUITA BRANDS: Names Cyrus F. Freidheim as Chairman and CEO
Chiquita Brands International, Inc. (NYSE: CQB), the world's
largest banana producer, announced that Cyrus F. Freidheim, Jr.,
was elected chairman of the board and chief executive officer.  
Freidheim, 66, will retire as vice chairman of Booz Allen &
Hamilton at the end of this month after 35 years of service with
the firm.

Steven G. Warshaw, who successfully led the company through the
difficult bankruptcy reorganization process, has resigned as
president, chief executive officer and as a director of the

Robert W. Fisher, a Board member and former president of Dole
Food Co., was named acting chief operating officer. Fisher, 64,
also served as chief operating officer of The Noboa Group, the
largest private banana company, and as president of Geest Banana

Freidheim commended Warshaw for his dedicated work in helping
put together a reorganization plan acceptable to the court and
the creditors. "Steve provided leadership during the most
difficult period in the company's history," Freidheim said. "We
all wish Steve well in the next phase of his career.

"I consider it a privilege to head up one of the oldest and most
distinguished companies in the United States. Chiquita is one of
the most recognizable and successful brand names in the world
and it has become synonymous with quality.

"Thanks to the dedication and hard work of our loyal employees
in North America, Europe and Latin America, we have weathered
the storm and have emerged intact from our Chapter 11

"Our focus in the weeks and months ahead will be rebuilding as
we all work together to restore profitability, grow shareholder
value and resume our position of leadership in the industry."

Freidheim said the board and the company's top managers would
conduct an intensive top-to-bottom review of company operations
over the next few months to determine the future course of
Chiquita Brands.

Other board members besides Freidheim and Fisher include: Morten
Arntzen, 46, chief executive officer for American Marine
Advisors, a merchant banking company for global shipping;
Jeffrey Benjamin, 40, managing director of investment banking
firm Libra Securities LLC; Roderick Hills, 71, chairman of Hills
Enterprises Ltd., an investment consulting firm, and former
chairman of the Securities and Exchange Commission; and Carl H.
Lindner, former chairman of the board of Chiquita Brands

Freidheim has over 35 years of business consulting experience
with some of the world's leading corporations in 15 countries.
His clients were spread across several industries including
food, consumer products, and agribusiness. Freidheim has
specialized in strategy and restructuring of global
corporations, including playing a key role in devising and
implementing the successful government-backed program to restore
the Chrysler Corporation to profitability.

The new board also reaffirmed the Company's previous statements
that the financial projections prepared last May in connection
with its restructuring discussions and that were subsequently
publicly disclosed in connection with the Chapter 11 process
will not be updated and should not be regarded as the company's
prediction of future performance. Principally due to seasonality
and volatility inherent in its business, Chiquita will resume
its prior practice of not publishing or publicly disclosing
financial projections.

Chiquita Brands International, Inc., is a leading international
marketer, producer and distributor of bananas and other quality
fresh and processed foods sold under the Chiquita and other
brand names. The Company is the U.S. leader of private label
canned vegetables and has a growing export business. The
diversified foods product line includes fruits and vegetable
juices and beverages; processed bananas and other processed
fruits and vegetables; fresh cut and ready-to-eat salads; and
edible oil-based products.

           Background on Cyrus F. Freidheim, Jr.

Cyrus F. Freidheim, Jr., the newly elected chairman of the board
and chief executive officer of Chiquita Brands International,
Inc., brings more than 35 years of experience in helping
restructure and revitalize global corporations.

As vice chairman of Booz Allen & Hamilton, Freidheim worked with
the some of the world's leading corporations in 15 countries,
including corporations in food, consumer products and

In taking up his new post, Freidheim, 66, is retiring from Booz
Allen after 35 years of service.  While at Booz Allen, Freidheim
was managing director U. S.; President-International in Paris;
and managing director-Latin America.

His major client focuses centered on restructuring,
organization, turn-arounds, and crisis management for global
corporations.  He played a lead role in planning and
successfully implementing the government-backed program to
restructure and return to profitability the then financially
strapped Chrysler Corporation during the 1979-1981 period when
the company faced bankruptcy.

Freidheim has written and spoken widely on global business,
corporate governance and corporate organization, financing and
restructuring.  His 1998 book, "The Trillion Dollar Enterprise.  
How the Alliance Revolution Will Transform Global Business,"
presaged the many mega-mergers and alliances among major global
corporations that have taken place since then.

Freidheim received his bachelor's degree in chemical engineering
from Notre Dame University in 1957 and his master's degree from
Carnegie Mellon University in 1963.  In 1959, while serving with
a U.S. Navy security group, he attended the U. S. Naval Language
School, where he majored in Russian.

Before joining Booz Allen, Freidheim worked for Union Carbide,
Price Waterhouse and the Ford Motor Company.

He is a member of the Council on Foreign Relations in New York,
the U.S.-Japan Business Council and has served on many
commercial and not-for-profit boards.

DebtTraders reports that Chiquita Brands' 10.250% bonds due 2006
(CQB06USR1) are quoted at a price of 98. See  
real-time bond pricing.

COMDISCO INC: Christus Wants Master Agreement Assumption Barred
Christus Health asks the Bankruptcy Court to:

-- bar the assumption of a Master Technology Services Agreement
    by virtue of the financial accommodation benefiting
    Comdisco, Inc., and its debtor-affiliates or

-- modify the automatic stay and allow them to terminate the

Allan R. Mills, Esq., at Barnes & Thornburg, in Indianapolis,
Indiana, relates that the Debtors and Christus Health are
parties to a Master Technology Services Agreement.  Under the
Agreement, Christus is to make quarterly payments in advance for
services or equipment being provided amounting to $1,983,787.  
"This figure is based on pre-payment of $1,777,541 per quarter
for equipment leasing and a pre-payment for the IT CAP Services
in the amount of $206,247 per quarter," Mr. Mills says.

Mr. Mills tells the Court that Christus is under no obligation
to spend its quarterly payment since it was stated in the
Agreement that Christus may spend less or more than the
quarterly payment. "Thus, the Agreement is not a requirements
agreement nor does it place a quota on Christus to purchase a
certain level of equipment or services from the Debtors," Mr.
Mills states.  In the event that Christus does not utilize the
entire amount of a quarterly payment, the Debtors who pay
Christus interest at 6% per annum retain the unspent amount.

Mr. Mills reports that the Agreement also contains a clause
allowing a party to terminate the Agreement upon the insolvency
or filing of a bankruptcy petition by the other party.  The
Agreement has also not been assumed by the Debtors or subject to
pending assignment to any other third-party.  Mr. Mills asserts
that the Agreement is an executory contract or an unexpired
lease because Christus is under a continuing obligation to make
quarterly payments; thus, the Debtors have a reciprocal duty to
either lease computer equipment or provide IT CAP Services.

Under the Agreement, Mr. Mills explains that the quarterly
payments constitute a financial accommodation since:

    (i) the payments are made in advance of the performance of
        services or the leasing of equipment by the Debtors;

   (ii) Christus is obligated to make the quarterly payments,
        regardless of whether Christus intends on purchasing IT
        CAP Services or equipment from the Debtors for that
        particular quarter;

  (iii) the Agreement places no mandatory purchasing quotas on
        Christus and yet Christus' obligation to advance nearly
        $2,000,000 per quarter continues for the life of the

   (iv) the Debtors pay Christus 6% per annum on the retained
        refunds held in the Technology Funding Pool, thus, a de
        facto lender/borrower relationship is created;

    (v) Because Christus is obligated to advance the quarterly
        payments in advance of the need or receipt of the
        equipment or IT CAP Services, the Agreement requires
        Christus to accept from the Debtors a mere promise to
        repay the retained funds or to provide the equipment and
        services required by Christus;

   (vi) Christus only entered into the Agreement based on the
        Debtors' financial health, which this proceeding now
        calls into doubt;

  (vii) the quarterly payments and retained funds are not placed
        in trust or otherwise isolated for the benefit of
        Christus and the Debtors thus has the use of the
        quarterly payments and retained funds until returned to
        or utilized by Christus; and

(viii) the quarterly payments allow the Debtors to purchase the
        equipment when it otherwise would not be able to do so.

"Therefore, cause exists for this Court to modify the automatic
stay to allow Christus to exercise its right to terminate the
contract," Mr. Mills asserts.

Christus Health thus asks the Court to bar the assumption of the
Agreement by the Debtors or in the alternative, modify the
automatic stay to allow them to terminate the Agreement.
(Comdisco Bankruptcy News, Issue No. 22; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   

COVANTA ENERGY: Negotiating Additional Waivers with Bank Lenders
Covanta Energy Corporation (NYSE:COV) announced that it is
discussing with its banks the impact of the recent put to it of
the Class A Distressed Preferred Shares related to the Corel
Centre in Ottawa, Canada and the Class II Distressed Preferred
Shares related to Ottawa Senators Hockey Team. The Company's
obligations to repurchase these shares for approximately $105.5
million are secured by letters of credit issued under the
Company's Master Credit Facility.

Covanta is now in discussions with its banks regarding possible
means of resolving these obligations, although there can be no
assurances that the discussions will result in an agreement.

As previously announced, the Company is pursuing a restructuring
of its balance sheet as part of its comprehensive review of
strategic options.

Covanta Energy Corporation is an internationally recognized
designer, developer, owner and operator of power generation
projects and provider of related infrastructure services. The
Company's independent power business develops, structures, owns,
operates and maintains projects that generate power for sale to
utilities and industrial users worldwide. Its waste-to-energy
facilities convert municipal solid waste into energy for
numerous communities, predominantly in the United States. The
Company also offers single-source design/build/operate
capabilities for water and wastewater treatment infrastructures.
Additional information about Covanta can be obtained via the
Internet at or through the  
Company's automated information system at 866-COVANTA (268-

CYPRESS FOODS: Completes Disposition of 1.2 Mil. Hens at 9 Farms
Georgia Commissioner of Agriculture Tommy Irvin announced that
the disposition of more than a million chickens left without
adequate food following the bankruptcy of a Florida egg company
is now complete.

The state Department of Agriculture advised, monitored and
supervised the trustees of Cypress Foods, Inc., with the removal
and disposal of approximately 1.2 million hens at nine farms in
southeast Georgia.

Approximately 705,000 hens were sold to other poultry business
entities, 40,000 were shipped to slaughter and 426,000 were
humanely euthanized.  The Department expended more than 180
working hours in helping resolve this dilemma, according to
Commissioner Irvin.

The company's bankruptcy left the egg producers with little or
no supply of feed.  Under the agreement the producers had with
the company, the company supplied feed for the birds.  Cost of
the feed could be thousands of dollars per week depending on the
size of the operation.

"Some producers tried purchasing feed themselves to keep the
flocks alive until a solution could be found.  We persuaded the
bankruptcy judge to allow what little cash assets were available
be used to remedy the situation," said Commissioner Irvin.

"We want to thank the Georgia Poultry Federation for helping
rally support from the poultry industry and Wimpey Poultry,
American Protein Inc., Claxton Poultry and Tim Ford for
providing feed, workers or services to assist in resolving this
problem," said Irvin.

DANKA BUSINESS: Intends to Repay Outstanding 6.75% Conv. Notes
Danka Business Systems PLC (Nasdaq:DANKY) announced that its
6.75% convertible subordinated notes due 2002 mature on April 1,
2002 and that Danka plans to pay the outstanding principal
amount of $15,988,000 of 6.75% Notes in full on maturity,
together with the accrued interest thereon, from Danka's
available cash resources. The 6.75% Notes are convertible,
subject to the terms and conditions of the indenture for the
6.75% Notes, into Danka's American depositary shares or, in the
limited circumstances set out in the indenture, Danka's ordinary
shares, up to 5.00 p.m. (New York City time) on April 1, 2002.

Danka Business Systems, PLC, headquartered in London, England,
and St. Petersburg, Florida, is one of the world's leading
providers of office imaging solutions and related services and
supplies. Danka provides office imaging equipment and related
services, parts and supplies to customers in 27 countries around
the world. For additional information about copier, printer and
other office imaging products from Danka, visit the Web site at:

DECORATIVE SURFACES: Case Summary & Largest Unsecured Creditors
Debtor: Decorative Surfaces International, Inc.
        1610 Design Way
        Dupo, Illinois 62239

Bankruptcy Case No.: 02-10841

Chapter 11 Petition Date: March 19, 2002

Court: District of Delaware (Delaware)

Judge: Peter J. Walsh

Debtors' Counsel: Bruce Grohsgal, Esq.
                  Pachulski, Stang, Ziehl Young & Jones
                  919 N. Market Street
                  16th Floor
                  Wilmington, Delaware 19899-8705
                  Fax : 302-652-4400


                  Laura Davis Jones, Esq.
                  Pachulski, Stang, Ziehl Young & Jones
                  919 N. Market Street
                  16th Floor
                  Wilmington, Delaware 19801

Estimated Assets: $10 to $50 Million

Estimated Debts: $50 to $100 Million

Debtor's 20 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Polyone Corporation           Trade                   $881,440
Patti MacLean
940 Chippawa Creek Road
PO Box 1026
Avon Lake, Ohio 44012
Tel: (800) 438-4366
Fax: (905) 353-4260

Wade Steen-Franklin           Real Estate and         $589,207
County Treasurer             Personal Property
373 S. High Street, 17th       Taxes
Columbus, Ohio 43215-6306
Tel: (614) 462-3053
Fax: (614) 221-8024

Borden Chemicals &            Trade                   $430,860
Plastics Corp.
4338 Highway 73
Geismer, Los Angeles
Tel: (225) 673-6121
Fax: (225) 673-0672

Munksjo Paper D,cor, Inc.     Trade                   $430,860
B. Nourie
642 River Street
Fitchburg, Massachusetts
Tel: (978) 342-1080
Fax: (978) 345-0639

Spartan Mills Corp.           Trade                   $410,703  
John K. Fort, Esq.
In Re Spartan
Mills, Chapter 7 Debtor
USBC, District of South
Carolina - Case N. 01-10254 (B)
195 N. Fairview Avenue
Spartanburg, SC 29302
Tel: (864) 573-5311
Fax: (864) 582-6236

American Electric             Utilities               $261,418
Power Co.       
One Riverside Plaza
Columbus, Ohio 43215
Tel: (614) 223-1000
Fax: (614) 223-1823

Tentok Paper Co. Ltd.         Trade                   $239,701

Enron Energy Marketing        Utilities               $165,031

Columbia Gas of Ohio, Inc.    Utilities               $192,658

Interstate Gas Supply         Utilities               $133,777

Schweitzer-Mauduit            Trade                   $128,703

Mid-American Machine &        Trade                   $125,100
Equipment, LLC         

Creditor Int'l Trading &      Trade                   $114,534
Assisting Co.

Olympia Partners              Lease                   $105,924

Formosa Plastics Corporation  Trade                   $102,610

St. Clair County Tax          Taxes                    $99,105

IMPC, Inc.                    Trade                    $98,772

Kaneka Texas Corporation      Trade                    $95,200

Shumaker Loop & Kendrick,     Professional Fees        $94,622

Aristech Chemical Corp        Trade                    $76,652

DOE RUN: Moody's Hatchets Junk Ratings After Interest Nonpayment
Moody's Investors Service lowered its ratings for The Doe Run
Resources Corporation following the company's non-payment of
approximately $16 million of interest due March 15 for its $305
million of senior notes. The company has plans of a debt
restructuring. Rating outlook is negative.

Ratings Actions                               To          From

* $100 million secured revolving credit      Caa1          B3

* $50 million of 11.25% guaranteed            Ca          Caa2
senior secured notes due 2005,

* $200 million of 11.25% guaranteed           C           Caa3
senior notes due 2005,

* $55 million of guaranteed floating          C           Caa3
interest rate senior notes
(FIRSTSsm*) due 2003,

* Doe Run's senior implied rating,            Ca          Caa2  

* Doe Run's senior unsecured issuer rating    C           Caa3

The Doe Run Company, headquartered in St. Louis, Missouri, is a
fully-integrated US lead producer and processor of complex
polymetallic mineral concentrates in Peru.

ELIZABETH ARDEN: S&P Maintaining Watch on Low-B Ratings
On March 15, 2002 Standard & Poor's said that its single-'B'
ratings on fragrance and cosmetics maker Elizabeth Arden Inc.
would remain on CreditWatch with negative implications, where
they were placed on January 31, 2002. The company recently
completed the negotiations with its bank group for an amendment
to its credit agreement, waiving financial covenant violations
for the fourth quarter fiscal 2002 (ended January 31), amid weak
financial performance for the fiscal year.

The amendment to the credit agreement also loosened the related
covenant levels for each quarter of fiscal 2003 and the first
three quarters of fiscal 2004.

Standard & Poor's said the company's performance was impacted by
the challenging conditions in the retail cosmetics industry,
which was especially hard hit following the September 11, 2001
terrorist attacks.

Revenues and operating profits were affected by the soft 2001
holiday selling season, intense competition, destocking by
retailers, and reduced store traffic, especially at department
stores and travel outlets.

The company's January 2001 acquisition of Unilever's Elizabeth
Arden business also added a significant amount of debt to the
company's balance sheet, which has further exacerbated its
weakened financial performance.

Standard & Poor's expects that fiscal 2002 credit protection
measures will include total debt to EBITDA of about 5 times,
while EBITDA interest coverage is likely to be about 1.5x, far
below the ratios achieved in fiscal 2001.

Standard & Poor's will meet with Elizabeth Arden's senior
management to discuss its ongoing business and financial

Elizabeth Arden both manufactures and distributes fragrances and

EMAGIN CORP: Secures Commitment for $15MM Continued Financing
eMagin Corporation (AMEX: EMA) announced that it has received a
commitment to provide the Company with up to $15 million from a
private equity fund.

The deal provides eMagin with the right, but not the obligation,
to issue shares when it wishes to over the next thirty six
months, subject to certain monthly maximum and minimum amounts
up to a maximum of $15 million and in certain circumstances up
to $20 million. The financing is subject to the filing of a
registration statement with the Securities and Exchange
Commission covering the registration of the shares. Pricing will
be based upon the volume weighted average price of the Company's
stock during the investment period.

Gary Jones, president and CEO of eMagin, commented, "This
financing commitment will give us the flexibility to issue
equity if it is needed to finance the expansion of the company,
specifically with the rollout of our OLED based imaging products
to customers. It will serve primarily as back up working capital
support, and we are excited about the chance to work with
another institutional investor. The availability of these funds
should help us accelerate our growth and enable our OEM
customers to bring a new class of imaging products to the

Further details on the terms will be available in the company's
forthcoming Form 8-K, to be filed with the Securities and
Exchange Commission.

eMagin Corporation (AMEX:EMA) designs, develops, and markets
virtual imaging system-on-a-chip solutions to enable the visual
display of information, data, video, and games through a wide
variety of mobile electronic devices and the next-generation of
interactive virtual reality systems. The world leader in organic
light emitting diode (OLED)-on-silicon technology, eMagin
combines integrated circuits, microdisplays, and optics to
create a virtual image similar to the real image of a computer
monitor or large screen TV. eMagin invented the award-winning
SVGA+ and SVGA-3D OLED microdisplays, the worlds' first and only
single-chip color video OLED microdisplay and embedded
controller for advanced virtual imaging. eMagin's microdisplay
systems are expected to enable new mass markets for wearable
personal computers, wireless Internet appliances, portable DVD-
viewers, digital cameras, and other emerging applications for
consumer, industrial, and military applications. OLED
microdisplays demonstrate performance characteristics important
to military and other demanding commercial and industrial
applications including low power consumption, high brightness
and resolution, wide dimming range, wider temperature operating
ranges, shock and vibration resistance, and insensitivity to
high G-forces. eMagin's intellectual property portfolio of more
than 100 patents issued or filed is leveraged by key OLED
technology licensed from Eastman Kodak. eMagin's corporate
headquarters and microdisplay operations are co-located with IBM
on its campus in East Fishkill, N.Y. Optics and system design
facilities are located at its wholly owned subsidiary, Virtual
Vision, Inc., in Redmond, WA. Additional information is
available at

As previously reported, eMagin considered bankruptcy filing to
reorganize its operational and financial structures.

EMAGIN CORP: Raises $2.5 Million from Private Equity Placement
eMagin Corporation (AMEX: EMA) announced the completion and
receipt of approximately $2.5 million private placement of
common stock with several institutional and individual

The financing consisted of approximately 3.6 million shares of
eMagin common stock and warrants to purchase up to approximately
1.4 million additional shares. The common stock investment was
completed at 110% of the prior 5-day average market price on the
determination date of February 27, 2002, which was $0.6913 per
share of common stock. Warrants were issued at 120% of the above
market price, or $0.7542 per share. The three-year warrants
provided these investors with the future right to purchase 0.4
shares of eMagin common stock for every share of Common stock
purchased in this transaction.

