TCR_Public/020402.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

              Tuesday, April 2, 2002, Vol. 6, No. 64     

                          Headlines

ADELPHIA BUSINESS: Seeks OK to Access $135MM DIP Financing Pact
ADVOCAT INC: Appoints Wallace E. Olson to Board of Directors
ALTERRA HEALTHCARE: Working Capital Deficit Tops $130 Million
AMERICAN SEAFOODS: S&P Assigns B Rating to Proposed $175MM Notes
AMRESCO CAPITAL: Net Assets in Liquidation Drop by $1.6M in Dec.

ANALYTICAL SURVEYS: Will Issue $2MM Secured Conv. Note to Tonga
ARMSTRONG HOLDINGS: Obtains 3rd Extension of Exclusive Periods
BORDEN CHEMICALS: Court Okays Formosa's Bid to Acquire PVC Plant
BURLINGTON INDUSTRIES: Court Names Warren Smith as Fee Auditor
CALPINE CORP: Sets-Up Reserve for Third-Party Default on ERCs

CANADA 3000: Selling Assets by Public Auction on April 13, 2002
CEDARA SOFTWARE: NASDAQ Transfers Listing to Small Cap Market
COVANTA ENERGY: Files for Chapter 11 Reorganization in New York
COVANTA ENERGY: Case Summary & 30 Largest Unsecured Creditors
DYNEX CAPITAL: Considering Feasibility of Depository Institution

ENRON CORP: Committee Taps Squire Sanders as Conflicts Counsel
ENRON DIRECT: Will Sell Assets via Auction on Apr. 13 in Canada
ENTERTAINMENT PUBLICATIONS: S&P Assigns B+ Corp. Credit Rating
EXIDE TECHNOLOGIES: Likely Debt Default Spurs S&P Downgrade
FLEMING: S&P Affirms Low-B Rating Based on Kmart Proceedings

FRIEDE GOLDMAN: Sells Canadian Unit's Assets to Peter Kiewit
GC COMPANIES: Completes Sale of Assets to AMC Entertainment
GENTEK: Fitch Junks Senior Secured & Senior Sub. Debt Ratings
GLOBAL CROSSING: Plans to Restructure Service Pact with SWIFT
GRAHAM PACKAGING: Posts Improved EBITDA Results for FY 2001

HAYES LEMMERZ: Realigns European Wheels Business Operations
HEAFNER TIRE: S&P Slashes Credit Rating to SD After Tender Offer
HEARTLAND TECHNOLOGY: Will Delay Form 10-Q Filing with SEC
HYBRID NETWORKS: Plans to Cease Operations Due to Lack of Funds
IT GROUP: U.S. Trustee Names Todd Neilson as Chapter 11 Examiner

INT'L WIRE: S&P Rates Bank Loan & Credit Ratings at Low-B Levels
JAM JOE: Gets Court Nod to Extend Lease Decisions Time to May 31
KAISER ALUMINUM: Brings-In Shaw Norton as LA Litigation Counsel
KARTS INT'L: Defaults on $2.5M Note Owed to Schlinger Foundation
KMART CORP: Bank of New York Wants to Effect $2.5 Million Setoff

KRYSTAL COMPANY: Has Sufficient Funds to Continue through 2002
LODGIAN INC: Wins Nod to Hire Arthur Andersen as Accountants
MEMC ELECTRONIC: December 31 Balance Sheet Upside-Down by $20MM
MARINER POST-ACUTE: Resolves Tort Claimants' Objections to Plan
MATLACK SYSTEMS: Has Until April 23 to Chapter 11 Plan

MEDMIRA INC: Completes Arrangements for $1.4MM Bridge Financing
MUZAK LLC: Gets Waiver of Covenant Violations Under Credit Pact
NTL INC: NYSE Intends to Delist Shares After Trading Suspension
NATIONAL STEEL: Court Grants Injunction Against Utility Firms
NATIONSRENT: Judge Walsh Establishes Fee Applications Procedures

NEWPOWER HOLDINGS: Eyes Options After Centrica Bolts from Talks
NEXELL THERAPEUTICS: Mulling Alternatives to Continue Operations
OLYMPUS HEALTHCARE: Solicitation Period Extended Until May 10
OPTICAL DATACOM: Gets Okay to Sign-Up Trumbull as Claims Agent
OUTSOURCING SOLUTIONS: Likely Default on Facility Concerns S&P

PACIFIC GAS: Expected to Amend Disclosure Statement Tomorrow
PERLE SYSTEMS: Fails to Comply with Nasdaq Listing Requirements
PLASTIC SURGERY: Files for Chapter 11 Reorganization in Calif.
POLAROID CORP: Seeks Okay to Continue Employee Severance Program
PRIME RETAIL: Says Violations of Certain Loan Covenants Likely

SAFETY-KLEEN: Gains Okay of Tiered Clean Harbor Break-Up Fee
SAFETY-KLEEN CORPORATION: Full-Year 2001 Net Loss Tops $229MM
SERVICE MERCHANDISE: Court OKs Sale of All Fixtures & Equipment
SPECIAL METALS: Titanium Metals Discloses $27 Million Exposure
SPORTS CLUB: Kayne Anderson Completes $10.5MM Private Placement

SWEET FACTORY: Wants Lease Decision Deadline Moved until May 31
TRANSTECHNOLOGY: Obtains Extension of Existing Forbearance Pacts
TRI-NATIONAL DEV'T: Senior Care Says Press Releases are False
TWINLAB CORPORATION: Feeble Financials Spur S&P to Junk Rating
USG CORP: Judge Wolin Will Review His Advisors' Fees & Expenses

VELOCITA CORP: Banks Waive Potential Loan Covenant Violations
VIADOR INC: Shareholders' Equity Deficit Tops $2.4MM at Dec. 31
VIASYSTEMS INC: Fitch Further Downgrades Senior Sub Debt Rating
W.R. GRACE: 12% Contingent Fee for Fresenius & Sealed Air Suits
WINSTAR COMMS: Trustee Wins Nod to Enter into Employment Pacts

ZENITH INDUSTRIAL: Engages Sidley Austin as Bankruptcy Attorneys

                          *********

ADELPHIA BUSINESS: Seeks OK to Access $135MM DIP Financing Pact
---------------------------------------------------------------
"[Adelphia Business Solutions, Inc., and its debtor-affiliates]
urgently require working capital to maintain their operations
and businesses during the chapter 11 process," Judy G.Z. Liu,
Esq., at Weil, Gotshal & Manges, LLP, tells the Bankruptcy
Court.  "Indeed, in the absence of available working capital,
the Debtors would be forced to cease their operations and
constrained to discontinue service to their customers. Any
significant disruptions of the Debtors' ordinary course
operations due to a lack of sufficient funding would be
devastating at this critical juncture. The inability of the
Debtors to obtain sufficient operating liquidity and to meet
their postpetition obligations on a timely basis may result in a
permanent and irreplaceable loss of business, causing a loss of
value to the detriment of the Debtors and the creditors of the
Debtors' estates."

Prior to the Petition Date, ABIZ funded its working capital
needs using (a) the proceeds realized from the issuance by ABIZ
of (i) the 12-1/4% Senior Secured Notes due 2004, issued on
August 27, 1997 in the aggregate amount of $250,000,000, (ii)
the 13% Senior Discount Notes due 2003, issued on April 15, 1996
in the aggregate amount of $329,000,000, and (iii) the 12%
Senior Subordinated Notes due 2007, issued on March 2, 1999 in
the aggregate amount of $300,000,000; (b) unsecured borrowings
under that certain bank credit facility between Adelphia
Business Solutions Operations, Inc., as borrower, and Bank of
America, NA and Chase Manhattan Bank, as Co-Administrative
Agents, pursuant to which Adelphia Business Solutions
Operations, Inc., a wholly owned subsidiary of ABIZ and one of
the Debtors herein, borrowed an aggregate of $500,000,000; and
(c) following the spin-off from Adelphia Communications
Corporation, working capital funding from ACC in the aggregate
amount of approximately $35,000,000.

Shortly before the Petition Date, Adelphia contacted several
potential post-bankruptcy lenders.  Ultimately, the Debtors were
able to identify two financial institutions as real potential
sources of postpetition financing, but neither source submitted
a proposal for more than $75 million -- not enough to see these
cases through chapter 11.  Moreover, the terms of those
proposals were terribly onerous.  The Debtors concluded that a
debtor-in-possession financing proposal presented by Adelphia
Communications Corporation, as the administrative agent for
itself and certain Lenders party thereto from time to time, was
the best.

Talks with ACC culminated in documentation of a Secured Debtor
in Possession Credit and Security Agreement, dated as of March
27, 2002, among the Debtors, as borrowers, and Adelphia
Communications Corporation, as administrative agent for itself
and other DIP Lenders.  The facility provides the Debtors with
access to up to $135,000,000 -- enough to meet the Company's
working capital and liquidity needs throughout these chapter 11
cases.

The salient terms of the DIP Financing facility are:

Borrowers:       Adelphia Business Solutions, Inc.
                 Adelphia Business Solutions Atlantic, Inc.
                 Adelphia Business Solutions of Tennessee, Inc.
                 Adelphia Business Solutions of Vermont, Inc.
                 Adelphia Business Solutions of Kentucky, Inc.
                 Adelphia Business Solutions of Florida, Inc.
                 Adelphia Business Solutions Operations, Inc.

Guarantors:      All of the Borrowers' direct and indirect
                 domestic subsidiaries

Lenders:         Lenders party to the Facility from time to
                 time.

Administrative
Agent:           Adelphia Communications Corporation

The Facility:    A revolving credit facility made available to
                 the Borrowers in an aggregate principal amount
                 of $135,000,000 in two Tranches:

                 * $67,500,000 Revolving Tranche A Loans backed
                   by Adelphia Communications Corporation and

                 * $67,500,000 Revolving Tranche B Loans backed
                   by Highland 2000, L.P.

Maturity Date:   The earliest of:

                 (a) March 26, 2004;

                 (b) the effective date of a joint plan of
                     reorganization;

                 (c) termination after an Event of Default.

Closing Date:    The first date on which any Loan is made.

Availability:    Availability under the Facility will be subject
                 to a borrowing base comprised of the sum of:

                 (a) $5,000,000

                      and

                 (b) the sum of:

                     (x) (1) in the case of any Borrowings in
                             April 2002, the amount of
                             $27,000,000; and

                         (2) in the case of any Borrowings
                             thereafter, the amount listed
                             as "Free Cash Flow Borrowings"
                             in a non-public Cash Budget

                         and

                     (y) the cumulative amount of "Free Cash
                         Flow Borrowings" from the Closing Date
                         through the current month.

Interest:        Loans will bear interest at an annual rate of
                 Wachovia Bank, N.A.'s prime rate plus 3.75%.
                 In the event of a default, the Interest Rate
                 increases by 2.00%.

Fees:            The Debtors agree to pay the Lenders:

                 * an up-front $4,050,000 Closing Fee and

                 * 1.00% [according to the DIP Loan Agreement,
                   but 0.25%, according to a summary document]
                   per year on every dollar not borrowed as
                   a Commitment Fee.

Mandatory
Repayments:      Mandatory repayments of the Loans under the
                 Facility are required in an amount equal to:

                 (1) 100% of the net sale proceeds from non-
                     ordinary course asset sales; and

                 (2) 100% of any insurance or condemnation
                     proceeds received by a Borrower or
                     Guarantor.

Priority:        All amounts owing by the Borrowers under the
                 Facility and by the Guarantors will constitute
                 allowed super-priority administrative expense
                 claims with priority over all administrative
                 expenses of the kind specified in 11 U.S.C.
                 Sec. 503(b) and 11 U.S.C. Sec. 507(b), subject
                 only to the Carve-Out.

Carve-Out:       The Lenders agree to a $4,000,000 Carve-Out
                 [according to a draft copy of the DIP Loan
                 Agreement, but $2,000,000 according to a draft
                 copy of the Interim DIP Financing Order] to
                 allow for payment of (i) professional fees
                 incurred in the Cases that are acceptable to
                 the Administrative Agent and (ii) fees pursuant
                 to 28 U.S.C. Sec. 1930 payable to the United
                 States Trustee or the Bankruptcy Clerk.

Security:        All amounts owing by the Borrowers under the
                 Facility and by the Guarantors are secured by a
                 first priority perfected security interest in
                 and lien on all assets (tangible, intangible,
                 real, personal and mixed) of the Borrowers and
                 the Guarantors, whether now owned or hereafter
                 acquired, including, without limitation,
                 accounts, inventory, equipment, capital stock
                 in subsidiaries, investment property,
                 instruments, chattel paper, real estate,
                 leasehold interests, contracts, patents,
                 copyrights, trademarks and other general
                 intangibles, and all products and proceeds
                 thereof, subject only to (i) valid and
                 enforceable liens of record as of the date of
                 the commencement of the Cases and (ii) the
                 Carve-out.

Financial
Covenants:       The Debtors covenant that cumulative free cash
                 flow will not deviate by more than $5,000,000
                 from these targets:
                                          Cumulative Free
                 For the Quarter Ending   Cash Flow Target
                 ----------------------   ----------------
                 June 30, 2002              ($36,994,000)
                 September 30, 2002         ($71,195,000)
                 December 31, 2002         ($112,224,000)

                 The Debtors covenant that Cumulative EBITDA
                 will not deviate by more than $5,000,000 from
                 these targets:

                                              Cumulative
                  For the Quarter Ending     EBITDA Target
                  ----------------------     -------------
                  June 30, 2002               ($6,178,000)
                  September 30, 2002          ($9,000,000)
                  December 31, 2002           ($7,643,000)

                 Additionally, the Debtors covenant that Total
                 Assets will not deviate by more than $5,000,000
                 from non-public target amounts at the end of
                 any fiscal quarter.

The Debtors have determined, in the exercise of their sound
business judgment, that it is critical to their reorganization
efforts to obtain a postpetition credit facility providing
access to up to:

       $27,000,000 on an interim basis, pending a Final DIP
                   Financing Hearing; and up to

      $135,000,000 on a permanent basis to fund the Company's
                   working capital needs during these chapter 11
                   cases.

The DIP Financing Pact grants liens to the DIP Lenders on the
same collateral that secures the 12-1/4% Senior Secured Notes.
The Ad Hoc Committee contends that the stock pledges securing
repayment of those notes diminish in value and that entitles the
noteholders to adequate protection payments.  Ms. Liu indicates
that the Debtors disagree with the Ad Hoc Committee's
contention. In exchange for peace on this issue, the Debtors
agree to pay Akin Gump's and Houlihan Lokey's reasonable fees
and expenses in connection with those professionals'
representation of the Ad Hoc Committee.

Lewis U. Davis, Jr., Esq., Paula A. Zawadzski, Esq., Joan G.
Dorgan, Esq., and Joy Flowers, Esq., at Buchanan Ingersoll P.C.,
in Pittsburgh, represent Adelphia Communications Corporation in
the Debtors' chapter 11 cases. ((Adelphia Bankruptcy News, Issue
No. 1; Bankruptcy Creditors' Service, Inc., 609/392-0900)


ADVOCAT INC: Appoints Wallace E. Olson to Board of Directors
------------------------------------------------------------
For the purpose of informing the market, Advocat Inc. has
announced that effective March 20, 2002 Wallace E. Olson joined
Advocat's Board of Directors. Advocat's Board of Directors now
consists of Charles W. Birkett, M.D., J. Bransford Wallace,
William C. O'Neil, Edward G. Nelson and Wallace E Olson. Joseph
F. Furlong, III and Paul Richardson had previously resigned from
the Board.

Advocat strives to be an advocate for the elderly through its
nursing homes and assisted-living facilities in the US and
Canada. The company operates some 65 owned or managed nursing
homes with more than 7,000 beds, as well as about 55 assisted-
living centers with nearly 5,500 units. The company focuses on
rural areas, mainly in the Southeast and Canada. Advocat's
facilities provide a range of health care services including
skilled nursing, recreational therapy, and social services, as
well as rehabilitative, nutritional, respiratory, and other
specialized ancillary services. Payments from Medicare and
Medicaid account for more than 80% of total revenues.

At June 30, 2001, the company's balance sheet showed a working
capital deficit of close to $62 million, and a total
shareholders' equity deficit of about $2 million.


ALTERRA HEALTHCARE: Working Capital Deficit Tops $130 Million
-------------------------------------------------------------
Alterra Healthcare Corporation (AMEX: ALI) announced financial
results for the year ended December 31, 2001, and provided an
update on its restructuring activities. At year end, the Company
operated or managed 430 residences with a total capacity to
serve approximately 20,200 residents.

                    Fiscal 2001 Results

The Company reported revenues of $508.8 million for the year
ended December 31, 2001, a 9.1% increase over revenues of $466.5
million for 2000. The Company's pre-tax loss for 2001 was $104.1
million (excluding $189.3 million of reserves recorded for
anticipated losses related to asset dispositions and $6.5
million in restructuring costs). The pre-tax loss for 2001
includes $76.3 million of non-cash expenses including
depreciation, amortization, and payment-in-kind interest
expense. The Company's net loss for 2001 was $299.9 million,
which reflects the impact of adjustments to the reserve for
assets held for sale and restructuring costs.

          Recent Operational Results And Initiatives

In the fourth quarter of 2001, the Company's residence level
operating margins were 31.6%, an increase of 4.9% over residence
level operating margins in the fourth quarter of 2000. Monthly
rates averaged $2,879 for the quarter ended December 31, 2001,
an increase of 12.0% over the average monthly rate for the
December 2000 quarter. In addition, general and administrative
costs (excluding costs related to the Company's restructuring
activities) declined to $11.7 million in the quarter ended
December 31, 2001, or 9.2% of total residence revenue. For the
three months ended December 31, 2001, the Company reported
overall average occupancy of 80.8%.

                  Restructuring Activities

In March of 2001 the Company commenced efforts to implement a
restructuring plan, the principal components of which include
the disposition of selected assets and the comprehensive
restructuring of its capital structure. Restructuring
discussions with various senior capital structure constituents
transpired during 2001 and are ongoing. While certain binding
restructuring arrangements have been executed, negotiations with
respect to the majority of the Company's secured debt and lease
arrangements have not been concluded. Negotiations with junior
capital structure constituents have not commenced, as these
negotiations are dependent upon the outcome of negotiations with
senior capital structure constituents. The Company noted that
its Annual Report on Form 10-K for the year ended December 31,
2001, filed today with the Securities and Exchange Commission,
includes a comprehensive summary of the Company's restructuring
activities. The Company's 2001 Annual Report will be publicly
available through the SEC's Web site at http://www.sec.govand  
through the Company's Web site at http://www.assisted.com  

               Portfolio Rationalization Activity

The Company's Board of Directors adopted a plan in 2000 and 2001
to dispose of or terminate leases on 102 residences with an
aggregate capacity of 4,444 residents and 33 parcels of land. As
of December 31, 2001, 59 residences representing a resident
capacity of 2,774 have either been sold or transferred to a new
lessee. In addition, the Company has sold ten land parcels.

Subsequent to December 31, 2001, six additional residences (258
resident capacity) were either sold or residence leases were
terminated. The sale or lease termination of these assets
resulted in the retirement of approximately $16.6 million of
debt and lease obligations.

         Discontinuation Of Joint Venture Arrangements

During 2001, the Company negotiated a series of arrangements
that resulted in the discontinuation of joint venture
arrangements with respect to 42 residences. Specifically, in
October 2001, the Company negotiated the buyout of joint venture
partner interests in fifteen residences in connection with a
modification and settlement agreement with one investor group.
In December 2001, the Company also terminated joint ventures
with a second joint venture partner by exchanging ownership
interests in twelve joint venture entities jointly owned,
resulting in the Company and the joint venture partner each
acquiring sole ownership in six of these residences. Also in
December 2001, the Company terminated its joint venture with
Manor Care, Inc. relating to thirteen residences in connection
with the consummation of a global settlement of various pending
litigation and arbitration proceedings between the Company and
Manor Care, Inc. and its affiliates. As of December 31, 2001, 47
of the Company's residences continue to be owned or operated in
joint venture structures.

Patrick Kennedy, Alterra's President and Chief Executive Officer
commented, "2001 was a turning-point year for Alterra. Though
occupancy rates continue to be lower than we would prefer,
residence margin and cash flow performance have begun to
strengthen. In addition, while there remains much work to be
done, we have made meaningful progress on our restructuring
activities. We attribute our continued improvement in operations
to our dedicated and experienced field personnel who continue to
support the Company and are committed to its mission of service
to our nation's seniors. We look forward to making further
progress on both operating and capital structure initiatives in
2002."

Alterra offers supportive and selected healthcare services to
our nation's frail elderly and is the nation's largest operator
of freestanding Alzheimer's/ memory care residences. Alterra
currently operates in 26 states.

The Company's common stock is traded on the American Stock
Exchange under the symbol "ALI."

At December 31, 2001, the company reported a working capital
deficit of about $130 million.


AMERICAN SEAFOODS: S&P Assigns B Rating to Proposed $175MM Notes
----------------------------------------------------------------
On March 29, 2002, Standard & Poor's assigned a 'B' rating to
American Seafoods Group LLC (ASG) and American Seafoods Inc.'s
(a wholly owned subsidiary of ASG and co-obligor) proposed $175
million senior subordinated notes due 2010. The notes are to be
issued under Rule 144A to private investors with future
registration rights. At the same time, Standard & Poor's
assigned a 'BB-' minus corporate credit rating to American
Seafoods Group. The rating outlook is stable.

Simultaneously, Standard & Poor's assigned a 'BB' rating to
American Seafoods Group's planned $390 million senior secured
credit facility. The secured facility is comprised of a $75
million revolving credit facility maturing on September 30,
2007, a $90 million term loan A facility maturing on September
30, 2007, and a $225 million term loan B facility maturing on
March 31, 2009. The facility is secured by a first perfected
lien on virtually all of the assets of American Seafoods Group
and any of its domestic subsidiaries. This includes the firm's
vessels, other fixed assets, contracts (fishery cooperative
agreements), fishery permits and licenses, and all other
tangible or intangible property. Additionally, 100% of the
capital stock of any present or future domestic subsidiaries and
65% of the capital stock of any foreign subsidiaries is pledged
as collateral.

The bank loan rating is one notch higher than the corporate
credit rating because Standard & Poor's is reasonably confident
of full recovery of principal due to the value of the assets,
which are primarily the firm's vessels, its fishing rights,
quota share allocations and licenses, all of which are fully
transferable. Given the company's high debt levels, exposure to
moderate levels of operating stress within the industry could
affect financial performance. However, Standard & Poor's
believes that given the fungible nature of the sophisticated
fishing vessels and the inherent value of the fishing quotas,
the assets would retain sufficient value to cover the fully
drawn bank facility in the event of a default. Additionally, the
mandatory amortization schedule and the mandatory cash flow
sweep provisions of the bank facility provide additional asset
coverage.

The ratings on American Seafoods Group and its wholly owned
subsidiary, American Seafoods Inc., reflect the company's high
level of debt following its recapitalization by Centre Partners
Management LLC; its participation in a competitive, commodity-
oriented business (about 70% of revenues); exposure to foreign
currency risk (about 40% of revenues are yen denominated); and
quota limitations. This is partially offset by the firm's
leading position as the largest and lowest cost producer in the
industry, a proven track record under the new regulatory
environment, its hedging strategy (about 80% of the next 12-
months Yen revenues are fixed), and an experienced management
team.

American Seafoods is a fully integrated seafood harvesting,
processing, and marketing company, operating catcher-processor
vessels, which participate in the largest commercial fishery in
U.S. waters. The company's products are subject to supply and
demand vagaries that can affect financial performance.
Mitigating these concerns is American Seafoods' strong position
in the Bering Sea/Aleutian Island pollock fishery, and
regulatory support following the passing of the American
Fisheries Act (AFA) by the U.S. Government in October 1998. The
AFA created a more rational, stable, and profitable operating
environment by limiting the number of vessels operating in the
fishery, restricting about one-third of the total number of
boats that previously fished there. In November 2001, Congress
passed legislation that made the AFA's provisions permanent,
reducing some of the operating risk.

The AFA facilitated the formation of the Pollock Conservation
Cooperative (PCC). The PCC apportioned the amount of the total
allowable catch permitted by each of the members to 17.5% of the
directed pollock catch. American Seafoods is the largest member
of the PCC, controlling about 16.8% of the catch. With the
firm's purchase of 0.7% of the direct catch of other catcher-
vessels, American Seafoods has reached its 17.5% statutory
limitation under the AFA in each of the last two years. American
Seafoods was able to acquire community development quotas from
Alaska Community Development groups in 2001, which did not count
against the 17.5% limitation. However, the firm's ability to
grow its core pollock harvesting operations either through
purchase of community development quotas or through legislative
change will remain a key rating concern with regard to the
firm's business risk profile.

Pro forma for the recapitalization, Standard & Poor's expects
that EBITDA to interest coverage will be about 2.8 times, total
debt to EBITDA of about 4.3x, and operating margins (before
depreciation and amortization) of above 30%. American Seafoods
should continue to generate significant free cash flow, which
will be used for required debt amortization payments and
mandatory excess cash flow sweep. This should result in an
improving financial profile over the intermediate term. Standard
& Poor's expects that total debt to EBITDA will improve to less
than 3.5x and EBITDA to interest of over 3.0x in 2004. Capital
expenditures are not expected to be material and should remain
below $8.0 million over the next several years.

                         Outlook

Standard & Poor's expects that American Seafoods will maintain
its leading market position and that its financial profile will
improve over the intermediate term.


AMRESCO CAPITAL: Net Assets in Liquidation Drop by $1.6M in Dec.
----------------------------------------------------------------
AMRESCO Capital Trust (OTC Bulletin Board: AMCT) reported that
net assets in liquidation decreased by $1.6 million (or $0.16
per share) during the quarter ended December 31, 2001.  As
previously communicated, the company has been liquidating its
assets under a plan of liquidation and dissolution; shareholders
approved the liquidation and dissolution of the company on
September 26, 2000.  As of December 31, 2001, net assets in
liquidation totaled $15.6 million (or $1.55 per share), down
from $17.2 million (or $1.71 per share) at September 30, 2001.  
During the fourth quarter, revenues and expenses totaled $0.4
million and $0.8 million, respectively. Additionally, during the
period, the company reduced the carrying value of its remaining
mortgage loan by $1.3 million and it increased the carrying
value of its investment in its unconsolidated taxable subsidiary
by $0.1 million.  Both of these investments were liquidated in
March 2002 at their December 31, 2001 carrying values.

As previously announced, the company expects to make its sixth
and final liquidating distribution on or about April 30, 2002.  
The company currently estimates that its final liquidating
distribution will approximate $1.51 to $1.56 per share.  
Including liquidating distributions paid to date, a final
liquidating distribution within this range would result in total
liquidating distributions of $12.11 to $12.16 per share.  There
can be no assurances, however, that the actual amount of the
final liquidating distribution (or the timing of its payment)
will not vary materially from the estimates.  Shortly after the
final distribution is made, the company expects to file articles
of dissolution.

DebtTraders reports that Amresco Inc.'s 10% bonds due 2004
(AMMB04USR1) are quoted at a price of 23. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=AMMB04USR1
for real-time bond pricing.


ANALYTICAL SURVEYS: Will Issue $2MM Secured Conv. Note to Tonga
---------------------------------------------------------------
On March 21, 2002, Analytical Surveys, Inc. (ASI) entered into a
definitive agreement with Tonga Partners, L.P., an investment
fund managed by Cannell Capital LLC, under which ASI is
obligated, at the time of closing, to issue to Tonga a senior
secured convertible note in the principal amount of $2,000,000.
Tonga is purchasing the note with available cash.

The note is convertible at any time into common stock of ASI at
a price equal to the least of (i) $0.40, (ii) 90% of the average
closing bid prices of the common stock for the 90 trading days
ending the trading date immediately preceding the closing date,
and (iii) 90% of the average closing bid prices for the 3
trading days having the lowest closing bid price during the 20
trading days immediately prior to the conversion date, but under
any event, the number of shares issuable upon full conversion of
the note must constitute at least 38% of the issued and
outstanding shares, on a fully diluted basis, as of the date of
full conversion. Assuming a conversion price of $0.40 per share,
ASI would issue 5.0 million shares of common stock if the note
were fully converted. The note accrues interest at the rate of
5% per annum, but interest is not payable currently. At the time
of conversion, any unpaid interest is paid in shares of common
stock. The note is subject to mandatory conversion in three
years and is secured by all of the assets ASI. Tonga is required
to release its lien on the collateral if ASI obtains at least
$4.0 million of additional permanent financing.

Tonga also will receive warrants to purchase an additional 5.0
million shares of common stock (subject to adjustment). One
whole warrant will entitle the Investor to acquire an additional
share of common stock at an exercise price equal to 115% of the
conversion price of the note. Assuming an exercise price of
$0.46 per share (115% of $0.40), the aggregate exercise price
for the warrants would be $2.3 million for the issuance of 5.0
million shares of common stock, but the shares issuable upon
conversion of the note and exercise of warrants are to be no
less than 55% of the outstanding common stock (unless Tonga
exercises the warrants in a cashless exercise where Tonga uses
the value of some of the warrants to pay the exercise price for
other warrants).

If at the time of conversion of the note, the price of the
common stock has dropped below $0.40 per share, the number of
shares of common stock issuable upon conversion of the note and
upon exercise of the warrants would increase. Similarly, if ASI
issues shares of common stock at a price of less than $0.40 per
share, the conversion price and the exercise price decrease to
that lower price, and the number of shares issuable under the
note and the warrants would therefore increase.

Under the definitive agreements, ASI is required to register the
shares underlying the note and warrants. Also, ASI is generally
restricted from issuing additional equity securities without
Tonga's consent, and Tonga has a right of first refusal as to
certain subsequent financings.

As part of the transaction, Tonga will appoint three of the five
directors of ASI and, as a result, will control ASI. In
addition, upon exercise of the warrants and conversion of the
note, Tonga will own a majority of the common stock, thereby
giving Tonga additional control over ASI. It is expected that
Messrs. John Thorpe and Sol Miller will remain on the board of
directors, and the other directors will resign in favor of
individuals yet to be named by Tonga.

Under Nasdaq rules, the issuance of securities that are
convertible into more than 20% of the outstanding common stock
normally would require shareholder approval. However, under
rules that provide an exception to that requirement, ASI has
obtained a waiver of the shareholder approval requirement from
Nasdaq for the issuance of the note and warrants. ASI justified
its request for a waiver on the basis of a financial need to
expedite the transaction. ASI's audit committee has approved the
waiver. Additionally, ASI is mailing to all shareholders, no
later than 10 days before issuing the note and warrants,
information describing the transaction and informing such
shareholders of its decision to obtain a waiver of the
shareholder approval requirement in lieu of seeking the
shareholder approval that otherwise would have been required.
The transaction is scheduled to close on or about March 31,
2002.

In an effort to retain ASI's Nasdaq listing and as required by
the definitive agreements, management intends to effect a
reverse split of the common stock. Details of the reverse split
will be issued once they have been finalized.

Analytical Surveys Inc. (ASI) provides technology-enabled
solutions and expert services for geospatial data management,
including data capture and conversion, planning, implementation,
distribution strategies and maintenance services. At September
30, 2001, the company's total current liabilities eclipsed its
total current assets by about $2.7 million.


ARMSTRONG HOLDINGS: Obtains 3rd Extension of Exclusive Periods
--------------------------------------------------------------
Judge Randall Newsome further extends the deadlines by which
Armstrong Holdings, Inc., and its debtor-affiliates have the
exclusive right to propose and file a plan of reorganization and
solicit acceptances of that plan.  The Exclusive Plan Filing
Period is extended through October 4, 2002, and that the
Company's Exclusive Solicitation  Period is extended through
December 3, 2002, without prejudice to Armstrong's right to
request further extensions.

DebtTraders reports that Armstrong Holdings Inc.'s 9% bonds due
2004 (ACK04USR1) are quoted at a price of 58.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=ACK04USR1for  
real-time bond pricing.


BORDEN CHEMICALS: Court Okays Formosa's Bid to Acquire PVC Plant
----------------------------------------------------------------
Borden Chemicals and Plastics Operating Limited Partnership
announced that the U.S. Bankruptcy Court for the District of
Delaware has approved the bid by Formosa Plastics Corporation,
Delaware, to acquire the assets and operations of BCP's
polyvinyl chloride plant in Illiopolis, Ill., for approximately
$35 million, subject to adjustments for working capital and
other items.

On March 8, 2002, BCP announced that it had executed an asset
purchase agreement with Formosa to acquire the Illiopolis assets
and operations, pending court approval. BCP expects to conclude
the sale transaction during the month of April.

"We are very pleased to have reached this point with the second
sale of assets," said Mark J. Schneider, president and chief
executive officer, BCP Management, Inc. (BCPM), the general
partner of BCP. "I thank the employees of Illiopolis for their
understanding and continued hard work during this very
challenging time."

Schneider said that discussions continue concerning disposition
of BCP's plant in Geismar, La. On February 28, 2002, BCP
completed the sale of assets of its PVC plant in Addis, La., to
Shintech Louisiana, LLC.

Based in Delaware City, Del., Formosa Plastics Corporation,
Delaware, is part of the Dispersion Polyvinyl Chloride business
unit of Formosa Plastics Corporation, U.S.A., a privately held
manufacturer of plastic resins and petrochemicals headquartered
in Livingston, New Jersey. It is part of the Formosa Plastics
Group, a $15-billion global enterprise based in Taiwan with
nearly one-half century of experience in petrochemical
production and processing.

Meanwhile, the court granted a motion by BCP for an extension of
the term of the Primary Debtor-in-Possession (DIP) facility,
which was due to expire March 31, 2002. The amended order
extends the termination date under the facility (provided by a
group of lenders led by Fleet Capital Corporation) until April
30, 2002. This provides BCP with funding for continued
operations through the closing of the sale of the Illiopolis
plant.

The court also granted final approval of up to $10 million in
postpetition loans under the Secondary Debtor-in-Possession
credit facility (Secondary DIP Facility) to be provided by BCPM.
The court had previously given interim approval for a partial
amount of that facility.

BCP and its subsidiary, BCP Finance Corporation, filed voluntary
petitions for protection under Chapter 11 of the U.S. Bankruptcy
Code in the United States Bankruptcy Court for the District of
Delaware on April 3, 2001. Borden Chemicals and Plastics Limited
Partnership (BCPLP), the limited partner of BCP, was not
included in the Chapter 11 filings. (Borden Chemical, Inc., a
separate and distinct entity, is not related to the filings.)

DebtTraders reports that Borden Chemical & Plastics' 9.500%
bonds due 2005 (BCPU05USR1) are last quoted at a price of 5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=BCPU05USR1
for real-time bond pricing.


BURLINGTON INDUSTRIES: Court Names Warren Smith as Fee Auditor
--------------------------------------------------------------
Judge Newsome appoints Warren H. Smith & Associates as the Fee
Auditor for Burlington Industries, Inc., and its debtor-
affiliates, and to act as a special consultant to the Court to
review periodic fee and expense applications and provide the
Court with an analysis of those compensation requests submitted
by:

    (i) all professionals employed in these cases;

   (ii) all members of official committees appointed in these
        cases; and

  (iii) any claims for reimbursement of professional fees and
        other expenses as permitted by the Court, except
        for professionals retained as ordinary course
        professionals.

Judge Newsome further rules that the terms of the Court's
previous administrative order are modified by this order except
that:

  (i) retroactive to the Petition Date, professionals must not
      file monthly fee applications with the Court, but instead
      file a Notice of Monthly Fee and Expense Invoice, together
      with the monthly invoice, after the end of the applicable
      month.  A copy of the Monthly Statement must be provided
      in Adobe Acrobat format via e-mail to the interested
      parties.  In addition, the professionals should also send
      to:

        (a) the Auditor, the U.S. Trustee, and the Debtors, the
            fee detail containing the time entries in hardcopy
            format via first class, U.S. mail; and

        (b) the Auditor and the U.S. Trustee the Fee Detail in
            an electronic format such as Excel, Microsoft Word
            or Wordperfect via e-mail.

      If the professional cannot reasonably convert the Fee
      Detail into the required format, the Auditor must work
      with necessary professionals to find an appropriate
      electronic format.  Professionals must, within 15 days up
      to and including April 6, 2002, provide the Auditor a copy
      of all monthly fee applications filed prior to this date.
      These must be in both hardcopy and electronic formats;

(ii) the Notice Party has 20 days after service
      of a Monthly Statement to object to the Monthly
      Statement.  Upon the expiration of the objection deadline,
      each professional must file with the Court and provide to
      the Notice Parties a certificate of no objection,
      certifying that no objection or partial objection has
      been filed relative to the Monthly Statement.  After this,
      the Debtors are authorized to pay the professional an
      amount equal to the lesser of:

      (a) 80% of the fees and 100% of the expenses requested in
          the Monthly Fee Statement; or

      (b) 80% of the fees and 100% of the expenses not subject
          to an objection.

(iii) if any Notice Party objects to a professional's Monthly
      Statement, it must file a written objection with the Court
      and serve it on the professional and each of the Notice
      Parties so that it is received on or before the objection
      deadline.  The objecting party and the professional may
      attempt to resolve the objection on a consensual basis.
      If the parties are unable to reach a resolution of the
      objection within 20 days after the service of the
      objection, then the professional may file a response to
      the objection with the Court, which is heard at the
      next interim or final fee application hearing scheduled.
      At this time, the Court considers and disposes of the
      objection, if requested by the parties;

(iv) the first interim fee application period covers all
      expenses and fees from the November 15, 2001 Petition Date
      through March 31, 2002.  Interim fee applications for the
      period must be filed not later than May 15, 2002.
      Subsequent interim fee application periods are four
      calendar months and interim fee applications for these
      periods are filed no later than 45 days after the end
      of a period; and

  (v) to the extent the Court disallows any professional's fees
      or expenses in an amount greater than the holdback, the
      disallowed amount is deducted from the Debtors' next
      payment to the affected professional.

The Court describes the Auditor's duties as:

  (i) the auditor reviews in detail interim and final fee
      applications filed with the Court.  To the extent
      reasonably practicable, the Auditor avoids
      duplicative review when reviewing final fee applications
      comprised of interim fee applications that have already
      been reviewed by the Auditor;

(ii) during the course of its review and examination, the
      Auditor consults with each professional concerning
      its interim and final fee applications if it notes any
      areas of concern regarding reasonable, actual and
      necessary fees and expenses;

(iii) the Auditor may review any filed documents in these cases
      and is responsible for being generally familiar with the
      docket in the Chapter 11 cases.  The Auditor is deemed to
      have filed a request for notice of papers filed in these
      cases.  The Auditor must be provided with all such papers;

(iv) within 30 days after service of a fee application, the
      Auditor must communicate in writing to an affected
      professional concerning his findings in the fee
      application.  This is known as the Initial Report;

  (v) if the Auditor notes issues in a professional's
      fee application, the Auditor must contact the affected
      professional concerning the report within 15 days after
      the date of the Initial Report. Both parties then engage
      in an informal response process.  The purpose of the
      informal response process is to resolve matters raised in
      the Initial Report.  The Auditor must endeavor to reach
      consensual resolutions with each professional.  Each
      professional may provide the Auditor with such verbal or
      written supplemental information relevant to the
      applicable Initial Report;

(vi) within 45 days after the date of the Initial Report, the
      Auditor must conclude the informal response process by
      filing a final report for each fee application with the
      Court.  This period may be extended by mutual consent of
      the Auditor and the professional;

(vii) the Auditor must serve each Final Report on the
      affected professional and the Notice Parties.  The Final
      Report must be in a format designed to opine whether the
      requested fees of the professional meet the applicable
      standards of the Bankruptcy Code;

(viii) within 20 days after the date of the Final Report, the
      subject professional may file a Response with the Court.
      This Response must be served upon the Notice Parties.
      Hearings on all fee applications for a particular interim
      fee application period are scheduled by the Court in
      consultation with the Debtors' counsel after the Auditor
      has filed a Final Report; and

(ix) the Auditor must be available for deposition and cross-
      examination by the Debtors, each of the Committees, the
      U.S. Trustee and other interested parties.  The Auditor
      Must have the power of discovery, as though he were
      party to a contested matter with each professional.

Judge Newsome authorizes that the fees and expenses of the
Auditor be subject to application and review, and upon Court
approval, be paid from the Debtors' estates as an administrative
expense.  The compensation is:

    (i) the hourly rate of Mr. Smith is $275, while the hourly
        rates of his assisting associates are:

        - Michael Donohoe            $220
        - Michelle Shriro            $210
        - legal assistants    $70 to $135

   (ii) 1% of the aggregate applicant billings reviewed by the
        Auditor over the life of this bankruptcy proceeding.
        (Burlington Bankruptcy News, Issue No. 10; Bankruptcy
        Creditors' Service, Inc., 609/392-0900)   


CALPINE CORP: Sets-Up Reserve for Third-Party Default on ERCs
-------------------------------------------------------------
Calpine Corporation (NYSE: CPN) announced that subsequent to
releasing its 2001 earnings on January 31, 2002, the company
learned that certain emission reduction credits (ERCs) it
purchased in 2001 were not available. The company is
aggressively pursuing recovery of this loss and has filed a
civil suit against the ERC broker.  Calpine routinely purchases
ERCs to help obtain environmental permits to build new power
plants.

While an in-depth investigation of the loss is continuing, the
company has determined that it is likely that the ERCs were not
available to the company prior to December 31, 2001.
Accordingly, Calpine's 2001 earnings previously released will be
reduced by approximately $11.5 million after-tax.  This change
has been reflected in Calpine's Annual Report on Form 10-K filed
today. As a result of this reserve, diluted earnings per share
before and after extraordinary items for the year ending
December 31, 2001 have been reduced by $0.03 to $1.85 and $1.87,
respectively.  Diluted earnings per share from recurring
operations(a) for the year also have been lowered by $0.03 to
$1.92. This will not negatively affect the company's future
earnings, and Calpine is confident that all other ERCs it has
purchased in the course of its development program are secure
and not at risk of similar loss.

Based in San Jose, California, Calpine Corporation is an
independent power company that is dedicated to providing
customers with clean, efficient, natural gas-fired power
generation.  It generates and markets power, through plants it
develops, owns and operates, in 29 states in the United States,
three provinces in Canada and in the United Kingdom.  Calpine is
the world's largest producer of renewable geothermal energy, and
it owns and markets 1.3 trillion cubic feet of proved natural
gas reserves in Canada and the United States.  The company was
founded in 1984 and is publicly traded on the New York Stock
Exchange under the symbol CPN.  For more information about
Calpine, visit its Web site at http://www.calpine.com  

(a) From recurring operations, before deduction of merger
expense in connection with the Encal Energy Ltd. pooling-of-
interests transaction, and before extraordinary items and
cumulative effect of a change in accounting principle.

                         *   *   *

As reported in the March 15, 2002 edition of Troubled Company
Reporter, Fitch Ratings has lowered its rating on Calpine
Corporation's senior unsecured debt from 'BB+' to 'BB' and the
rating on the company's convertible trust preferred from 'BB-'
to 'B'. The Rating Watch Negative has been removed, and replaced
by a Stable Rating Outlook. This action follows Calpine's
announcement that it has pledged its U.S. and Canadian natural
gas reserves, United Kingdom Saltend power plant, and equity
investment in nine U.S. power plants to the financial
institutions providing $2 billion of funding, under a new
secured debt financing arrangement.

The rating downgrades reflect the following factors. The pledged
collateral will secure a total of $2 billion of term debt and
borrowing capacity that is structurally senior to Calpine's
unsecured debt. In addition, by pledging these assets, the
amount of asset protection available to unsecured bondholders
has been reduced. The value of the pledged assets is
significant. Management recently valued its natural gas reserves
at around $2.7 billion, and they had been considered a viable
source of near-term liquidity either through a direct sale or
reserve base financing.


CANADA 3000: Selling Assets by Public Auction on April 13, 2002
---------------------------------------------------------------
Canada 3000 assets in Calgary are to be sold April 13, 2002 by
Unreserved Public Auction. Century Services, with offices in
Vancouver, Edmonton, Calgary, Toronto and Los Angeles will be
conducting the sale.