Commenting on this financing transaction, Gary Jones, president
and chief executive officer, stated, "This investment and
investment commitment enables us to continue to move our
manufacturing ramp forward and generate increased cash flow from
sales in the near term. We will carefully control expenditures
as we begin to fulfill order backlogs and increasing rate of
sales. We plan to increase our supply inventories and add staff,
mostly to increase off-shift production. The high level of
automation of our microdisplay production equipment should
permit large production gains from relatively small staffing

The company stated that it expects to use the net proceeds of
the offering for working capital and general corporate purposes,
and to help execute manufacturing goals for production of both
consumer and military products. Further details on the terms
will be available in the Company's forthcoming form 8-K,
currently being filed with the Securities and Exchange

eMagin Corporation (AMEX:EMA) designs, develops, and markets
virtual imaging system-on-a-chip solutions to enable the visual
display of information, data, video, and games through a wide
variety of mobile electronic devices and the next-generation of
interactive virtual reality systems. The world leader in organic
light emitting diode (OLED)-on-silicon technology, eMagin
combines integrated circuits, microdisplays, and optics to
create a virtual image similar to the real image of a computer
monitor or large screen TV. eMagin invented the award-winning
SVGA+ and SVGA-3D OLED microdisplays, the worlds' first and only
single-chip color video OLED microdisplay and embedded
controller for advanced virtual imaging. eMagin's microdisplay
systems are expected to enable new mass markets for wearable
personal computers, wireless Internet appliances, portable DVD-
viewers, digital cameras, and other emerging applications for
consumer, industrial, and military applications. OLED
microdisplays demonstrate performance characteristics important
to military and other demanding commercial and industrial
applications including low power consumption, high brightness
and resolution, wide dimming range, wider temperature operating
ranges, shock and vibration resistance, and insensitivity to
high G-forces. eMagin's intellectual property portfolio of more
than 100 patents issued or filed is leveraged by key OLED
technology licensed from Eastman Kodak. eMagin's corporate
headquarters and microdisplay operations are co-located with IBM
on its campus in East Fishkill, N.Y. Optics and system design
facilities are located at its wholly owned subsidiary, Virtual
Vision, Inc., in Redmond, WA. Additional information is
available at

EMAGIN CORP: Dec. 31 Balance Sheet Shows Equity Deficit of $5MM
eMagin Corporation (AMEX:EMA), which develops and markets
organic light emitting diode (OLED) microdisplays built on
silicon chips and virtual imaging systems, announced its
financial results for the fourth quarter and for the full year
ended December 31, 2001.

Revenue for the fourth quarter 2001 rose 42% to $1.0 million
compared to total revenue of $0.7 million in the fourth quarter
of 2000. Revenues for the twelve months ended December 31, 2001
increased 87% to $5.8 million compared to total revenue of $3.1
million for the same period in 2000. In addition to the above
revenues, eMagin received contract research reimbursements of
$1.6 million during 2001 that were categorized as a negative
expense to research and development rather than as revenue as a
result of accounting classification for government contracts for
which the company contributes, or cost shares, a portion of the
total program costs.

For the three months ended December 31, 2001, eMagin reported a
net loss, as adjusted for certain non-cash charges, of $3.7
million versus a loss of $4.2 million for the same period of the
prior year. The net loss, as adjusted for certain non-cash
charges, excludes purchased intangibles amortization and non-
cash charges related to stock-based compensation. Including
purchased intangibles amortization and non-cash charges related
to stock-based compensation, the Company reported a net loss of
$5.6 million for the fourth quarter of 2001. The net loss
resulted from increased research and development and
administrative expenses, which were partially offset by higher
billings on government contracts. During the fourth quarter of
2001, the company reduced its staff by 66.

The as adjusted net loss for the twelve months ended December
31, 2001, which excludes purchased intangibles amortization and
non-cash charges related to stock-based compensation, was a loss
of $14.7 million versus the as adjusted net loss for the 12
months ended December 31, 2000, which excludes amortization and
write-down of goodwill and purchased intangibles, in-process
research and development charges and non-cash charges related to
stock-based compensation, for a pro forma net loss of $14.4
million for the twelve months ended December 31, 2000. Revenues
and expenses, as adjusted for certain non-cash charges, for the
twelve months of 2000 include the revenue and expenses of FED
Corporation (the predecessor company) for the period January 1,
2000, through March 15, 2000, and eMagin revenue and expenses
for the twelve months ended December 31, 2000. Including
amortization and write-down of goodwill and purchased
intangibles and non-cash charges related to stock-based
compensation, the net loss for the twelve months ended December
31, 2001 was $68.5 million.

"We are now beginning to garner the benefits of our past
investments in technology development and marketing with
significant product introductions and acceptance," said Gary
Jones, eMagin's Chairman and CEO. "We introduced and shipped our
first commercial product, the SVGA+ OLED color microdisplay, to
more than 60 OEM customers for evaluation and qualification. In
the fourth quarter, we introduced the world's first imbedded
stereovision capable microdisplay, our SVGA-3D, which should be
a significant enabler for advanced game and wearable PC
applications during 2002. We were honored that our technology
and product design innovations were recognized by a number of
prestigious awards including Electronic Products Magazine's
Product of the Year, the Society Information Display and
Information Display Magazine Display of the Year Gold Award, and
the 2001 Army Quality Award. But even more significantly, we are
pleased with the strong levels of interest, acceptance and
initial design wins that we have achieved for products being
designed around our unique microdisplays and optics for mobile
information products including portable DVD players, gaming
platforms, medical products, and wearable computers, as well as
for key U.S. military programs such as Land Warrior and Joint
Strike Fighter. We continue to work with the US Air Force and US
Army, as well as OEM military systems integrators, to develop
high performance OLED microdisplays for a variety of avionics
and land-based helmet-mounted display systems. A strong focus on
manufacturing and engineering has permitted our products to be
qualified by some of the most demanding customers in the world
and to be declared to be more environmentally rugged and
reliable than other microdisplay alternatives."

Jones continued, "In spite of severe financial challenges during
2001, we posted record increases in revenue, which we expect to
continue to grow significantly during 2002. In the late fourth
quarter of 2001 we implemented cost reduction programs,
including a workforce reduction, reduction of expenditures
wherever practical, and renegotiated several fixed operating
cost arrangements. Our advanced technology and production
facilities are permitting us to ramp into initial production
with fewer staff. We have improved production yield and
efficiencies and are now delivering higher quantities of
displays. Strong sales and customer interest continue to outpace
our increasing production."

"Military, fire-rescue, medical, industrial, and consumer gaming
and entertainment are expected to be the primary sales drivers
for 2002 as OEM customers develop their own products using our
microdisplays as a key component. Our chief focus over the next
several quarters encompasses building up production so we can
supply the demand for our products, focusing on marketing and
customer service, formalizing key strategic partnerships,
augmenting communications with our investors, and continuing our
activities to secure sufficient financing for the company. We
look forward to reporting on further developments in process
with strategic, OEM, and financial partners. Because our
equipment set is already in place and operational, implementing
three-shift production operations and increasing our silicon
chip inventory base will be key to attaining our goals of 20X
throughput increases during the remainder of 2002. Profitability
on a monthly basis is now a reasonable goal by the end of this
year. We are diligently focused on delivering both leading
products to our customers and managing our operations to deliver
results to our shareholders."

    During 2001 the company also announced the following:

    -- Demonstration of the world's first SVGA+ color OLED-on-
          silicon microdisplay at the DisplaySearch US Flat
          Panel Display Conference in March 2001. The display
          operates in both 16:9 and 4:3 image aspect ratios for
          compatibility with a variety of applications,
          including DVD players, portable computers, military,
          medical, and industrial applications, and offers OEMs
          a complete integrated interface microdisplay solution.
          First evaluation samples of this display began
          shipping immediately after this conference.

    -- Demonstration of the world's first SVGA-3D display at the
          LCD/PDP conference in Japan the end of October 2001
          that imbedded stereovision capability, targeting the
          consumer PC gaming/DVD entertainment and the wearable
          PC markets.

    -- Demonstration of the world's first OLED-on-silicon direct
          view display, which was jointly developed with IBM
          Research. The VGA format display (640 by 480 pixels)
          has a very high resolution pixel density of 740 pixels
          per inch and was fabricated with eMagin's OLED
          technology and IBM's single crystal silicon chip
          electronics. The OLED display was demonstrated on a
          prototype wrist-worn computer watch using the Linux
          operating system.

    -- Received a $5 million renewal of its Phase III Small           
          Business Innovation Research (SBIR) contract from the
          US Air Force to further advance the development of
          high-resolution active matrix OLED microdisplays
          toward extremely high luminance applications.

    -- Presented data showing the ability to create OLED video
          displays with a balanced full-color spectrum exceeding
          that of the best commercially available liquid crystal
          display notebook displays. This balanced full-color
          spectrum represents the largest color gamut known to
          have been obtained from an OLED display of any type.

    -- Received a 2001 U.S. Army Phase II Quality Award for the
          development of high-resolution active matrix OLED
          microdisplays for incorporation into military head-
          mounted displays. The annual Quality Awards Program
          recognizes top quality Army Phase II projects for
          their technical achievement, contribution to the Army,
          and potential for commercial use.

eMagin Corporation (AMEX:EMA) designs, develops, and markets
virtual imaging system-on-a-chip solutions to enable the visual
display of information, data, video, and games through a wide
variety of mobile electronic devices and the next-generation of
interactive virtual reality systems. The world leader in organic
light emitting diode (OLED)-on-silicon technology, eMagin
combines integrated circuits, microdisplays, and optics to
create a virtual image similar to the real image of a computer
monitor or large screen TV. eMagin invented the award-winning
SVGA+ and SVGA-3D OLED microdisplays, the worlds' first and only
single-chip color video OLED microdisplay and embedded
controller for advanced virtual imaging. eMagin's microdisplay
systems are expected to enable new mass markets for wearable
personal computers, wireless Internet appliances, portable DVD-
viewers, digital cameras, and other emerging applications for
consumer, industrial, and military applications. OLED
microdisplays demonstrate performance characteristics important
to military and other demanding commercial and industrial
applications including low power consumption, high brightness
and resolution, wide dimming range, wider temperature operating
ranges, shock and vibration resistance, and insensitivity to
high G-forces. eMagin's intellectual property portfolio of more
than 100 patents issued or filed is leveraged by key OLED
technology licensed from Eastman Kodak. eMagin's corporate
headquarters and microdisplay operations are co-located with IBM
on its campus in East Fishkill, N.Y. Optics and system design
facilities are located at its wholly owned subsidiary, Virtual
Vision, Inc., in Redmond, WA. Additional information is
available at

At December 31, 2001, the company recorded a working capital
deficit of about $6.5 million, and a total shareholders' equity
deficit of about $5 million.

ENRON CORP: Energy Debtors Propose Contract Bidding Procedures
Enron Energy Services Inc. asks the Bankruptcy Court to approve
uniform Bidding Procedures designed to yield a transaction that
will maximize the realizable value of their Retail Contracts to
supply power to customers located in Texas, Maine and

The proposed Bidding Procedures provide that:

-- To participate in the bidding process, each person must
   deliver to Enron Energy:

     (i) an executed confidentiality agreement, and

    (ii) current audited financial statements of the Potential

-- A "Qualified Bidder" is a Potential Bidder that delivers the
   documents and whose financial information demonstrates the
   financial capability to consummate the purchase of the

-- Within two business days after the Potential Bidder delivers
   all of the materials required, Enron Energy shall determine,
   and shall notify a Potential Bidder in writing, whether the
   Potential Bidder is a Qualified Bidder. At the same time,
   Enron Energy shall deliver to the Qualified Bidder:

      (i) a confidential memorandum containing information and
          financial data relative to the Retail Contracts, and,

     (ii) copies of the Purchase and Sale Agreements.

-- To obtain due diligence access or additional information, a
   Qualified Bidder must first advise Enron Energy in writing of
   its preliminary proposal regarding:

       (i) the assets sought to be acquired,
      (ii) purchase price range,
     (iii) the structure and financing of the transaction,
      (iv) any additional conditions to closing that it may wish
           to impose, and
       (v) the nature and extent of additional due diligence it
           may wish to conduct.

-- Neither Enron Energy nor any of its affiliates are obligated
   to furnish any information relating to Enron Energy to any
   person except to such Qualified Bidder who makes an
   acceptable preliminary proposal.

-- All bids must be submitted to:

     (i) Stuart Rexrode, Enron Energy Services, Inc. 1400 Smith
         Street, Houston, Texas 77002, and

    (ii) Irene M. Goldstein, Esq., at LeBoeuf, Lamb, Greene &
         MacRae LLP, 125 West 55th Street, New York, New York

   not later than 4:00 p.m. (EST) on a date that is at least 5
   business days prior to the Sale Hearing.

-- A Bid is a letter from a Qualified Bidder stating that:

    (i) the Bidder offers to purchase the Retail Contracts upon
        the terms and conditions set forth in the Purchase and
        Sale Agreements relating to the Retail Contracts that
        the Qualified Bidder is interested in, marked to show
        those amendments and modifications, including, but not
        limited to price, any escrow or indemnities and the time
        of closing, that the Qualified Bidder proposes, and

   (ii) the Bidder's offer is irrevocable until rejected by
        Enron Energy.

   Enron Energy shall provide a copy of all Bids to
   Constellation and the Committee.

-- A Bidder shall accompany its bid with a good faith deposit in
   an amount equal to 5% of its bid.  The Good Faith Deposit
   shall be by:

       (i) wire transfer to the account of an escrow agent to be
           provided upon request, or

      (ii) issuance, by a money center bank having capital of at
           least $100,000,000, of an irrevocable letter of      
           credit for the benefit of Enron Energy.

   In the case of a wire transfer, the Good Faith Deposit shall
   be held by an escrow agent in an escrow account together with
   any interest earned thereon, and shall be returned to any
   Bidder whose Bid is not accepted by Enron Energy within three
   business days of the consummation of the proposed sale.  The
   Good Faith Deposit of the successful Bidder, together with
   any interest earned thereon, shall be treated in accordance
   with the terms of the escrow agreement in the form to be
   mutually agreed upon by Enron Energy and such Bidder and
   shall be applied against the purchase price.

-- Enron Energy will consider a bid only if the bid:

  (a) provides for consideration having a readily ascertainable
      fair market value of not less than 3% in excess of the sum
      of the Base Purchase Price plus the Termination Payment
      payable to Constellation;

  (b) is on terms that, in Enron Energy's business judgment
      after consultation with the Committee, are not materially
      more burdensome than the terms of the Purchase & Sale

  (c) is not conditioned on obtaining financing or on the
      outcome of unperformed due diligence by the Bidder;

  (d) does not request or entitle the Bidder to any break-up
      fee, termination fee, expense reimbursement or similar
      type of payment, and

  (e) is likely to receive all governmental approvals,
      including, without limitation, the requirement that Bidder
      is or will become a retail electric provider under Texas

-- If Enron Energy receives a Qualified Bid from an entity other
   than Constellation, Enron Energy will conduct an auction at
   the offices of LeBoeuf, Lamb, Greene & MacRae, L.L.P., 125
   West 55th Street, New York, New York 10019 two business days
   prior to the Sale Hearing, beginning at 10:00 a.m. (EST) or
   such later time or other place as EESI shall notify all
   Qualified Bidders who have submitted Qualified Bids.

-- Only Constellation, Enron Energy, representatives of the
   Committee and any Qualified Bidders who have timely submitted
   Qualified Bids shall be entitled to attend the Auction and
   only Constellation and such Qualified Bidders will be
   entitled to make additional bids at the Auction.

-- The opening bid at the Auction shall not be less than
   $200,000 greater than the highest Qualified Bid. All offers
   subsequent to the opening bid at the Auction must exceed the
   prior offer by not less than $200,000. Bidding at the Auction
   will continue until such time as the highest and best offer
   is determined.

-- Upon conclusion of the Auction, Enron Energy shall review
   each Qualified Bid on the basis of financial and contractual
   terms and the factors relevant to the sale process, including
   those factors affecting the speed and certainty of
   consummating the sale with respect to the Retail Contracts,
   and after consultation with the Committee, submit the highest
   or otherwise best bid for approval by this Court.

-- Bids submitted by the Bid Deadline shall remain open and
   irrevocable until expressly rejected by Enron Energy, which
   rejection shall be deemed to have occurred with respect to
   all bids not ultimately approved as the highest and best bid
   for the Retail Contracts by the Court.

-- If Enron Energy does not receive any higher or otherwise
   better offers at the Auction, Enron Energy will report the
   same to the Court and will proceed with a sale and assignment
   of the Retail Contracts to Constellation. (Enron Bankruptcy
   News, Issue No. 16; Bankruptcy Creditors' Service, Inc.,

ENRON INDIA HOLDINGS: Voluntary Chapter 11 Case Summary
Lead Debtor: Enron India Holdings Ltd.
             P.O. Box 1350, The Huntlaw Building
             Fort Street, G.T.
             Grand Cayman, Cayman Islands, B.W.I.

Bankruptcy Case No.: 02-11268

Debtor affiliates filing separate chapter 11 petitions:

     Entity                                     Case No.
     ------                                     --------
     Enron Mauritius Company                    02-11267  

Type of Business: Debtor is a holding company for an
                  ownership interest in Enron Mauritius

Chapter 11 Petition Date: March 19, 2002

Court: Southern District of New York (Manhattan)

Judge: Arthur J. Gonzalez

Debtors' Counsel: Brian S. Rosen, Esq.
                  Weil, Gotshal & Manges LLP
                  767 Fifth Avenue
                  New York, New York 10153
                  Fax: 212-310-8007
                  Melanie Gray, Esq.
                  Weil, Gotshal & Manges LLP
                  700 Louisiana, Suite 1600
                  Houston, Texas 77002
                  Telephone: (713) 546-5000

Total Assets: $7,357,086

Total Debts: $12,144

ENRON MAURITIUS: Case Summary & Largest Unsecured Creditor
Lead Debtor: Enron Mauritius Company
             10 Frere Felix De Valois Street
             Port Louis

Bankruptcy Case No.: 02-11267

Debtor affiliates filing separate chapter 11 petitions:

     Entity                                     Case No.
     ------                                     --------
     Enron India Holdings Ltd.                  02-11268

Type of Business: Debtor is a holding company for an interest
                  in Dahbol Power Company.

Chapter 11 Petition Date: March 19, 2002

Court: Southern District of New York (Manhattan)

Judge: Arthur J. Gonzalez

Debtors' Counsel: Brian S. Rosen, Esq.
                  Weil, Gotshal & Manges LLP
                  767 Fifth Avenue
                  New York, New York 10153
                  Fax: 212-310-8007
                  Melanie Gray, Esq.
                  Weil, Gotshal & Manges LLP
                  700 Louisiana, Suite 1600
                  Houston, Texas 77002
                  Telephone: (713) 546-5000

Total Assets: $200,676,205

Total Debts: $42,915,343

Debtor's Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Multiconsult                Trade Debt                  $7,500

FEDERAL-MOGUL: Hanly & Conroy Replaces C&W as Asbestos Counsel
Federal-Mogul Corporation, and its debtor-affiliates sought and
obtained entry of an order substituting Hanly & Conroy LLP as
special asbestos litigation counsel in place of Coblence &
Warner P.C., nunc pro tunc to February 1, 2002, pursuant to the
same terms and conditions as set forth in the Court's order
appointing Coblence & Warner as special asbestos litigation
counsel to the Debtors.

James E. O'Neill, Esq., at Pachulski Stang Ziehl Young & Jones
P.C. in Wilmington, Delaware, relates that on February 1, 2002,
nine attorneys who were members of or associated with Coblence
at the time of the retention order left the firm to form Hanly &
Conroy. A review of Coblence's billing records confirms that all
of Hanly's attorneys who had worked in matters related to these
chapter 11 cases since the petition date are now members or
employees of Hanly. Accordingly, the proposed substitution of
counsel to the Debtors is closer to a change of firm name than
to a true substitution of counsel.

As a result of the Court aprroval, Hanly & Conroy will provide
legal and litigation support required by the Debtors in
connection with their asbestos litigation matters, including:

A. providing analysis and advice to the Debtors in formulating
    and implementing a litigation strategy for resolving
    asbestos-related claims;

B. providing strategic advice to and representing the Debtors in
    connection with any and all matters in these bankruptcy
    proceedings arising from asbestos-related personal injury
    and property damage claims including:

     1. counseling and representing the Debtors in connection
        with all aspect of asbestos claims related litigation,
        including commencing, conducting and defending such
        litigation wherever located;

     2. counseling and representing the Debtors and assisting
        the Debtors' general bankruptcy counsel in connection
        with the formulation, negotiation and promulgation of a
        plan of reorganization and related documents related to
        asbestos claims; and

     3. counseling and representing the Debtors and assisting
        the Debtors' general bankruptcy counsel in connection
        with reviewing, estimating & resolving the asbestos

C. Analyzing, litigating and advising the Debtors concerning the
    asbestos claims, including issues related to:

       1. removal, transfer, venue, abstention, injunctions,
          automatic stay and related matters, to the extent
          related to alleged asbestos liability;

       2. assisting the Debtors' general bankruptcy counsel with
          respect to asbestos claims bar date, asbestos-related
          proof of claim forms and related notice and asbestos
          claim processing issues, asbestos claim objections and
          litigation relating to claim allowance or
          disallowance, to the extent related to alleged
          asbestos liability. (Federal-Mogul Bankruptcy News,
          Issue No. 13; Bankruptcy Creditors' Service, Inc.,

FLEMING: Strikes Major Supply Pact with Albertson's Stores
In an announcement that is strategically significant within the
industry and representative of the company's expanding market
opportunities for supplying self-distributing chains, Fleming
(NYSE: FLM) announced an agreement with Albertson's,
Inc. to provide procurement and distribution services to
Albertson's stores in two states.

"Self-distributing retailers are looking critically at their
supply chains to identify the most efficient alternatives," said
Mark Hansen, Fleming Chairman and CEO. "We believe this
agreement is a confirmation of the advantages provided by
Fleming's nationwide footprint of distribution facilities."

Hansen continued, "Fleming's ability to efficiently serve
quality retailers of all sizes and formats, including self-
distributing chains, is a key component of our continued growth.
This arrangement with Albertson's supports our strategy to
further diversify our customer base and makes Albertson's one of
our five largest customers. We are proud to provide our supply
chain efficiencies to this leading supermarket retailer."