Canada 3000 is Canada's second largest scheduled air carrier,and
operates flights to over 100 destinations worldwide, offering
scheduled and chartered passenger service domestically within
Canada and internationally to the United States, United Kingdom,
Europe, Mexico, the Caribbean, India and the South Pacific. The
company carries approximately 3.3 million passengers per year
and employs 4,800 people full and part-time, substantially all
of whom live in Canada. In November 2001, Canada 3000 obtained
protection from creditors under Canadian Companies' and
Creditors Arrangement (CCCA) Act.


CEDARA SOFTWARE: NASDAQ Transfers Listing to Small Cap Market
-------------------------------------------------------------
Cedara Software Corp. (TSE:CDE/Nasdaq:CDSW) announced that the
Nasdaq Listing Qualifications Panel has decided to continue
Cedara's Nasdaq listing but to transfer such listing from the
Nasdaq National Market to the Nasdaq Small Cap Market effective
Monday, April 1, 2002.

"With this decision, Cedara will continue to be listed on the
Nasdaq Stock Market under the same symbol. In addition, Cedara
continues to trade on the Toronto Stock Exchange, Canada's
premiere market for senior equities", said Michael Greenberg,
Chairman and Chief Executive Officer.

Cedara Software Corp., based in the greater Toronto area, is a
leading medical imaging software developer. Cedara serves
leading healthcare solution providers and has long-term
relationships with companies such as Cerner, GE, Hitachi,
Philips, Siemens, and Toshiba. Cedara offers its OEM customers a
rich array of end-to-end imaging solutions. The Cedara
Foundation Technology supports Windows and Unix. This
continuously enhanced imaging software is embedded in 30% of
MRIs sold on March 27. Cedara offers components and applications
that address all modalities and aspects of clinical workflow
including: 3D imaging and advanced post-processing; volumetric
rendering; disease-centric imaging solutions for cardiology; and
streaming DICOM for web-enabled imaging. Cedara's picture
archiving and communications systems (PACS) solutions, Cedara
I-View (TM), Cedara I-Read (TM) and Cedara I-Report (TM) are
sold via systems integrators and distributors around the world.
Through its Dicomit Dicom Information Technologies Inc.
subsidiary, Cedara provides an ultrasound and DICOM connectivity
solutions to OEM customers. At the end of the second quarter of
the current fiscal year, Cedara's balance sheet showed a total
shareholders' equity deficiency of close to $100 million.


COVANTA ENERGY: Files for Chapter 11 Reorganization in New York
---------------------------------------------------------------
Covanta Energy Corporation (NYSE: COV) announced a financial
restructuring plan resulting from its comprehensive review of
strategic alternatives. As the first element of that plan, the
Company has filed a voluntary petition for Chapter 11
reorganization with the U.S. Bankruptcy Court in the Southern
District of New York. The Company's core energy and water
facilities will continue to operate in the normal course of
business and will be unaffected by the filing.

                 Results of Strategic Review

This announcement represents the culmination of the strategic
review conducted by the Company's Board and management, with
outside financial advisers, which was announced in December
2001. As a result of that review, the Company:

     - Determined that reorganization under Chapter 11
represents the most viable venue to reorganize the Company's
capital structure, complete the disposition of its remaining
non-core entertainment and aviation assets, and protect the
value of the Energy and Water franchise;

     - Entered into a non-binding Letter of Intent with the
investment firm of Kohlberg Kravis Roberts & Co. (KKR) for a
$225 million equity investment under which a KKR affiliate would
acquire the Company upon emergence from Chapter 11; and

     - Announced a strategic restructuring program to focus on
the U.S. energy and water market, expedite the disposition of
non-core assets and, as a result, reduce overhead costs.

In connection with the filing, Covanta obtained a commitment for
$463 million of debtor-in-possession financing from its current
bank group. This financing, subject to approval by the
Bankruptcy Court, will cover all of the Company's ongoing cash
needs and help ensure the continuation of the Company's Letters
of Credit, which are used to support the performance and payment
obligations of its core energy and water facilities.

Scott G. Mackin, Covanta President and Chief Executive Officer,
stated, "We have painstakingly reviewed and pursued all options
outside of a Chapter 11 filing for quite some time now. Our core
businesses - Waste to Energy, Independent Power Production and
Water - are strong. However, the capital structure impediments
left over from the non-core, former Ogden Corporation
businesses, and the lack of access to the capital markets as
means by which to deal with them, have foreclosed other options.
The exhaustive strategic review has demonstrated that Chapter 11
represents the most viable venue for Covanta to address those
capital structure issues, expedite our restructuring and
preserve the value of our strong core businesses. When we
emerge, we will do so with a strong balance sheet and core
businesses unencumbered by the problems we inherited.

"We are gratified by the support of our bank group and KKR,
which we believe will allow us to complete the Chapter 11
process expeditiously. Our bank group, particularly the Agents,
has worked exceptionally hard to put together an impressive D-I-
P facility that will preserve our core businesses through this
process. And, the relationship we have formed with KKR over the
past several months is particularly exciting. Their expertise,
business acumen and financial resources will add significant
value to Covanta's prospects, and their potential investment
affirms the strength of our core energy and water operations.

"We are working to obtain court approval of the substantial DIP
package quickly, but in the meantime, interim approval affords
us access to ample cash with which we will continue to operate
our energy and water facilities as usual. At this time, the
Company has in excess of $55 million in its domestic accounts.
We intend to pay in full our post-petition obligations,
including payments to vendors. With our bank group and KKR, we
look forward to working with our creditors to develop a Plan of
Reorganization that is fair and feasible and positions us to
realize the full potential of our core businesses," Mr. Mackin
said.

               $225 Million Equity Investment by KKR

The non-binding Letter of Intent with KKR provides that the
Company and the Agents for its bank group will work exclusively
with KKR for up to 90 days. Upon completion of due diligence,
the negotiation and execution of definitive agreements
satisfactory to the Company, KKR, the bank group and other
creditors, the confirmation of a Plan of Reorganization by the
Court and the satisfaction of other conditions, KKR would
acquire the Company upon its emergence from Chapter 11. The
Agents of the bank group providing the Company's D-I-P financing
have signed the Letter of Intent and support a transaction with
KKR.

The rights of Covanta's creditors would be determined as part of
the Plan of Reorganization. Existing common equity and preferred
shareholders are not expected to participate in the new capital
structure.

Scott Stuart, Member of KKR, said, "KKR has been working closely
with Covanta's management team for several months to determine
the Company's optimal course for the future. We are pleased that
the Company has elected to partner with us after its lengthy
strategic review process. While this is an extremely complex
situation given the particular challenges of the Company's
capital structure, we are attracted to Covanta's core assets and
strong management team. We look forward to continuing to work
closely with the Company, the bank group and other creditors to
implement a Plan of Reorganization that will best meet Covanta's
objectives now and over the long term."

          $463 Million Debtor-in-Possession Financing
                Arranged by Existing Bank Group

The filing immediately enhanced Covanta's liquidity by enabling
the Company to restructure liabilities associated with its non-
core entertainment and aviation businesses. Moreover, the
Company has obtained a commitment for $463 million in debtor-in-
possession (D-I-P) financing from its bank group, led by the
Agents. This financing, which is subject to definitive court
approval, will cover all of the Company's ongoing cash needs and
helps ensure the continuation of the Company's Letters of Credit
that support the performance and payment obligations of our core
energy and water facilities.

                 Restructuring Program to Focus
              on Its Core Energy and Water Business

Covanta also announced a restructuring program to focus on the
U.S. energy and water industry, expedite the disposition of its
non-core assets and, thereby reduce overhead costs.

Further, the Company announced that it has completed the sale of
its Thai energy assets for $35 million to two consortia of co-
investors. The sales included Covanta's Saha and Rojana co-
generation facilities, as well as its subsidiary operating those
plants.

                   Core Energy, Water Facilities
               Conducting Business in Ordinary Course

Covanta will continue to conduct business at its core energy and
water facilities. The Chapter 11 filing will have no effect on
their operation, and the Company intends to continue operating
those facilities according to the same high standards as always.

"Continued performance to our loyal customers, client
communities, partners and vendors is our paramount focus," said
Mr. Mackin. "We value those relationships and are committed to
maintaining the same levels of service and performance that they
have come to expect from us. In particular, we are grateful to
the many clients who have gone out of their way to voice their
support for us as we go through this process.

"We will become predominately a domestic energy and water
business allowing us to more efficiently focus our resources on
the current operations and the expansion opportunities available
to us in the U.S. The Chapter 11 process along with KKR's
continuing involvement will give us the ability to efficiently
accomplish this self-help program which we will begin
immediately."

The Company's project debt is unaffected by the Chapter 11
filing. Project bondholders should expect that all debt service
payments will continue. In fact, because Chapter 11 protects the
value of the Company's core energy assets, the filing will help
ensure the projects' continued performance and associated
project debt payments.

The Company intends to maintain its qualified benefits programs
for employees and to continue the current payroll schedule.

"The foundation of Covanta is its employees," Mr. Mackin
concluded. "Their effort and dedication, particularly over the
last two years, have put us in a position to build on our core
franchise to further strengthen the Company and enhance its
prospects for the future. We are grateful for their ongoing
support."

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 http://www.covantaenergy.comor through the  
Company's automated information system at 866-COVANTA (268-
2682).


COVANTA ENERGY: Case Summary & 30 Largest Unsecured Creditors
-------------------------------------------------------------
Lead Debtor: Covanta Energy Corporation
             40 Lane Road
             Fairfield, New Jersey 07004
             fka Ogden Corporation

Bankruptcy Case No.: 02-40841

Debtor affiliates filing separate chapter 11 petitions:

     Entity                                     Case No.
     ------                                     --------
     Ogden New York Services, Inc.              02-40826
     Ogden Allied Abatement &                   02-40827
      Decontamination Service, Inc.
     Ogden Allied Maintenance Corp.             02-40828
     Ogden Aviation Distributing Corp.          02-40829
     Ogden Aviation Service International       02-40830
      Corporation
     AMOR 14 Corporation                        02-40886
     Covanta Acquisition, Inc.                  02-40861
     Covanta Alexandria/Arlington, Inc.         02-40929
     Covanta Babylon, Inc.                      02-40928
     Covanta Bessemer, Inc.                     02-40862
     Covanta Bristol, Inc.                      02-40930
     Covanta Cunningham Environmental           02-40863
      Support Services, Inc.
     Covanta Energy Americas, Inc.              02-40881  
     Covanta Energy Construction, Inc.          02-40870     
     Covanta Energy Corporation
     Covanta Energy Resource Corp.              02-40915
     Covanta Energy Sao Jeronimo, Inc.          02-40854
     Covanta Energy Services of New             02-40900
      Jersey, Inc.
     Covanta Energy Services, Inc.              02-40899
     Covanta Energy West, Inc.                  02-40871
     Covanta Engineering Services, Inc.         02-40898
     Covanta Fairfax, Inc.                      02-40931  
     Covanta Financial Services, Inc.           02-40947
     Covanta Geothermal Operations              02-40873
      Holdings, Inc.
     Covanta Geothermal Operations, Inc.        02-40872
     Covanta Heber Field Energy, Inc.           02-40893
     Covanta Hennepin Energy Resource, Co., L.P.02-40906
     Covanta Hillsborough, Inc.                 02-40932
     Covanta Honolulu Resource Recovery Venture 02-40905
     Covanta Huntington Limited Partnership     02-40916   
     Covanta Huntington Resource Recovery       02-40919   
      One Corp.
     Covanta Huntington Resource Recovery       02-40920
      Seven Corp.
     Covanta Huntington, Inc.                   02-40918
     Covanta Huntsville, Inc.                   02-40933
     Covanta Hydro Energy, Inc.                 02-40894
     Covanta Hydro Operations West, Inc.        02-40875
     Covanta Hydro Operations, Inc.             02-40874
     Covanta Imperial Power Services, Inc.      02-40876
     Covanta Indianapolis, Inc.                 02-40934
     Covanta Kent, Inc.                         02-40935
     Covanta Key Largo, Inc.                    02-40864
     Covanta Lake, Inc.                         02-40936
     Covanta Lancaster, Inc.                    02-40937
     Covanta Lee, Inc.                          02-40938
     Covanta Long Island, Inc.                  02-40917
     Covanta Marion Land Corp.                  02-40940
     Covanta Marion, Inc.                       02-40939  
     Covanta Mid-Conn, Inc.                     02-40911
     Covanta Montgomery, Inc.                   02-40941
     Covanta New Martinsville Hydro-Operations  02-40877
      Corp.
     Covanta Northwest Puerto Rico, Inc.        02-40942  
     Covanta Oahu Waste Energy Recovery, Inc.   02-40912      
     Covanta Oil & Gas, Inc.                    02-40878
     Covanta Onondaga Five Corp.                02-40926
     Covanta Onondaga Four Corp.                02-40925
     Covanta Onondaga Limited Partnership       02-40921
     Covanta Onondaga Operations, Inc.          02-40972
     Covanta Onondaga Three Corp.               02-40924
     Covanta Onondaga Two Corp.                 02-40923
     Covanta Onondaga, Inc.                     02-40922
     Covanta Operations of Union, LLC           02-40909
     Covanta OPW Associates, Inc.               02-40908
     Covanta OPWH, Inc.                         02-40907
     Covanta Pasco, Inc.                        02-40943
     Covanta Power Development, Inc.            02-40855
     Covanta Power Development of Bolivia, Inc. 02-40856
     Covanta Power Equity Corp.                 02-40895
     Covanta Projects of Hawaii, Inc.           02-40913
     Covanta Projects of Wallingford, L.P.      02-40903   
     Covanta RRS Holdings, Inc.                 02-40910
     Covanta Secure Services USA, Inc.          02-40896
     Covanta Secure Services, Inc.              02-40901
     Covanta SIGC Energy II, Inc.               02-40884
     Covanta SIGC Energy, Inc.                  02-40885
     Covanta SIGC Geothermal Operations, Inc.   02-40883   
     Covanta Stanislaus, Inc.                   02-40944
     Covanta Systems, Inc.                      02-40948
     Covanta Tampa Bay, Inc.                    02-40865
     Covanta Tulsa, Inc.                        02-40945
     Covanta Union, Inc.                        02-40946
     Covanta Wallingford Associates, Inc.       02-40914
     Covanta Warren Energy Resource Co., L.P.   02-40904
     Covanta Waste Solutions, Inc.              02-40897
     Covanta Waste to Energy of Italy, Inc.     02-40902
     Covanta Waste to Energy, Inc.              02-40949
     Covanta Water Holdings, Inc.               02-40866
     Covanta Water Systems, Inc.                02-40867
     Covanta Water Treatment Services, Inc.     02-40868
     DSS Environmental, Inc.                    02-40869
     ERC Energy II, Inc.                        02-40890
     ERC Energy, Inc.                           02-40891
     Heber Field Company                        02-40888
     Heber Field Energy II, Inc.                02-40892
     Heber Geothermal Company                   02-40887
     Heber Loan Partners                        02-40889
     J.R. Jack's Construction Corporation       02-40857
     LaGuardia Fuel Facilities Corp.            02-40831
     Lenzar Electro-Optics, Inc.                02-40832
     Newark Automotive Fuel Facilities          02-40833   
      Corporation, Inc.
     Ogden Allied Payroll Services, Inc.        02-40835                
     Ogden Attractions, Inc.                    02-40836
     Ogden Aviation Fueling Company             02-40837
      of Virginia, Inc.
     Ogden Aviation Service Company             02-40839
      of Colorado, Inc.
     Ogden Aviation Service Company             02-40840
      of New Jersey, Inc.
     Ogden Aviation Service Company             02-40842
      of New York, Inc.
     Ogden Aviation Service Company             02-40834
      of Pennsylvania, Inc.
     Ogden Aviation, Inc.                       02-40838
     Ogden Cargo Spain, Inc.                    02-40843
     Ogden Central and South America, Inc.      02-40844
     Ogden Constructors, Inc.                   02-40858
     Ogden Environmental & Energy Services      02-40859
      Co., Inc.
     Ogden Facility Holdings, Inc.              02-40845
     Ogden Facility Management Corporation      02-40846
      of Anaheim
     Ogden Film and Theatre, Inc.               02-40847
     Ogden Firehole Entertainment Corp.         02-40848
     Ogden International Europe, Inc.           02-40849
     Ogden Services Corporation                 02-40850
     Ogden Support Services, Inc.               02-40851
     OPI Quezon, Inc.                           02-40860
     PA Aviation Fuel Holdings, Inc.            02-40852
     Philadelphia Fuel Facilities Corporation   02-40853
     Second Imperial Geothermal Co., L.P.       02-40882
     Three Mountain Operations, Inc.            02-40879
     Three Mountain Power, LLC                  02-40881   
     
Type of Business: Covanta Energy Corporation is a publicly
                  traded holding company whose subsidiaries
                  develop, own or operate power generation
                  facilities and water and wastewater
                  facilities in the United States and abroad.
                  Covanta owns or operates 62 power generation
                  facilities, 46 of which are in the United
                  States and 16 of which are located outside of
                  the United States. Covanta's power generation
                  facilities use a variety of fuels, including
                  water (hydroelectric), natural gas, coal,
                  geothermal fluid, municipal solid waste, wood
                  waste, landfill gas, heavy fuel oil and
                  diesel fuel. Covanta also offers single-
                  source design, construction and operating
                  capabilities for water and wastewater
                  treatment facilities.

Chapter 11 Petition Date: April 1, 2002

Court: Southern District of New York (Manhattan)

Judge: Cornelius Blackshear

Debtors' Counsel: Deborah M. Buell, Esq.
                  Cleary, Gottlieb, Steen & Hamilton
                  One Liberty Plaza
                  New York, New York 10006
                  (212) 225-2000
                  Fax : (212) 225-3499

Total Assets: $3,280,378,000

Total Debts: $3,031,462,000

Debtor's 30 Largest Unsecured Creditors:

Entity                      Nature Of Claim       Claim Amount
------                      ---------------       ------------
Deutsche Bank               6% Convertible         $85,000,000
(f/k/a Bankers Trust         Debentures
Company)
Attn: Rodney Gaughen
100 Plaza One
Jersey City, New Jersey 07311
(Fiscal Agent for Issuer)
Ph: (201) 593-6857

Deutsche Bank               5 3/4% Convertible     $63,650,000
(f/k/a Bankers Trust         Debentures
Company)
Attn: Rodney Gaughen
100 Plaza One
Jersey City, New Jersey 07311
(Fiscal Agent for Issuer)
Ph: (201) 593-6857

Sempra Energy               Promissory Note         $8,170,663
Attn: Tony Molnar
101 Ash Street
San Diego, California 92101
Ph: (619) 696-4521
Fax: (619) 696-4899

GE Power Generation         Trade Payables          $4,693,200
Attn: Carlos Llera
1 River Road Building 2-414
Schenectady, New York 12345
Ph: (410) 737-7251

Citibank, N.A.             Letter of Credit         $3,910,000
Attn: Ruth Irwin           related to Bangledesh
388 Greenwich Street       facility
New York, NY 10013
Ph: (212) 816-9871

Broad Street Resources,    Trade Payables           $2,548,200
Inc.
154 King Street
Charleston, SC 29401

Donna Yarnell, Tax         Trade Payables             $697,213
Assessor
940 West Main Street,
Room 106  
El Centro, California 92243-2864
Ph: (760) 482-4301

Welding Services, Inc.    Trade Payables              $440,270
Attn: Gary Dixon
2225 Skyland Court
Norcross, GA 30071
Ph: (770) 449-1706
Fax: (770) 449-4684

County of Fairfax         Trade Payables              $435,870
Attn: Joyce M. Doughty
Division of Solid Waste
Disposal & Resource Recovery
1200 Government Center Parkway,
Suite 463
Fairfax, VA 22035
Ph: (703) 324-5040
Fax: (703) 802-5949

Boiler Tube Co.          Trade Payables               $403,436
of America
Attn: Mary Redden
506 Charlotte Highway
Lyman, SC 29365
Ph: (800) 845-3052
Fax: (864)439-8283

PWC Securities LLC       Trade Payables               $360,000
Attn: Brain Womser
1177 Avenue of the Americas
19th Floor
New York, NY 10036
Ph: (646) 471-4904
Fax: (646) 471-4901

Four Flint Hill Limited  Trade Payables               $275,769
Partnership
11501 Huff Court
North Bethesda,
MD 20895-1094

Rita Fraad               Trade Payables               $262,083
17 Oxford Rd.
Scardale, NY 10583

Chemtreat, Inc.          Trade Payables               $259,577
Attn: John Nygren,
President
4301 Dominion Blvd.
Glen Allen, VA 23060
Ph: (804) 935-2000

Calgon Carbon Corp.      Trade Payables               $230,839

Tanner Industries, Inc.  Trade Payables               $227,230

Gary W. Gray Trucking    Trade Payables               $221,351
Inc.

Thomason Mechanical Corp. Trade Payables              $214,571

Kvaerner Pulping, Inc.   Trade Payables               $195,210

Iverson, Yoakum,         Trade Payables               $190,000
Papiano & Hatch

Wheelabrator Millbury,   Trade Payables               $185,693
Inc.

Commissioner of Revenue  Trade Payables               $169,230
Service

Dravo Lime Company       Trade Payables               $169,214

Graymont (PA) Inc.       Trade Payables               $155,664

North American Industrial Trade Payables              $144,245
Services

Oliva Development LLC    Trade Payables               $139,500

Higgins Sales & Service  Trade Payables               $139,335

Zampell Refractories, Inc. Trade Payables             $135,771

Techalloy Company, Inc.  Trade Payables               $135,364

General Dynamics         Trade Payables               $132,037
OTS, Inc.


DYNEX CAPITAL: Considering Feasibility of Depository Institution
----------------------------------------------------------------
Dynex Capital, Inc. (NYSE:DX) has filed its Annual Report on
Form 10-K for the year ended December 31, 2001 with the
Securities and Exchange Commission.

As part of such filing, the Company disclosed that it has
engaged an advisor to assist it in evaluating the feasibility of
the Company forming or acquiring a depository institution.
Excerpts of what the Company stated in its Form 10-K are set
forth below; investors should reference the Company's Form 10-K
for the complete text.

Thomas H. Potts, President of the Company, stated, "One of our
primary focuses over the past three years has been to conserve
capital and repay recourse obligations. While still subject to
some uncertainty, we expect to have all of our existing recourse
obligations repaid on or before July 15, 2002 in accordance with
their contractual terms. At such time, the Company estimates
that its shareholders' equity will be comparable to the $173
million as of December 31, 2001, that the Company will have a
reasonable level of cash flow for reinvestment, and that the
Company will have a tax loss carry-forward of over $180 million,
$125 million of which is net operating losses which will not
begin to expire until 2013. In the context of this outlook, the
Company has recently reviewed various alternatives for the
Company as a financial services business on a going-forward
basis. Based on this review, the Company has taken the first
step in exploring the formation or acquisition of a depository
institution by engaging an advisor that specializes in such
area."

Mr. Potts continued, "In comparison to the other alternatives we
reviewed, the depository institution appears to have the best
risk-versus-return profile. In particular, the depository
institution would significantly reduce liquidity risk, as new
assets would primarily be funded through the depository
institution. We view the depository institution structure as the
optimal vehicle for aggregating high-quality loans and
securities in the future. Further, given the tax loss carry-
forwards, the income of the depository institution would be
sheltered from taxes for an extended period of time."

Mr. Potts stated further, "We continue to be focused on
improving shareholder value. Based on recent information,
institutions insured by the FDIC had on average a pre-tax
return-on-equity of 19.7% and the publicly traded institutions
trade on average at a premium to book value. Should Dynex be
able to transition to a depository institution that achieves
similar results, we would expect shareholder value as measured
by both book value and market value to improve substantially
over the long term. We anticipate that a decision to pursue a
depository institution strategy will take 3 to 4 months to
properly evaluate and develop a business plan, and during that
time the Company may also review other alternatives. If the
Company proceeds with pursuing a depository institution
strategy, its business plan will be subject to regulatory
approvals as well."

Excerpts of the discussion of this item as set forth in the Form
10-K are set forth below.

Since 2000, the Company's business operations have been
essentially limited to the management of its investment
portfolio and the active collection of its portfolio of
delinquent property tax receivables. As of December 31, 2001,
the Company had paid off all its recourse obligations
(borrowings and letters of credit) except for $58.0 million of
its senior notes due July 15, 2002 and $0.2 million related to a
capital lease. Based on its projected cash flow from its
investment portfolio and the projected proceeds from a
securitization the Company is planning in the second quarter of
2002, the Company projects that it will payoff its Senior Notes
and capital lease in accordance with their contractual terms. At
such time, the Company will have no recourse obligations
remaining, and not be subject to any contractual restrictions on
its business or investment activities.

The Board continues to evaluate strategies to improve
shareholder value. Given the improvement in the market value of
the Company's equity securities since January 2001, the Board
feels that it is unlikely that any offer will be made by a third
party that would be at a level that would be approved by both
the Board and the requisite percentage of shareholders. The
Board has also reviewed possible liquidation scenarios, but the
illiquid nature of many of the Company's remaining assets and
the lack of buyers for many of such assets makes such an
alternative impractical over any reasonable time horizon.

As a result, the Board has requested management of the Company
to analyze various business directions for the Company to pursue
on a going forward basis once the remaining Senior Notes are
paid in full, which the Company expects to be completed on or
before July 15, 2002. Based on a review of such alternatives by
the Board in February 2002, the Company has engaged an advisor
to assist it in evaluating the feasibility of the Company
forming or acquiring a depository institution. The Company sees
the benefits of forming or acquiring a depository institution as
follows: (i) as future investments (i.e. loans and/or
securities) would be owned by the depository institution (which
has access to deposits insured by the Federal Deposit Insurance
Corporation and to borrowings from the Federal Home Loan Bank
System), there would be reduced liquidity risk to the Company in
the future, a risk that has historically caused considerable
losses to specialty finance companies including the Company;
(ii) the depository institution is not as dependent on the
public or private markets for funding; (iii) given that the
Company's net operating and capital loss carryforwards exceed
$180 million in the aggregate (the "NOL"), the fact that
depository institutions are subject to state and federal income
taxes should not be a detriment to financial results for the
foreseeable future; (iv) while owning and operating a depository
institution would probably require the Company to give up its
REIT status, the Company will not for the foreseeable future
realize any material benefits from maintaining REIT status
(certain of the Company's subsidiaries will maintain REIT status
as required while their respective securitizations are
outstanding); and (v) regulatory guidelines would likely require
an investment strategy that would be of lower risk than the
Company's historic investment strategies.

The Company also sees various drawbacks to forming or acquiring
a depository institution as follows: (i) a depository
institution is highly regulated, and such regulation limits and
restricts the activities and operations of a depository
institution; (ii) the Company would become a bank or thrift
holding company and subject to various restrictions and
regulations; (iii) depository institutions operate in a very
competitive environment; (iv) the Company may not be able to
achieve a return on the equity invested in a depository
institution that enhances shareholder value relative to other
alternatives for the Company; (v) the Company currently has no
experience in managing a depository institution; and (vi) the
annual dividend rate on each of the three series of preferred
stock outstanding would increase by an amount equal to
approximately 0.50%.

To the extent the Company pursues forming or acquiring a
depository institution, the Company would likely use the
majority of its cash flow until the NOL is fully utilized to
invest in the depository institution. While subject to
significant uncertainty, the Company projects that the NOL will
not be fully utilized until at least 2010. However, as the
Company believes that the two tender offers and partial dividend
on its preferred stock during 2001 did contribute to the
improvement in the liquidity and the market prices of both the
Company's preferred and common shares, it is likely that the
Company would allocate a portion of its cash flow in the future
to make distributions on its preferred stock. Such distributions
would be in the form of dividends and/or periodic tender offers.
Any such distributions (and assuming that no equity securities
were issued) would likely delay further the full utilization of
the NOL. The Company is precluded from making any distributions
on its common stock until all dividends are current on its
preferred stock. However, if the Company does pursue forming or
acquiring a depository institution, the Company would most
likely minimize any future dividends on its common stock and
either retain earnings or purchase its common stock in an effort
to grow earnings per common share.

At this time, the Company has not developed a business plan for
a depository institution to submit to a regulatory agency.


ENRON CORP: Committee Taps Squire Sanders as Conflicts Counsel
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of Enron
Corporation seeks the Court's authority to retain Squire,
Sanders & Dempsey LLP as its special counsel, nunc pro tunc to
January 29, 2002.

Wells Fargo Bank Minnesota Vice-President Gavin Wilkinson, co-
chair of the Committee, reminds the Court that their counsel --
Milbank Tweed Hadley & McCloy LLP -- had suggested that the
Committee retain special counsel to represent it in matters
where Milbank is conflicted.  Milbank earlier identified several
potential conflict circumstances where it would be unable to act
for the Committee.  "By retaining Squire Sanders as Conflicts
Counsel, the Committee will reasonably and responsibly address
its responsibilities in such Potential Conflict Circumstances,"
Mr. Wilkinson says.

Particularly, the Committee wants Squire Sanders to represent
them in any litigation against entities that are clients of
Milbank in matters unrelated to these chapter 11 cases, such as
Chase Manhattan Bank NA and Citibank NA.  According to Mr.
Wilkinson, the ability to be adverse to these entities was a
significant factor in the selection and retention of Conflicts
Counsel.  "Squire Sanders certainly satisfies this criteria,"
Mr. Wilkinson notes.

Specifically, Squire Sanders is expected to:

  (a) advise the Committee with respect to its rights, powers
      and duties in these cases;

  (b) assist and advise the Committee in its consultations with
      the Debtors relative to the administration of these cases;

  (c) assist the Committee in analyzing the claims of the
      Debtors' creditors in negotiation with such creditors;

  (d) assist with the Committee's investigation of the acts,
      conduct, assets, rights, liabilities and financial
      condition of the Debtors and of the operation of the
      Debtors' businesses;

  (e) investigate, file and prosecute litigation on behalf of
      the Committee;

  (f) assist the Committee in its analysis of and negotiations
      with the Debtors or any third party concerning matters
      related to, among other things, the terms of a plan or
      plans of reorganization for the Debtors;

  (g) assist and advise the Committee with respect to its
      communications with the general creditor body regarding
      significant matters in these cases;

  (h) represent the Committee at hearings and other proceedings;

  (i) review and analyze applications, orders, statements of
      operations and schedules filed with the Court, and advise
      the Committee as to their propriety;

  (j) assist the Committee in preparing pleadings and
      applications as may be necessary in furtherance of the
      Committee's interests and objectives; and

  (k) perform such other legal services as may be required and
      are deemed to be in the interests of the Committee in
      accordance with the Committee's powers and duties as set
      forth in the Bankruptcy Code.

Mr. Wilkinson assures the Court that Milbank and Squire Sanders
will coordinate their activities to avoid duplication of efforts
and services.

Stephen D. Lerner, Esq., a partner at Squire, Sanders & Dempsey
LLP, informs Judge Gonzalez that the Firm will bill at its
customary hourly rates:

            partners                   $300 - 550
            counsels and associates     200 - 525
            legal assistants             60 - 250

Mr. Lerner relates that Squire Sanders has previously
represented two Enron Companies on matters not related to these
chapter 11 cases.  The firm is also currently representing
Limbach Company -- which is indirectly related to Enron -- in an
Ohio Asbestos Personal Injury Litigation.  Out of an abundance
of caution, Mr. Lerner says, Squire Sanders has established an
"Ethical Wall" to separate attorneys and employees from all
other personnel that will be representing the Committee.

"To the best of my knowledge, neither Squire Sanders nor ay
attorney at the Firm holds or represents an interest adverse to
the Committee or the Debtors' estates, except as disclosed in
the affidavit," Mr. Lerner assures the Court.

Should there be circumstances wherein neither Milbank nor Squire
Sanders are able to act for the Committee, Mr. Wilkinson says,
the Committee will have to retain other conflict counsel. (Enron
Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


ENRON DIRECT: Will Sell Assets via Auction on Apr. 13 in Canada
---------------------------------------------------------------
Enron Direct assets in Calgary are to be sold April 13, 2002 by
Unreserved Public Auction.  Century Services, with offices in
Vancouver, Edmonton, Calgary, Toronto and Los Angeles will be
conducting the sale.


ENTERTAINMENT PUBLICATIONS: S&P Assigns B+ Corp. Credit Rating
--------------------------------------------------------------
On March 29, 2002, Standard & Poor's assigned its corporate
credit ('B+'), senior secured bank facility ratings to
Entertainment Publications Operating Co. Inc. (EPOC). At the
same time, Standard & Poor's assigned its rating to the senior
unsecured pay-in-kind notes issued by the holding company
parent, Entertainment Publications Inc. (EPI) These notes are
guaranteed by EPOC, a Troy, Michigan-based leader in the coupon
book business. The credit rating outlook is stable.

Ratings reflect the company's leadership position in the coupon
book business, relatively steady operating results, and improved
credit measures. These factors are offset by its narrow business
focus, competitive market conditions, and small cash flow base.
In addition, the business is extremely seasonal, with virtually
all cash flow received in the company's December 31 fiscal
second quarter.

Entertainment Publications is the leading marketer and publisher
of coupon books and discount programs. The company also produces
customized corporate products for use as incentives and loyalty
rewards and sells national advertisements in the coupon books.

The coupon book business, which accounts for a majority of
revenues and cash flow, is distributed through a network of more
than 67,000 North American charitable and school organizations,
which retain a percentage of the revenues for the books sold.
Merchants advertise discounts for no charge in the coupon books,
and the company maintains a database of more than 70,000
merchants with about 275,000 locations. The business benefits
from a broad and diversified customer base and high renewal
rates, resulting in substantial recurring revenues and cash
flows. In addition, given the relatively low price point of $20-
$40 per book, the business has proven to be relatively resistant
to economic changes. The corporate products and paid advertising
segments are more sensitive to economic conditions, being driven
by the marketing budgets of corporations.

Consolidated EBITDA for the six months ended December 31, 2001,
was $52.3 million, an approximately 13% increase from the prior-
year period, due to solid coupon book volumes and management's
aggressive cost-cutting initiatives. Based on current operating
trends, EBITDA to total interest for the year ending June 30,
2002, is expected to be around 2 times. Total debt to EBITDA
(including the holding company notes) is expected to be around
3x. The holding company notes do not pay cash interest until
2005. Financial flexibility is adequate, with an $85 million
revolver and modest capital spending requirements.

EPOC's credit facility is rated the same as the corporate credit
rating. This facility consists of an $85 million revolving
credit facility due December 31, 2004, a $55 million Term Loan A
due December 31, 2004, and a $100 million Term Loan B due
December 31, 2005. The facility is secured by a pledge of the
stock and assets of the company and its subsidiaries. Standard
and Poor's simulated default scenario assumed that the revolving
credit facility was fully drawn, and cash flow multiples were
assumed to be at distressed levels. Because these facilities are
secured, lenders can expect to recover more than a typical
unsecured creditor in the event of a default or bankruptcy. In
addition, expected financial covenants would provide further
protection. However, based on Standard & Poor's simulated
default scenario, it is not clear that a distressed enterprise
value would be sufficient to cover the entire loan facility.

                            Outlook

Ratings stability reflects the expectation that Entertainment
Publication will maintain its leadership position in coupon
books and that the company's consolidated financial profile will
remain solid.


EXIDE TECHNOLOGIES: Likely Debt Default Spurs S&P Downgrade
-----------------------------------------------------------
On March 27, 2002, Standard & Poor's lowered its long-term
corporate credit rating on automotive and industrial batteries
producer Exide Technologies (formerly Exide Corp.) at 'CC' based
on Standard & Poor's belief that Exide could default on its debt
obligations within the next 30 days. In addition, the rating
remains on CreditWatch with negative implications, where it was
placed August 31, 2001.

Standard & Poor's believes that Exide's liquidity has become
severely constrained and that this could prevent the company
from meeting debt service requirements. Exide's operating
results and cash generation have been under pressure for the
past several years due to its onerous debt burden, intense
industry pressures, costs associated with internal restructuring
activities, and legal issues. Pressures have recently
intensified due to slowing demand in both its automotive and
industrial battery businesses. Cash flow protection measures are
currently quite weak. Adjusted for operating leases and accounts
receivable sales and nonrecurring items, debt to EBITDA is
estimated to be about 10 times.

Earnings pressures, cash requirements of restructuring actions
and debt service commitments have all combined to significantly
constrain the company's financial flexibility. Availability
under its revolving credit facility was just $32 million at
December 31, 2001 and is believed to be even more constrained at
the present time.

Exide was in violation of covenants under its bank agreement as
of December 31, 2001 and received a waiver through April 12,
2002. Exide has a bond interest payment due on April 15, 2002.
It also faces interest and principal payments on its bank debt
in the coming week.

Standard & Poor's will monitor the company's liquidity situation
and ability to meet interest and principal payments as they come
due. Failure to meet upcoming debt service requirements will
result in a lowering of ratings to 'D'.

DebtTraders reports that Exide Technologies' 10.000% bonds due
2005 (EXIDE2) are last quoted at a price of 10. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=EXIDE2for  
real-time bond pricing.


FLEMING: S&P Affirms Low-B Rating Based on Kmart Proceedings
------------------------------------------------------------
The `BB' credit ratings on Fleming Cos. Inc. were affirmed by
Standard & Poor's and removed from CreditWatch on March 27,
2002. The ratings had been placed on CreditWatch on January 22,
2002, based on uncertainty about the impact of Kmart Corp.'s
bankruptcy filing. Outlook is negative.

The ratings affirmation was based on the expectation that
Kmart's store closing program will only modestly effect Fleming;
the designation of Fleming as a critical vendor by the
bankruptcy court, giving it priority in payment over other
vendors; the expectation that Fleming will continue its supply
contract with Kmart; and Standard & Poor's belief that Kmart
will emerge from bankruptcy. Although the supply contract can be
confirmed or denied in bankruptcy court, neither party is
expected to cancel the contract, given the mutual dependency of
the relationship, though some alteration is possible. Kmart's
national presence, large base of employees, and vendor support
increase the likelihood of its successful reorganization. Kmart
is targeting emergence from bankruptcy for the summer of 2003.

Kmart represents a key business for Fleming, accounting for
about 20% of Fleming's $16 billion of revenues in fiscal 2001.
Fleming's 10-year supply chain agreement with Kmart, effective
June 2001, covers distribution of substantially all of Kmart's
food and consumables products.

Kmart's recently announced 284-store closing program targets
lower-volume stores, accounting for significantly less sales
than their relative percentage of the total Kmart store base.
Fleming's management has estimated that revenues from Kmart
would decline by about $900 million from previous expectations,
with $400 million attributable to lost sales from the closed
stores and $500 million from lower volumes in existing stores,
typical of a retailer undergoing the disruption of bankruptcy.
Originally estimated at $4.5 billion, Fleming now expects annual
volume under the Kmart contract to be about $3.6 billion. The
anticipated $10 million negative impact on net earnings for
fiscal 2002 is relatively modest.

The ratings on Fleming are supported by its position as one of
the two largest food wholesalers in the U.S., improving
operating trends, and solid financial improvement over the past
two years. This improvement provides some cushion to enable
Fleming to get through this period of adjustment.

The lower than expected volume resulting from the Kmart
bankruptcy filing is being partially offset by gains in
distribution from new and existing customers. Growth in non-
Kmart customers was 4% in fiscal 2001 and is expected to be 5%
in fiscal 2002. Moreover, Fleming has made good improvements in
its core distribution and retail business. Operating efficiency
is improving, reflected in higher inventory turnover and return
on assets. Continued leveraging of sales growth and investments
in technology should enable cash flow to grow. The company's
growth plans include acquisitions of both retail stores and
distribution businesses. These are expected to be carried out
within the context of a moderate financial policy, as management
has stated its intent to deleverage the company.

EBITDA covered interest expense by 2.8 times in fiscal 2001, up
from 2.6x in fiscal 2000. Moderate growth in cash flow in
fiscals 2002 and 2003 should allow coverage to improve. The
company's $600 million revolving credit facility provides good
flexibility for ongoing operations.

Although Fleming's traditional wholesale customer base eroded
over the past few years, the company's shift to non-traditional
channels bodes well for this segment. The traditional wholesale
customer has been affected by accelerated consolidation in the
supermarket industry, which is creating chains with the critical
mass to self-distribute and placing independent operators at
risk. Yet Fleming is gaining new customers from independent
supermarket operators and non-traditional retail channels,
including general merchandise retailers, supercenters, and
convenience stores. The company has also gained some business
from self-distributing supermarket chains that find Fleming's
value proposition economically advantageous in certain regions.
Fleming is focused on growing its food and general merchandise
distribution in these channels as well as its Food 4 Less value
retail format. The "no frills" Food 4 Less format can be
expanded more quickly and with less capital than conventional
supermarkets. The company has exited its conventional
supermarket chains, which had very poor profitability in recent
years.
                        Outlook

Continued modest improvement in cash flow protection is
incorporated into the rating on Fleming. Further negative
developments from the Kmart alliance, including additional store
closings or an inability to compete successfully in the discount
industry, could negatively affect Fleming's business and
financial position. With a new management team at Kmart, the
extent of further restructuring is unclear at this time.


FRIEDE GOLDMAN: Sells Canadian Unit's Assets to Peter Kiewit
------------------------------------------------------------
Friede Goldman Halter, Inc. (OTC: FGHLQ) announced it has sold
the assets of Friede Goldman Newfoundland, the Company's
Canadian subsidiary located in the province of Newfoundland and
Labrador Canada, to Peter Kiewit Sons Co. Ltd.

The transaction is part of the continuing effort to restructure
the company and facilitate its emergence from Chapter 11
bankruptcy.

Bob Shepherd, Executive Vice President - Administration of FGH,
commented, "The sale of the assets of FGN is in the best
interests of the company as it emerges from Chapter 11
bankruptcy protection. The transaction allows the Company to
reduce outstanding obligations."

Friede Goldman Halter is a world leader in the design and
manufacture of equipment for the maritime and offshore energy
industries. Its operating units are Friede Goldman Offshore
(construction, upgrade and repair of drilling units, mobile
production units and offshore construction equipment), Halter
Marine (construction and repair of ocean-going vessels for
commercial and governmental markets), FGH Engineered Products
Group (design and manufacture of cranes, winches, mooring
systems and marine deck equipment), and Friede & Goldman Ltd.
(naval architecture and marine engineering).


GC COMPANIES: Completes Sale of Assets to AMC Entertainment
-----------------------------------------------------------
AMC Entertainment, one of the world's leading theatrical
exhibition companies, announced that it has completed its
acquisition of GC Companies Inc.

The acquisition, valued at approximately $167 million, follows a
confirmation order issued March 19 by the Bankruptcy Court for
the District of Delaware approving GC's reorganization plan,
which is now final and effective.

The transaction includes 66 theatres with 621 screens in the
United States, and a 50 percent interest in a joint venture that
operates 17 theatres with 160 screens in South America. Efforts
are underway to re-brand the newly acquired U.S. complexes as
AMC theatres, and AMC expects the process to be completed by
Memorial Day. AMC has no near-term plans for closing any of the
GC properties.

"The GC theatres, with their high per-screen revenues, are a
great addition to AMC's portfolio of high-volume, top-performing
theatres," said AMC chairman and chief executive officer Peter
C. Brown. "We are pleased to complete this important
acquisition, and plans for a smooth and quick integration are
well underway."

The GC Companies acquisition, along with the recent acquisition
of New Orleans-based Gulf States Theatres, increases AMC's total
screen count to 3,520 screens in 247 complexes. AMC's 3,130 U.S.
screens are located in 29 states and the District of Columbia,
with 88 per cent located in the top 50 U.S. markets.

AMC Entertainment Inc. is a leader in the theatrical exhibition
industry. Through its circuit of AMC Theatres, the Company
operates 247 theatres with 3,520 screens in the United States,
Canada, France, Hong Kong, Japan, Portugal, Spain, Sweden and
the United Kingdom. Its Common Stock trades on the American
Stock Exchange under the symbol AEN. The Company, headquartered
in Kansas City, Mo., has a Web site at
http://www.amctheatres.com


GENTEK: Fitch Junks Senior Secured & Senior Sub. Debt Ratings
-------------------------------------------------------------
Fitch Ratings has lowered GenTek's senior secured debt rating to
'CCC' from 'BB-' and lowered the company's senior subordinated
debt rating to 'CCC-' from 'B-'. The senior secured debt rating
of 'CCC' applies to the company's $800 million senior secured
bank facility and the senior subordinated debt rating of 'CCC-'
applies to the company's $200 million of outstanding senior
subordinated notes due 2009. The ratings have been placed on
Rating Watch Negative.