Larry Johnston, Albertson's Chairman and CEO, said "Our recent
decision to exit several markets served by the Tulsa
distribution center created an opportunity for Albertson's and
Fleming to work together. Fleming is a highly regarded
wholesaler and this transaction allows us to both maximize
shareowner value and increase supply chain efficiency."

The five-year arrangement initially includes annualized sales
volume of approximately $250 million. As part of the companies'
agreement, Fleming will acquire the Albertson's distribution
center in Tulsa to supply the 28 Oklahoma Albertson's stores.
Fleming's Lincoln Division will supply the 11 Nebraska stores.  
The parties expect that this arrangement, which is subject to
customary closing conditions in the agreement, will commence in
July 2002.

"The Tulsa distribution center is already staffed with a high-
quality associate team, and we anticipate hiring the vast
majority of these associates to continue serving the Albertson's
stores in Oklahoma," said Hansen.

The company intends to lease the Tulsa facility from a third
party. Related capital expenditures, estimated at $15 million,
are included in Fleming's 2002 capex target of approximately
$200 million.

"Our distribution strategy is based on high-volume, low-cost
distribution centers. From 1998 through 2001, Fleming's average
sales per distribution center increased from approximately $389
million to a run rate of approximately $640 million, which is
among the highest in the industry. We believe there are several
opportunities to increase the sales levels at this state-of-the-
art Tulsa facility, consistent with Fleming's distribution
strategy. The specifics of our plan will be announced at the
time of the company's first quarter earnings release," said

Fleming is the #1 distributor of consumables to the United
States retail industry and has a growing presence in value
retailing. Fleming's primary business is buying and selling
merchandise. The company serves approximately 3,000
supermarkets, 6,800 convenience stores, and more than 2,000
supercenters, discount, limited assortment, drug, specialty, and
other stores across the United States. To learn more about
Fleming, visit our Web site at

As previously reported in the Troubled Company Reporter, S&P has
placed its low-B ratings assigned to Fleming on CreditWatch with
negative implication. This rating action was taken after the
bankruptcy filing of major retailer Kmart Corporation.

GLOBAL CROSSING: Teleglobe Wants Adequate Assurances of Payment
Teleglobe USA, Inc. and Teleglobe Canada, Inc. want an order:

A. Deeming rejected Teleglobe USA's Telecommunications Services
     Agreement with Link USA Corporation, n/k/a Global Crossing
     Advanced Card Services, Inc., Teleglobe Canada's
     Telecommunications Services Agreement with Frontier
     Communications Services Inc., n/k/a Global Crossing
     Telecommunications, Inc., and Teleglobe USA's
     Telecommunications Services Agreement with Global Telecom
     entered into on or about March 12, 2001; and

B. granting Teleglobe relief from the automatic stay to exercise
     its contractual rights to terminate the Agreements or to
     increase rates and/or require security absent termination
     as provided in the Agreements.

Absent such relief, Teleglobe alternatively seeks adequate
assurances of payment under section 366(b) of the Bankruptcy
Code or otherwise requests adequate protection for any post-
petition services provided under the Agreements. Since these
cases were commenced, the Debtor Counter-Parties have incurred
more than $800,000 in usage charges for Teleglobe's services
under the Agreements.

Pursuant to the Agreements, Larren M. Nashelsky, Esq., at
Morrison Foerster LLP in New York, New York, relates that
Teleglobe in the last quarter of 2001 provided an average of
approximately $181,000 per month in Services to Global. Since
their January 28, 2002 bankruptcy petitions, however, Debtors'
usage of Teleglobe Services has increased dramatically, and
before Global filed its bankruptcy petitions, Teleglobe was
working with it to obtain security against the credit risk it
started presenting.

Despite listing numerous telecommunications service providers
providing very similar services to the Debtors, Mr. Nashelsky
contends that the Debtors neglected to include Teleglobe on the
list of utilities and gave only the listed Utilities notice of
entry of the 366 Motion even though the Debtors sought to
prohibit all Utilities, regardless of whether listed, from
discontinuing service unless they sought additional adequate
protection within 25 days after entry of the order. Debtors
never served the 366 Motion on Teleglobe.

In their 366 Motion, Mr. Nashelsky points out that the Debtors
described a net loss of about $4,600,000,000 for the nine months
ending September 30, 2001, which equates to an annualized
pre-petition net loss for 2001 as of September 30, 2001 in the
amount of $6,125,333,332, and an average monthly pre-petition
net loss of $510,444,444. Although the Debtors have failed in
any of their court filings thus far to disclose what their
average monthly pre-petition net cash loss was for 2001, it
presumably was a figure closer to their average monthly pre-
petition net loss of $510,444,444 than to their aggressively low
projected net cash loss of only $138,100,000 for the first
thirty days following the Petition Date. Given their Chapter 11
filings, the associated costs, disruptions of bankruptcy, and
the recent failures of so many other telecommunications
companies to emerge from bankruptcy, however, the Debtors' claim
that they will be able to achieve such reduced cash drain so
quickly is not credible.

Even giving the Debtors the benefit of substantial doubt, Mr.
Nashelsky contends that Debtors will still run out of their
unrestricted cash on hand, in little over four months from the
Petition Date using their own numbers in the absence of a prompt
infusion of additional cash from asset sales or debtor-in-
possession financing. Debtors apparently pin their hopes of
avoiding running out of cash in four months in their Investment
Motion, which they filed on February 5, 2002, under which,
Debtors request entries of court orders approving a letter of
intent under which Hutchison Whampoa Limited and Singapore
Technologies Telemedia Pte. Ltd. may invest $750 million to
become 79% equity owners of the reorganized Debtors. However,
even if the numerous conditions for the proposed investment in
the LOI are met and the Potential Investors do decide to
actually commit to making it, the remains the substantial
possibility that the Debtors will run out of cash based on the
timetable provided for fulfillment of those conditions in the
LOI, which requires Debtors to obtain exit financing "within 230
days of the Commencement Date," or more than 7 1 /2 months into
their bankruptcies, as a final condition to closing on the
proposed investment. Thus, extrapolating from the Debtors' own
30 Day Projection, their potential white knight may arrive three
months too late to save them.

Furthermore, Mr. Nashelsky claims that the LOI imposes extensive
conditions precedent to any commitment by the Potential
Investors that will be difficult to achieve given the current
caution exhibited by the capital markets towards
telecommunications companies. In addition to meeting numerous
financial performance targets, Debtors are further required to
obtain debtor-in-possession financing of "no less than US$150
million" and additional exit financing "of not less than US$350
million." However, in the Teligent bankruptcies, for example,
lenders demonstrated their new caution when those debtors'
potential white knight, Teligent Acquisition Corporation, could
not even obtain financing for its asset purchase under an
amended sale agreement which reduced the price from $117.5
million to just $78 million.

Indeed, Mr. Nashelsky believes that potential lenders are likely
to exhibit great caution here since it is likely the
postpetition lenders in the Winstar bankruptcy cases will not
even be repaid their principal on the post-petition loan
following the conversion of those cases to Chapter 7. The fact
is that the LOI on which Debtors rest their hopes is nothing
more than "an indication of interest for discussion purposes
only . . . [that] does not constitute a legally binding
obligation," yet further qualified by difficult conditions
precedent and governed by an uncertain timetable which still
might prove too long even if the Debtors succeed in
accomplishing its bankruptcy restructuring milestones within
half the time permitted by the LOI. In other words, without a
grant of the relief requested herein, Teleglobe would be asked
to finance the Debtors' attempt at reorganization on terms that
would not be acceptable to customary providers of post-petition
credit in these circumstances, where payment and even
administrative expenses is far from certain.

Mr. Nashelsky informs the Court that Teleglobe sought through
several meetings with Global's representatives since the
Petition Date to resolve this matter consensually with the
Global, but has thus far been unable to come terms with them.
(Global Crossing Bankruptcy News, Issue No. 5; Bankruptcy
Creditors' Service, Inc., 609/392-0900)

HAYES LEMMERZ: CIBC Balks at Houlihan Lokey's Engagement Terms
Canadian Imperial Bank of Commerce urges the Court to deny the
Committee's application to retain Houlihan, Lokey, Howard &
Zukin Financial Advisors, Inc., in the chapter 11 cases of Hayes
Lemmerz International, Inc., and its debtor-affiliates.

Monica Leigh Loftin, Esq., at Potter, Anderson & Corroon LLP in
Wilmington, Delaware, asserts that the indemnification
provisions of the Houlihan Lokey retention agreement, which
exculpate the advisory firm from potentially unlimited
liability, are too broad and inappropriate. There is no
justification to make the Debtors' estates act as insurer for
Houlihan Lokey and be saddled with a potential administrative
obligation to indemnify the firm for its negligence.  It's
axiomatic, Ms. Loftin suggests, that Houlihan's negligence will
not confer an actual or necessary benefit upon the Debtors,
their estates or the creditors.  Moreover, the Debtors and their
creditors face the risk that Houlihan's indemnification claim
might be so large that it could effectively act as an impediment
to confirmation of a reorganization plan in these cases.

Leaving aside the propriety of any indemnification to the
Debtors, Ms. Loftin asserts that the proposed indemnification
must be revised to make clear that Houlihan Lokey will not be
indemnified, on a post-petition administrative expense claim
basis, for any prepetition acts or omissions.  There is just no
justification for why a pre-petition indemnification claim
should be converted to a postpetition administrative expense
obligation. She also balks at the provision that Houlihan's
affiliates will be indemnified from prepetition and postpetition
claims.  Ms. Loftin argues that, assuming that Houlihan Lokey is
apt to receive an indemnity for its postpetition negligence,
there is no reason as well to give the firm's affiliates --
whoever they might be -- a limitless indemnity right against the

In addition to this, CIBC objects to the improper heightening of
the gross negligence standard in the agreement by inclusion of
the word "primarily" in connection with the carve-out from the
indemnity resulting from Houlihan Lokey's gross negligence or
willful misconduct.  The agreement also suggests waiving the
rights of creditors or other parties-in-interest from seeking to
recover compensation for damages sustained based upon the
Houlihan Lokey's acts or omissions in these cases or otherwise.

Ms. Loftin claims that the agreement also gives the firm
unilateral consent rights with respect to Debtors' ability to
resolve pending claims, actions or proceedings in these cases
that relate to the Houlihan Lokey.  She believes that if the
firm is concerned with how the Debtors propose to settle a
claim, Houlihan Lokey is free to express its reservations to the
Court at the appropriate time. The agreement also puts cap or
limit the firm's liability to the fees and expenses paid to it.

Ms. Loftin adds that CIBC objects to the provisions of the
agreement letter to the extent that the firm's retention under
section 328 could later preclude the Court from conducting a de
novo review of any alleged indemnification obligation.  She
suggests that the Court, instead, should retain the unrestricted
right to review whether it is appropriate for the Debtors'
estates to indemnify Houlihan Lokey and, if so, the reasonable
amount of any indemnity payment.  She adds that any
indemnification obligation should be given and discharged to the
extent of the consummation of a plan of reorganization.

Ms. Loftin believes that without disclosure in the agreement,
the advisory firm is also seeking as part of its retention a
waiver of any claim the Debtors' estates might have against
Houlihan Lokey for amounts received by the firm prior to the
petition date.  Houlihan Lokey rendered prior service to the
Debtors in prepetition acquisitions and transactions and,
therefore, is not as disinterested as it claims to be.

Ms. Loftin informs the Court that Canada Imperial Bank, the
Committee and Houlihan Lokey have had several discussions since
the filing of the Application in an attempt to resolve concerns
about the transaction fee.  In that regard, the Committee has
agreed that Houlihan's transaction fee will be paid solely from
property to be distributed to unsecured creditors. (Hayes
Lemmerz Bankruptcy News, Issue No. 7; Bankruptcy Creditors'
Service, Inc., 609/392-0900)

HORIZON MEDICAL: Arranges Recap. to Extinguish Senior Bank Debt
Horizon Medical Products, Inc. (Amex: HMP) announced that it has
completed an arrangement with ComVest Venture Partners, LP,
LaSalle Business Credit, Inc. and Medtronic, Inc. (NYSE: MDT) to
implement a major recapitalization of the Company that will
extinguish all of HMP's senior debt held by Bank of America (B
of A).  Commonwealth Associates, an affiliate of ComVest, acted
as advisor to HMP in the restructuring and recapitalization.

Marshall B. Hunt, in conjunction with Commonwealth Associates,
led the recapitalization effort for the Company.  Mr. Hunt, who
will reassume the position of Chairman of the Board and Chief
Executive Officer, commented that the capital restructuring will
provide an approximate $14.8 million gain for the Company in
2002, and substantially reduce the Company's debt service going
forward.  "In addition, this new debt structure will give us
much more latitude to set our own business course than we had
under the forbearance agreement with B of A," Mr. Hunt said.  
"Even more significant is our new relationship with Medtronic,
one of the world's premier medical technology companies." HMP
and Medtronic, which has invested $4 million into the Company,
have entered into a two year co-promote alliance to market
Medtronic's IsoMed(R) and SyncroMed(R) drug infusion systems to
the oncology market. HMP has one of the largest sales forces in
the United States focused on the oncology market, which is a key
target for IsoMed and SyncroMed sales.

In addition to Mr. Hunt's re-appointment as Board Chairman and
Chief Executive Officer, the Company is adding three new members
to its Board of Directors and has formed an executive committee
to the Board.  The new Board members include Robert Tucker,
former chairman and chief executive officer of Scherer
Healthcare, Inc., H. Ross Arnold, III, founder of Quest Capital
Corp, and Lee Provow of Commonwealth Associates; the Executive
Committee consists of Lee Provow, Robert Tucker and Marshall

To facilitate the recapitalization, ComVest has purchased HMP's
$40.3 million senior note payable to B of A for approximately
$22 million in cash, leaving $2 million in subordinated debt
held by B of A.  Commonwealth has negotiated a reduction in
HMP's indebtedness to B of A by approximately $16 million.  In
return, HMP has entered into a Note Purchase Agreement with
several investors led by Comvest and Medtronic, under which the
Company has issued senior subordinated convertible notes in an
aggregate principal amount of $11 million to ComVest and other
investors introduced by Commonwealth and in an aggregate
principal amount of $4 million to Medtronic.  In addition,
ComVest provided a bridge loan to the company to cover certain
costs of the transaction.  A portion of the notes ($270,000) may
be converted into up to 27 million shares of HMP common stock,
subject to a downward adjustment upon a repayment of a portion
or all of the notes.  Following the conclusion of this
transaction, the Company will have approximately 50 million
shares of common stock outstanding on a fully diluted basis. The
remaining balance of the transaction will be funded by senior
debt covered in a new credit and term loan facility of up to $22
million that HMP has negotiated with LaSalle. HMP will seek
shareholder approval for the recapitalization transaction and to
increase the number of authorized shares of common stock from 50
million to 100 million shares.

           Year-End And Fourth Quarter 2001 Results

HMP announced that for the year ended December 31, 2001, EBITDA
increased to $2.7 million from an EBITDA loss of $11.9 million
in 2000.  Revenue for 2001 was $59.1 million compared to $63.3
million for the prior year.  The Company's net loss for 2001
decreased to $5.1 million from $19.8 million in 2000.  For 2001,
gross profit increased to 34.4 percent compared to 26.2 percent
in 2000.  SG&A expenses were up slightly for 2001 over 2000.

For the fourth quarter ended December 31, 2001, EBITDA increased
to $296,595 from an EBITDA loss of $17 million in fourth quarter
2000.  Revenue for fourth quarter 2001 was $13.6 million
compared to $13.8 million for the prior period.  The Company's
net loss for fourth quarter 2001 decreased to $1.5 million from
$18.5 million in fourth quarter 2000.

Horizon Medical Products, Inc., headquartered in Atlanta, is a
specialty medical device company focused on manufacturing and
marketing vascular access products. The Company's oncology
product lines include implantable ports, some of which feature
VTXT technology; tunneled central venous catheters; and stem-
cell transplant catheters used primarily in cancer treatment
protocols.  VTXTM Technology refers to the swirling blood flow
produced by a uniquely rounded reservoir design and tangential
outlet that substantially eliminates thrombosis, or the buildup
of sludge from blood and drug byproducts, in the port reservoir
and reduces certain complications that require additional
surgery. The Company also markets a complete line of acute and
chronic dialysis catheters.

Commonwealth Associates is an Investment and Merchant Bank,
established intion, typically acting as the lead investor in
each investment that it sponsors.

ICG COMMUNICATIONS: Court Allows Continued Cash Collateral Use
Judge Wizmur enters her Order granting ICG Communications,
Inc.'s Motion, in the absence of any objection by any party,
authorizing the Debtors to use cash collateral according to the
revised budget, up to the hearing on the Debtors' revised
Disclosure Statement.  All equipment lease payments required to
be made during this period under leases between the Debtors will
continue to be made in the ordinary course of business; however,
the Debtors represent that they did not make any intercompany
lease payments for the month of January, 2002, subject to a full
reservation of rights, and the Lenders agree that such failure
to make intercompany lease payments will not be enforced as a

All unpaid out-of-pocket costs and expenses of the Agent and the
Lenders, including professional fees incurred in connection with
matters related to the Credit Agreement, the Lenders' collateral
and these bankruptcy cases, "and for the avoidance of doubt",
are to be paid by the Debtors.

As stated in the Debtors' Motion, the revised budget indicates
that the intercompany lease payments for the months of January
2002 and February 2002 are to be accrued rather than paid.
However, nothing in this stipulation is to be construed as an
agreement by or waiver by the prepetition lenders to the
nonpayment of these amounts.

The Debtors and the Lenders agreed that the Debtors might
continue to use cash collateral for ordinary budget purposes up
to the date of the hearing on approval of the Debtors'
disclosure statement.

The Debtors agreed to pay all unpaid out-of-pocket costs of the
Lenders, including professional fees, incurred in connection
with the Credit Agreement. (ICG Communications Bankruptcy News,
Issue No. 19; Bankruptcy Creditors' Service, Inc., 609/392-0900)  

IT GROUP: Look for Schedules and Statements on Friday
The IT Group, Inc., and its debtor-affiliates sought and
obtained an order giving them more time to file their schedules
of assets and liabilities, schedules of executory contracts and
unexpired leases, and statements of financial affairs.  The
documents are due March 22, 2002. (IT Group Bankruptcy News,
Issue No. 6; Bankruptcy Creditors' Service, Inc., 609/392-0900)  

INTEGRATED HEALTH: Obtains Approval of Replacement DIP Facility
As previously reported, Integrated Health Services, Inc., and
its debtor-affiliates moved the Court for an order authorizing
the IHS Debtors to enter into a Commitment Letter setting forth
the terms on which the Lenders have agreed to provide the IHS
Debtors with replacement DIP financing. The Court has granted
the Commitment Letter Motion.

As advised in the Commitment Letter Motion, the parties
proceeded to negotiate a definitive Replacement DIP Agreement
that will avail the Debtors of the DIP Facility after its
current expiry date of May 3, 2002 until the earlier of (i) one
year anniversary of the Closing Date, (ii) the effective date of
a plan of reorganization for any of the IHS Debtors, (iii)
acceleration following the occurrence and continuation of all
Event of Default and (iv) such earlier date as specified in the
DIP Credit Agreement.

In this motion, the Debtors seek the issuance and the entry of a
Final DIP Financing Order pursuant to section 364(c)(1), (2) and
(3) of the Bankruptcy Code and Bankruptcy Rules 2002, 4001(c)
and 9014 authorizing the IHS Debtors to enter into the DIP
Credit Agreement and to perform their obligations under it.

The major elements of the DIP Facility are:

a.  Borrower.


b.  Guarantors

    All the Borrower's subsidiaries that also are debtors and
    debtors-in-possession under chapter 11 of the Bankruptcy

c.  Facility.

    The principal amount of the DIP Facility will be an amount
    not to exceed $75,000,000 in the aggregate, of which  
    $50,000,000 will be available for letters of credit. The DIP
    Facility will be utilized to satisfy in full all obligations
    arising out of the Initial DIP Agreement and to fund the
    Debtors' operations in accordance with the terms of the DIP
    Order and the DIP Credit Agreement.

d.  Availability.

    Availability under the DIP Facility may not exceed the
    lesser of

     i.   $75,000,000; and
     ii.  the Borrowing Base; minus certain reserves;

e.  Borrowing Base.

    The Borrowing Base consists of a formula which essentially
    encompass (i) the sum of 85% of Eligible Accounts, plus
    certain required cash collateral balances, minus (ii)
    Eligibility Reserves.

f.  Interest.

    Interest on outstanding Loans under the DIP Facility will
    accrue, at the option of the Borrower, at either the
    Eurodollar Rate plus 325 basis points or the Base Rate plus
    125 basis points, in each case calculated on the basis of a
    year of 360 clays.

g.  Fees/Expenses.

    In addition to the costs and expenses of the Agents and the
    DIP Lenders, the following fees are payable by the Debtors:

    i.   a loan facility fee in the amount of $750,000, payable
         to the Administrative Agent as follows:

          (x) an amount equal to $375,000, payable upon the
              granting of the Commitment Letter Motion (but no
              later than March 11, 2002); and

          (y) the balance payable on the Closing Date.

    ii.  a collateral management fee in the amount of $125,000
         per annum for the account of the Collateral Agent;

    iii. an arrangement fee in an amount equal to $125,000
         payable to the Administrative Agent on the Closing

    iv.  a line of credit fee of 0.50% per annum will accrue as
         a percentage of the daily average unused Portion of the
         DIP Facility, payable monthly in arrears and on the
         Termination Date.

    v.   an early termination fee in an amount equal to $750,000
         payable to the Administrative Agent for the account of
         DIP Lenders in the event the IHS Debtors terminate the
         DIP Facility prior to the Termination Date under
         certain specified circumstances.

    vi.  letter of credit fees (calculated on the basis of a
         year of 360 days) payable to the Administrative Agent
         for the account of each DIP Lender that participates in
         a letter of credit guaranty in the amount of 2.5% per
         annum plus all charges imposed on the DIP Lenders by
         the letter of credit issuing bank.

h.  Security and Priority.