The current ratings reflect the heightened risk that GenTek
could default on its debt obligations, poor financial
performance caused by a cyclical slowdown in the automobile and
manufacturing sector, as well as the significant reduction in
capital spending seen in the telecommunications sector. As a
result of lower earnings, free cash flow available for debt
reduction is expected to be minimal until 2003 or beyond.

GenTek disclosed yesterday that they have drawn down available
amounts under its revolving credit agreement so that current
cash balances are approximately $150 million. GenTek has
indicated that this action was intended to provide liquidity to
its customers, suppliers and employees.

The senior secured credit facility agreement as amended contains
various restrictions and covenants, including financial tests as
measured by total debt-to-EBITDA and EBITDA-to-interest. The
company acknowledged that they expect to not be in compliance
with the terms of the credit facility by as early as the first
quarter of 2002. As a result of this expectation, the company's
independent auditors will issue an auditor's report with an
explanatory paragraph with respect to GenTek's ability to
continue as a going concern.

As of Dec. 31, 2001 the company was in compliance with the terms
of the credit facility. The company's senior secured credit
facility was amended Aug. 9, 2001. Prior to the amendment
secured creditors had security in common stock (equity). Under
the most recent amendment, secured creditors will receive
security in substantially all assets of GenTek. In conjunction
with the current downgrade, Fitch has revised the notching
between the secured debt and the subordinated debt from three
notches to one notch to reflect the lowered estimate of recovery
by secured lenders.

GenTek has made twelve acquisitions since the beginning of 1999
including, (1) Krone AG, a producer of telecommunications
connectivity equipment, (2) the Digital Communications Group of
Prestolite Wire Corp., a manufacturer of copper and fiber optic
cable for telecom applications, (3) Noma Industries, a
manufacturer of wire and cable harnesses, and (4) Defiance Inc.,
a producer of bearings principally for automobile camshaft
components. These debt-financed acquisitions have resulted in an
improved product offering of automotive engine components
through the combination of complementary product lines and have
established a telecommunications voice/data cabling products and
services business.


GLOBAL CROSSING: Plans to Restructure Service Pact with SWIFT
-------------------------------------------------------------
Global Crossing announced that it plans to restructure its
service agreement with SWIFT, the industry-owned co-operative
supplying secure messaging services and interface software to
7,000 financial institutions in 196 countries.  The new
agreement, which is still subject to certain approvals, was
developed to be consistent with Global Crossing's recently
announced refocusing of its strategy of serving the world's top
200 business cities with core high capacity, high speed data
transport services.  The agreement is expected to be signed by
both parties later today.

Both SWIFT and Global Crossing have altered their strategies
since the original partnership agreement was executed last year.  
Increased awareness of the importance of carrier level
diversity, particularly following the terrorist attacks on
September 11, 2001, prompted SWIFT to pursue a multi-provider
solution to provide maximum protection against intrusion or
physical infrastructure failure.  Global Crossing is
streamlining its product offering as part of its cost
restructuring and margin improvement initiatives. Global
Crossing has substantially limited the availability of its
managed services offering in order to emphasize its more
profitable and unique high capacity, high speed data transport
offering.

"We greatly value our relationship with SWIFT and look forward
to officially announcing later today that we have been able to
negotiate a new agreement with them that is more aligned with
our strategy and profitability targets, while at the same time
giving SWIFT greater flexibility," said John Legere, chief
executive officer of Global Crossing.  "This is an example of
the way in which Global Crossing is building on its strengths
and leveraging its assets by doing what we do best -- providing
the highest quality core data transport services, cost-
efficiently and profitably."

"Continuing to provide SWIFT secure and reliable on-net core
data transport services maps to our inter-city networking
strategy," Legere continued.  "In addition, our decision to
emphasize high-margin services which can be delivered with
significantly less associated capital and operating expense will
have an immediate positive impact on our financial results as we
continue to aggressively manage our cash position."

SWIFT and Global Crossing originally announced they had entered
into an agreement to co-develop and co-manage SWIFT's network
operations with Global Crossing on February 6, 2001.

Under the terms of the new agreement expected to be signed
today, Global Crossing will no longer serve as the exclusive
provider of managed services to SWIFT.  Global Crossing narrowed
its global managed services offering earlier this year as part
of its effort to streamline its product line and reduce
expenses.  Specifically, Global Crossing would no longer manage
the development and operation of SWIFT's Secure IP Network
(SIPN) infrastructure, nor would Global Crossing continue to
migrate SWIFT's current X.25 network to SIPN.

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

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

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

SWIFT is the industry-owned cooperative supplying secure
messaging services and interface software to 7,000 financial
institutions in 196 countries.  SWIFT carried over 1.5 billion
messages in 2001.  The average daily value of payment messages
on SWIFT is estimated to be above US$6 trillion.  SWIFT provides
messaging services to banks, broker/dealers and investment
managers, as well as to market infrastructures in payments,
treasury, securities and trade.  These services help customers
reduce costs, improve automation and manage risk.  For more
information about SWIFT please refer to our Web site:
http://www.swift.com


GRAHAM PACKAGING: Posts Improved EBITDA Results for FY 2001
-----------------------------------------------------------
Graham Packaging Holdings Company, parent company of Graham
Packaging Company, L.P., reported worldwide net sales of $923
million for the year ended December 31, 2001, in its Form 10-K
Annual Report filed with the U.S. Securities and Exchange
Commission.  The company also reported adjusted earnings,
excluding non-cash impairment charges, before interest, taxes,
depreciation and amortization (adjusted EBITDA) of $171 million.

Chief Financial Officer John E. Hamilton said worldwide sales in
2001 were $81 million ahead of last year, an improvement of
about 10 percent, and worldwide adjusted EBITDA was $18 million
ahead of last year, an improvement of about 12 percent.  "We
continue to be pleased with the improvement these numbers show,
especially in the challenging economic environment in 2001,"
Hamilton said.

The company continues to restructure its global business,
principally in Europe, to refocus on global strategic customers
and utilize its core technologies.  As a result, the company has
recently announced the closure or sale of several plant
locations and has announced an intent to sell or close several
more European plants.  At the same time, the company has opened
several new locations in line with its ongoing strategy.

President and Chief Operating Officer Roger M. Prevot said,
"These structural changes are important to ensure Graham
Packaging remains competitive and continues to provide
exceptional service to its strategic customers.  As a result of
these strategic changes, we incurred a non-cash impairment
charge of $38 million in 2001 and a net loss of $44 million for
the year.  We also anticipate additional charges in 2002 as we
complete our restructuring.  However, our business will be
significantly better positioned for the future due to the steps
we are taking now.  When these planned changes are fully
implemented we will have a more strategically aligned business
focused on our strategic global customers."

Chief Executive Officer Philip R. Yates said, "I am pleased with
the results after a disappointing 2000 when our adjusted EBITDA
flattened after several years of growth.  In addition, I feel we
have implemented the appropriate operational and strategic
changes to realign our global business and position the company
for the future."

Based in York, Graham Packaging is a worldwide leader in the
design, manufacture, and sale of customized blow-molded plastic
containers.  It designs and makes customized blow-molded plastic
containers for branded food and beverage products, household and
personal care products, and automotive lubricants.  The company
employed approximately 4,100 people at 59 plants throughout
North America, Europe, and Latin America as of December 31,
2001, and produced more than eight billion containers in 2001.

For a more complete description of the company's results of
operations, see the company's Form 10-K Annual Report for the
year ended December 31, 2001, filed with the Securities Exchange
Commission.


HAYES LEMMERZ: Realigns European Wheels Business Operations
-----------------------------------------------------------
Hayes Lemmerz International, Inc. (OTC Bulletin Board: HLMMQ)
announced the strategic realignment of its European Wheels
Operations.  The move combines the Company's European Fabricated
Wheels and its European Cast Aluminum Wheels Business Units,
creating a newly formed European Wheels Group.

Under the new structure:

Giancarlo Dallera, formerly President of European Cast Aluminum
Wheels Business Unit will be President of the Company's new
European Wheels Group, reporting directly to Curtis Clawson,
Hayes Lemmerz' Chairman, President and CEO.

Hans-Heiner Buchel, who is responsible for the operations of the
European Fabricated Wheels business will report to Mr. Dallera.

"Integrating the Company's European Operations makes smart
business sense, and enables us to fully leverage product
development capabilities and existing investments in technology
and resources," said Mr. Clawson.  "This realignment positions
us uniquely in the marketplace to provide unparalleled service
as well as create one trusted source of solutions for our
customers."

Hayes Lemmerz International, Inc. is one of the world's leading
global suppliers of automotive and commercial highway wheels,
brakes, powertrain, suspension, structural and other lightweight
components.  The Company has 43 plants, 2 joint venture
facilities and approximately 14,000 employees worldwide.

On December 5, 2001, Hayes Lemmerz International, Inc., filed
for reorganization under Chapter 11 of the U.S. Bankruptcy Code,
to reduce their debt and strengthen their competitive position.  
This filing includes 22 facilities in the United States and one
plant in Mexico.  The Company's stock is traded Over the Counter
(OTC) with the symbol HLMMQ.  More information about Hayes
Lemmerz International, Inc., along with a complete list of
current and archived press releases, is available at
http://www.hayes-lemmerz.com  

DebtTraders reports that Hayes Lemmerz Intl Inc.'s 11.875% bonds
due 2006 (HAYES1) are last quoted at a price of 52. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=HAYES1for  
real-time bond pricing.


HEAFNER TIRE: S&P Slashes Credit Rating to SD After Tender Offer
----------------------------------------------------------------
On March 28, 2002, Standard & Poor's lowered its rating on
Heafner Tire Group's $150 million 10% senior notes to 'D', and
lowered its long-term corporate credit rating on the company to
'SD'. The ratings were removed from CreditWatch where they were
placed November 19, 2001. The senior secured debt rating on
Heafner remains on CreditWatch, but the implications have been
changed to developing from negative. Huntersville, North
Carolina-based Heafner is an independent tire distributor.

The downgrades follow Heafner's completion of its tender offer
for up to $126 million of its senior notes. About $121 million
in principal amount of the notes were tendered for $535 per
$1,000 principal amount. The purchase price represents a deep
discount to the face value of the notes, resulting in impairment
of the bondholders.

The completion of the tender and other financing transactions
will result in reduced debt levels. Nevertheless, Heafner
continues to be challenged by a heavy debt burden, weak cash
flow generation, and difficult end-market conditions. Standard &
Poor's will review the prospects and likely time frame for
achieving operating improvements and assess the impact of the
tender on the company's capital structure, debt service
requirements, and financial flexibility. The senior secured debt
rating could be lowered if it appears that operating performance
will remain weak and financial flexibility will remain
constrained, or raised if it appears that cash flow protection
and liquidity will improve.


HEARTLAND TECHNOLOGY: Will Delay Form 10-Q Filing with SEC
----------------------------------------------------------
Heartland Technology, Inc. has declared itself unable to timely
file its latest financial information with the SEC because it
finds that it is currently experiencing substantial liquidity
difficulties.

Management has been focusing its efforts on developing plans to
restructure its business. Specifically, the change in the nature
of the Company's business has occurred due to the shutdown of
Zecal Technology, LLC, in which Heartland had an equity interest
and the sale of P.G. Design Electronics, a significant
subsidiary.  Heartland Technology is in default on significant
amounts of its debt and has been reviewing and discussing with
its creditors ways to restructure itself. Lastly, the Company
has changed auditors for the fiscal year ended December 31,
2001. The devotion of management's attention to these matters
has precluded management from focusing sufficient efforts
necessary to ensure the filing of a complete and accurate Form
10-K. As a result, the Company is unable, without unreasonable
effort or expense, to file its Form 10-K for the fiscal year
ended December 31, 2001 within the prescribed period. Heartland
believes that the Form 10-K will be filed on or before the 15th
calendar day following the due date.

Heartland generated preliminary total operating revenues of
$7,060,000 for the year ended December 31, 2001 as compared to
$22,619,000 for the year ended December 31, 2000 and incurred an
estimated net loss of $8,160,000 for the year ended December 31,
2001 compared to a net loss of $4,335,000 for the year ended
December 31, 2000. Results for 2001 are unaudited, subject to
adjustment and reflect the sale of a significant subsidiary in
June 2001.


HYBRID NETWORKS: Plans to Cease Operations Due to Lack of Funds
---------------------------------------------------------------
Hybrid Networks Inc. (Nasdaq:HYBR) has announced that its
efforts to complete a strategic transaction, such as a sale or
merger of the company, have thus far not proven successful. The
Company further noted that it expects that revenue for the first
quarter of 2002 will not exceed $700,000 and that it has no
backlog for future periods. Effective March 29, 2002, the
Company will further reduce its work force by eliminating
approximately 80% of its remaining staff.

After payment of employee compensation, termination and other
expenses, the Company will have cash and accounts receivables of
less than $1 million. The Company does not foresee having
sufficient liquid assets to continue even its scaled back
operations beyond April 30, 2002. Therefore, the Company intends
to pursue an orderly cessation of its operations.

The Company's remaining liabilities consist primarily of the
company's $5.5 million convertible notes that are secured by
substantially all of the assets of the company and its
obligations to its landlord. The Company does not expect that
any assets will be available for distribution to holders of its
common or preferred stock after the claims of its creditors have
been settled.

Headquartered in San Jose, California, Hybrid Networks Inc.
designs, develops, manufactures and markets fixed broadband
wireless systems that enable telecommunications companies,
wireless systems operators and network providers to offer high-
speed Internet data and voice services to businesses and
residences. Hybrid was first to market with patented two-way
wireless products that focus on the MMDS and WCS spectrum in the
United States. For more information, call (408) 323-6252 or
visit http://www.hybrid.com  


IT GROUP: U.S. Trustee Names Todd Neilson as Chapter 11 Examiner
----------------------------------------------------------------
Judge Walrath directs the U.S. Trustee to appoint one
disinterested person to serve as examiner with expanded powers  
in the chapter 11 cases of The IT Group, Inc., and its debtor-
affiliates, whose duties, rights and powers are subject for
further modification by the Court, after notice and a hearing,
of any party in interest.

                           *   *   *

                  U.S. Trustee Appoints Neilson

Pursuant to FRBP 2007.1, Donald F. Walton, the Acting United
States Trustee for Region 3, asks the Court for an Order
approving is appointment of Todd Neilson as Examiner in these
chapter 11 cases.

Roberta A. DeAngelis, Assistant United States Trustee, claims
that the decision was given after the U.S. Trustee has consulted
with the following parties-in-interest regarding the
appointment:

A. Thomas Lauria, Esq., and John Cunningham, Esq., of White &
     Case and Jeffrey Schlerf, Esq., of The Bayard Firm,
     proposed attorneys for the Official Committee of Unsecured
     Creditors; and,

B. Gregg Galardi, Esq., of Skadden, Arps, Slate, Meagher & Flom,
     attorneys for the Debtors.

The conditions for Mr. Neilson's appointment are:

A. That the examiner has filed income tax returns for the 3
     years preceding his appointment in the case;

B. That the examiner owes no delinquent tax obligations to any
     taxing authority;

C. That the examiner has never been convicted of a felony;

D. That the examiner is not addicted to any drug, narcotic or
     alcohol;

E. That there are no outstanding money judgments entered against
     the examiner;

F. That the examiner is not individually named as a defendant in
     any lawsuit pending at this time; and,

G. That the examiner is not delinquent in repaying any
     outstanding student loan obligations.

Mr. Neilson's ascertains that he has no connections with the
Debtors, creditors, any other parties in interest, their
respective attorneys and accountants, the United States Trustee,
and persons employed in the Office of the United States Trustee.
(IT Group Bankruptcy News, Issue No. 7; Bankruptcy Creditors'
Service, Inc., 609/392-0900)  


INT'L WIRE: S&P Rates Bank Loan & Credit Ratings at Low-B Levels
----------------------------------------------------------------
On March 26, 2002, Standard & Poor's assigned a double-`BB'-
minus bank loan rating to International Wire Group Inc.'s $70
million secured, borrowing based revolving credit facility
maturing January 15, 2005 with a $35 million sub-limit for
letters of credit. At the same time, Standard & Poor's affirmed
its existing `B+' credit rating on the company. Rating outlook
is negative.

The bank loan rating is higher than the corporate credit rating
because Standard & Poor's believes that under a default
scenario, the collateral securing the revolving credit facility
is expected to be sufficient to cover amounts drawn under the
facility. Drawdowns will be used for working capital and general
corporate purposes. The facility will be guaranteed by IWG's
parent, International Wire Holding Company and each of its
direct and indirect domestic subsidiaries.

The ratings on International Wire Group Inc., a subsidiary of
International Wire Holding Company, reflect its material market
share in copper wire products, its current weak end markets and
its aggressive debt leverage. IWG's copper wire products are
used primarily to transmit electricity in automotive, appliance,
computer, and data communication applications. Copper price
fluctuations are generally a pass through to the company and
have limited affect on its margin dollars. Over the years, the
company has made a number of small-scale acquisitions, recently
focusing outside of the U.S. These acquisitions were meant to
broaden the company's product base, strengthen market share,
increase capacity, and realize efficiencies. Diverse
manufacturing facilities provide flexibility of operations while
reducing the risk of disruption due to operating problems.
Nevertheless, the company is affected by intense competition
from other producers, a concentrated customer base, and cyclical
swings in demand in certain markets. The company is highly
exposed to major industrial sectors including, the automotive
industry with a 42% concentration, consumer appliances at 20%,
and electronics and data communications at 21%. These sectors
are highly sensitive to consumer confidence, which was
negatively affected by September 11. In response, the company
has closed several facilities and reallocated production to
facilities currently operating at low utilization rates. This is
expected to save the company approximately $17 million annually.

The company's total debt to total capital ratio still remains
very aggressive at 81%. Given slowing demand in many of the
company's key markets, EBITDA declined 41% to $58 million for
fiscal year ending Dec. 31, 2001, translating into a weak EBITDA
to interest coverage of 1.8 times. Moreover, IWG had a deficit
of $17 million in free operating cash flow, raising the
company's reliance on its new bank facility. Standard & Poor's
remains concerned about a restrictive covenant under its new
bank facility, which could limit borrowing if necessary. The
covenant requires an EBITDA minimum of $48 million. Although an
extension of the fourth quarter ending December 31, 2001, EBITDA
of $9.3 million would be particularly tight and concerning,
Standard & Poor's expects an economic recovery and hence an
improvement in the company's financial profile. In any event, if
funding under the bank lines is restricted, limited cash
balances of $8 million will not be sufficient to fund debt
service and capital spending alone.

                          Outlook

Further declines in demand from the company's key end markets or
a restriction of availability under the company's revolving
credit facility could result in a deterioration in the company's
financial performance and a downgrade.


JAM JOE: Gets Court Nod to Extend Lease Decisions Time to May 31
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extends
the time of Jam Joe LLC and its affiliated debtors to elect
whether to assume, assume and assign, or reject unexpired
nonresidential real property leases. The deadline set by the
Bankruptcy Code to decide on leases is enlarged to run through
May 31, 2002.

Jam Joe, L.L.C. filed for bankruptcy protection Under Chapter 11
of the U.S. Bankruptcy Code on July 23, 2001. Christopher S.
Sontchi, Esq. at Ashby & Geddes represents the Debtors in their
restructuring efforts.


KAISER ALUMINUM: Brings-In Shaw Norton as LA Litigation Counsel
---------------------------------------------------------------
Kaiser Aluminum Corporation, and its debtor-affiliates ask the
Court authority to retain Shaw Norton, L.L.P. as special counsel
with respect to specific litigation matters pending in the State
of Louisiana.

Patrick M. Leathem, Esq., at Richards, Layton & Finger in
Wilmington, Delaware, informs the Court that New Orleans-based
firm concentrates in commercial law, litigation and alternative
dispute resolution.  Shaw Norton's litigation attorneys have
extensive experience practicing before state and federal courts
and in alternative dispute resolution forums. In particular, the
firm is recognized for its expertise in construction dispute
litigation and arbitration. Shaw Norton ahs represented the
Debtors in connection with the Louisiana Litigation Matters
since May 200 and has developed extensive knowledge regarding
the particular facts and issues involved in the Louisiana
Litigation Matters.

Shaw Norton's services will relate primarily to representation
of the Debtors in three Louisiana lawsuits:

A.  Hatch Associates, Inc. and Hatch Associates Consultants,
     Inc. v. Kaiser Aluminum & Chemical Corporation, American
     Arbitration Association and Kaiser Aluminum & Chemical
     Corporation v. Hatch Associates Consultants, Inc., and
     Lexington Insurance Company. Both cases arising from the
     design, engineering and other work and efforts of Hatch
     Associates, Inc., and Hatch Associates Consultants, Inc. on
     the Debtors' rebuild project of its Gramercy, Louisiana
     refinery; and,

B. Kaiser Aluminum & Chemical Corporation v. Willis of Maryland,
     Inc., Travelers Property Casualty Corporation and Moment
     Select Insurance Company. This arises from the improper
     procurement of insurance coverage and subsequent failures
     to return to the Debtors unearned insurance premiums.

Shaw Norton will:

A. continue to counsel and represent the Debtors in connection
     with all matters or proceedings arising from or relating to
     the Louisiana Litigation Matters; and,

B. advise and represent the Debtors in any other matters in
     Louisiana in which Shaw Norton's expertise may be required.

The professionals primarily responsible for representing the
Debtors and their respective hourly rates are:

     Professional            Position       Rate
   ---------------------    ----------    --------
    Danny G. Shaw             Partner       $210
    William N. Norton         Partner       $210
    Gerardo R. Barrios        Partner       $175
    Mark W. Mercante         Associate      $155
    Mark W. Frilot           Associate      $135
    C. Patrick Abercrombie   Paralegal      $ 70
    Jennifer O'Brien         Paralegal      $ 70

Mr. Leathem recalls that prior to petition date, on or about
February 11, 2002, the Debtors provided Shaw Norton with a
payment amounting to $595,402 for services rendered or to be
rendered and for reimbursement of expenses relating to the
Louisiana Litigation Matters, including the payment of fees of
certain litigation experts and consultants retained by Shaw
Norton. The firm has applied $286,684.90 of the February Payment
for its services and those of such litigation experts and
consultants provided prepetition, while the remaining
$308,717.10 will be held by the firm as a postpetition retainer.
Including the Retainer amount, the Debtors made payments to Shaw
Norton aggregating $834,806.94 during the year immediately
preceding the petition date coming from the Debtors' operating
cash for the fees and expenses incurred by the firm on matters
relating to the Debtors.

Danny G. Shaw, Esq., a general partner of the law firm of Shaw
Norton, L.L.P., believes that Shaw Norton has not represented
and does not currently represent any of entity other than the
Debtors in matters related to these chapter 11 cases.  However,
the firm agrees to file a supplemental disclosure as promptly as
possible after discovering any additional significant
connections or other information required to be disclosed, and
will not represent any other persons or entities in connection
with their claims against the Debtors. (Kaiser Bankruptcy News,
Issue No. 4; Bankruptcy Creditors' Service, Inc., 609/392-0900)   


KARTS INT'L: Defaults on $2.5M Note Owed to Schlinger Foundation
----------------------------------------------------------------
The management of Karts International Incorporated (OTC Bulletin
Board: KINT) announces that it will not file it's Annual Report
on Form 10-KSB by the deadline of March 31, 2002.

Timotheus benHarold, the Company's President, Chief Executive
Officer, Chief Accounting Officer and one of the Company's two
remaining Directors stated that the Company's financial
condition and on-going negotiations with The Schlinger
Foundation, the Company's lead lender were contributing factors
to this situation.  The Company has been notified by The
Schlinger Foundation that it may foreclose its security interest
in substantially all of the Company's assets as a result of
defaults under the Company's $2,500,000 promissory note and
related agreements.  The Company will strive to complete the
required filing as soon as practicable upon the conclusion of
negotiations with The Schlinger Foundation.  If the negotiations
with The Schlinger Foundation are unsuccessful, the Company may
have to seek protection under Chapter 11 of the Federal
Bankruptcy Code.

The Company experienced significant declines in revenues from
approximately $12,000,000 in Calendar 1999 to approximately
$9,000,000 in Calendar 2000 to approximately $4,000,000 in
Calendar 2001.  Further, the Company has limited opportunity to
reduce variable costs.

Management has identified various assets and designated them
"Surplus and held for sale" including the Company's former
production facility in Prattville, Alabama and various non-
utilized equipment.

Management notes that during the six years ended December 31,
2001, the Company has experienced cumulative net losses from
operations and has utilized cash in operating activities of
approximately $17,000,000.  The Company's continued existence is
dependent upon its ability to generate sufficient cash flows
from operations to support its daily operations as well as
provide sufficient resources to retire existing liabilities and
obligations on a timely basis.

To support operations during 2001, the Company received
approximately $5,000,000 in non-interest bearing working capital
advances from Morgan Creek Company, an unaffiliated entity and
experienced net reductions in accounts receivable through cash
collections of approximately $1,400,000.  During 2000, the
Company supported operations and retired certain short-term
lines of credit from a non-financial institution lender with the
receipt of approximately $615,000 and $9,600,000 in private
transactions from the sale of common and preferred stock,
respectively.

The Company restructured its management during the third and
fourth quarter of 2000 and during the first quarter of 2001.

At the present time, the Company is not performing at levels
significant enough to support daily operations.  The Company
remains dependent upon additional external sources of financing;
however, there can be no assurance that the Company will be able
to obtain additional funding or, that such funding, if
available, will be obtained on terms favorable to or affordable
by the Company.

The Company is in default on the debenture payable to The
Schlinger Foundation.  A distinct possibility exists that The
Schlinger Foundation may post a notice of foreclosure on the
secured Company assets.  This action will significantly impair
the Company's ability to continue operations.

The Company's independent certified public accountants, S. W.
Hatfield, CPA, has notified the Company that its auditor's
report on the 2001 consolidated financial statements will
contain a "going concern" opinion, as did their opinion on the
2000 consolidated financial statements, which will state that
"substantial doubt about the Company's ability to continue as a
going concern" exists.


KMART CORP: Bank of New York Wants to Effect $2.5 Million Setoff
----------------------------------------------------------------
Bank of New York and Kmart Corporation are parties to three
separate lending transactions:

  (1) $1,100,000,000 Three Year Credit Agreement dated December
      1999 among Kmart, Chase Securities Inc. as "Lead Arranger
      and Book Manager"; The Chase Manhattan Bank as
      "Administrative Agent"; Bank of America as "Syndication
      Agent"; BankBoston as "Co-Documentation Agent"; and Bank
      of New York as "Co-Documentation Agent";

  (2) Standing Agreement for Commercial Letters of Credit dated
      May 2000 -- wherein Bank of New York is authorized to
      charge Kmart's accounts maintained with Bank of New York
      for any and all amounts payable, and granted a security
      interest and lien in any funds in such accounts, and in
      other Collateral to secure Kmart's obligations; and

  (3) $400,000,000 364-Day Credit Agreement dated as of November
      1999 among Kmart, JP Morgan Securities Inc. as "Advisor,
      Arranger and Bookrunner", The Chase Manhattan Bank as
      "Administrative Agent", and Credit Suisse First Boston,
      Fleet National Bank and Bank of New York as "Co-
      Syndication Agents".

Mark D. Rasmussen, Esq., at Chapman and Cutler, in Chicago,
Illinois, tells the Court that Kmart and certain of its
subsidiaries are currently indebted to Bank of New York in a
pre-petition amount in excess of approximately $140,000,000 --
including approximately $24,000,000 of exposure for letters of
credit.

On the other hand, Mr. Rasmussen notes, approximately $2,500,000
of pre-petition Kmart funds are currently in several deposit
accounts maintained by Bank of New York.

Bank of New York
Account Number      Corporate Name on Account    Balance 1/22/02
----------------    -------------------------    ---------------
0300011152          VTA Inc.                          $32,106
0300011566          Kmart Holdings, Inc.              479,727
6801746118          Kmart of Pennsylvania LP           40,485
0224653485          Kmart Corporation                 948,432
9792020051          VTA                             1,000,868
                                                ---------------
                                                   $2,501,618

Mr. Rasmussen asserts that Bank of New York has contractual,
common law and statutory rights to setoff the funds in the
deposit accounts against that portion of Kmart's indebtedness to
Bank of New York, including Bank of New York's exposure under
the letter of credit agreement.

But since it is currently precluded from exercising its setoff
rights by virtue of the automatic stay, Bank of New York asks
the Court to lift the automatic stay in order to allow them to
exercise its setoff rights.  In the alternative, Bank of New
York seeks adequate protection from the Debtors on account of
its interests in the deposit accounts.

Consistent with applicable law, Mr. Rasmussen relates that Bank
of New York has placed an administrative freeze on certain
deposit accounts pending the resolution of this motion.

                        Debtors Object

According to J. Eric Ivester, Esq., at Skadden, Arps, Slate,
Meagher & Flom, in Chicago, Illinois, Bank of New York is
adequately protected.  Thus, Debtors assert that Bank of New
York's motion should be denied.

Mr. Ivester asserts that Bank of New York is adequately
protected because its collateral is comprised of cash.   
"Therefore, the Debtors are prohibited from utilizing the funds
in the Accounts without the Bank's consent unless this Court
authorizes such use consistent with the requirements of the
Bankruptcy Code," Mr. Ivester points out.

Mr. Ivester contends that the automatic stay need not be
modified to authorize the Bank to effectuate a setoff, nor
should the Debtors be further constrained from utilizing the
funds in the Accounts.  "Bank of New York will be adequately
protected by a replacement lien that the Debtors propose to
grant on substantially all their assets," Mr. Ivester relates.  
Although the proposed Setoff Lien is a junior lien, Mr. Ivester
assures the Court that the Debtors maintained assets prior to
the Petition Date with a book value of roughly $17,000,000,000.
"These assets were substantially unencumbered as of the Petition
Date," Mr. Ivester says.

Furthermore, Mr. Ivester argues that it would be inequitable and
unfair for Standard to benefit from freezing the funds of the
Debtors when other creditors, who continued to support the
Debtors -- including numerous other banks that held deposits of
approximately $110,000,000 as of the Petition Date -- are left
with general unsecured claims.

Moreover, Mr. Ivester maintains that section 553 of the
Bankruptcy Code bars creditors from exercising rights of setoff
where an obligation to a debtor is manufactured for the purpose
of creating a setoff right or where the pre-petition exercise of
the setoff would improve the creditor's position.  By refusing
to honor checks properly payable, Mr. Ivester says, Standard
created an obligation to the Debtors for the purpose of
manufacturing a setoff right.

With respect to the other arrangement involving a separate
letter of credit agreement, Mr. Ivester asserts that the Bank's
motion should be denied for the additional reason that the Bank
is attempting "an improper triangular set-off".

The Debtors dispute that Bank of New York has any valid setoff
right under the Letter of Credit Agreement with respect to funds
held in Accounts owned by VTA Inc., one of the affiliate
Debtors. "Mutuality does not exist among three-party
relationships," Mr. Ivester argues.  According to Mr. Ivester,
Bank of New York is attempting to complete an improper
triangular setoff without a formal agreement in place.  Mr.
Ivester points out that only Kmart and Bank of New York entered
into the Letter of Credit Agreement -- VTA is not a party.  "Yet
two of the accounts that Bank of New York is attempting to
setoff against are accounts of VTA," Mr. Ivester notes. (Kmart
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   


KRYSTAL COMPANY: Has Sufficient Funds to Continue through 2002
--------------------------------------------------------------
The Krystal Company was founded in 1932 as a single restaurant
in Chattanooga, Tennessee by R. B. Davenport, Jr. and J. Glenn
Sherrill.  The Company expanded steadily in subsequent years,
entering the Georgia market in 1936, and during the 1950's and
1960's, began relocating restaurants from urban to suburban
locations and transforming its format from "cook-to-order" items
to a more standardized quick-service menu.

The Company's centerpiece of growth was its namesake, the
KRYSTAL, a small, square hamburger with steamed-in flavor served
hot and fresh off the grill. As competition in the restaurant
industry increased in the late 1980's, the Company firmly
maintained its market niche by emphasizing the unique KRYSTAL.
Krystal restaurants have continued to emphasize the KRYSTAL and
have built their customer base around this and other items such
as "Krystal Chili," "Chili Pups," "Corn Pups," the "Sunriser," a
specialty breakfast sandwich, the "Krystal Chik," a specialty
chicken sandwich and the "Country Breakfast."

On September 26, 1997 (effective September 29, 1997 for
accounting purposes), the Company was acquired by Port Royal
Holdings, Inc.   At the closing of the Acquisition, a wholly-
owned subsidiary of Port Royal was merged with and into the
Company and the Company as the surviving corporation retained
the name "Krystal."  As a result of the Acquisition and Merger,
Port Royal became the owner of 100% of the common stock of the
Company.

The Company develops, operates and franchises full-size KRYSTAL
and smaller "double drive-thru" KRYSTAL KWIK quick-service
restaurants.  The Company believes it is among the first fast
food restaurant chains in the country.  The Company began to
franchise KRYSTAL KWIK restaurants in 1990 and KRYSTAL
restaurants in 1991.  In 1995, the Company began to develop and
franchise KRYSTAL restaurants located in non-traditional
locations such as convenience stores.  At December 30, 2001, the
Company operated 246 units (241 KRYSTAL restaurants and 5
KRYSTAL KWIK restaurants) and franchisees operated 165 units (97
KRYSTAL restaurants, 26 KRYSTAL KWIK restaurants and 42 KRYSTAL
restaurants in non-traditional locations) in eleven states in
the Southeastern United States.

The Company also leases 19 restaurant sites in the Baltimore,
Washington, D.C. and St. Louis metropolitan areas which it in
turn subleases to Davco Restaurants, Inc., a Wendy's
International, Inc. franchisee and former affiliate of the
Company.

Since 1977 the Company has operated a fixed base hangar and
airplane fueling operation through a subsidiary company
("Krystal Aviation") in Chattanooga, Tennessee.

       Comparison of the Fiscal Year Ended December 30, 2001
            to the Fiscal Year Ended December 31, 2000

Restaurant sales for the total Krystal system (Company and
Franchise combined) or fiscal year ended December 30, 2001 were
$372.4 million compared to $355.6 million for the twelve months
ended December 31, 2000, a 4.7% increase.

Total Company revenues decreased 2.3% to $260.7 million for
fiscal 2001 compared to $266.7 million for fiscal 2000.  Of this
$6.0 million decrease, restaurant sales accounted for a $7.1
million decrease, franchise fees increased $0.1 million,
royalties increased $1.0 million, and the Company's
aviation subsidiary revenues decreased $0.1 million.

Company-owned average same restaurant sales per week for fiscal
2001 were $18,894 compared to $18,959 for fiscal 2000, a
decrease of 0.34%.  The decrease in same restaurant sales per
week was attributable to several factors, including heavy
discounting by competitors and a decrease in transaction counts
which was partially offset by an increase in the average
customer check.  The Company operated 246 restaurants at
December 30, 2001 compared to 251 restaurants at December 31,
2000.  The five store decrease in Company operated units
resulted from the Company's sale (re-franchising) of two
restaurants, which were sold in connection with the execution of
new restaurant development commitments by franchisees, and the
closure of three under-performing units.

The average customer check for Company-owned restaurants in
fiscal 2001 was $4.65 as compared to $4.55 in fiscal 2000, an
increase of 2.2%.  The increase in average customer check was
due primarily to maintaining product price increases of
approximately 1.75% implemented during fiscal 2001.  Transaction
counts per restaurant day decreased to 592 in fiscal 2001
compared to 606 in fiscal 2000, a decrease of 2.3%.

Franchise fee income was $1.0 million in fiscal 2001 compared to
$901,000 in fiscal 2000.  Royalty revenue increased 20.9% to
$6.0 million in fiscal 2001 from $4.9 million in fiscal 2000.  
The increase in franchise fees, which are earned upon the
opening of new franchise restaurants, resulted primarily from an
increase in the number of new franchise restaurants opened in
fiscal 2001 compared to the same period in 2000.  During fiscal
2001, franchisees opened 32 new restaurants, and re-opened six
additional restaurants that had been temporarily closed.  There
were no franchise fees associated with the re-opened
restaurants.  During fiscal 2000, franchisees opened 24
franchise restaurants. The increase in franchise royalties was
due to a 23.5% increase in franchise system sales compared to
fiscal 2000 resulting primarily from a 18.7% increase in the
number of franchisee operated restaurants.  The franchise system
operated 165 restaurants at December 30, 2001 compared to 139 at
December 31, 2000.

Other revenue, which is generated primarily from the Company's
aviation subsidiary, was $6.8 million for fiscal 2001 compared
to $6.9 million for fiscal 2000, a 1.4% decrease.  This decrease
in revenue resulted primarily from a 7.3% decrease in jet fuel
sales and was partially offset by a 3.1% increase
in average retail jet fuel prices during fiscal 2001 compared to
fiscal 2000.

The Company's net loss for fiscal 2001 was $3,601 as compared to
$5,311, the net loss for fiscal 2000.

At December 30, 2001, the Company had existing cash balances of
$13.0 million and availability under its credit facility of $3.5
million.  The Company expects these funds and funds from
operations will be sufficient to meet its operating requirements
and capital expenditures through 2002.

                           *   *   *

Standard & Poor's lowered its corporate credit and senior
unsecured debt ratings on The Krystal Co. to single-'B' from
single-'B'-plus and lowered its senior secured bank loan rating
to double-'B'-minus from double-'B'. All ratings were removed
from CreditWatch, where they had been placed August 16, 2001.
The outlook is stable.

The downgrade is based on Krystal's weakened operating and
financial performance, as the company has experienced negative
comparable-store sales and receding operating margins over the
past two years. Intense competition from stronger industry
players, and higher food and paper costs have negatively
impacted results. Comparable-store sales at company-owned stores
declined 1.4% for the nine months ended Sept. 30, 2001,
following a decrease of 4.4% in 2000.


LODGIAN INC: Wins Nod to Hire Arthur Andersen as Accountants
------------------------------------------------------------
Lodgian, Inc. secures authority from the Court to employ and
retain Arthur Andersen LLP as their auditors and accountants,
nunc pro tunc to December 20, 2001.

The auditing and accounting services that the firm will render
to the Debtors include:

A. perform financial audits and related audit and accounting
       services, including, assisting with the preparation of
       Forms 10-Q, 10-K and other forms as may be required to
       file with the SEC;

B. research, analyze and advise with regard to a variety of
       audit, accounting and regulatory compliance issues; and

C. provide temporary loan staff services to assist the Debtors
       in completing certain accounting and regulatory reporting
       tasks on a timely basis.

As stated in the Debtors' Motion, Arthur Andersen will be
seeking compensation based on the current hourly billing rates
of its professionals rendering the service plus reimbursement of
out-of-pocket expenses incurred in connection with the
engagement. For the audit of the company's financial statement
for the year ending December 31, 2001, the firm will charge the
Debtors 90% of their normal hourly billing rates and for interim
reviews of the company's unaudited financial statements, the
firm will charge 80% of their normal hourly billing rates. The
firm's current hourly rates are as follows:

     Consultation Partners                          $900 - 1,000
     Engagement, Concurring & Advisory Partners     $465 -   598
     Consultation Managers                          $750
     Engagement Managers                            $366 -   588
     Engagement Seniors                             $242 -   299
     Engagement Experienced Staff                   $185 -   207
     Engagement Staff                               $134 -   150
     Engagement Intern                              $ 67 -    75
(Lodgian Bankruptcy News, Issue No. 7; Bankruptcy Creditors'
Service, Inc., 609/392-0900)  


MEMC ELECTRONIC: December 31 Balance Sheet Upside-Down by $20MM
---------------------------------------------------------------
MEMC Electronic Materials, Inc. (NYSE: WFR) released financial
results for the fourth quarter and year ended December 31, 2001.

As previously reported, on November 13, 2001, an investor group
led by Texas Pacific Group (TPG) purchased from E.ON AG and its
affiliates (E.ON) all of E.ON's debt and equity holdings in MEMC
for a nominal purchase price. In addition, on that date TPG and
MEMC restructured MEMC's debt acquired by TPG from E.ON.

As a result of the purchase of E.ON's equity interest in MEMC by
TPG and the rights possessed by TPG through its ownership of
MEMC's convertible preferred stock, the Company applied purchase
accounting and pushed down TPG's nominal basis in MEMC to its
accounting records, reflected in the Company's consolidated
financial statements for periods subsequent to November 13,
2001.

The analysis of the Company's operating results in this press
release utilizes combined information of MEMC for the quarter
and year ended December 31, 2001. The combined information
consists of the sum of the financial data from October 1, 2001
or January 1, 2001 through November 13, 2001 for the predecessor
and from November 14, 2001 through December 31, 2001 for the
successor to obtain the quarterly and annual data for 2001. The
comparability of the Company's operating results for the periods
prior to and following push down accounting is affected by the
purchase accounting adjustments.

                    Fourth Quarter Results

MEMC reported net sales of $120.4 million for the 2001 fourth
quarter compared to net sales of $255.2 million in the year ago
period. The 53% decrease in net sales reflects the industry's
well-documented slowdown in 2001.

The Company's gross margin and operating profit improved
sequentially from the third to the fourth quarter primarily due
to lower headcount, as well as reduced depreciation and
amortization reflecting the write-down of property, plant and
equipment, goodwill and intangible assets resulting from push
down accounting. Sequentially, product volumes increased
significantly, but were offset by declines in average selling
prices resulting from the weakened market conditions, as well as
a modest decline in product mix.

For the period from November 14, 2001 to December 31, 2001, the
Company reported negative gross margin as a result of volume
declines as customers tightly controlled their year-end
inventory levels, declines in average selling prices, and
scheduled temporary plant shutdowns.

The Company incurred an operating loss of $61.4 million in the
2001 fourth quarter, excluding restructuring charges of $10.1
million, compared to an operating profit of $15.1 million for
the quarter ended December 31, 2000.

"Although volumes began to stabilize in the fourth quarter, the
continued weakened market caused downward pressure on our
average selling prices," commented Klaus von Horde, MEMC's Chief
Executive Officer. "In response to the prolonged slowdown, we
took the necessary steps of reducing our headcount further this
quarter."

As a result of the workforce reductions, the Company recognized
a $10.1 million restructuring charge during the 2001 fourth
quarter.

Interest expense for the fourth quarter of 2001 was $14.1
million, compared to $23.9 million in the year-ago period and
$22.9 million for the quarter ended September 30, 2001. The
decreased interest expense resulted from the restructuring of
the Company's debt on November 13, 2001.

Equity in loss of the Company's Taiwanese joint venture was $2.8
million in the fourth quarter of 2001, compared to income of
$7.2 million in the prior year period. Compared to the year-ago
period, Taisil experienced a double-digit percentage decrease in
product volume and significant decreases in average selling
prices. In addition, in the 2001 fourth quarter Taisil increased
its deferred tax valuation allowance related to certain net
operating loss carryforwards, of which the Company's share was
approximately $3 million.

The Company reported a net loss allocable to common
stockholders, which is after cumulative preferred stock
dividends of $4.2 million, for the 2001 fourth quarter of $82.3
million, compared to net income of $1.7 million for the 2000
fourth quarter.

The Company reported negative operating cash flow of $13.8
million for the 2001 fourth quarter, compared to negative $20.8
million in the 2001 third quarter. Capital expenditures during
the quarter totaled $11.0 million, flat with the previous
quarter. Depreciation and amortization in the 2001 fourth
quarter totaled $27.5 million, a decline of $19.1 million
compared to the previous quarter, reflecting the write-down of
property, plant and equipment, goodwill, and intangible assets
resulting from the application of push down accounting effective
November 13, 2001.

                         2001 Results

For the year ended December 31, 2001, the Company's net sales
decreased by 29% to $617.9 million from $871.6 million in 2000.
The Company's product volumes for the 2001 calendar year as
compared to the 2000 calendar year decreased 24%. This decline
was across all product diameters, but especially in smaller
diameters as customers utilized their larger diameter fabs to
realize the lowest cost per device. In addition, average selling
prices decreased moderately in 2001 compared to 2000, resulting
from the weakened market conditions in the semiconductor and
silicon wafer industries.