    The Administrative Agent and the DIP Lenders shall be
    granted first and second priority liens on and security
    interests in all Collateral under sections 364(c)(2) and (3)
    of the Bankruptcy Code, subject only to

     (i)   valid, perfected and enforceable liens of record
           existing as of the Petition Date,

     (ii)  the Carve-Out, and

     (iii) certain purchase money liens.

    The Obligations also constitute "superpriority"
    administrative claims against each of the Debtors with
    priority over all other administrative expenses of the kind
    specified in sections 503(b) or 507(1)) of the Bankruptcy
    Code, subject to the Carve-Out.

    The Collateral shall not be surchargeable under any section
    of the Bankruptcy Code, including, without limitation,
    section 506(e) of the Bankruptcy Code.

i.  Collateral.

    The Collateral consists of all assets and properties of the
    Borrower and each Guarantor, whether now owned or hereafter

j.  The Carve-Out.

    The Carve-Out includes

    (i)  amounts payable pursuant to 28 U.S.C. Sec. 1930(a) and

    (ii) the payment of allowed and unpaid fees and expenses of
         professionals retained pursuant to sections 327 and
         1103 of the Bankruptcy Code (other than fees and
         expenses incurred in the prosecution of claims against
         the Agents or the DIP lenders) in an aggregate amount
         not to exceed $3,000,000 (the Cap);

    provided that any payments made to such professionals prior
    to the occurrence of an Event of Default or Potential Event
    of Default shall not reduce the Cap.

k.  Conditions Precedent.

    The effectiveness of the DIP Credit Agreement is subject to
    the satisfaction of certain conditions including that

    (i)  the Rotech Plan shall have been consummated, and

    (ii) on any particular Borrowing Date, the balance of the
         CITBC Collateral Account shall be at least equal to the
         Required Cash Collateral Balance.

m.  Repayment.

    The Debtors must repay all amounts outstanding under the DIP
    Credit Agreement, and the commitments shall terminate, on
    the earlier to occur of the following: (i) the one year
    anniversary of the Closing Date, (ii) the effective date of
    a plan of reorganization for any of the IHS Debtors, (iii)
    acceleration following the occurrence and continuation of
    all Event of Default and (iv) such earlier date as specified
    in the DIP Credit Agreement.

n.  Events of DIP Default.

    The occurrence and continuation of an Event of Default gives
    the Administrative Agent and the DIP Lenders the right to
    immediately terminate the DIP Facility and to accelerate the
    payment of all Obligations.

o.  The Automatic Stay.

    The automatic stay under section 362 of the Bankruptcy Code
    will be vacated upon the entry of the DIP Order. During the
    continuance of an Event of Default, upon three Business
    Day's prior written notice to the Borrower, any creditors'
    committee appointed in the Cases and the U.S. Trustee, the
    Administrative Agent and the DIP Lenders shall be permitted
    to take immediately any action permitted under the DIP
    Credit Agreement, the Other Loan Documents, the Bankruptcy
    Code, the UCC or other applicable law with respect to the
    Collateral or otherwise.

    The Debtors also request that the DIP Order provide that
    with respect to any recoupment and/or setoff rights
    resulting from any overpayment and other claims owing to
    certain governmental entities, the settlement with the
    United States Department of Health and Human Services (HHS)
    embodied in the Stipulation between HHS and the Debtors, as
    approved by the Court, be carried forward, and that such
    settlement continue in full force and effect with respect to
    the Agents and the DIP Lenders. (Integrated Health
    Bankruptcy News, Issue No. 32; Bankruptcy Creditors'
    Service, Inc., 609/392-0900)   

KAISER ALUMINUM: Will Be Paying Prepetition Trust Fund Taxes
Kaiser Aluminum Corporation and its debtor-affiliates sought and
obtained authority to pay any trust fund taxes collected prior
to the petition date, but not yet remitted to the applicable
taxing authorities.  Paying these trust fund taxes, the Debtors
assert, will avoid the serious disruption to their
reorganization efforts that would result from the nonpayment of
such taxes, including the distractions that could result from
liability for the nonpayment imposed upon the Debtors' officers
and directors.

In the ordinary course of business, Daniel J. DeFranceschi,
Esq., at Richards, Layton & Finger in Wilmington, Delaware,
relates that the Debtors collect certain trust fund taxes from
their customers and employees, as applicable, and hold them for
a certain period of time before remitting them to the
appropriate taxing authorities.  In addition, the Debtors
withhold certain taxes such as income, FICA and Medicare taxes
from the Debtors' employees' paychecks, which amounts then are
periodically to the appropriate federal, state or local taxing
authority.  Mr. DeFranceschi explains that the prepetition trust
fund taxes that have been collected or withheld by the Debtors
are held in trust for the benefit of those third parties to whom
payment is owed or on behalf of whom such payment is being made.
As such, these taxes are not property of the Debtors' estates
with the meaning of section 541 of the Bankruptcy Code and will
not otherwise be available to the Debtors' estates. Thus, the
payment of the prepetition trust fund taxes will not adversely
affect the Debtors' estates and is warranted.

In addition, Mr. DeFranceschi tells the Court that many federal,
state and local taxing authorities impose personal liability on
the officers and directors of entities responsible for
collecting trust fund taxes to the extent that such taxes are
collected but not remitted. Thus, if any prepetition trust fund
taxes remain unpaid, the Debtors' officers and directors may be
subject to lawsuits or even criminal prosecution on account of
such nonpayment during the pendency of these chapter 11 cases.
Such lawsuits or proceedings obviously would constitute a
significant distraction to the directors and officers at the
time when they should be focused on the Debtors' effort to
stabilize their postpetition business operations and develop and
implement a successful reorganization strategy. The taxing
authorities may also cause the Debtors to be audited if these
taxes are not paid promptly. Such audits would further divert
attention and resources from the reorganization process.

Mr. DeFranceschi submits that the Debtors made their best
efforts to pay sales, use and similar taxes in full before the
petition date. Such that, in the later half of January 2002 and
in accordance with the Debtors' usual practice, the debtors
remitted to the applicable taxing authorities all sales, use and
similar taxes collected on behalf of the customers through
December 2001. Furthermore, the amount of sales and use taxes
collected by the Debtors on a monthly basis is generally de
minimis. As of petition date, the Debtors' remaining obligations
for prepetition sales, use and similar taxes collected from
January 1, 2002 through the petition date are de minimis.

The Debtors also remitted the following employees' prepetition
withheld taxes to the applicable authorities:

A. on February 8, 2002 and in accordance with the Debtors'
     payroll cycle, all incomes, FICA and Medicare taxes
     withheld which are paid on weekly basis through January 27,
     2002 or February 3, 2002;

B. on February 11, 2002 and in accordance with the Debtors'
     payroll cycle, all incomes, FICA and Medicare taxes
     withheld which are paid on a bi-weekly basis through
     January 20, 2002, February 2, 2002, February 4, 2002 or
     February 8, 2002;

C. on February 1, 2002 and in accordance with the
     Debtors' payroll cycle, all income, FICA and Medicare taxes
     withheld which are paid on a semi-monthly basis through
     January 31, 2002;

Mr. DeFranceschi informs the Court that, as of petition date,
the Debtors' remaining employees' withheld tax obligations are
estimated at $1,850,000. The Debtors represent that they have
sufficient cash reserves, together with the anticipated access
to the sufficient DIP financing to pay promptly all their
respective remaining obligations for the prepetition trust fund
taxes in the ordinary course of business.

The Court also order that all applicable banks and financial
institutions are authorized and directed to receive, process,
honor and pay any and all checks drawn to pay the said tax
obligation, whether the checks were presented before or after
the petition date, as sought by the Debtors, provided that
sufficient funds are available in the applicable accounts to
make the payments. (Kaiser Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service, Inc., 609/392-0900)   

KMART: Institutional Committee Signs-Up FTI as Fin'l Advisors
The Official Committee of Institutional Creditors in the chapter
11 cases of Kmart Corporation and its debtor-affiliates seeks
the Court's authority to retain FTI Policano & Manzo as its
Financial Advisors, nunc pro tunc to February 5, 2002.

Agnes L. Levy, managing director of JP Morgan Chase & Company
and chairing the Institutional Creditors' Committee, tells the
Court that they were impressed with the firm's extensive
experience in and knowledge of business reorganizations under
Chapter 11 of the Bankruptcy Code.

The Institutional Committee expects FTI Policano to:

  (a) advise and assist the Committee in its analysis and
      monitoring of the Debtors' historical, current and
      projected financial affairs, including without limitation:

        -- schedules of assets and liabilities,
        -- statement of financial affairs,
        -- periodic operating reports,
        -- analyses of cash receipts and disbursements,
        -- analyses of cash flow forecasts,
        -- analyses of trust accounting,
        -- analyses of various asset and liability accounts,
        -- analyses of cost-reduction programs,
        -- analyses of any unusual or significant transactions
           between the Debtors and any other entities, and
        -- analyses of proposed restructuring transactions;

  (b) analyze the Debtors' store closing plans, including
      arrangements for liquidation sales;

  (c) analyze the Debtors' plans regarding the rejection or
      assumption of real estate leases;

  (d) analyze arrangements with trade creditors regarding post-
      petition credit extension, including inventory return
      programs and other related issues;

  (e) develop a monthly monitoring report to enable the
      Committee to effectively evaluate the Debtors' performance
      on an ongoing basis;

  (f) if requested by the Committee and counsel, assist and
      advise the Committee and counsel in reviewing and
      evaluating any court motions filed or to be filed by the
      Debtors or any other parties-in-interest;

  (g) analyze and critique any debtor-in-possession financing

  (h) advise and assist the Committee in reviewing executory
      contracts, including leasing arrangements, and provide
      recommendations to assume or reject;

  (i) advise and assist the Committee in identifying and
      reviewing preference payments, fraudulent conveyances and
      other causes of action;

  (j) analyze the Debtors' assets and analyze the Committee's
      recovery under various recovery scenarios;

  (k) assist and advise the Committee in evaluating and
      analyzing restructuring plans proposed by the Debtors;

  (l) analyze alternative reorganization scenarios in an effort
      to maximize the recovery to the Committee and develop
      negotiation strategies to support the Committee's

  (m) assist the Committee and its counsel in the negotiation of
      any and all aspects of a restructuring;

  (n) review and provide analysis of any plan of reorganization
      and disclosure statement relating to the Debtors;

  (o) assist and advise the Committee in implementing a plan of
      reorganization of the Debtors;

  (p) perform a liquidating analysis of the Debtors and advise
      the Committee and counsel in connection with it;

  (q) advise and assist the Committee in its assessment of the
      Debtors' management team, including a review of any
      existing or proposed bonus incentive and retention plans;

  (r) advise and assist the Committee in reviewing any proposed
      sales or acquisitions of assets or business units;

  (s) advise and assist the Committee in its review of the
      Debtors' existing management processes, including but not
      limited to organizational structure, cash management and
      management information and reporting systems;

  (t) advise and assist the Committee in its review of
      transactions between the Debtors and non-filing
      subsidiaries and affiliates;

  (u) render expert testimony and litigation support services,
      as requested from time to time by the Committee and
      counsel, regarding the feasibility of a plan of
      reorganization and other matters;

  (v) attend Committee meetings and court hearings as may be
      required in the role as financial advisor of the
      Committee; and

  (w) provide other services that are consistent with the
      Committee's role and duties as may be requested from time
      to time.

Ms. Levy assures the Court that the Committee will try its best
to ensure that its professionals avoid a duplication of services
to the fullest extent possible.  According to Ms. Levy, FTI
Policano has agreed to coordinate its activities with the
Unsecured Creditors' Committee's professionals in instances
where the two committee's interests are aligned.

In exchange for its services, FTI Policano will charge its
customary hourly rates:

             Managing Director     $525 - 575
             Staff                  250 - 475
             Support Staff           75 - 175

FTI Policano will maintain detailed contemporaneous records of
time and any actual and necessary expenses incurred in
connection with their services to the Institutional Committee.

Edwin N. Ordway, managing director of FTI Policano & Manzo,
tells Judge Sonderby that the firm does not have any connection
with the Debtors, the Debtors' creditors, their respective
attorneys and accountants or any other parties in interest,
except as otherwise disclosed to the Court.  "The firm does not
provide advisory services to any other entity having an adverse
interest in connection with these cases," Mr. Ordway adds.

Mr. Ordway explains that FTI Policano is a separate operating
unit of FTI Consulting Inc., a public company that provides
consulting services regarding litigation support and engineering
and scientific investigation.    Mr. Ordway admits it is
possible that one of FTI Consulting's clients may hold a claim
or is a party-in-interest in Kmart's chapter 11 cases.  "But we
do not believe any of these business activities constitute
interests materially adverse to the Debtors' estates, or to the
Committee in matters upon which FTI Policano is to be employed,"
Mr. Ordway says.

Although every reasonable effort has been made to discover and
eliminate the possibility of any conflict, Mr. Ordway admits
that FTI Policano is unable to state with certainty whether one
of its clients holds a claim or is a party in interest in these
chapter 11 cases.   "If FTI Policano discovers any information
that is contrary to or pertinent to the disclosures made, the
firm will file a supplemental disclosure with the Court," Mr.
Ordway assures Judge Sonderby. (Kmart Bankruptcy News, Issue No.
7; Bankruptcy Creditors' Service, Inc., 609/392-0900)   

LERNOUT & HAUSPIE: Court Okays Asset Sale to SpeechWorks Int'l
Having reserved allocations of proceeds and other related issues
in her prior bench Order approving this sale, Judge Wizmur now
enters a written Order approving the sale of its Speech and
Language Technology Business to SpeechWorks International Inc.,
and finding that L&H Holdings "soundly exercised its business
judgment" in entering into this sale between Holdings and
Scansoft, Inc. by which Scansoft purchased the "audiomining" SLT
asset, free and clear of all liens, claims and encumbrances,
excepting that the term "encumbrance" does not include any
licenses or escrow agreements, outside of a plan, and that
subsequent to the auction ScanSoft submitted the highest and
best offer for these assets.  However, Judge Wizmur still does
not address the allocation issues, in this Order, but the issues
are resolved through the Motion described above, subject to the
approval of the Belgian court representatives.

                        The Asset Sale

The SLT Assets include, without limitation, equipment,
inventory, intellectual property and other intangible property,
permits, receivables, license agreements and other executory
contracts, and goodwill that are associated with eight separate
asset groups that together comprise the SLT Assets. These eight
asset groups are:

     (i) the Text-to-Speech Asset Group;

    (ii) the L&H Speech Processing/Dialog (and Automotive) Asset    

   (iii) the Dragon Speech Processing/Dialog Asset Group (which
         includes the M-REC speech recognition engine);

    (iv) the ISI Speech Processing/Dialog Asset Group;

     (v) the Intelligent Content Management Asset Group;

    (vi) the Audiominig Asset Group;

   (vii) the Knexyx Asset Group; and

  (viii) the Machine Translation Asset Group.

The Debtors/Sellers entered into the Agreement, pursuant to
which the Sellers have agreed to sell two of the SLT Asset
Groups (the Text-to-Speech Asset Group and the L&H Speech
Processing/Dialog (and Automotive) Asset Group) to the
Purchaser, subject to higher or otherwise better offers. The SLT
Assets, excluding the Purchaser Assets, are referred to in this
Motion as the "Other Assets".

                   The SLT Business

The SLT Business is comprised of the SLT Assets owned and
operated by L&H NV, Holdings, and the other Sellers. The SLT
Business constitutes a substantial part of the remaining core
assets of the L&H Group. The SLT Business is a leading
developer, licensor, and provider of conversational user
interface technologies, systems, and products to customers in
multiple markets. As of October, 2001, the SLT Business employed
approximately 600 full-time employees around the world,
including almost 400 research and product development engineers.

B. Products and Services. The SLT Business develops and sells a
wide variety of speech and language technologies, systems, and
products that incorporate automatic speech recognition, text-to-
speech, intelligent content management, and other capabilities.
These technologies enable telecommunication systems, computing
equipment, and mobile communications devices to effectively hear
what users say, speak to users, carry on conversations,
recognize users by their voice, and understand the information
in the computer or on the web in order to find what users need
and deliver it in the most natural and efficient way. The SLT
Business products and services are capable of operating across
multiple languages and in a variety of environments.

L&H NV and Holdings believe, in their business judgment, that
the Sellers will receive maximum value from the Purchaser Assets
if they are sold on the terms set forth in the Agreement,
subject to higher or otherwise better offers in accordance with
the Bidding Procedures, and if the Other Assets can also be sold
at the Auction to the highest and best bidder or bidders.
(L&H/Dictaphone Bankruptcy News, Issue No. 20; Bankruptcy
Creditors' Service, Inc., 609/392-0900)  

MAGNUM HUNTER: S&P Ups Credit Rating to BB- Following Merger
On March 15, 2002, Standard & Poor's raised the corporate credit
ratings of Magnum Hunter Resources Inc. to BB- and its senior
unsecured debt rating to B+.

The ratings on Magnum Hunter Resources Inc. reflect its
participation in the volatile exploration and production segment
of the petroleum industry and aggressive financial leverage. The
company's midsize reserve base consists of 920 billion cubic
feet equivalent of reserves (76% proved developed; 58% natural
gas) located in the Permian Basin (47%), Mid-Continent (30%),
Gulf Coast (14%), and offshore Gulf of Mexico (9%). Magnum
Hunter benefits from geographic diversification, enhanced
technical expertise in core reservoirs, increased operating
scale, and operational control. In addition, the company has a
conservative balance between longer-lived onshore properties and
faster-producing offshore plays. Magnum Hunter's sizeable
inventory of lower-risk drilling prospects provides a measure of
stability to its higher-risk, high-impact, shallow-water Gulf of
Mexico program.

Magnum Hunter's capital structure remains aggressive, with total
debt to capital expected to remain around 60% in 2002. The
company's financial profile, however, benefits from a favorable
hedge position and a moderately conservative 2002 capital-
spending program. Roughly 50% of anticipated 2002 production is
hedged at $3.35 to $3.62 per million cubic feet and $23.22 to
$25.15 per barrel. Magnum Hunter's $115 million capital program
is skewed toward development and offsets riskier offshore
exploration efforts with low-risk drilling in its familiar
onshore properties. Cash flow protection measures are expected
to be adequate for the rating category with EBITDA interest
coverage of around 4.5 times and EBITDA interest plus capital
expenditures of 1.25x, in a midcycle pricing environment.
Liquidity is strong, given cash on hand and availability under
the company's senior secured revolving credit facility.


The stable outlook reflects expectations that Magnum Hunter's
management will finance growth initiatives in a conservative

MALAN REALTY: Board of Directors Adopts Plan of Liquidation
The board of directors of Malan Realty Investors, Inc. (NYSE:
MAL), a self-administered real estate investment trust (REIT),
voted to recommend a plan of liquidation to the company's
shareholders.  The proposed plan contemplates the sale of all
the company's properties and other assets and will be subject to
shareholder approval at the annual meeting of shareholders,
scheduled for later this summer, as well as to agreements from
some of the company's lenders.  The board believes at this time
that the plan of liquidation is the best course of action to
maximize shareholder value, given the current trading price of
the company's common stock.

"From the time the current board was elected, our strategic plan
has always included all possible options, including
liquidation," stated Jeffrey D. Lewis, Malan's chief executive
officer.  "At this juncture, the board has decided that
liquidation offers the best possibility for shareholders to
realize a premium to the current trading price of our stock."  
Factors influencing the board's decision include the company's
debt structure, including the over-leverage at Bricktown,
impediments to the redevelopment of Malan's Farmington Hills,
Michigan property, the recession, and the bankruptcy filing of
Kmart Corporation, the company's largest tenant.

If the shareholders approve the plan of liquidation, Malan
expects to achieve meaningful reductions in operating costs
during the liquidation period.  The company is actively
considering a number of cost-control measures, including
reducing general and administrative expenses.  In addition, the
board has voted to decrease the size of the board of directors
from seven directors to five at the next annual meeting.

Management does not anticipate any immediate reductions in staff
because the number of owned and managed properties generally
determines Malan's staffing requirements.  Staff reductions are
anticipated to begin after the formal approval of the plan of
liquidation and will be consistent with the reduced size of the

In anticipation of the adoption of a plan of liquidation and
because of the uncertainty surrounding the company's cash flow
due to the Kmart bankruptcy filing, the board announced it is
indefinitely suspending the regular quarterly cash dividend,
which would have been declared at this time. It is currently
contemplated that during the liquidation period, cash generated
from operations and property sales will be used first to make
required repayments of debt and other liabilities, and then
distributed to common shareholders.

The liquidation plan will not become effective until after
shareholder approval.  The liquidation process is anticipated to
proceed in an orderly fashion and could take 24 months or more
to complete from the date of shareholder approval.  However,
there are no assurances that the process will be either shorter
or longer than the current time estimate.  The company's common
stock is expected to qualify for continued listing on the New
York Stock Exchange until total market capitalization drops
below $15 million.

Chicago-based Cohen Financial is advising the company on the
sale of properties as part of the liquidation process.  For
further information, contact Richard Tannenbaum at (312) 346-

Malan Realty Investors, Inc. owns and manages properties that
are leased primarily to national and regional retail companies.  
The company owns a portfolio of 58 properties located in nine
states that contains an aggregate of approximately 5.4 million
square feet of gross leasable area.