Had MEMC Korea Company been included in the Company's operating
results for the entire year in 2000, the year-over-year decline
in net sales in 2001 would have been approximately 38%, caused
primarily by a 34% decline in product volumes.

Gross margin declined to negative $51 million in 2001 compared
to positive $129 million in 2000, primarily as a result of the
significant decline in product volumes which caused an
underabsorption of manufacturing fixed costs in 2001, as well as
the moderate decline in average selling prices.

Push down accounting resulted in the recognition of a net
deferred tax asset. The Company reviewed its total deferred tax
assets by taxable jurisdiction and recognized a valuation
allowance where it was determined more likely than not that the
Company would be unable to realize a benefit from these assets.

Section 382 of the Internal Revenue Code restricts the
utilization of net operating losses and other carryover tax
attributes upon the occurrence of an ownership change. As a
result of TPG's purchase of E.ON's interests in MEMC, the
Company believes that a significant majority of its U.S. net
operating loss carryforwards will be utilized or applied to
reduce its tax attributes. To the extent that any U.S. or
foreign net operating loss carryforwards remain, the Company has
recognized a valuation allowance to fully offset any associated
deferred tax assets. Accordingly, as of December 31, 2001,
MEMC's net operating loss carryforwards do not carry any value
in the Company's consolidated balance sheet.

                           Outlook

"Looking ahead, we are encouraged by signs of market
stabilization and recovery. Since a low point in demand in the
third quarter of 2001, we have seen a modest recovery in
worldwide shipments of silicon wafers," continued von Horde. "We
expect that product volumes will be up in the first quarter of
2002 as compared with last quarter. During the semiconductor
industry's downturn, we have continued to reduce our fixed costs
and to improve our production yields. When market volumes
stabilize and grow, we believe the positive effects of our
reduction in fixed costs will become increasingly visible in our
bottom line results. As a result, we expect that our operating
profit, before depreciation and amortization, could approach
break-even in the 2002 first quarter."

The Company expects its write-down of property, plant and
equipment, goodwill, and intangible assets to result in a
reduction in depreciation and amortization of approximately $150
million in 2002.

As a result of the restructuring of the Company's debt, TPG
acquired $50 million in principal amount of the Company's newly
issued senior subordinated secured notes. TPG also retained a
note issued by MEMC's Italian subsidiary in the principal amount
of 55 million Euro (approximately $48 million). These notes were
recorded at their combined fair market value of two dollars. The
senior subordinated secured notes and the 55 million Euro note
will accrete interest up to their face values in six years and
less than one year, respectively.

Beginning in 2002, the Company transitioned its 300 millimeter
operations from a pilot line to full-scale production.
Consequently, beginning in 2002, 300 millimeter revenue and
associated production costs will be presented in Net Sales and
Cost of Goods Sold, respectively.

MEMC is a leading worldwide producer of silicon wafers for the
semiconductor industry. Silicon wafers are the fundamental
building block from which almost all semiconductor devices are
manufactured, such as are used in computers, mobile electronic
devices, automobiles, and other consumer and industrial
products. Headquartered in St. Peters, MO, MEMC operates
manufacturing facilities directly in every major semiconductor
manufacturing region throughout the world, including Europe,
Japan, Malaysia, South Korea, Taiwan and the United States and
through a joint venture in Taiwan.

At December 31, 2001, the company's balance sheet showed a total
shareholders' equity deficit of about $20 million.


MARINER POST-ACUTE: Resolves Tort Claimants' Objections to Plan
---------------------------------------------------------------
The Ness Motley Tort Claimants (Mary Brinson, Barbara Casey,
James Chandler, Lonzie Hodum, Lucille Pruitt, Dormaine Robinson,
Odeller Scruggs), represented by Kelhr, Harrison, Harvey,
Branzburg & Ellers, LLP, have advised Mariner Post-Acute
Network, Inc., and its debtor-affiliates that they may file
certain objections to the Plan absent a satisfactory consensual
resolution.

To avoid litigation, the Debtors and the Ness Motley Tort
Claimants agree and stipulate as follows:

     1.  Debtors agree, that notwithstanding confirmation of the
Plan, the rights, if any, of the Ness Motley Tort Claimants to
seek recovery of punitive damages from third party insurers, to
the extent permissible under applicable non-bankruptcy law and
the terms of any applicable insurance policies, will not be
affected by (i) the separate classification of punitive damage
claims under the Plan, (ii) the distribution of no consideration
from the Debtors' estates under the Plan on account of such
claims, and (iii) the discharge of such claims pursuant to the
Plan.

     2.  Each of the Ness Motley Tort Claimants agrees that he
or she will be deemed to have timely voted in favor of
acceptance of the Plan. Each of the Claimants further agrees not
to vote against, object to, or otherwise oppose or delay the
confirmation of the Plan. Such agreements are expressly
conditioned upon (i) the ultimate approval of this Stipulation
by the Bankruptcy Court, and (ii) the Plan continuing to provide
at least as favorable treatment for the Ness Motley Tort
Claimants as the Plan currently provides.

     3.  Four of the Ness Motley Tort Claimants, Mary Brinson,
Barbara Casey, James Chandler, and Dormaine Robinson have filed
a Motion to compel Mariner Post-Acute Network, Inc. to respond
to requests for the production of documents, and the Debtors
have filed a response. The Movants agree to withdraw the Motion
with prejudice pending resolution of the ADR procedures
operative in these bankruptcy cases, without prejudice to the
Movants' right to seek the same categories of documents in state
court discovery process.

                          *   *   *

Certain Tort Claimants represented by The Marks Firm, P.C. (the
Marks Tort Claimants) have advised the Debtors that they intend
to file certain objections to the Plan absent a satisfactory
consensual resolution of the Marks Objections.

To avoid litigation, the parties desire to resolve the Marks
Objections and related issues by entering into a stipulation.
Pursuant to the Stipulation, the Debtors agreee to the
following, notwithstanding confirmation of the Plan:

1.  The rights, if any, of the Marks Tort Claimants to seek and
    obtain judgments for actual, punitive, and exemplary damages
    against multiple entities, to the extent permitted under
    applicable non-bankruptcy law, and to the extent limited to
    a recovery of insurance proceeds, shall not be affected by

    (a) substantive consolidation pursuant to the Plan

    (b) provisions in the Plan for (i) the separate
        classification of punitive damage claims under the Plan,
        (ii) the distribution of no consideration from the
        Debtors' estates under the Plan on account of such
        claims, and (iii) the discharge of such claims pursuant
        to the Plan;

   (c) the disallowance under the Plan of punitive and exemplary
       damages as administrative expenses

   (d) the paragraph entitled "Limitation on Total Distribution"
       contained in Section II.D.3.d.iii of the Plan.

   (a) and (b) apply to postpetition claims of tort claimants
       now or hereafter represented by The Marks Firm, P.C., who
       may assert administrative expenses on account of alleged
       torts arising out of postpetition patient care occurring
       in Texas or Arkansas.

   Such proceeds may be recovered, if available under applicable
   non-bankruptcy law and the terms of any applicable insurance
   policies in the absence of the Plan.

2.  No portion of the Plan affects the Marks Tort Claimants'
    rights, if any, to recover damages pursuant to article 4590i
    Sec. 11.02 of Vernon's Annotated Texas Civil Statutes as
    interpreted by Rose v. Doctor's Hospital, 801 S.W.2d 841
    (Tex. 1990), if and to the extent that such recovery would
    have been permitted under applicable non-bankruptcy law in
    the absence of the Plan, but only to the extent that the
    Debtor's liability, if any, is covered by applicable
    insurance and is satisfied from any such applicable
    insurance.

3.  Nothing contained in the Plan is intended to deprive Cindy
    Lee Anderson Rutledge and The Partnership for Fraud Analysis
    of the benefits of the Federal Government Settlement.

4.  The requirement for qualification as an "Allowed Claim"
    contained in Section I.A.4(c) of the Plan shall not
    permanently disallow any claim of the Marks Tart Claimants
    solely on the ground that such claim is, as of the Effective
    Date, being administered pursuant to the ADR Procedure, if
    and to the extent that, after the Effective Date, any of the
    requirements contained in Section I.A.4(c)(i) or (ii) or
    (iii) of the Plan shall have been duly satisfied and such
    claim otherwise qualifies for treatment as an Allowed Claim.

5.  With respect to the Claims Estimation Procedure set forth in
    Section IV.D of the Plan,

    (a) any estimation of any claim of the Marks Tort Claimants
        that may be conducted by the Bankruptcy Court shall be
        solely for the purposes of determining the distributions
        to be made from the Debtors' estates pursuant to the
        Plan and maintaining reserves therefor, and shall not be
        deemed to establish the allowed amount of such claim for
        any other purpose;

    (b) any such estimation shall not be determinative of any
        parties' rights or obligations under the terms of any
        applicable insurance policies;

    (c) if such an estimation is undertaken, the claims of the
        Marks Tort Claimants shall each be estimated at an
        "Estimated Maximum Amount" (as defined in Section IV.D
        of the Plan) equal to at least $1.00 more than any
        applicable self-insured retention or deductible under
        applicable policies of insurance; and

    (d) any such estimation shall not be binding or constitute
        collateral estoppel or res judicata in any non-
        bankruptcy proceeding, or be used as evidence by the
        Debtors, their insurers or the Marks Tort Claimants in
        any non-bankruptcy proceeding.

6.  The discharge of certain indemnity obligations of the
    Debtors to certain former employees contained in Section
    VI.C of the Plan shall not (i) affect, preclude, or limit
    the rights of the Marks Tort Claimants to seek recovery of
    insurance coverage to or for the benefit of such former
    employees, to the extent permissible under applicable non-
    bankruptcy law and the terms of any applicable insurance
    policies; or (ii) affect or discharge the obligations, if
    any, of insurers under any such policies.

7.  The limitation of liability contained in Section IX.F of the
    Plan shall not release the direct claims, if any, of the
    Marks Tort Claimants against any employees of the Debtors
    allegedly arising out of the provision of patient care by
    such employees.

                          *   *   *

109 Tort Claimants represented by the law firm Wilkes & McHugh,
P.A. have advised the Debtors that they intend to file
objections to the Plan absent a satisfactory consensual
resolution.

In the interests of avoiding litigation, the Debtors on the one
hand and the Wilkes & McHugh Tort Claimants on the other hand
agree and stipulate whereby Debtors agree as follows:

(a) The automatic stay imposed by section 362 of the Bankruptcy
    Code and any injunction arising as a result of the
    confirmation of the Plan (a Plan Injunction) shall be
    modified to permit Wilkes & McHugh Tort Claimant and the
    Debtors to prosecute and defend against any action filed in
    any non-bankruptcy court by such Wilkes & McHugh Tort
    Claimant on account of any claim (whether arising pre-
    Petition Date or post-Petition Date) until settlement or
    final judgment has been reached and to take such actions as
    are necessary or appropriate to exercise their respective
    rights of appeal, until such rights have been exhausted;

    provided, however, that,

    each Wilkes & McHugh Tort Claimant may enforce or execute
    upon any (a) settlement, (b) judgment entered by a court of
    competent jurisdiction or (c) other disposition of the
    underlying claims of such Wilkes & McHugh Tort Claimant only
    against the proceeds from any applicable Debtor's liability
    insurance policies and, with respect to any General
    Unsecured Claim or Allowed Administrative Expense, by
    seeking distribution under the Plan in accordance with the
    terms of the Plan and applicable orders of the bankruptcy
    court.

    Except as to insurance proceeds and any right to receive
    distributions under the Plan available to satisfy the
    liquidated claims of the Wilkes & McHugh Tort Claimants, the
    automatic stay and any applicable Plan Injunction shall
    continue to apply to any effort by any Wilkes & McHugh Tort
    Claimant to otherwise enforce or collect on any claim from
    any property of any Debtor, estate of a Debtor, or
    Reorganized Debtor (but this proviso shall not affect or
    limit the right of any Wilkes & McHugh Tort Claimant to
    proceed against any applicable insurance coverage for
    compensatory or punitive damage claims).

    The term "Stay Relief Date" shall mean different dates with
    respect to different groups of the Wilkes & McHugh Tort
    Claimants.

    The "Stay Relief Date" shall be March 27, 2002 for certain
    Wilkes & McHugh Tort Claimant (i) who resides in Texas or
    Florida and who elected inclusion in Plan B of the Debtors'
    ADR Procedure, but was denied inclusion in Plan B (Rejected
    W & M Plan B Claimants);

    The Wilkes & McHugh Tort Claimants who have not obtained a
    modification of the automatic stay as of the Confirmation
    Date shall be divided into five groups.

    Group 1 shall consist only of the Rejected W & M Plan B
    Claimants who have not obtained a stipulation modifying the
    automatic stay.

    The four other groups shall be equally divided groups of the
    remaining Wilkes & McHugh Tort Claimants. Counsel for the
    Wilkes & McHugh Tort Claimants shall identify one-half of
    the Wilkes & McHugh Tort Claimants to be placed into each of
    Groups 2 though 5, and counsel for the Debtors shall
    identify one-half of the Wilkes & McHugh Tort Claimants to
    be placed in each of Groups 2 through 5.

    The Stay Relief Date applicable to the claims within each
    group shall be as follows:

    Group 1 -- March 27, 2002

    Group 2 -- 30 days after the Confirmation Date

    Group 3 -- 60 days after the Confirmation Date

    Group 4 -- 90 days after the Confirmation Date

    Group 5-- 120 days after the Confirmation Date.

(b) Neither the Plan, the Confirmation Order, nor any other
    order entered in connection with the Chapter 11 Cases (other
    than the order approving this Stipulation) shall affect,
    preclude, or limit the rights, if any, under applicable
    state law, of the Wilkes & McHugh Tort Claimants (x) to
    assert and prosecute claims for punitive damages in any
    action against any of the Debtors in any non-bankruptcy
    court, or (y) to recover such damages from third-party
    insurers if, and to the extent that, such recovery is
    permissible under applicable nonbankruptcy law and the terms
    of any applicable insurance policies (provided, however,
    that, as against the Debtors, their estates, the Reorganized
    Debtors and their respective assets, any recovery of or with
    respect to such punitive damage claims of the Wilkes &
    McHugh Tort Claimants shall be treated only as provided in
    the Plan, but such claims, although subordinated to all
    other claims and classes of claims, shall not be expunged).

(c) The terms of the Plan do not preclude Wilkes & McHugh Tort
    Claimants from seeking the allowance of Administrative
    Expense for punitive damages against any of the Debtors, the
    recovery of which would be permissible under applicable
    nonbankruptcy law. The Debtors reserve their right to object
    to the allowance of any such Administrative Expense.

    The determination on allowance of each Wilkes & McHugh Tort
    Claimant's compensatory or punitive damage claim and
    Administrative Expense claim for punitive damages shall be
    made on a case-by-case basis, by the Delaware Bankruptcy
    Court, but only following the entry of a final judgment by
    any court of competent jurisdiction that includes an award
    of compensatory or punitive damages to such Wilkes & McHugh
    Tort Claimant that is not paid with insurance proceeds.

(d) In the event that a Wilkes & McHugh Tort Claimant obtains a
    final judgment against any Debtor that includes any award of
    pre-Petition Date punitive damages that is a Punitive
    Damages Claim, the Debtors will, to the extent permissible
    under applicable nonbankruptcy law and the terms of the
    applicable insurance policy, assign any bad faith claims
    they might have against the applicable insurer to the Wilkes
    & McHugh Tort Claimant that was awarded such punitive damage
    judgment.

(e) Any releases contained in the Plan are not intended to and
    shall not release the direct claims, if any, of any of the
    Wilkes & McHugh Tort Claimants against any officers,
    directors, employees or agents of the Debtors.

(f) The Reorganized Debtors will provide such litigation
    assistance, support or cooperation as is requested by any
    applicable insurance policy; provided, however, that nothing
    contained herein shall be deemed to require the performance
    of any other duty or obligation under any insurance policy
    or other agreement.

(g) The Plan shall not preclude the allowance as a General
    Unsecured Claim or an Administrative Expense of any claim   
    for attorneys' fees asserted by any Wilkes & McHugh Tort
    Claimant if, and to the extent, that recovery of such claim
    is permissible under applicable nonbankruptcy law.

(h) Any proof of claim filed by a Wilkes & McHugh Tort Claimant
    that was filed after the claims bar date of September 29,
    2000 shall be deemed timely filed, if all of the following
    conditions are satisfied with respect to such proof of
    claim: (1) the proof of claim must have been filed on or
    before March 25, 2002; and (2) the Wilkes & McHugh Tort
    Claimant on behalf of whom such proof of claim was filed
    provides the Debtors with a sworn affidavit that (a) until
    after the Claims Bar Date had passed, such Wilkes & McHugh
    Tort Claimant (i) was not aware of the pendency of the
    Debtors' Chapter 11 Cases and (ii) had not consulted with
    the law firm of Wilkes & McHugh for the purpose of filing a
    claim against the Debtors, and (b) such Wilkes & McHugh Tort
    Claimant's proof of claims was filed no later than 90 days
    after such Wilkes & McHugh Tort Claimant (x) learned of the
    Debtors' Chapter 11 Cases and (y) consulted the law firm of
    Wilkes & McHugh for the purpose of filing a claim against
    the Debtors.

    A Wilkes & McHugh Tort Claimant who is unable to satisfy the
    foregoing conditions but who files a Proof of Claim before
    March 25, 2002 may seek authorization from the Bankruptcy
    Court to file such late filed claim, and the Debtors reserve
    all rights to oppose any such late filing (as well as any
    defenses on the merits).

    Any proof of claim filed by any Wilkes & McHugh Tort
    Claimant after March 25, 2002, shall conclusively be deemed
    to be barred and not entitled to any distribution under the
    Plan by the late filing of such claim without the need for a
    further order of the Bankruptcy Court, and no motion shall
    be filed to permit the late filing of such claim.

    Neither the failure to file nor the late filing of any proof
    of claim by any Wilkes & McHugh Tort Claimant, nor the
    disallowance of any such claim on the grounds that it was
    filed after the Claims Bar Date, shall affect, preclude, or
    limit the rights, if any, of such Wilkes & McHugh Tort
    Claimant to seek recovery from any third party insurer if,
    and to the extent, such recovery is permissible under
    applicable nonbankruptcy law and the terms of any applicable
    insurance policies.

The Parties agree that, in any action by any of the Wilkes &
McHugh Tort Claimants against any of the Debtors, the Parties
will not allege, assert or seek to establish fraudulent acts or
omissions directly on the part of any of the (Mariner Bankruptcy
News, Issue No. 27; Bankruptcy Creditors' Service, Inc.,
609/392-0900)  


MATLACK SYSTEMS: Has Until April 23 to Chapter 11 Plan
------------------------------------------------------
Matlack Systems, Inc. won a fourth extension from the U.S.
Bankruptcy Court for the District of Delaware to further extend
the exclusive periods during which only the Debtors have the
right to file a Plan of Reorganization and Solicit Acceptances
of the Plan.  The Court gives the Debtors until April 23, 2002
to file a plan and until June 24, 2002 to solicit votes from its
creditors.  

Matlack Systems, Inc., North America's No. 3 tank truck company,
provides liquid and dry bulk transportation, primarily for the
chemicals industry.  The company filed for chapter 11 protection
last March 29, 2001 and is represented by Richard Scott Cobb,
Esq., at Klett Rooney Lieber & Schorling.  Matlack's 10Q Report,
filed with the Securities and Exchange Commission on
March 31, 2001, lists assets of $81,160,000 and liabilities of
$89,986,000.


MEDMIRA INC: Completes Arrangements for $1.4MM Bridge Financing
---------------------------------------------------------------
MedMira Inc. announced that it had completed arrangements first
announced on December 3, 2001 for a loan facility of $1.4
million from a group of individuals, including the Chairman
and CEO, Stephen Sham, and director Dr. Michael Giuffre.

The terms of the loan facility provide for interest to be paid
at an annual rate of 8%. The loans have a minimum term of 6
months, and are repayable as soon as funds shall be available
and before the Company will pay other creditors other than trade
creditors in the ordinary course of business. The Company has
agreed to pay the lenders either a bonus in the form of common
shares equivalent to 20% of the principal amount of the loan
or a warrant to purchase common shares equivalent to 40% of the
principal of the loan at a 20% discount to market price. In the
aggregate, this means that the company has sought approval from
the CDNX to issue up to 153,329 common shares as a share bonus
and warrants to purchase 60,000 common shares. The number of
shares to be issued and the exercise price for the warrants were
calculated in accordance with the requirements of the CDNX at
prices that reflect the fact that the funds were advanced over
an approximate 3 month period.

In addition, subject to CDNX approval, the Company also plans to
issue 396,825 common shares at $1.26 per share to an individual
investor resident in Alberta relying on private placement
exemption provisions under the applicable securities laws.

MedMira is a publicly traded (CDNX:MIR), ISO 9001 registered
Canadian medical biotechnology company that develops,
manufactures and markets qualitative, in vitro diagnostic tests
for the detection of antibodies to certain diseases such as HIV
in human serum, plasma or whole blood. MedMira's diagnostic test
technology is designed to provide a quick, portable, safe and
cost-effective alternative to conventional laboratory testing.
In addition to seeking FDA approval for its Rapid HIV Test,
MedMira is actively seeking worldwide approvals for its complete
product line.

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

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


MUZAK LLC: Gets Waiver of Covenant Violations Under Credit Pact
---------------------------------------------------------------
Muzak LLC has obtained a waiver of its violation of the maximum
consolidated capital expenditures covenant under the Senior
Credit Facility from the requisite lenders for the period ending
December 31, 2001.

In addition, Muzak LLC has increased its aggregate revolving
commitments under the Senior Credit Facility by $20.0 million,
for a total commitment of $55.0 million, and amended certain
financial covenants for 2002 and 2003. Additionally, the
existing equity holders, including ABRY Partners LLC,
contributed $10.0 million in the form of junior subordinated
unsecured notes to Muzak, the proceeds of which were used to
repay outstanding revolving loan balances. As a result of this
increased commitment and the amended financial covenants, Muzak
currently has approximately $40.0 million available under its
Senior Credit Facility and has enhanced its financial
flexibility.

Through Audio Architecture and Audio Marketing, the art of
capturing the emotional power of music and putting it to work
for clients seeking to enhance their brand image, Muzak serves
approximately 335,000 customer locations in the United States
and 14 foreign countries. More than 100 million people hear the
Company's products each day. The Company delivers music, videos,
messaging and sound system design through more than 200 sales
and service locations.