MARINER POST-ACUTE: Pangia Seeks Equity Committee Appointment
Vincent C. Pangia, the beneficial holder of 1,905,965 shares
representing approximately 2.5% of Mariner Post-Acute Network,
Inc.'s outstanding common stock, moves the Court for an
appointment of an Equity Holders Committee to represent
interests of holders of MPAN common stock.

Mr. Pangia, a certified public accountant in Poughkeepsie, New
York, sees a possible error of half a billion dollars in CDG's
"enterprise value" of MPAN/MHG. An error of that magnitude is
worthy of investigation by an independent appraiser/auditor
through an equity holders committee, Mr. Pangia avers.

Mr. Pangia, like other holders of MPAN common stock (Class EP-1
in the Plan), will receive no consideration if the Plan is
approved, will not be issued shares of the emerging "New MPAN"
entity, and are deemed to have voted against the Amended Plan.
MPAN's creditors, on the other hand, would be issued new shares
of stock, along with other valuable consideration, if the Plan
is approved.

Mr. Pangia objects to the Plan for its:

* Failure to take in account the equity holders' interests;

* Failure to adequately and properly value the present assets of

* Failure to adequately and properly value the future potential
   of MPAN; and

* Failure to treat equity holders fairly and properly.

Mr. Pangia explains to the Court his Per-Bed Valuation of the
Debtors' facilities as follows:

  CDG arrived at "enterprise value" figures for Debtors of $810
  - $870 million. Of those figures, $560 million - $600 million
  is attributed to MPAN, and $250 million - $270 million is
  attributed to MHG. If one takes the low-end CDG figure of $810
  million, and divides it by the number of beds available
  (33,373) under the occupancy rate assumed by Debtors (88% of
  the total of 38,100 beds), a per bed figure of $24,271 is
  obtained. At 100% occupancy, the per-bed figure would be

Mr. Pangia submits those figures are artificially low and do not
accurately reflect the values of the MPAN or MHG facilities
either on a fair market value basis or on a per-bed basis. Fair
market value is the price that would be paid by a willing buyer
with full knowledge of the facts pertaining to the facilities.

Mr. Pangia goes on:

  Under the proposed Plan, Senior Credit Facility holders would
  receive 96.01% of stock in the new post-bankruptcy company,
  as well as all cash in excess of $25 million. The estimated
  cash according to the Disclosure Statement is well in excess
  of $200 million. If one takes the CDG low-end estimate of $810
  million and adds back a conservative figure of $200 million
  for available cash, the result is a figure of $1,010,000,000
  for total company value.

  If one then takes the liabilities listed in Annex 4
  (712,700,000) and backs them out, a figure of $1,722,700,000
  is obtained for the total value of Debtors' assets. One may
  then subtract the Disclosure Statement figure of $389,900,000
  for non-facility assets leaving a figure of 1,332,800,000 for
  the total value of Debtors' facilities. Dividing that figure
  by the number of beds available at an 88% occupancy rate
  (33,793) gives a per-bed value of the facilities of $39,440.
  At an occupancy figure of 100% (38,100 beds), the per-bed
  value of the facilities would be $34,980.

These figures are based on the data and estimates contained in
the Disclosure Statement, and they are significantly higher
(about 50%) than the figures based only on the "enterprise
values" cited by CDG, Mr. Pangia tells the Court.

Moreover, figures for comparable facilities in the health care
industry should be of prime importance to any reasonable
valuation of MPAN or MHG facilities, but Debtors even concede
that CDG did not consider this factor, Mr. Pangia points out.

Mr. Pangia obtained information concerning the recent (December
2001) sales of facilities owned by Sunrise Assisted Living,
Inc., the operator of facilities that are reasonably similar to
Debtors' health care facilities. The publicly reported per-bed
fair market value figure for four Sunrise transactions at a time
when Sunrise was in financial difficulty were as follows:

          $180,987 per bed (12 facilities, 1,094 beds)
          $127,551 per bed (2 facilities, 196 beds)
          $195,122 per bed (1 facility, 82 beds)
          $ 49,382 per bed (1 facility, 162 beds).

More recently, at the end of January 2002, ILM II Senior Living,
Inc. announced a sale of 703 units in senior assisted living
facilities for $45,500,000 which amounts to $64,723 per bed. It
is evident from the figures in the ILM and Sunrise transactions
that per-bed figures for Debtors' facilities, calculated from
the information in the Disclosure Statement, are considerably
lower than what actually exist in the marketplace, Mr. Pangia

Mr. Pangia notes that the difference in per-bed fair market
value is greater than $15,000 ($34,980 for Mariner versus
$49,382 for Sunrise), which represents a 50% difference.
Multiplying the difference of $15,000 by the number of MPAN/MHG
beds (38,100) gives a figure of $571,500,000 for full occupancy
or $506,895,000 at 88% occupancy (33,793 beds).

Thus, Mr. Pangia arrives at a difference of more than half a
billion dollars over CDG's "enterprise value" of MPAN/MHG.

Mr. Pangia also notes the following that might cast doubt upon
the fairness in the Debtors' way of spending money and their
valuation of assets:

-- It is unclear why three separate valuation consultants
   (American Appraisal Associates (AAA), Value Management Group
   (VMG) and Conway, Del Genio, Gries & Co., L.L.C. (CDG)) were
   retained, and why only CDG's conclusions were referenced in
   the Disclosure Statement. Debtors have not disclosed any of
   AAA's work product, although a fee application in excess of
   $220,000 has been submitted and approved. It is unknown what
   VMG did in the last 18 months as Debtors have chosen not to
   disclose any of VMG's work product or its conclusions.

-- CDG's analysis, to the extent there was one, is flawed for a
   number of reasons. For example, CDG failed to determine or
   even consider the fair market value of the health care
   facility assets.

-- From the Disclosure Statement, it appears that CDG relied
   completely on figures and information provided to it by
   Debtors without any independent verification. Moreover, based
   on the disclaimers and statements concerning the limitation
   of the evaluation, it is evident that CDG's "analysis" is
   essentially meaningless.

-- Debtors acknowledge that they did not follow standard
   accounting practices in performing its analysis. Basically,
   Debtors' figures are estimates prepared exclusively by them
   and designed expressly to support their Plan. There is
   certainly no assurance given by Debtors that their figures
   are reliable or were reviewed by anyone other than an
   interested party to this bankruptcy proceeding.

-- The valuation analysis failed to include, or take into
   account, the significant reductions in operating costs
   already realized by Debtors as a result of their
   reorganization efforts.

-- It is not clear how, or even whether, Debtors' two captive
   and solvent insurance companies, as well as significant
   interests in other solvent companies, were considered in the
   valuation process. On a related note, it is not clear why
   Debtors included figures of more than $33 million in cash
   during post-reorganization years in the "changes in long-term
   insurance reserves" section of their forecasts of future cash
   flow. No such asset appears in the liquidation analysis in
   Annex 5 of the Disclosure Statement.

-- In CDG's analysis, there is no explanation or disclosure of
   the transaction in which Debtors take an MPAN loan obligation
   (the Modified Omega Loan) with an approximate balance of
   $59.7 million, "off - balance sheet". (See prior entry at

-- CDC has not properly identified, disclosed, or provided for
   MPAN's agreement to manage, or have a subsidiary manage,
   Omega Facilities which will result in retained management
   fees (70% of the free cash flow of the Omega Facilities in
   addition to a monthly 5% management fee).

-- Debtors have resisted producing any documents to Mr. Pangia
   absent a signed confidentiality order that would severely
   restrict Mr. Pangia's ability to utilize the information so

-- Erroneous Valuation of APS Subsidiary which shows that
   Debtor's valuation analysis for the NeighborCare transaction
   was flawed by nearly 100%. (See prior entry at [00339].)

Mr. Pangia submits that the facts and circumstances of this case
warrant the appointment of an Equity Holders Committee:

       "First, there are 1,029 equity shareholders and the
  companies are publicly traded. The investors are, therefore,
  scattered and unconcentrated, which diminishes their voice in
  this proceeding in the absence of a representative body such    
  as a Committee.

       "Next, this is a complex Chapter 11 case involving the
  valuation and future of hundreds of individual health care
  facilities and other assets. Debtors have already retained
  numerous professionals with the intent of hastily cramming
  down an Amended Plan that favors certain creditor interests
  over Debtors' own stockholders. The complexity of the issues
  and the proceeding weigh in favor of the stockholders voicing
  a "second opinion," particularly given Debtors' history of
  significantly undervaluing their own assets.

       "The delay involved in appointment of a Committee would
  be minimal given the economic value that might be returned to
  Debtors, creditors, and stockholders through proper valuation
  of Debtors' assets and possible sales of Debtors' assets.

       "Further evaluation of Debtors' assets could also affect
  the determination of whether the entities are truly insolvent.

       "This application for appointment of a Committee is also
  timely given the facts and circumstances of the case. Debtors
  first proposed their Plan to exclude all equity interests on
  November 30, 2001, which is less than 90 days ago. During the
  nearly two years between the filing of the bankruptcy
  petitions and the first proposal of the Plan, Mr. Pangia and
  other equity holders relied to their detriment on Debtors'
  officers and directors honoring their fiduciary duties with
  respect to protecting stockholder interests. ... [S]enior
  management of MPAN and MHG received in excess of $18 million
  under the "management incentive programs" while they were
  engaged in formulating a plan to strip their stockholder
  constituents of the complete value of their investments. Up to
  this point, Mr. Pangia has single-handedly pursued the
  interests of all equity holders and unsecured creditors at his
  own expense. As a lone stockholder, he acted promptly upon
  receiving notification that he stands to lose his entire
  investment based on an analysis that he, as a certified public
  accountant, knows to be inaccurate and misleading."

Mr. Pangia tells the Court he does not have the financial
resources necessary to protect the interests of the
stockholders, particularly with respect to the costs of
retaining a health care industry appraisal expert. Mr. Pangia
has been in contact with a health care industry appraisal
expert, Michael P. Bertrand, MAI, of Bertrand & Associates,
Inc., in connection with possible retention to conduct a proper
appraisal of Debtors' assets but he cannot bear the expense of
such an appraisal on his own.

Mr. Pangia indicates that he stands ready to assist an Equity
Holders Committee in any way he can, including consultation with
Mr. Bertrand or any other suitable appraiser, which will
ultimately benefit both stockholders and creditors.

"Fairness and equity weigh in favor of appointment of an Equity
Holders Committee that could possibly return higher value to
Debtors, creditors, and stockholders than contemplated at
present under Debtors' proposed Plan," Mr. Pangia represents,
"The fact that Debtors's stockholders are to receive nothing
under the proposed Plan, combined with the questionable
performance of Debtors' management, should trigger serious
concern in the minds of stockholders, creditors, and the Court.
This case presents the quintessential example of 'the natural
tendency of a debtor in distress to pacify large creditors, with
whom the debtor would expect to do business, at the expense of
small and scattered public investors.'"

                  Objection of the Committee

The Committee tells the Court the motion should be denied

(1) the formation of an equity committee would cause unnecessary
    delay and increased costs for the estates;

(2) the Debtors are hopelessly insolvent;

(3) the Motion has been filed on the eve of confirmation; and

(4) shareholders are adequately represented; and

(5) the substantial costs associated with an equity committee
    are unjustified in these cases.

Both the Debtors' independent financial advisor and the
Creditors' Committee's financial advisor have concluded that the
MPAN Debtors' estates are insolvent, the Committee advises.
Specifically, the Committee advises,

-- The Debtors' book equity is worthless by a wide margin and
   continues to decline. The Debtors' book equity as of
   September 30, 2001 totaled negative $1.5 billion. This
   deficit would be approximately $302 million greater if the
   Debtors had continued to fully accrue interest on their
   liabilities during the Chapter 11 Cases.

-- The market value of the Debtors' senior bank debt and
   subordinated debt is less than half compared to the related
   claims, further demonstrating that there is no value to the
   Debtors' current equity holders. Upon information and belief,
   the Debtors' bank debt has been trading between 55 and 65
   cents and the Debtors subordinated debt is trading
   infrequently and then at values of between 1 and 5 cents.
   Thus, while the aggregate principal amount of the claims of
   the Debtors' senior bank lenders and subordinated noteholders
   total approximately $2.1 billion, the total market value,
   using the high end of the range, totals approximately $939

-- The Debtors have no prospective reorganization value of
   magnitude even remotely sufficient to cover the creditor
   indebtedness. Claims aggregating approximately $2.6 billion
   have been asserted against the Debtors (not including claims
   for punitive damages and settlements with the United States
   government). Thus, before there is any value for the existing
   equity, the reorganized value of the Debtors must exceed $2.4
   billion (total claims amount net of excess cash at
   emergence). Even under a best case scenario in which the
   Debtors are able to fully achieve their projected operating
   results, the Debtors' enterprise value falls far short of the
   Debtors' approximately $2.4 billion of claims.

The comparatives used by the Movant in his analysis are not
appropriate in the Debtors' circumstances, the Committee avers:

-- The analysis in the Motion is based on 38,100 beds. However,
   approximately 35% of these beds are leased and would not be
   available for sale or consideration under a true asset

-- For per bed comparatives, the analysis in the Motion uses
   assisted living facilities which command much higher per unit
   values. Assisted living facilities maintain higher margins
   generally 30% to 40% EBITDA compared to nursing homes which
   maintain 10% to 20%. In addition, the facilities used as
   comparatives in the Motion, on the average, are 10 to 15
   years newer than those of the Debtors.

-- The analysis in the Motion utilizes several transactions with
   Sunrise Assisted Living for comparative purposes. However,
   the majority of the Sunrise transactions were not arms length
   as Sunrise maintained an ownership interest in the company
   purchasing the facilities and receives an ongoing management
   fee. The analysis refers to Sunrise as being troubled but at
   and around the time of the transactions throughout December
   2001, Sunrise maintained a stock price in excess of $20 per

The Committee tells the Court that appointment of an equity
committee in the face of undeniable evidence of insolvency is an
unreasonable risk, the costs of which will be borne solely by
estate creditors. Moreover, shareholders' interests are
adequately represented and it is simply too late in the Debtors'
chapter 11 cases to appoint an Equity Committee, the Committee

"The Motion is an overt attempt by Movant to foist the costs of
his objections to the Plan onto the Debtors' creditors," the
Committee says, " Creditors should not shoulder the expense of
the Movant's opposition to the Plan."

If Movant wishes to remain involved in these cases, he is
permitted to do so, but he should bear his own costs and not be
permitted to shift them to the estate, the Committee avers.

The Committee points out that it had every incentive to contest
the Debtors' and Senior Lenders valuations in order to increase
unsecured creditor recovery and the Committee's interests were
aligned with those of equity holders in as much as a higher
valuation would ultimately benefit shareholders if a 100%
recovery were realized for unsecured creditors. The Committee's
independent valuation revealed, however, that this was not

The Committee tells the Court that an equity committee will
result in substantial costs, will give equity holders a license
to try to extract hold up value and will burden the Debtors'
estates, all of which will inure to the detriment of creditors.
Thus, the facts do not warrant the discretionary appointment of
an equity committee pursuant to section 1102 of the Bankruptcy
Code, the Committee concludes.

                  The Debtors' Objection

The Debtors object to the motion for essentially similar

The Debtors remind the Court that near the end of December,
2001, Mr. Pangia, through his counsel, contacted the United
States Trustee regarding the appointment of an equity committee.
The United States Trustee promptly informed Mr. Pangia's counsel
that the United States Trustee found no basis for appointing an
equity committee at this late stage in the case, particularly in
light of the agreement of the creditors' committees that
unsecured creditors would receive far less than payment in full
based upon the Debtors' financial condition. Mr. Pangia failed,
upon the United States Trustee's rejection of his request, to
file an immediate motion to appoint an equity committee, the
Debtors point out. The Court, at the January 25 hearing on the
Disclosure Statement, made clear to Mr. Pangia's counsel that
any request for the appointment of an equity committee had to be
made by way of a properly noticed motion. The Court set the
March 25, 2002 confirmation hearing date and the March 5, 2002
deadline to object to confirmation. "Mr. Pangia's counsel did
not object to the setting of these dates," the Debtors note,
"Nor did Mr. Pangia's counsel request a hearing date for a
motion to appoint an equity committee."

"There is absolutely no explanation of, or justification for,
Mr. Pangia's delay in filing his Equity Committee Motion," the
Debtors tell the Court, "Mr. Pangia waited to file his Equity
Committee Motion for more than twenty-five months after the
petition date; for more than three months after he knew what the
Debtors' Plan provided; for more than two months after the
United States Trustee informed Mn Pangia that he did not support
an equity committee; and for more than one month after th[e]
Court told him that his prior "request" was procedurally

The Debtors also point out that the members of MPAN's Board are
significant holders of MPAN's common stock and/or options to
purchase such stock, either directly or indirectly. At the
direction of the Board, MPAN's senior management team and
professional advisors developed a business plan designed to
maximize the Debtors' reorganization value so as to provide the
basis for the optimal treatment of all classes of claims and
equity interests, and that business plan was ultimately approved
by the Board.

Further, the Debtors reveal that, in connection with
negotiations regarding the Joint Plan, the Debtors proposed
repeatedly that their principal creditor constituencies consent
to a plan of reorganization that allowed current MPAN
stockholders to receive some consideration, notwithstanding the
fact that unsecured creditors would themselves receive far less
than payment in full on account of their allowed claims. These
proposals were rejected each time they were made, and the
Debtors do not believe that their principal creditor
constituencies would vote to accept any plan that would provide
consideration for current MPAN stockholders.

"Thus, notwithstanding the Debtors' negotiators' best efforts at
the direction of MPAN's Board to achieve some distribution for
holders of MPAN's prepetition equity interests, it was not
feasible to do so based upon any supportable valuation of the
Debtors," the Debtors aver, "The absence of any distribution
under the Joint Plan for holders of prepetition equity interests
is not indicative of any lack of adequate representation on
behalf of shareholders; rather, it reflects the economic reality
that MPAN is hopelessly insolvent and that the holders of equity
interests have no bargaining power. That reality will not change
whether or not an official equity holders' committee is
appointed in MPAN's case."

Based on the reasons represented, the Debtors request that the
Court deny Mr. Pangia's Equity Committee Motion. (Mariner
Bankruptcy News, Issue No. 26; Bankruptcy Creditors' Service,
Inc., 609/392-0900)  

MEDICALOGIC: GE Medical Systems Pitches Highest Bid for Assets
MedicaLogic (OTC:MDLIQ), announced that GE Medical Systems
Information Technologies, a unit of General Electric Company,
has been declared the winning bidder at an auction to acquire
the digital health record business of MedicaLogic, a provider of
electronic medical records for outpatient settings.

GE Medical Systems initially announced its agreement to acquire
the digital health record assets of MedicaLogic in January of
this year. An auction was held in Wilmington, Delaware on March
18, 2002. GE Medical Systems' winning bid was for the amount of
$35,250,000 and was subject to bankruptcy court approval that
was expected to be received at a hearing Tuesday.

MedicaLogic/Medscape, Inc. (OTC:MDLIQ) is a leading provider of
digital health records. The core of MedicaLogic's product
portfolio is the industry-leading Digital Health Record (DHR).
DHR applications and services are an integral part of the
practice of medicine and are used every day by physicians and
consumers across the country.

MedicaLogic's DHR enables physicians to access patient
information, share data with existing systems, communicate among
practice members and capture and store quantifiable data for
patient-by-patient or population-based studies. The DHR also
enables practice sites to interact with their patients
electronically to answer questions, schedule appointments and
address personal health concerns, while offering consumers
private access to their medical records and related disease
management information and services. More than 16 million
patients now have digital records hosted on MedicaLogic systems.
More information about MedicaLogic's products and services is
available on the Web at  

The Company, headquartered in Hillsboro, Oregon, currently
employs approximately 200 people.

MedicaLogic and Logician are registered trademarks of
MedicaLogic/Medscape, Inc. in the United States. Other product
and brand names are trademarks of their respective owners.

GE Medical Systems Information Technologies provides hospitals
and healthcare systems with advanced software and technologies
to improve their clinical performance. The Company's expertise
spans the areas of cardiology, patient monitoring, image
management, clinical communications, clinical information
systems and Six Sigma-based management tools to enable a real-
time, integrated electronic medical record for the in-and
outpatient settings. GE Medical Systems Information Technologies
is a business of GE Medical Systems, an $8 billion global leader
in medical imaging and technology. Additional information about
GE Medical Systems can be found at

MONUMENT CAPITAL: Fitch Cuts Class B Notes Rating to Low-B Level
Fitch Ratings takes rating actions on two tranches of
liabilities issued by Monument Capital Ltd. (Monument) and
removes both tranches from Rating Watch Negative. The following
rating actions are effective immediately:

     -- $306,000,000 Class A Notes affirmed at 'AAA';

     -- $64,000,000 Class B Notes downgraded from 'BBB' to 'B'.

Monument is a collateralized loan obligation, which is backed
predominantly by senior secured loans. Monument is managed by
Alliance Capital. Based on the most recent numbers available to
Fitch, the deal has a total of $18.65 million (5.08%) in
defaulted assets outstanding. There is also $26 million (7.07%)
'CCC+' rated assets, excluding defaults. As a result, Monument
is failing its weighted average rating test. Due to the negative
migration of the credit quality of the assets in the portfolio,
Fitch does not believe that the 'BBB' rating of the class B
notes is commensurate with the risk to noteholders and
subsequently has downgraded the notes to the appropriate rating.
After extensive model simulations, Fitch does find that despite
the negative migration of the credit quality of the current
portfolio, the class A notes continue to maintain credit
enhancement levels consistent with its assigned rating of 'AAA'.

NATIONAL STEEL: Wins Approval to Maintain Existing Bank Accounts
Prior to the Petition Date, National Steel Corporation and its
debtor-affiliates maintained approximately 38 Bank Accounts.

According to Mark A. Berkoff, Esq., at Piper Marbury Rudnick &
Wolfe, in Chicago, Illinois, the Bank Accounts are an integral
part of the Debtors' centralized cash management system that the
Debtors need to maintain these accounts in order to ensure
smooth collections and disbursements in the ordinary course of
businesses.  The Debtors routinely deposit, withdraw and
transfer funds from and among the Bank Accounts by various
methods including check, wire transfer, automated clearing house
transfer and electronic funds transfer.  "The Debtors complete
thousands of transactions per month through the Bank Accounts,"
Mr. Berkoff states.

The Debtors ask Judge Squires to waive the requirements of the
United States Trustee "Operating Guidelines and Financial
Reporting Requirements Required in All Cases Under Chapter 11,"
which mandate, among other things, the closure of the Debtors'
pre-petition bank accounts, the opening of new bank accounts and
the immediate printing of new checks with a "Debtor-in-
possession" designation on them.  The burdens outweigh the
benefits in these billion-dollar bankruptcy cases.

                           *   *   *

In response, Judge Squires authorizes the Debtors to:

  (i) designate, maintain and continue to use any and all of
      their respective depository, lockbox, concentration,
      payroll disbursement and non-payroll disbursement accounts
      in existence as of the Petition Date, with the same
      account numbers;

(ii) maintain any blocked account or account control agreements
      related to said bank accounts;

(iii) if necessary, open new accounts, and give the U.S. Trustee
      prompt notice of each such newly opened account, wherever
      they are needed, irrespective of whether such banks are
      designated depositories in the Northern District of
      Illinois; and

(iv) treat the Bank Accounts and any such newly opened accounts
      for all purposes as accounts of the Debtors in their
      capacity as debtors-in-possession. (National Steel
      Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
      Service, Inc., 609/392-0900)

NABI: Changes Name to Nabi Biopharmaceuticals Following Merger
At the close of business on March 4, 2002, Nabi changed its name
from "Nabi" to "Nabi Biopharmaceuticals". The name change was
effective upon the filing of a Certificate of Ownership and
Merger with the Secretary of State of Delaware resolving to
merge a wholly owned subsidiary of the Company into the Company
for the sole purpose of changing its name.

The Company's common stock still trades under the ticker symbol
"NABI" on the Nasdaq Stock Market.

Nabi makes products to prevent and treat infectious diseases and
autoimmune disorders. The firm sells Nabi-HB, which prevents
hepatitis B; WinRho SDF for immune platelet disorders; AutoPlex
T for the treatment of hemophilia; and Aloprim to treat
chemotherapy-induced hyperuricemia, a condition that can lead to
renal disease. It is developing therapies to combat staph
infections, nicotine addiction, and hepatitis C. To focus on its
drug development programs, Nabi sold to Australia's CSL a unit
that provides plasma and plasma-based products and screens
donors for naturally occurring antibodies that can be
administered as therapeutics to patients suffering particular
diseases.  In October 2001, Standard & Poors raised the junk
ratings on the company following the sale of its Antibody
Collection assets.

NATIONSRENT INC: CIT Group Seeks Stay Relief to Recover Property
CIT Group/ Equipment Financing, Inc., asks the Court to:

A. Terminate the automatic stay, compelling surrender and
       turnover of CIT's property; or,

B. Compel NationsRent Inc., and its debtor-affiliates to provide
       adequate protection; or,

C. Compel the Debtors to assume or reject unexpired Leases.

Ralph N. Sianni, Esq., at Duane Morris LLP in Wilmington,
Delaware, tells the Court that the Debtors and CIT are parties
to certain leases to which the Debtors are leasing from CIT
certain equipment owned by CIT. Pursuant to the Lease
Agreements, the Debtors are required, inter alia, to:

A. make monthly rental payments to CIT;

B. pay, when due, and to indemnify and hold CIT harmless from
       all license, title and registration fees, levies, import
       duties charges, withholdings and sale, use, personal
       property, stamp or other taxes;

C. maintain the Equipment in good and safe operating order,
       repair and condition; and,

D. maintain insurance on the Equipment.

As of petition date, the Debtors were indebted to CIT in the
aggregate approximate amount of $5,384,682.41, net residuals,
unearned income, taxes and late charges, plus interest,
collection costs, and other damages arising from the Debtors'
defaults under the Lease.  Mr. Sianni believes that CIT is
entitled to relief from automatic stay pursuant to section
362(d)(1) of the Bankruptcy Code because its interest in the
Equipment is not adequately protected because of:

A. the Debtors failure to make the payments required by the
       Lease Agreements;

B. the Debtors' lack of any equity in the Equipment;

C. the continuing decline in the value of the Equipment caused
       by the passage of time and the Debtors' use of the

D. the possible failure by the Debtors to keep the Equipment in
       good repair, maintain insurance on the Equipment as
       required by the Lease Agreements and pay charges
       applicable to the Equipment; and,

E. the failure of the Debtors to provide CIT with any form of
       adequate protection.

In addition, Mr. Sianni claims that the that automatic stay
provisions must be lifted pursuant to section 362(d)(2) because
the Debtors lack equity in the Equipment, which is titled in the
name of CIT, and the Equipment is not essential or necessary for
an effective reorganization since it is not unique and can be
obtained from another vendor. The Court should order the
termination of the automatic stay to permit CIT to take
possession of its Equipment and to exercise and enforce all of
its rights and remedies against the Equipment in accordance with
the provisions of the Lease Agreements and applicable law,
direct the Debtors to assemble and deliver the Equipment to CIT,
maintain proper insurance coverage on the Equipment and make all
applicable payments until it is returned to CIT as well as
maintain the Equipment in good condition and repair until such
Equipment is returned to CIT.

However, if relief from automatic stay is not granted, the
Debtors should provide CIT with adequate protection in five

A. The Debtors must provide CIT with proof that insurance
       on the Equipment is being maintained for both physical
       damage and loss of the Equipment with CIT named as
       loss payee;

B. The Debtors must provide CIT with proof that the
       Equipment is being maintained in good operating condition
       and repair, and that the repair of such Equipment
       complies with manufacturer specifications;

C. The Debtors must provide CIT with proof that accurate
       maintenance records are being kept with respect to the

D. The Debtors must provide CIT with proof that no mechanics or
       other possessory liens have been or are being to be
       attached to the Equipment;

E. The Debtors must make the Equipment and any and all
       maintenance records available for inspection by CIT or
       its agents at reasonable times; and,

F. The Debtors must cure all payment and other defaults and
       make payments to CIT on an ongoing basis in accordance
       with the Lease.

Mr. Sianni submits that if the Court should decide not to grant
CIT's relief from the automatic stay, the Debtors should be
required, in the alternative, to decide whether they would
assume or reject the Lease because, to date, the Debtors have
continued to enjoy all monetary and other post-petition benefits
from CIT's Equipments, while refusing to pay CIT for such
continued use. CIT is in the unenviable position of suffering
ongoing and increasing injury as its Equipment depreciates in
value, while simultaneously being compelled to perform its
obligations under the Lease with no reciprocal performance by
the Debtors. In this event, CIT proposes that:

A. the Debtors be compelled to assume or reject the unexpired
       Lease within 10 days of the entry of the Order;

B. if the Debtors elect to assume the Lease Agreements, compel
       the Debtor to:

       a. cure all monetary and non-monetary defaults;

       b. provide adequate assurance of future performance under
            the Lease Agreements;

       c. comply with the terms and conditions of the Lease in
            accordance with the provisions of the Lease; and,

C. if the Debtor elects to assume the Lease but fails to comply
       with the terms of Section 365 of the Code or the Order
       approving this Motion, or if the Debtor elects to reject
       the Lease:

       a. the automatic stay shall be terminated without further
            application to this Court to permit CIT to take
            possession of the Equipment and exercise and enforce
            all of its rights and remedies against the Equipment
            in accordance with the provisions of the Lease and
            applicable law;

       b. the Debtor shall be required to assemble the Equipment
            and deliver the Equipment to CIT and maintain
            proper insurance coverage on the Equipment in
            accordance with the terms of the Lease until said
            Equipment is returned to CIT; and,

       c. the Debtor shall maintain the Equipment in good
            condition and repair until it is returned to CIT.

Mr. Sianni asserts that all postpetition unpaid amounts due
under the Lease should be allowed as administrative claims and
the Debtors should make their rent payments and other
obligations to CIT that continue to accrue on an ongoing and
timely basis. (NationsRent Bankruptcy News, Issue No. 7;
Bankruptcy Creditors' Service, Inc., 609/392-0900)

NAVISTAR FINANCIAL: S&P Rates $200MM Exchangeable Notes at BB-
On March 15, 2002, Standard & Poor's assigned its rating to
Navistar Financial Corp.'s new $200 million subordinated
exchangeable notes due 2009 at 'BB-'.

On March 13, 2002, Standard & Poor's lowered its long-term
corporate credit ratings on Navistar Financial and its parent
company, Navistar International Corp to 'BB+'. All ratings were
removed from CreditWatch where they were placed on February 11,
2002. The outlook is negative.

The downgrades of March 13 reflected Navistar's increase in
financial leverage and a significant diminution in financial
flexibility, which have resulted from persistent soft demand in
the North American heavy- and medium-duty truck markets.
Standard & Poor's expects that the end markets may have
bottomed, however, the timing and magnitude of a recovery is
uncertain. As a result, a material reduction in debt is unlikely
in the next few years.

Navistar is a leading producer of trucks, operating in the
highly cyclical and intensely competitive heavy- and medium-duty
truck markets. Heavy-duty truck demand remains at very depressed
levels, resulting from the cyclical downturn that started in
mid-2000. Demand for new heavy- and medium-duty trucks is
closely tied to the business cycle, and as a result, can be very
volatile. Although demand for new trucks has recently shown some
signs of improvement, this may be temporary, as truck operators
place orders to "pre-buy" trucks prior to the new engine
emission standards, which go into effect in October of 2002.
Adding to weak market conditions is the glut of used truck

During the past several years the company has spent heavily on
capital expenditures ($1.3 billion since 1999) for new
facilities and product development related to the company's next
generation trucks and diesel engines. As a result, Navistar has
a newer product offering than some of its competitors.
Additionally, Navistar continues to diversify to help reduce its
exposure to the cyclical swings in the truck market, as
evidenced by its expanded role as a supplier of med-range diesel
engines to Ford Motor Co. Navistar has continued to focus on
improving its cost structure by emphasizing improvements in
labor productivity, parts procurement, and working capital

Navistar has been effective in enhancing its cost-
competitiveness, emphasizing improvements in labor productivity,
and by shifting production to lower-cost facilities.

The company accelerated its cost-cutting efforts by reducing its
white-collar staff by 15% in fiscal 2001. Although capital
expenditures have been large in the past several years, they are
expected to decline from their peak levels in 2000. However,
they will remain significant over the near term, resulting in
continued negative free cash flow.

Navistar's leverage has increased during the past several years
due to weak cash generation and heavy capital outlays. Total
debt at the company's manufacturing operation (including sale
lease back obligations) was about $1.4 billion at fiscal year-
end, compared with $700 million in 2000. Additionally, leverage
at the company's finance operation Navistar Financial remains
very aggressive, with net debt (adjusting for asset back
securities) to equity of over 13 to 1. Adding to financial risk
is Navistar's significantly un-funded pension liability of about
$509 million and $1.4 billion in medical retirement benefits at
fiscal year end 2001.


Although borrowing capacity is expected to remain adequate for
the revised ratings, an extended or prolonged downturn in the
economy could cause financial flexibility to erode further.
Additionally, asset protection for the company's senior note
holders is diminishing due to the company's heavy use of sale
leasebacks; continued use could result in potential notching
down relative to the company's corporate credit rating.

NETIA HOLDINGS: Resumes Trading on Nasdaq Beginning March 20
The Nasdaq Stock Market(R) announced that the trading in Netia
Holdings S.A. (Nasdaq: NTIAQ), ZAP (Nasdaq: ZAPPQ), and
Frontline Capital Group (Nasdaq: FLCGQ) resumes Wednesday, March
20, 2002 at 8:00 a.m., Eastern Time.   Each of these issues was
previously halted based upon the announcement of the filing of a
bankruptcy petition.  Nasdaq's review of the continued listing
status of these issues is ongoing.  If Nasdaq determines to
delist an issuer, the issuer will be notified in accordance with
Nasdaq's rules and be required to issue a press release
announcing such determination.  Nasdaq's rules further provide
that an issuer can request a review of such a determination.

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

DebtTraders reports that Netia Holdings SA's 13.50% bonds due
2009 (NETH09PON2) are trading between 18 and 20. See
for real-time bond pricing.

NEXTEL COMMS: Fitch Revises Outlook on Low-B Ratings to Negative
Fitch Ratings has changed the Rating Outlook on Nextel
Communications Inc. to Negative from Stable. The Negative Rating
Outlook applies to Nextel's senior unsecured note rating of
'B+', the senior secured bank facility of 'BB' and the preferred
stock rating of 'B-'.

The Negative Rating Outlook reflects Fitch's concern of Nextel
fully executing its strategic objectives in 2002/2003 and
accelerating its operational performance improvement to meet
several challenges. While current financial and operating
performance is encouraging, the company must make steady
progress toward free cash flow positive by early 2004. This is
especially important due to a rapidly increasing debt service
beginning in 2003 that could put pressure on liquidity absent
strong cash flow progress. The company should also consider debt
pay-down as a priority as a means to enhance cash flow and
improve overall credit quality. Additional challenges for the
company include capital expenditure reductions without affecting
service quality, the competitive wireless pricing environment
and quarterly EBITDA requirements associated with its bank
convenants. These concerns are partially mitigated by Nextel's
adequate near-term liquidity position, which reflects $3.5
billion in cash at the end of 2001 and $1.5 billion remaining on
its bank facility, a unique and differentiated offering to
moderate pressure on ARPU and a high quality subscriber base.

Although credit protection measures improved modestly with debt-
to-EBITDA from domestic operations decreasing from 8.3 times in
2000 to 7.3x in 2001, the company remains highly leveraged, and
capital expenditures remain high in the near-term due to
capacity and growth requirements. Nextel has indicated
opportunities exist to substantially reduce capital spending
during the next two years, which Fitch believes is necessary to
further enhance its liquidity position when considering future
debt service requirements. During 2002, net debt service is
expected to increase by about $150 million. By 2003, net debt
service is expected to significantly grow by approximately $800
million more due to an increase in cash interest expense
associated with senior redeemable discount notes, cash dividend
requirements from its preferred stock and the amortization of
its bank facility. With its high leverage and debt service
obligations, limited ability to access the capital markets and
domestic debt of about $14 billion, Fitch believes it's critical
for Nextel to meet its free cash flow objective of 2004 or
earlier to avoid potential liquidity concerns.

Based on the company's guidance, bank covenant requirements are
not expected to be an issue in 2002. EBITDA for the fourth
quarter 2001 was about $540 million, and Nextel expects to
generate approximately $2.5 billion in EBITDA for 2002. Assuming
total debt remains constant, Nextel will require approximately
$500 million of EBITDA for each of the first two quarters of the
year and about $580 million of EBITDA per quarter for the second
half of 2002 to remain in compliance. For 2003, EBITDA
requirements increase to $700 million per quarter, which could
be potentially more challenging for the company.

Resolution of the Negative Rating Outlook requires the company
to execute its operational and financial targets over the next
several quarters, provide further positive indication of its
ability to meet meaningful free cash flow by 2004 or earlier,
materially improve credit protection measures through cash flow
growth and debt reduction and further penetrate its small
business, enterprise and government segments to meet subscriber
addition targets.

DebtTraders reports that Nextel Communications' 12% bonds due
2008 (NEXCOM4) are quoted at a price of 72. See  
real-time bond pricing.

OHIO CASUALTY: Closes $201MM Convertible Note Private Offering
Ohio Casualty Corporation (Nasdaq:OCAS) announced that it has
closed the sale of $201,250,000 aggregate principal amount of
5.0% convertible notes due March 19, 2022.

The sale included the exercise of an over-allotment option
granted to the initial purchasers. The notes will be convertible
at the option of the holders into shares of Ohio Casualty
Corporation common stock at a conversion price of $22.62 (which
represents a conversion premium of 27% over the last reported
bid price on the Nasdaq National Market on March 13, 2002). The
net proceeds from the note offering have been used for repayment
of bank debt.

The notes have been privately offered only to qualified
institutional buyers under Rule 144A under the Securities Act of
1933 and outside the United States to non-U.S. persons under
Regulation S under the Securities Act. The notes have not been
registered under the Securities Act, and may not be offered or
sold in the United States absent registration or an applicable
exemption from registration requirements.

As previously reported in the Troubled Company Reporter March
14, 2002 edition, Standard & Poor's assigned a BB rating to the
company's proposed $125 million convertible notes.

PACIFICARE HEALTH: S&P Affirms BB- Counterparty Credit Rating
Standard & Poor's said it affirmed its double-'B'-minus
counterparty credit rating on PacifiCare Health Systems Inc. and
removed it from CreditWatch because of PacifiCare's expected
earnings improvements in 2002 and the company's continued work
on refinancing or extending the maturity of its existing bank
term loans, which are due on Jan. 2, 2003.

Standard & Poor's also said that the outlook on the company is
negative. "If PacifiCare is unable to refinance or extend the
maturity of the existing bank loans in the near term, Standard &
Poor's will probably lower the ratings," explained Standard &
Poor's credit analyst Phillip C. Tsang.

The ratings had been placed on CreditWatch on Aug. 3, 2001,
following PacifiCare's announcement that it was terminating its
debt financing arrangement.

Santa Ana, California-based PacifiCare currently has a strong
business position as a regional managed care organization, with
key market shares in California, Colorado, Oklahoma, Arizona,
and Texas. It had 3.5 million members as of Dec. 31, 2001.
Offsetting this strength are PacifiCare's below-average
operating performance, marginal capitalization, and high
percentage of goodwill in its capital.

PENTON MEDIA: Amends Sr. Credit Facility after Private Placement
Penton Media, Inc. (NYSE:PME) announced that it has closed on
its agreement with an investor group led by ABRY Mezzanine
Partners, L.P. for the private placement of 40,000 shares of a
new series of convertible preferred stock and warrants to
purchase 1.28 million shares of Penton common stock for $40
million. The sale of an additional 10,000 shares of preferred
stock and warrants to purchase 320,000 shares of Penton common
stock for $10 million is expected to close within 30 days. The
additional closing is subject to the absence of a material
change in Penton's business or in the financial markets and
certain other customary conditions. There can be no assurance
that these conditions will be met or that this closing will

Coincidental with the closing of the private placement, an
agreement to amend the terms of the Company's existing senior
secured credit facility became effective. The amendment provides
the Company with significant covenant relief and will reduce its
revolving credit facility to a maximum availability of $40

The securities noted in this press release have not been
registered under the Securities Act and may not be offered or
sold in the United States absent registration or an applicable
exemption from the registration requirements. This press release
does not constitute an offer to sell or the solicitation of an
offer to buy any security and shall not constitute an offer,
solicitation or sale of any securities in any jurisdiction in
which such offering, solicitation or sale would be unlawful.

                         *   *   *

As reported on March 19, 2002, by Troubled Company Reporter,
Standard & Poor's lowered its ratings on Penton Media Inc. and
removed them from CreditWatch, whose current outlook is

Standard & Poor's also rated the company's proposed Rule 144A
$150 million senior secured notes due 2007 at 'B-'. Proceeds
from the notes and a $50 million preferred stock issue will be
used to repay approximately $180 million in existing bank term
debt and provide some modest near-term liquidity.

The downgrade reflected the significant deterioration of
Penton's credit profile as a result of the recession and post-
September 11 travel industry and advertising downturn.
Expectations are for additional weakness in the first half of
2002 and uncertainty exists about when key credit measures will

PICKUPS PLUS: Closes Initial Stage of Refinancing with Pups Inv.
Pickups Plus, Inc. (OTCBB:PUPS), a leading retailer and national
franchiser in the $30 billion truck and SUV aftermarket
accessories industry, announced that it has successfully
consummated the initial phase of its refinancing efforts.

Pickups Plus announced the completion its refinancing with Pups
Investment, LLC. Pups Investment, LLC is a Florida limited
liability company, which was formed by private investors to
provide funding for Pickups Plus and promote the company's
growth. Pups Investment, LLC has agreed to provide the

     --  $500,000 in funding over the next three (3) months for
working capital and initial expansion. The company initially
received $200,000.  

     --  The companies existing bank credit line with a balance
of $253,507 has been retired.  

     --  Terminated the companies equity credit line with
Cornell Capital Partners, L.P. and agreed to pay off the
companies existing note over 12 months, and issue Cornell
Partners 50,000 shares of stock.  
     --  Completed the conversion and/or redemption of all of
the company's outstanding convertible debentures.  

     --  Provide for an option to fund $500,000 in capital for
future expansion.  

"We are excited to announce the successful completion of the
initial stage of our refinancing with Pups Investment LLC.
Management believes that Pickups Plus will now have the
financial flexibility to address outstanding issues with our
vendor community and to undertake the key business initiatives
necessary to sustain our growth in 2002," said John Fitzgerald,
Chairman and President of Pickups Plus. "We believe that the
operating initiatives we have implemented, as well as the new
capital resources resulting from the refinancing, are important
steps in strengthening the Company operationally and financially
while providing growth funding."

John Fitzgerald also stated, "Pups Investment LLC has provided
the necessary capital through equity financing without debt and
has shown their faith in Pickups Plus by accepting all
restricted stock. By issuing restricted stock in this
transaction management believes the benefit to current
shareholders is that no marketplace dilution is anticipated for
at least two years."

Pickups Plus is a leading national operator and franchiser of
retail stores dedicated to the sale and installation of quality
aftermarket accessories for pickup trucks and SUV's. Pickups
Plus currently operates four corporate retail stores and has
another seven franchise stores throughout seven states. After
several years of extensive development and testing of its
franchise system, the Company intends to start a nationwide
expansion in both corporate and franchise stores to become the
first national chain in its growing, but highly fragmented

POTLATCH CORP: Fitch Affirms BB+ Sr. Subordinated Notes Rating
Fitch Ratings has affirmed Potlatch Corp.'s ratings of senior
secured at 'BBB', senior unsecured at 'BBB-', senior
subordinated notes at 'BB+', and commercial paper at 'F3'. The
Rating Outlook for PCH is Stable.

The ratings reflect PCH's announcement that it is selling its
printing paper assets in Cloquet, MN. The proceeds of $480
million will be used to reduce the company's debt. The sale will
take PCH out of the coated paper business, which has been the
business most affected by the recession and generated operating
losses ($36.7 million) for the year 2001. Without coated papers,
Fitch anticipates improved earnings from continuing operations
in 2002 and improved credit statistics, with EBITDA/interest
near or north of 3.0 times.

PREMIER LASER: Tranzon Auctioning Laser & IP Inventory
Premier Laser Systems (Irvine, Calif.), is auctioning off its
assets as part of a bankruptcy process. This auction includes an
expansive inventory of: lasers; parts; delivery devices;
intellectual property; and FDA clearances. Applications for
these devices and patents include: dental, surgical, veterinary,
and aesthetics. Premier also has more than fifty 510(k)
clearances, and more than 100 issued and pending patents.

"After reviewing this inventory package, I believe that it
contains significant value and opportunity for our industry,"
said Michael Moretti, President of Medical Insight, Inc., and
editor of the industry trade report Medical Laser Insight.
"Aside from the laser and parts inventory, the intellectual
property and regulatory clearances may offer strategic
advantages to many companies in our industry. In addition,
Premier management has advised me that they are open to
strategic discussions regarding licensing of the intellectual
property in their portfolio."

A sealed bid sale is currently underway, and the deadline for
sealed bids is April 26, 2002. To place a bid, or for further
details, contact: Mike Walters at Tranzon Walters via phone at:
714 508 9211 or email:

Mr. Moretti is also available to discuss the strategic value and
market potential for the Premier assets.

Medical Insight is a publishing and market research company
specializing in high-tech medical devices and new technologies.
For a complete list of market studies and publications,
including the monthly Medical Laser Report, visit

PROVANT INC: IIR Intends to Purchase $47MM Outstanding Bank Debt
Irvine Laidlaw, Chairman of the Institute for International
Research (IIR), announced on Thursday, January 24, 2002, that he
made a proposal to the board of directors of Provant, Inc. and
has asked to commence discussions regarding a possible

IIR is ready to purchase Provant's outstanding bank debt of
approximately $47 million and convert such indebtedness in
exchange for approximately 47 million new common shares of
Provant (a conversion price of $1 per share). Further, IIR is
prepared to offer existing Provant shareholders the option to
exchange up to 50% of their existing shares at $1 cash per
share. Mr. Laidlaw stated that the proposal would "provide
existing shareholders a premium of approximately one hundred per
cent while also permitting the shareholders to take part in the
future of the company." IIR intends to maintain Provant's
listing on Nasdaq. Upon consummation of the proposed
transaction, IIR would own between approximately 71% and 85% of
the equity of Provant, depending on the strength of
shareholders' response to the tender offer.

The proposal is subject to the approval of the Provant board and
to customary conditions, including due diligence, financing,
antitrust and other regulatory approvals. In addition, the
proposal is subject to Provant not disposing of certain
strategic assets.

Mr. Laidlaw stated that he believes that "the elimination of
Provant's debt and the extensive experience of IIR in this
sector would be beneficial to Provant. We have determined to
make our proposal to make an offer public because of our belief
in the underlying value of Provant and our concern that the
board of directors is not addressing the current financial
position of the company in a manner designed to enhance long
term shareholder value."

Institute for International Research is the largest provider of
corporate training in the world, with brands such as Achieve
Global, ESI and Huthwaite. It is an independent, privately-owned
company with offices in more than 30 countries that delivers
strategic, legal, technical, product and financial
information to business professionals via a network of
conferences and events.

            The Information Agent for the Offer is:
                      Georgeson Shareholder
                 17 State Street - 10th Floor
                        New York, NY 10004
              Banks and Brokers Call 212.440.9800
           All Others Call Toll-Free 1.866.431.8991

PROVANT's training programs help large and medium-sized
companies learn, so they can earn. PROVANT, a group of more than
20 training companies, offers classroom instruction and training
programs, as well as technology-based training via CD-ROM, the
Internet, and intranets. Programs include human resources
training, performance skills, spoken communication, and customer
service improvement. PROVANT also offers management consulting
services. PROVANT serves more than 1,500 companies and
government bodies (federal government work accounts for 15% of
sales). The company was formed in 1998 from the combination of
seven smaller firms; since then it has bought more than a dozen
others. However, now PROVANT is considering putting itself up
for sale. At September 30, 2001, the company's balance sheet
showed a working capital deficiency of $41 million.

PSINET INC: Selling TX Real Property to Steam Realty for $10.5MM
PSINet, Inc., and its debtor-affiliates seek two orders (a Sale
Procedures Order and a Sale Order) relating to the proposed sale
of real property located at 1333 Crestside Drive in Coppell,
Texas. The Property consists of a building of approximately
80,000 square feet of rentable space improved with raised
flooring, suppplemental HVAC and redundant fiber network and
power to make it suitable for use as a hosting center, together
with approximately 6.527 acres of land.

On March 15, 2002, PSINet Realty Inc. and Stream Realty
Acquisition, L.L.C. entered into the Real Property Purchase and
Sale Agreement.  PSINet agrees to sell all of its right, title
and interest in and to the Property to Stream Realty or an
assignee as permitted under the Agreement for $10,500,000
subject to certain usual and customary adjustments as specified
in the Purchase Agreement.  The Sale is also subject to Stream
Realty being satisfied with the results of its due diligence

Although the Debtors believe the Purchase Agreement is fair and
reasonable and reflects the highest and best value for the
Property as of the date of the Motion, in order to obtain the
greatest value for the Property, the Debtors intend to submit
the Purchase Agreement to the test of the broader public
marketplace through the bidding procedures including sale at a
public auction if competing bids emerge.

The Debtors seek entry of a Sale Procedures Order approving the
bid procedure terms.  The Debtors seek entry of a Sale Order (i)
authorizing the Sale to the Buyer for $10,500,000, pursuant to
the Purchase Agreement (or such other buyer that the Debtors
will propose to the Court at the Sale Hearing as the highest and
best bidder) and (ii) directing that the Sale be free and clear
of all liens, claims, encumbrances, rights and interests (other
than Permitted Exceptions) and exempt from Transfer Taxes.

The Buyer has placed $150,000 of cash into escrow as the initial
deposit.  Upon the expiration of the due diligence period (a 52-
day period that commenced on March 15, 2002), if the Purchase
Agreement is still in force and effect, then the Buyer will
place into escrow a second cash deposit in the amount of
$150,000 and a third cash deposit in the amount of $200,000.

If the Buyer is satisfied with its due diligence and if the
Court approves the sale of the Property to the Buyer, then the
deposits will be credited against the Purchase Price on the
Closing Date. If the Buyer declines to proceed to closing based
on its due diligence review, or if the Court does not approve
the sale to the Buyer, then the escrow agent will return all
three deposits to the Buyer except that if the Buyer terminates
the Purchase Agreement after the due diligence period and before
the entry of the Sale Order, then the Seller will get the first
and second deposits and only the third deposit will be returned
to the Buyer.

Under the Purchase Agreement, the Buyer may terminate the
Purchase Agreement if (i) the Sale Order is not entered on or
before 60 days after the Due Diligence Period has expired; or
(ii) the Court enters an order approving the sale of the
Property to a person other than the Buyer.

The Seller will only make minimal, customary representations and
warranties, which are set forth in the Purchase Agreement.

              Part I.  Competitive Bidding Procedures

In the first part of the motion, the Debtors request entry of a
Sale Procedures Order:

(a) authorizing and scheduling a Bidding Deadline at May 13,
     2002, at 4:00 p.m. prevailing Eastern time, and an Auction
     to be held on May 15, 2002, at 10:00 a.m. Eastern time;

(b) scheduling a Sale Hearing on or about May 20, 2002, at 9:45
     a.m. Eastern time to consider the Sale Order;

(c) approving the Bidding Procedures, including the provision
     for a 3% breakup fee; and

(d) approving the manner of notice of the Sale, the bidding
     deadline, the Auction, the Bidding Procedures and the Sale

The Debtors request the Court to authorize them, outside of
their ordinary course of business and in accordance with the
Bidding Procedures, to solicit bids for a competing transaction
involving the Property, and if any Competing Bids meeting the
requirements of the Bidding Procedures are received, to
subsequently hold a public Auction at which the Buyer and any
qualified competing bidder may compete against each other to
offer that bid which the Debtors will select as the highest and
best bid for the Property and then propose to the Court for
approval at the Sale Hearing.

The Staubach Company - Northeast will help the Debtors actively
market for sale. In this regard, Staubach expects to, among
other things, make outgoing calls to potentially interested
parties. Those parties that express an interest in purchasing
the Property will be provided a copy of the Purchase Agreement.

The Debtors believe that their considerable efforts, together
with the ongoing efforts of Staubach, and the Bidding Procedures
will ensure that the Debtors obtain the highest and best offer
for the Property.

*  Qualified Competing Bid

  The Debtors will consider only Competing Bids that are made in
  compliance with the Bidding Procedures.

  To be qualified, a Competing Bid must:

  (a) be submitted (with a copy to the Committee and the Buyer)
      on or before the Bidding Deadline;

  (b) be for the purchase of the entire Property;

  (c) be in writing in the form of the Purchase Agreement marked
      to show all changes thereto; and

  (d) provide for the payment to the Debtors of at least
      $10,865,000 in cash (the Minimum Overbid) (which reflects
      the sum of the Buyer's Purchase Price of $10,500,000, plus
      the Breakup Fee of $315,000, plus an overbid of $50,000).

*  Auction

  If a Qualified Competing Bid is submitted prior to the Bidding
  Deadline, the Debtors will commence the Auction on May 15,
  2002, at 10:00 a.m. Eastern time at the offices of Wilmer,
  Cutler & Pickering, 1600 Tysons Boulevard, 10th Floor, Tysons
  Corner, Virginia.

  Only the Buyer and any prospective buyer who has timely
  submitted a Qualified Competing Bid will be entitled to
  participate in the Auction. The Buyer will be entitled to make
  an overbid and to credit bid the amount of the Breakup Fee
  against any such overbid. At the Auction, bidding will begin
  with the highest Qualified Competing Bid timely submitted on
  or before the Bidding Deadline. All subsequent overbids must
  include additional consideration of at least $50,000 more than
  the previous bid. The Auction will not conclude until each
  participating bidder has had the opportunity to submit any
  additional overbid with full knowledge of the existing highest

  The Debtors will determine in good faith whether a submitted
  Competing Bid complies with the Bidding Procedures and whether
  the Purchase Agreement or a submitted Qualified Competing Bid
  constitutes the most favorable transaction for the Debtors'
  estates. The most favorable bid as determined by the Debtors
  will be submitted to the Court for review and approval at the
  Sale Hearing.

*  Breakup Fee.

  Pursuant to the Bidding Procedures, the Seller shall pay to
  the Buyer the Breakup Fee in an amount equal to $315,000,
  which constitutes 3% of the Purchase Price if:

  (1) the Seller sells the Property to another bidder at or
      following the Auction pursuant to a Qualified Competing
      Bid, and

  (2) the Buyer was not, as of the date set by the Bankruptcy
      Court for the Auction, itself in breach of any material
      provision of the Purchase Agreement as to entitle the
      Debtors not to proceed to closing, and

  (3) the Buyer's right to terminate the Purchase Agreement has
      expired or been waived by the Buyer and the Buyer had not,
      on or prior to the date set by the Bankruptcy Court for
      the Auction, terminated the Purchase Agreement.

  Such amount shall be payable within 5 business days of the
  closing of a sale to the bidder submitting such Qualified
  Competing Bid.

  Although the Debtors seek approval of the Breakup Fee at a
  time when the Buyer is still conducting due diligence, the
  Buyer will not be entitled to the Breakup Fee unless its due
  diligence condition has expired or been waived.

  The Debtors submit that the Breakup Fee is the result of
  extended, good faith, arm's-length bargaining between the
  Debtors and the Buyer. The Debtors agreed to the Breakup Fee
  because, in their considered business judgment, the Debtors
  believed that the availability of this payment provides a net
  benefit to the Debtors' estates and that a transaction as
  favorable could not have been reached without it. The Buyer
  has indicated that it is unwilling to proceed with the
  Purchase Agreement unless the Breakup Fee is approved.

  The Breakup Fee is fair and reasonable, particularly in view
  of the Buyer's efforts to date to market the Property and the
  stalking horse risk to which public dissemination of its
  valuation now exposes it, the Debtors represent. The Buyer's
  $10,500,000 Purchase Price, once the due diligence conditions
  are waived or expire, will establish a floor against which
  other bidders can base their bids without conducting their own
  expensive due diligence. The Debtors believe that other
  bidders interested in the Property will be more inclined to
  bid, and to bid higher than they otherwise would.

*  Notice

  The Debtors propose to serve the Motion, the Purchase
  Agreement, the proposed Sale Order and the Sale Procedures
  Order on or before April 10, 2002, by overnight courier and/or
  first-class mail, postage prepaid, upon (i) the Office of the
  United States Trustee for the Southern District of New York;
  (ii) counsel for the Buyer; (iii) counsel for the Committee;
  (iv) all entities (or counsel therefor) known to have asserted
  any lien, claim, right of refusal, encumbrance or other
  interest of any kind whatsoever in or upon the Property; (v)
  all federal, state and local regulatory or taxing authorities
  or recording offices which have a reasonably known interest in
  the relief requested by the Motion; (vi) all parties known to
  have expressed a bona fide interest in acquiring the Property;
  (vii) the Internal Revenue Service; (viii) all entities who
  have filed a notice of appearance and request for service of
  papers in the Debtors' cases; and (ix) each indenture trustee
  of the Debtors.

  The Debtors submit that such notice constitutes good and
  sufficient notice under the circumstances.

  On April 9, 2002, 9:45 a.m., Judge Gerber will convene a
  hearing on the first part of the motion to consider entry of
  the Sale Procedures Order. April 8, 2002, 12:00 noon is the
  deadline for objections to the Sale Procedures.

           Part II.  Seeking Sale Order for Transaction

At the Sale Hearing, the Debtors will request the Court to enter
the Sale Order either (i) authorizing the Debtors, if no
Qualified Competing Bids have been submitted, to consummate the
Purchase Agreement with the Buyer, or (ii) confirming the
results of the Auction and approving the sale of the Property to
the bidder who has made the highest and best offer, and granting
related relief.

The Debtors submit that their decision to sell the Property
pursuant to the Purchase Agreement is an exercise of reasonable
business judgment. In the Debtors' view, the Purchase Agreement
represents substantial value to the Debtors' estates inasmuch as
it provides favorable terms for the disposition of the Property
at a price that represents fair and reasonable consideration
having a certain value.

The Property was marketed by Staubach commencing in September
2001. As part of its marketing efforts, Staubach contacted more
than 150 local and national real estate development and
investment companies in addition to contacting known active
users and owners both locally and nationally. In February 2002,
the Debtors and the Buyer commenced negotiations. The
negotiations with the Buyer were extensive, in good-faith, non-
collusive and at arm's length and were conducted by the
companies and their respective professionals, the Debtors

The Debtors submit that a sale free and clear of liens, claims,
encumbrances, rights and interests (including preferences and
other rights) is appropriate under the circumstances because any
lien, claim or interest in the Property that exists immediately
prior to the closing of the Sale will attach to the Sale
proceeds with the same validity, priority, force and effect as
it had at such time. Thus, the Sale satisfies Section 363(f)(1)
of the Bankruptcy Code. A sale free and clear of liens, claims,
encumbrances, rights and interests is necessary to maximize the
value of the Property while a sale subject to liens, claims and
interests will likely result in a lower purchase price, the
Debtors represent.

Moreover, the Sale is exempt from Transfer Taxes, the Debtors
aver, because Section 1146(c) of the Bankruptcy Code provides
that the making or delivery of an instrument of transfer under a
confirmed Chapter 11 plan of reorganization may not be taxed  
under any law imposing a stamp or similar tax, and in the
instant case, the Debtors' sale of the Property is essential to
the consummation of a plan and therefore should be deemed to be
"under a plan."

There are no conditions in the Purchase Agreement that
predetermine the rights of creditors under a plan. Therefore,
the proposed transaction is appropriate outside of a plan of
reorganization, the Debtors submit.

In summary, the Debtors submit that their marketing efforts, the
arm's-length negotiations with the Buyer, the postpetition
notice of the terms of the Sale and the opportunity for
interested bidders to make higher and better offers combine to
help assure that, whatever the ultimate purchase price is, it is
fair and reasonable.

The Debtors, in the exercise of their business judgment, have
determined that the prompt Sale of the Property pursuant to
Section 363 will return a greater benefit to the Debtors'
estates than any of the alternatives, including a sale at a
later date. Accordingly, the Debtors request that the Court
eliminate or reduce the 10-Day Stay under Rule 6004(g) of the
Federal Rules of Bankruptcy Procedure. Without such express
elimination by the Court, approval of the sale will be
automatically stayed for ten days after entry of the order
pursuant to Section 363 of the Bankruptcy Code.

The Debtors propose, pursuant to Bankruptcy Rule 9014, that
objections, if any, to the Sale of the Property must be filed
with the Court, and served so as to be received on or before
4:00 p.m. on May 16, 2002, by (i) counsel to the Debtors; (ii)
counsel to the Buyer; (iii) counsel for the Committee; and (iv)
the Office of the United States Trustee.

                     Relevant Dates

Objections to Sale Procedures -- by April 8, 2002, 12:00 noon
Sale Procedures Hearing -- April 9, 2002, 9:45 a.m.
Bidding Deadline -- May 13, 2002, 4:00 pm prevailing Eastern
Auction -- May 15, 2002, at 10:00 a.m. Eastern time;
Sale Hearing -- on or about May 20, 2002, 9:45 a.m. Eastern
Objections to Sale Transaction -- by 4:00 p.m., May 16, 2002.
(PSINet Bankruptcy News, Issue No. 17; Bankruptcy Creditors'
Service, Inc., 609/392-0900)   

SAMSONITE CORP: Fourth Quarter Operating Loss Doubles to $14MM
Samsonite Corporation (OTC Bulletin Board: SAMC) announced
financial results for the fourth quarter and fiscal year ended
January 31, 2002.  The Company's fourth quarter financial
results were adversely affected by the economic decline in its
major markets in the aftermath of the terrorist attacks on
September 11.  Revenues and operating loss for the fourth
quarter were $153.4 million and $14.0 million, respectively,
compared to revenues of $193.1 million and operating earnings of
$6.9 million in the prior year.  The fourth quarter operating
loss for the current year includes charges totaling $10.6
million for asset impairments, restructuring provisions and
expenses related to operating cost reduction initiatives
implemented in the Company's European, Mexican and U.S.
operations and a $3.3 million charge relating to the impairment
of goodwill associated with the Company's South American
operations.  During the prior year fourth quarter, the Company
incurred asset impairment and restructuring charges and expenses
of $8.4 million related to its U.S. operations.  Loss to common
stockholders before extraordinary item was $34.7 million for the
fourth quarter compared to $16.2 million in the prior year.

Revenues and operating earnings for the fiscal year ended
January 31, 2002 were $736.3 million and $21.2 million,
respectively, which compares to $783.9 million and $50.8 million
in the prior year.  Operating earnings for the current fiscal
year include charges totaling $22.4 million for goodwill and
asset impairments and restructuring provisions and expenses
related to operating cost reduction initiatives implemented in
the European, U.S., and Mexican/South American operations;
during the prior year, the Company incurred $8.4 million of
similar charges in its U.S. operations.  Loss to common
stockholders before extraordinary item for the fiscal year was
$72.1 million compared to $41.3 million in the prior fiscal

Reflecting difficult economic conditions after the September
attacks, Adjusted EBITDA (earnings before interest expense,
taxes, depreciation, amortization and minority interest,
adjusted for items which management believes should be excluded
to reflect recurring operations, including goodwill and asset
impairments and restructuring charges and expenses) was $6.6
million for the fourth quarter which compares with $23.7 million
for the same period in the prior year.  Adjusted EBITDA for the
year ended January 31, 2002 was $70.3 million compared to $90.3
million in prior year.

Luc Van Nevel, President and Chief Executive Officer, stated:  
"The Company's sales and operating earnings were severely
affected during the fourth quarter by the decline in worldwide
economic conditions resulting from the terrorist attacks in
September and the war in Afghanistan.  The terrorist attacks had
a disproportionately negative impact on companies involved in
travel and travel-related businesses, including the luggage
industry.  Prior to the September terrorist attacks, the
Company's operations, measured in growth in sales and operating
earnings, were showing steady improvement despite slowing
economic conditions in the United States and Europe.  Based on
internal forecasts prepared at the end of August, management
expected to achieve operating performance for the year in line
with its operating Business Plan which called for an improvement
of approximately 10% over the prior year and was obviously
substantially in excess of what we are reporting here.

"In an effort to preserve liquidity and sustain the Company
through the anticipated economic recovery period, management
implemented immediate actions to control expenses and optimize
cash flow.  The Company is also restructuring its softside
manufacturing operations after the admission of China into the
World Trade Organization and is accelerating existing plans to
eliminate or downsize certain redundant, inefficient hardside
production facilities.  In most cases, the accelerated
restructuring activities are actions the Company had planned to
implement over the next few years as part of its continuing
strategy to enhance the Company's long-term operating
profitability and marketplace competitiveness.

"The Company has seen significant improvement in retail sell-
through compared to the 60-90 day period immediately following
September 11, and airline travel has steadily increased.  Many
economic forecasters are now predicting improved economic
conditions during the second half of this year; we are hopeful
that this will be the case.  The difficult economic conditions
resulting from the September attacks present Samsonite with the
opportunity to use its strong brands and global sales, marketing
and distribution network to improve its competitive position in
the marketplace."

Richard Wiley, Chief Financial Officer, stated:  "In the current
economic environment, the Company has been faced with a number
of significant challenges including adjusting our cost
structure, amending our senior credit facility agreement, and
appropriately managing working capital and liquidity. In each
case, management has been successful in meeting these
challenges.  The restructuring of our U.S. operations and other
cost containment measures that have been put into effect have
achieved the targeted reduction in operating costs.  As
previously announced, on February 13, 2001 an amendment to the
senior bank credit facility agreement was obtained which waived
noncompliance at January 31, 2002 and modified covenants
applicable to the remaining term of the facility agreement.  As
evidenced by the decline in net working capital and net debt, we
have been successful in managing liquidity."

Samsonite is one of the world's largest manufacturers and
distributors of luggage and markets luggage, casual bags,
business cases and travel-related products under brands such as
LACOSTE(R), and SAMSONITE(R) black label.

SERVICE MERCHANDISE: Selling Store Fixtures in Bulk for $3.3MM
Service Merchandise Company, Inc., and its debtor-affiliates ask
the Court to approve a bulk sale of their store fixtures for
$3,270,000 to an entity formed by IAR Group LLC, National Retail
Equipment Liquidators Inc., Grand & Benedicts Inc. and Bland
Enterprises or their affiliates.

Sheldon M. Francis, Esq., at Bass, Berry & Sims PLC, in
Nashville, Tennessee, tells the Court that the proposed
purchasers are among the largest liquidating companies in the
United States.

Mr. Francis notes that if there is no other better bidder, the
Debtors and IAR Group will complete the sale transaction on
these terms:

  (a) Assets: All Fixtures located in the Stores, including
      any trailers located at any such Stores. The Fixtures
      shall be purchased "As Is, Where Is", free and clear of
      any liens, claims and encumbrances, with any such liens,
      claims and encumbrances to attach to proceeds;

  (b) Purchase Price: The Purchaser shall pay the Debtors an
      amount of $3,270,000. A deposit of $500,000 shall be paid
      upon execution of Agreement and the balance within two
      days after entry of order approving the sale;

  (c) Access to Stores: The Purchaser shall have non-exclusive
      access to Stores to market and sell Fixtures from
      February 26, 2002 to a date that is the later of April 9,
      2002 or four calendar days after the completion of a
      going out of business sale at a particular Store. Such
      access shall not interfere or impede with the going out
      of business sales conducted at any of the Stores; and

  (d) Broom Clean Condition: Each Store shall be left by the
      Purchaser in a broom clean condition, provided that the
      Proposed Purchaser may abandon in place to the Debtors
      any unsold Fixtures. (Service Merchandise Bankruptcy News,
      Issue No. 28; Bankruptcy Creditors' Service, Inc.,

SOFTWARE LOGISTICS: Zomax Inc. Bolts Asset Purchase Agreement
Zomax Incorporated (Nasdaq: ZOMX) announced that the agreement
to purchase the assets of Software Logistics Corporation (dba
iLogistix) has been terminated.  Certain significant conditions
to closing were not satisfied by iLogistix.  Upon termination of
the agreement and notice from Zomax, iLogistix is required to
refund the deposit plus accrued interest.  Transaction expenses
will be expensed during the current fiscal period resulting in a
charge of approximately $.04 cents per share.

iLogistix began a lawsuit against the Company today concerning
Zomax' termination of the agreement for the purchase of
iLogistix' assets.  The suit asks that Zomax be required to
complete the transaction or for unspecified damages.  The
Company anticipates the damages ultimately sought will involve a
material sum but believes it acted properly and intends to
defend itself vigorously.

Jim Anderson, Chairman and CEO, stated "While we are certainly
disappointed that iLogistix did not close and believe that their
lawsuit is without merit, we are shifting our focus to actively
pursue other transactions which we hope will provide similar or
greater benefits to Zomax and our world class customers.  We
plan to use our financial strength to expand our business
domestically and internationally, particularly in the Asian
market, during 2002.  As we explore other acquisition
opportunities, our customers will continue to benefit from our
single-minded focus on delivering value while planning for the

Zomax is a leading international outsource provider of process
management services.  The Company's fully integrated services
include "front-end" E-commerce support, call center and customer
support solutions; DVD authoring services; CD and DVD mastering;
CD and DVD replication; supply chain and inventory management;
graphic design; print management; assembly; packaging;
warehousing; distribution and fulfillment; and RMA processing.  
The Company's Common Stock is traded on the Nasdaq National
Market under the symbol "ZOMX."

iLogistix provides supply chain services to leading technology
companies, including procurement, inventory management,
assembly, fulfillment, e-commerce, and distribution services.
iLogistix has operating facilities in the United States, The
Netherlands, Singapore, Taiwan, Mexico, and Brazil.

As previously reported, the Bankruptcy Court approved the Asset
Purchase Agreement in which Zomax agreed to purchase the
business and substantially all the assets of Software Logistics
Corporation, dba iLogistix.  

TRI-NATIONAL DEV'T: Court Extends Exclusive Period to July 31
Tri-National Development Corp. (OTCBB:TNAVQ) announced that the
Honorable Judge Hargrove, the presiding judge over the Company's
Chapter 11 Reorganization in the San Diego Bankruptcy Court,
denied a motion from Senior Care Industries and granted the
Company's request for an extension of Tri-National's exclusivity
period through July 31, 2002.

The action by the bankruptcy court extends the period during
which only the Company may file a reorganization plan and during
which no other party may file a competing plan. The Company also
has an additional three months of exclusivity after timely
submittal of the plan to solicit the plan's approval. In
addition, Judge Hargrove has agreed to a stipulation to "fast
track" the lawsuit between the Company and Senior Care
Industries Inc. (OTCBB:SENC) with a target trial date in mid
June 2002. Senior Care had vigorously and unsuccessfully
attempted to oppose the Company's exclusivity extension. Judge
Hargrove indicated this extension was appropriate to allow the
adversarial issue with Senior Carte to be resolved first.

Michael Sunstein, President and Chief Executive Officer, said,
"This extension allows the Company and the court the time needed
to hear and rule on Senior Care's claims of their alleged
purchase of the Company's assets. What is extremely unclear and
illogical is why Senior Care would want to file its own plan for
the Company if in fact they had already closed on and own the
subject real properties -- properties they continue to list on
their balance sheet despite the obvious pending litigation.

"We continue to work on a comprehensive strategic plan -- a plan
we believe will help effect the realization of the significant
value of our numerous real estate assets. Such a plan,
successfully implemented, would result in the payment of all
creditors and reward our longstanding and patient shareholders,
whose continued support we greatly appreciate. We look forward
to making ongoing announcements of our continuing progress on
this path."

Tri-National Development Corp. is an international real estate
development, sales and management company.

TRICORD SYSTEMS: Fails to Meet Nasdaq Listing Requirements
Tricord Systems, Inc. (Nasdaq:TRCD) announced that it received a
notice from Nasdaq dated today indicating that it has failed to
comply with the $1.00 minimum bid price required for continued
listing of its common stock on the Nasdaq SmallCap Market
pursuant to Nasdaq Marketplace Rule 4310(C)(4). Pursuant to
Nasdaq rules, Tricord will have 180 days from the date of this
notice in which to establish compliance with this rule or its
common stock will be subject to delisting.

"We believe that continued listing on Nasdaq is an important
element of our goal of providing value to our stockholders" said
Keith Thorndyke, president and CEO, Tricord Systems, "and we
therefore intend to take all possible actions to maintain our
listing. We are committed to executing on our current business
plan and delivering the additional features required to compete
more effectively in the markets we are targeting. We believe
that successfully executing on this plan is an important
component to increasing stockholder value."

Mr. Thorndyke did caution, however, that there can be no
assurance that Tricord will be successful in its efforts to
satisfy Nasdaq's minimum $1.00 bid price requirement or the
other continued listing requirements, including the minimum
stockholder's equity or net tangible assets requirement, or
would otherwise be able to maintain the listing of its common
stock on Nasdaq. Any delisting would have a material adverse
effect on Tricord as outlined in Tricord's recent SEC filings.

Tricord's Illumina(TM) software consists of a revolutionary
distributed file system and management technology that clusters
multiple server appliances into a single resource. Because
multiple appliances in a cluster are managed as one entity, many
of the tasks associated with managing and growing storage
systems are eliminated. Illumina-enabled appliances are
literally plug-and-play, offering seamless growth and continuous
access to content with no downtime. As the number of appliances
grows, performance and throughput scale along with capacity.
This is achieved without expensive system administration or
downtime due to the ability of the appliances to operate as a
single unit.

Tricord Systems, Inc. designs, develops and markets clustered
server appliances and software for content-hungry applications.
The core of Tricord's revolutionary new technology is its
patented Illumina(TM) software that aggregates multiple
appliances into a cluster, managed as a single resource.
Radically easy to deploy, manage and grow, Tricord's products
allow users to add capacity to a cluster with minimal
administration. Appliances are literally plug-and-play, offering
seamless growth and continuous access to content with no
downtime. The technology is currently designed for applications
including general file serving, virtual workplace solutions,
digital imaging, and security. Tricord is based in Minneapolis,
MN with offices in Colorado, California and Georgia. For more
information, visit

W.R. GRACE: Court Okays HR&A as PD Committee's Claims Expert
Judge Fitzgerald approves Application of the Official Committee
of Asbestos Property Damage Claimants and authorizes the
retention of Hamilton Rabinovitz & Alschuler as a property
damage consultant, nunc pro tunc to May 2, 2001, in the chapter
11 cases of W. R. Grace & Co., and its debtor-affiliates.  

Judge Fitzgerald warns that she will not approve compensation to
two consulting firms for the same services and requires that the
attorneys for the PD Committee certify as to each monthly
application for fees that the attorneys have personally reviewed
the applications and either (1) identify each entry of
duplicative services, or (2) state there is no duplicative

HRA is a consulting firm, providing analytical services focused
on the estimation of claims and the development of claims
procedures with regard to payments and assets of a claims
resolution trust.

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

       (a) Estimation of the number and value of present and
future asbestos claims;

       (b) Development of claims procedures to be used in the
development of financial models of payments and assets of an
asbestos settlement trust;

       (c) Analyzing and responding to issues relating to the
setting of a bar date regarding the filing of property damage

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

       (e) Assisting the PD Committee in negotiations with
various parties;

       (f) Rendering expert testimony as required by the PD
Committee; and

       (g) Such other advisory services as may be requested by
the PD Committee from time to time.

HRA has agreed to accept as compensation for its services in
this case such sums as may be allowed by this Court in
accordance with law, based upon the services rendered, the
results achieved, the difficulties encountered, the complexities
involved, and other appropriate factors.  HRA has agreed to be
compensated for its services on an hourly basis, in accordance
with its normal billing practices, subject to allowance by this
Court in accordance with the Administrative Fee Order and other
applicable law. The current hourly rates HRA charges are:

           Position                        Charge Per Hour*
           --------                        ----------------
        Senior Partners                          $375
        Junior Partners                          $325
        Principals                               $275
        Directors                                $200
        Managers                                 $175
        Senior Analysts                          $150
        Analysts                                 $100
        Research Associates                      $ 75

     * Depositions, arbitration hearing or trial testimony hours
       are billed at time and one-half. (W.R. Grace Bankruptcy
       News, Issue No. 20; Bankruptcy Creditors' Service, Inc.,

WARNACO GROUP: Seeks Approval of Settlement with HIS Equipment
The Warnaco Group, Inc., and its debtor-affiliates leased
computer equipment from HIS Equipment Marketing Co., LP, and HIS
Equipment Services Inc. under a 1988 agreement. The Debtors
stopped making payments to HIS Equipment in June 1999, believing
that the automatic renewal provisions in the Agreements were
void and that they'd substantially overpaid HIS under the
Agreements.  Warnaco sent termination letters to HIS Equipment
on July 19, 1999 and November 30, 1999. Thereafter, the Debtors
returned some of the equipment to HIS.

On February 14, 2000, HIS sued the Debtors in the Supreme Court
of the State of New York, County of Kings, for the return of all
the Equipment and monetary damages.  The next day, the Debtors
counter-filed a case against HIS for violation of local laws
relative to the Agreements' renewal provisions. The case sought
for $2,000,000 recovery of overpayments.

On September 27, 2002, the State Court entered a judgment in
favor of HIS directing the Debtors to pay $888,450 plus interest
from August 31, 2000.  The Debtors appealed from that Order and
posted a bond, through Liberty Mutual Insurance Company, in the
amount of $895,145 plus interest from August 31, 2000.  The
appeal continued until it was stayed upon the filing of the
Debtors' chapter 11 petitions on June 11, 2001.

HIS contends that it now holds a pre-petition general unsecured
claim against the Debtors of more than $6,000,000 and an
administrative claim of $2,800,000 as of March 2, 2002.
Furthermore, HIS asserts that the Agreement is executory in
nature and needs to be assumed or rejected.

If HIS wins in the litigation, the Debtors could be required to
pay HIS:

  (a) an administrative claim of about $2,800,000 as of March 2,
      2002 and increasing at the rate of $350,000 per month;

  (b) a general unsecured claim exceeding $6,000,000 for unpaid
      pre-petition obligations under the Agreements; and

  (c) a general unsecured claim for damages arising from the
      rejection of the Agreements.

The Debtors would also need to purchase new computers and
related equipment to replace the to-be-returned Equipment.  To
end the litigation, the Debtors negotiated with HIS and inked a
Settlement Agreement.

Thus, the Debtors seek the Court's authority to settle the State
Action and enter into a Settlement Agreement with HIS Equipment
under these terms:

  (a) the Debtors shall withdraw and dismiss with prejudice the
      Appeal and will, upon Bankruptcy Court approval of the
      Settlement Agreement, file a withdrawal of the Appeal with
      the Appellate Division of the Supreme Court of the State
      of New York, Second Department;

  (b) on the Date the bond issuer issues full payment in
      connection with the obligations under the Bond with
      interest, and the Bond Payment is received by HIS
      Equipment and paid by the remitter's bank:

        -- both parties will execute a stipulation dismissing
           with prejudice the State Court Action;

        -- HIS Equipment will execute a quit claim releasing all
           interests in and rights and claims to the Equipment
           remaining in the Debtors' possession; and

        -- HIS Equipment will be granted an allowed general
           unsecured claim in the amount of $1,900,000 against
           the Debtors' estate and the Debtors will accordingly
           treat the claim under the Debtors' plan of
           reorganization, with no need for HIS Equipment to
           file a proof of claim.

Shalom L. Kohn, Esq., at Sidley Austin Brown & Wood, in New
York, argues that the settlement agreement should be approved
because the case is complex and with it now being on the appeal
stage, the Debtors face these difficulties:

    (1) the trial court erred in entering an order effectively
        operating as a summary judgment or on HIS Equipment's
        claim of replevin, requiring the immediate return of the
        Equipment, when:

        -- the OSC and supporting papers that brought on the
           motion do not seek summary judgment and do not refer
           to applicable New York law;

        -- HIS Equipment failed to annex the pleadings to the
           motion as required by New York law; and

        -- the Debtors had counterclaims for lease overcharges
           arising out of the same Agreements, and those
           counterclaims exceed the value of the Equipment by
           more than $1,000,000;

    (2) the trial court abused its discretion by entering an
        order that effectively operated as a summary judgment
        order, without staying entry of or execution of such
        judgment until such time the determination or related
        counterclaims that exceeded the amount set forth in the
        summary judgment order; and

    (3) the trial court erred in entering a judgment as a remedy
        for contempt, when:

        -- the Debtors had bonded an appeal from the trial
           court's order it was accused of violating in the full
           amount of the order; and

        -- HIS Equipment failed to comply with any of the
           requirements for seeking replevin under New York law.

Moreover, Mr. Kohn adds that a loss at the trial level are
infrequently reversed in the Appellate Division of the Supreme
Court of the State of New York.

Mr. Kohn also expects that the time and administrative expense
involved in advancing the complex arguments would likely exceed
any potential savings or recoveries to the estates.

Aside from that, Mr. Kohn asserts that the settlement is
beneficial to the Debtors' estate because it avoids the
diversion of its key management and legal personnel from the
reorganization efforts at hand and provides the Debtors with
clear title to the Equipment.

                     Liberty Mutual Objects

Liberty Mutual Insurance Company issued an Undertaking on Appeal
dated August 9, 2000 and numbered 15011705 in the original sum
of $888,450 in favor of HIS Equipment, as obligee. The Bond was
posted to allow the Debtors to stay its obligations under
certain orders in an action in the Supreme Court of the State of
New York, County of Kings. One of the orders appealed from,
namely the one dated July 21, 2001, gave the Debtors the option
of either:

    (a) returning millions of dollars of valuable computer
        equipment leased by Warnaco from HIS Equipment under
        several leases at issue in the State Court Action, or

    (b) paying $888,450 representing the agreed upon value of
        the Equipment.

Steven H. Rittmaster, Esq., at Torre, Lentz, Gamell, Gary &
Rittmaster, LLP, in Jericho, New York, complains that the
Debtors' motion is "nothing less than an outrageous attempt to
sell its appeal bond surety 'down the river' by abandoning a
fully perfected state court appeal causing its surety to pay on
the bond which the Debtors believes will allow it to retain
possession and to take title of the valuable computer equipment
which is the subject of the appeal, at Liberty's expense."

Mr. Rittmaster informs the Court that the Debtors entered into
the Settlement Agreement with HIS Equipment without the
knowledge or consent of Liberty.

Liberty believes that by entering into the Settlement Agreement,
the Debtors and HIS Equipment have effectively released Liberty
from any obligation under the Bond because pursuant to paragraph
4 of the Settlement Agreement, in the event that Liberty does
not make full payment to HIS Equipment under the Bond -- HIS
Equipment has "the option to declare this Settlement Agreement
null and void, in which event the parties hereto shall use their
respective best efforts to reinstate the Appeal or otherwise
place the parties in the same position as they would have been
had this Settlement Agreement not been executed."

Also, Mr. Rittmaster notes that Liberty has no obligation of
making payment under the Bond unless and until:

    (a) the appeal is affirmed or dismissed by the appellate
        court, as required by the terms of the Bond,

    (b) Liberty receives all of its legal and equitable rights
        and remedies, and

    (c) it is adjudicated that the Settlement Agreement did not
        release Liberty.

Even if the Court approves the Settlement Agreement, Mr.
Rittmaster asserts that the Settlement Agreement provides
Liberty with several defenses to payment under the Bond,

    (a) that the agreement violates Liberty's equitable
        subrogation rights over the equipment,

    (b) that the Debtors and HIS Equipment have colluded against
        Liberty effectively releasing Liberty under the Bond,

    (c) that the effect of the Settlement Agreement is to make
        the surety's liability greater than its principal's,

    (d) that by its actions, the Debtors, in effect, has
        attempted to assume the Equipment leases under 365 of
        the Bankruptcy Code with a third party (Liberty) curing
        the defaults, and

    (e) that subsequent proceedings in the State Court Action
        may have served to release the Bond by reserving for the
        jury the determination of the damages owed by the
        Debtors to HIS Equipment, which contradicts the
        September 27, 2000 judgment that had awarded to HIS
        Equipment money  damages in a fixed amount. (Warnaco
        Bankruptcy News, Issue No. 21; Bankruptcy Creditors'
        Service, Inc., 609/392-0900)  

* DebtTraders' Real-Time Bond Pricing

Issuer               Coupon   Maturity   Bid - Ask Weekly change
------               ------   --------   --------- -------------
Crown Cork & Seal     7.125%  due 2002  85.5 - 87.5     +1.5
Federal-Mogul         7.5%    due 2004    15 - 17       +2
Finova Group          7.5%    due 2009    41 - 42       +3.5
Freeport-McMoran      7.5%    due 2006    81 - 84       +1
Global Crossing Hldgs 9.5%    due 2009  3.75 - 4.75     +0.25
Globalstar            11.375% due 2004     7 - 9        +2
Lucent Technologies   6.45%   due 2029    63 - 65       -2
Polaroid Corporation  6.75%   due 2002     5 - 7        +1
Terra Industries      10.5%   due 2005    84 - 87        0
Westpoint Stevens     7.875%  due 2005    33 - 36        0
Xerox Corporation     8.0%    due 2027    55 - 57        0

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


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

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

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

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 Go 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 C. 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
firm for the term of the initial subscription or balance thereof
are $25 each.  For subscription information, contact Christopher
Beard at 240/629-3300.

                     *** End of Transmission ***