NTL INC: NYSE Intends to Delist Shares After Trading Suspension
---------------------------------------------------------------
As announced by the New York Stock Exchange, the shares of
common stock of NTL Incorporated (NASDAQ Europe: NTL Inc) have
been suspended from trading on the NYSE and thus will not reopen
on that exchange.

The NYSE indicated that it intends to delist NTL's common stock
following this suspension. However, the Company announced that
this event is not expected to have any effect on business
operations or customer service. Yesterday, the Company announced
that it had achieved record EBITDA for the 4th quarter of 2001
and that it had surpassed its goals for digital and broadband
subscribers and EBITDA for the quarter and year ended December
31, 2001.

As previously announced, the Company does not currently meet the
continued listing criteria of the NYSE requiring a minimum
closing share price exceeding $1 and a minimum market
capitalization of $100 million each for thirty consecutive days.
The NYSE's announcement indicated that today's decision was
based primarily upon our current stock price and these
deficiencies. The Company expects that the shares will commence
trading on the Over the Counter Bulletin Board ("OTC BB") in the
United States in due course and will trade at such time under
the new symbol "NTLD". The Company will provide additional
information to investors if and when available.

More on NTL:

     -  As announced on January 31, NTL has appointed Credit
Suisse First Boston, JPMorgan and Morgan Stanley to advise on
strategic and recapitalization alternatives to strengthen the
company's balance sheet and reduce debt.

     -  NTL offers a wide range of communications services to
homes and business customers throughout the UK, Ireland,
Switzerland, France, Germany and Sweden. Over 20 million homes
are located within the NTL's group franchise areas, covering
major European cities including London, Paris, Frankfurt,
Zurich, Stockholm, Geneva, Dublin, Manchester and Glasgow. NTL
and its affiliates collectively serve over 8.5 million
residential cable telephony and Internet customers.

     - In the UK, over 11 million homes are located within NTL's
fibre-optic broadband network, which covers nearly 50% of the UK
including, London, Manchester, Nottingham, Oxford, Cambridge,
Cardiff, Glasgow and Belfast. NTL Home now serves around 3
million residential customers.

     - NTL Business is a (pound)600 million operation and
customers include Royal Bank of Scotland, Tesco, Comet, AT&T and
Orange.

NTL offers a broad range of technologies and resources to
provide complete multi-service solutions for businesses from
large corporations to local companies.

     - NTL Broadcast has a 47-year history in broadcast TV and
radio transmission and helped pioneer the technologies of the
digital age. 22 million homes watch ITV, C4 and C5 thanks to
NTL's broadcast transmitters. With over 2300 towers and other
radio sites across the UK, NTL also provides a full range of
wireless solutions for the mobile communications industry.


NATIONAL STEEL: Court Grants Injunction Against Utility Firms
-------------------------------------------------------------
National Steel Corporation and its debtor-affiliates asks Judge
Squires to:

  (i) prohibit utility service providers -- Utility Companies --
      from altering, refusing or discontinuing services on
      account of outstanding pre-petition invoices or pre-
      petition claims;

(ii) establish procedures for determining requests by the
      Utility Companies for additional adequate assurance of
      future payment;

(iii) authorize but not obligate payment of pre-petition amounts
      owing to a Utility Company and providing that if a Utility
      Company accepts such payment, the Utility Company shall be
      deemed to be adequately assured of future payments and to
      have waived any right to seek additional adequate
      assurances in the form of a deposit;

(iv) provide that if a Utility Company timely and properly
      requests additional adequate assurance that the Debtors
      believe is unreasonable, and the Debtors are unable to
      resolve the request consensually with the Utility Company,
      then upon the request of the Utility Company, the Debtors
      shall file a motion for hearing at the next regularly
      scheduled omnibus hearing occurring more than 20 days
      after the date of such request unless another hearing date
      is agreed between the parties or ordered by the Court;

  (v) provide that any Utility Company having made a request
      for additional adequate assurance of payment shall be
      deemed to have adequate assurance of payment until the
      Court enters a final order in connection with such a
      request finding that the Utility Company is not adequately
      assured of future payment; and

(vi) provide that any Utility Company that does not timely and
      in writing request additional adequate assurance of
      payment shall be deemed to be adequately assured of
      payment.

The Debtors also request that the Utility Companies include with
any request for additional adequate assurance a summary of the
Debtors' payment history relevant to affected accounts.

David N. Missner, Esq., at Piper Marbury Rudnick & Wolfe, in
Chicago, Illinois, explains that uninterrupted utility services
are critical to the Debtors' ability to sustain their operations
during the pendency of their chapter 11 cases.  In the normal
conduct of their businesses, the Debtors use services provided
by the Utility Companies.  "The Debtors' facilities are
dependent on electricity in their manufacturing processes and
for lighting and general office use," Mr. Missner illustrates.  
Telephone service is necessary to permit the Debtors to conduct
sales and marketing functions and to communicate with customers,
vendors and corporate headquarters.  In addition, Mr. Missner
notes that continued water service is necessary to maintain
sanitary lavatory facilities for employees.  Maintenance of gas
service is essential to provide power to the equipment.  "Any
interruption of these services would severely disrupt the
Debtors' day-to-day operations," Mr. Missner asserts.

Mr. Missner assures the Court that the Debtors' record of
payment of pre-petition utility bills, their demonstrated
ability to pay future utility bills and the administrative
expense priority together constitute adequate assurance to each
of the Utility Companies of payment for all future services.

In addition, the Debtors also request authority to pay, in their
sole discretion, all pre-petition amounts owed to the Utility
Companies in lien of making deposits.  The Debtors recognize
however, the right of each Utility Company to request adequate
assurance.  Mr. Missner states that to process such requests in
an orderly fashion, the Debtors propose that the Utility
Companies be afforded 30 days from the date of entry of the
order granting this motion to make a request.  If the Debtors
are unable to resolve the request consensually, then upon
request of the Utility Company, the Debtors will file a motion
for determination of adequate assurance of payment and such
determination be set for hearing at the next regularly scheduled
omnibus hearing occurring more than 20 days after the date of
such request unless another hearing date is agreed between the
parties or ordered by the Court.

                          *   *   *

Finding the relief requested reasonable, Judge Squires issues an
interim order authorizing the Debtors to pay on a timely basis
all undisputed invoices for post-petition utility services.  The
Debtors are, without further order from the Court, authorized
but not obligated to pay any pre-petition amounts owed to each
Utility Companies in the ordinary course of their business.

Furthermore, the Court rules that absent any further order of
the Court, no Utility Company shall:

  (i) alter, refuse, or discontinue service to or discriminate
      against the Debtors, solely on the basis of these cases or
      on account of any unpaid invoice for services provided
      prior to the Petition Date; or

(ii) require the payment of a deposit or other security in
      connection with the Utility Company's continued provision
      of utility service. (National Steel Bankruptcy News, Issue
      No. 3; Bankruptcy Creditors' Service, Inc., 609/392-0900)


NATIONSRENT: Judge Walsh Establishes Fee Applications Procedures
----------------------------------------------------------------
In conjunction with the appointment of the Auditor, in the
chapter 11 cases of NationsRent Inc., and its debtor-affiliates,
Judge Walsh orders the establishment of uniform procedures for
review, allowance and payment of fees and expenses of Fee
Applicants to ensure compliance with Section 330 of the
Bankruptcy Code.

Judge Walsh directs that the scope of this Order includes:

A. All professionals in these cases employed, or to be employed;

B. All members of official committees appointed in these cases;
   and,

C. Any claims for reimbursement of professional fees and
   expenses under Section 503(b) of the Bankruptcy Code to the
   extent permitted by the Court, except professionals retained
   pursuant to the Court's Order authorizing the Debtors to
   retain, employ and pay certain ordinary course professionals.

Judge Walsh directs that the Terms of the Court's prior
Administrative Order establishing the procedures on interim
compensation and reimbursement of expenses of professionals will
not be modified by this Order, except that:

A. Retroactive to the petition date, Applicants shall not file
   monthly fee applications with the Court, but instead shall
   file after the end of the applicable month a Notice of
   Monthly Fee and Expense Invoice, together with the
   Applicant's monthly invoice;

B. Each Notice Party has 20 days after service of a Monthly
   Statement to object to it. Upon the expiration of the
   Objection Deadline, each Applicant must file with the Court
   and serve on the Notice Parties a certificate of no
   Objection. After this, the Debtors are authorized to pay such
   Applicant the Actual Interim Payment equal to the lesser of
   80% of the fees and 100% of the expenses requested in the
   Monthly Fee Statement, or 80% of the fees and 100% of the
   expenses not subject to an objection;

C. If any Notice Party objects to an Applicant's Monthly
   Statement, it must file a written objection with the Court
   and serve it on the Applicant and each Notice Party so
   that it is received on or before the Objection Deadline.
   Thereafter, the objecting party and the Applicant may attempt
   to resolve the objection on a consensual basis. If the
   parties are unable to reach a resolution within 20 days after
   the service of the objection, then the Applicant may file a
   response to the objection with the Court, which will be heard
   on the next interim or final fee application;

D. The first interim fee application period covers all fees and
   expenses from the December 17, 2001 petition date through
   April 30, 2002. Interim fee applications for such periods
   must be filed no later than June 14, 2002. Subsequent interim
   fee application periods are 4 calendar months. Interim fee
   applications for each of these periods must be filed no later
   than 45 days after the end of such period; and,

E. To the extent the Court disallows any Applicant's fees or
   expenses in an amount greater than the holdback otherwise due
   to an Applicant, the disallowed amount is deducted from the
   Debtors' next payment to the affected applicant. (NationsRent
   Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service,
   Inc., 609/392-0900)


NEWPOWER HOLDINGS: Eyes Options After Centrica Bolts from Talks
---------------------------------------------------------------
NewPower Holdings, Inc. (NewPower) (NYSE: NPW) announced that it
was informed that Centrica plc (Centrica) had decided not to
waive the condition to its tender offer for NewPower shares
requiring the Enron Corp. bankruptcy court to approve an order
enjoining claims against NewPower for any joint and several
liability it allegedly may have as a result of its membership
for a short time in the Enron consolidated tax and benefits
groups. Accordingly, Centrica had decided to allow its tender
offer to expire at midnight Thursday night without purchasing
any shares, despite the satisfaction of all other conditions to
the offer.

In light of Centrica's decision, which Centrica had informed
NewPower was irrevocable, NewPower has agreed to terminate the
merger agreement with Centrica. NewPower is evaluating all of
its alternatives.

NewPower and Centrica have agreed to hold discussions to
determine whether an offer to NewPower to purchase business
assets, rather than common stock, would be a viable alternative,
but there is no assurance that such discussions will lead to a
transaction.

NewPower, through a subsidiary, is the first national provider
of electricity and natural gas to residential and small
commercial customers in the United States. The Company offers
consumers in restructured retail energy markets competitive
energy prices, pricing choices, improved customer service and
other innovative products, services and incentives.

                         *   *   *

Centrica plc announced that following Enron Corp.'s failure to
obtain from the bankruptcy court an order enjoining claims
against NewPower (NYSE: NPW) for any joint and several liability
it potentially may have as a result of its membership for a
short time in the Enron consolidated tax and benefits groups,
which was a condition to Centrica's and Windsor's offer under
the terms of the merger agreement between Centrica, Windsor
Acquisition Corporation, an indirect wholly owned subsidiary of
Centrica, and NewPower, dated as of 22 February, 2002, Centrica
and Windsor, after due consideration, have decided not to waive
the condition.

Given the failure of this condition, Centrica and Windsor do not
intend to purchase shares of NewPower stock in the tender offer.  
Accordingly, Centrica and NewPower have agreed to terminate the
merger agreement.

The tender offer expired at midnight, New York City time, on
Thursday, March 28, 2002.

Centrica and NewPower have agreed to hold discussions to
determine whether an offer to NewPower to purchase business
assets, rather than common stock would be a viable alternative,
but there is no assurance that such discussions will lead to a
transaction.

Since its formation in 1997, Centrica has developed into a
leading provider of energy and other essential services. In the
UK, Centrica offers energy supply and related products under the
British Gas brand, roadside and financial services from the AA,
telecoms products and services through One.Tel and British Gas
and financial services from Goldfish.

The group's strategy of international expansion took a
significant step forward in August 2000 with the acquisition of
Toronto based Direct Energy, North America's largest unregulated
retailer of natural gas at that time. Centrica is also active in
six states in the U.S. through the Energy America brand, which
it acquired in January 2001.

Centrica currently supplies gas to 1.3 million customers across
North America under the Direct Energy and Energy America brands,
making it the largest unregulated energy supplier.  In addition,
600,000 customers have already signed up with Direct Energy in
anticipation of the opening of the Ontario electricity market
scheduled in May 2002.

In June 2001, Centrica also assumed full ownership of
GreenSource Limited, a company providing access to a network of
private gas servicing and installation contracting firms in
Ontario.  This was followed in January 2002 by the announcement
that it had reached agreement to acquire Enbridge Services Inc.,
which more than doubled the customer base of Centrica's Canadian
business.


NEXELL THERAPEUTICS: Mulling Alternatives to Continue Operations
----------------------------------------------------------------
Nexell Therapeutics Inc. (Nasdaq:NEXL) announced its results for
the year ended December 31, 2001.

          Company Seeks to Stabilize Financial Condition
            of New Therapeutics Development Business

Since the third quarter of 2001, Nexell has executed and
implemented agreements to transfer sales, marketing and
distribution of its former Toolbox business to Baxter Healthcare
Corp.  These changes have enabled the Company to reduce ongoing
staffing and expenses as it focuses on development of selected
therapeutic applications of its stem cell and cell processing
technology. Substantially all of the Company's product revenue
was also eliminated as a result of this transaction. During this
transition, the Company is exploring both financing and
strategic business combinations with the intention of
strengthening its financial condition but no such transactions
have been entered into as of this date.

Nexell's cash and cash equivalents are insufficient to fund  
projected operating expenses through the current fiscal year
and, based on the Company's current projections, will not fund
operations beyond June 2002. An effort to raise funds through a
private placement of equity securities was terminated in the
first quarter of 2002 principally so that the Company could
focus efforts on potential business combinations. Any such
transactions could result in substantial dilution to common
shareholders.

In addition, in order to complete such transactions, it may be
necessary to simplify the Company's capital structure by
converting its existing two series of preferred stock to common
stock, thereby eliminating the liquidation preference of such
preferred stock. In such an event it is possible that in
connection with the conversion of the Series B Preferred Stock,
Baxter could own substantially in excess of a majority of the
outstanding common stock.

"We believe that we have successfully refocused the Company's
business strategy and research and development operations," said
William A. Albright, Jr., President and Chief Executive Officer
of Nexell. "We continue to actively pursue all strategic options
to strengthen our financial condition and enable the Company to
continue its therapeutic development objectives."

                             Liquidity

Cash and cash equivalents at December 31, 2001, were $5.1
million versus $12.1 million at December 31, 2000.

Because of the Company's recurring losses from operations,
negative cash flow from operations and need for continued
funding the independent auditors' report on the consolidated
financial statements for the year ended December 31, 2001,
contains an explanatory paragraph indicating there is
substantial doubt about the Company's ability to continue as a
going concern. The Company is analyzing and considering various  
financial, strategic and restructuring alternatives available to
the Company, including a strategic alliance, the possible sale
of all or a portion of the Company or liquidation.

                      2001 Operating Results

All financial results were impacted significantly by the Baxter
transaction, which was completed as of August 31, 2001. For the
year ended December 31, 2001, total revenues decreased $5.0
million, or 28 percent, to $13.2 million, compared to $18.2
million in 2000. In accordance with the terms of the asset
purchase agreement, Baxter paid Nexell approximately $2.6
million at closing. Additional proceeds of approximately $2.1
million were received in March 2002 as a result of a final
settlement agreement between the parties executed in March
2002 resolving certain post-closing adjustments and related
matters. The proceeds were partially offset by approximately
$0.7 million in net cash collected by the Company related to
activities during the four months following the transaction. In
addition, Baxter agreed to purchase additional inventory and
reimburse Nexell for certain transitional support services in
the first quarter of 2002 with such additional proceeds totaling
$1.6 million received in the first quarter of 2002. Certain non-
recurring charges were recorded in the third and fourth quarters
as described below as a result of the agreement with Baxter and
the related restructure.

Gross profit on sales in fiscal 2001 decreased to $6.4 million
from $6.8 million, a decrease of $0.4 million or 6 percent. The
gross profit percentage in 2001 was 48 percent versus 37 percent
in 2000. These changes were the result of the transfer of the
cell processing product business to Baxter, changes in sales
mix, principally decreased sales of lower margin devices and
certain non-recurring items between years.

Operating expenses in 2001 were $29.6 million compared to $39.2
million in 2000, a decrease of $9.6 million or 25 percent. This
was the result of focused headcount reductions, including the
elimination of sales and marketing functions, as a result of the
Company's shift in focus to cellular drug development, which
included the transfer of its cell processing product business to
Baxter.

The Company incurred non-operating expense of $0.1 million in
2001 compared to non-operating income of $4.4 million realized
in 2000. Factors in this difference were that in 2000 the
Company realized a non-operating gain of $3.2 million on the
sale of an equity investment and interest income declined by
approximately $0.8 million in 2001 due to lower average cash
balances.

The net loss for fiscal 2001 declined by $4.8 million, or 17
percent, to $23.3 million from the 2000 net loss of $28.1
million. The net loss applicable to common stock also declined
in 2001 to $30.0 million versus $34.5 million in 2000. Weighted
average shares outstanding for the year ended December 31, 2001,
were 20.7 million versus 18.8 million for the comparable 2000
period.

                      Fourth Quarter Results

Nexell Therapeutics reported fourth quarter 2001 revenue of $0.2
million, a $3.1 million decrease in revenue from the third
quarter of 2001. Comparing the same period in the previous year,
fourth quarter 2000 revenues were $4.3 million or $4.1 million
higher than the same period in 2001. These decreases resulted
from the transfer of the cell processing products business to
Baxter. In the fourth quarter of 2001, the Company recognized
gross profit of $1.9 million. This was principally the result of
the reversal of previous recognized cost of goods sold as a
result of the final settlement with Baxter. In the previous
quarter the Company had recorded a $1.2 million increase to
cost of goods sold. This was a result of Baxter's decision at
that time not to purchase certain inventory that the Company
believed would have been saleable in the ordinary course of
business except for the non compete provisions that were part of
the agreement with Baxter.  

Operating expenses for the fourth quarter 2001 were $4.8
million, compared to $7.8 million for the same period in 2000.
This decrease occurred despite the inclusion of a $1.3 million
charge in 2001 for the write-down of certain fixed assets held
for sale as a result of changes in the business. The decrease is
primarily due to the implementation of spending reductions and
the transaction with Baxter, which resulted in the elimination
of sales and marketing expenses. The net loss for the fourth
quarter of 2001 decreased $3.6 million to $3.0 million from a
loss of $6.6 million in the comparable quarter in 2000. Net loss
applicable to common stock for the fourth quarter of 2001 was
$4.7 million versus a net loss of $8.2 million in the fourth
quarter of 2000.

                    Fourth Quarter Developments

In November 2001 the Company announced that it had received
Orphan Drug Designation for its lead therapeutic stem cell
product for the treatment of chronic granulomatous disease
(CGD).

In December 2001, Joseph A. Mollica resigned his position as a
Director of the Company due to his commitments as Chairman,
Chief Executive Officer and President of Pharmacopeia, Inc.

Located in Irvine, California, Nexell Therapeutics Inc. (Nasdaq:
NEXL) is a biotechnology company that is focused on the
modification or enhancement of human immune function and blood
cell formation utilizing adult hematopoietic (blood-forming)
stem cells and other specially prepared cell populations. Nexell
is developing proprietary cell-based therapies that address
major unmet medical needs, including treatments for genetic
blood disorders, autoimmune diseases, and cancer.


OLYMPUS HEALTHCARE: Solicitation Period Extended Until May 10
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approves
the second motion of Olympus Healthcare Group, Inc. and its
affiliated-debtors seeking extension of their exclusive periods.
The Court gave the Debtors until February 28, 2002 to file a
plan exclusively. The Debtors filed their Chapter 11 Plan of
Reorganization and Disclosure Statement on January 31, 2002. The
Debtors' exclusive right to solicit acceptances of the Plan of
Reorganization now runs through May 10, 2002.

The Order granting an extension to Feb. 28, which was signed by
the Honorable Mary F. Walrath was entered on March 18, 2002. No
order appears on the Court's docket indicating that an extension
beyond Feb. 28 was requested or granted.

Olympus Healthcare Group, Inc. filed for chapter 11 protection
on May 25, 2001. Michael Lastorwki, Esq. at Duane, Morris &
Hecksher represents the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed estimated assets of not more than $50,000 and estimated
debts of $10 million to $50 million


OPTICAL DATACOM: Gets Okay to Sign-Up Trumbull as Claims Agent
--------------------------------------------------------------
Optical Datacom LLC wins approval from the U.S. Bankruptcy Court
for the District of Delaware to engage Trumbull Services, LLC as
Agent of the Bankruptcy Court in this chapter 11 case.

Trumbull has agreed that as Claims Agent, they will provide the
Clerk's Office with these services:

     a) relieve the Clerk's Office of all noticing under any
        applicable rule or bankruptcy procedure and processing
        of claims and interests;

     b) at any time, upon request, satisfy the Court that the
        Claims Agent has the capability to efficiently and
        effectively notice, docket, and maintain proofs of claim
        and proofs of interest;

     c) furnish a notice of bar date approved by the Court for
        the filing of a proof of claim and proof of interest, a
        form for filing of a proof of claim to each creditor
        notified of the filing, and a form for filing of a proof
        of interest to each interest holder notified of the
        filing;

     d) within five business days after the service of a
        particular notice, file with the Clerk's Office a
        certificate or affidavit of service;

     e) maintain all proofs of claim and proofs of interest
        filed in this case;

     f) maintain official claims and interest registers by
        docketing all proofs of claim and proofs of interest in
        a claims database;

     g) maintain the original proofs of claim and proofs of
        interest in correct claim and interest number order, in
        an environmentally secure area and protect the integrity
        of these original documents from theft or alteration;

     h) transmit to the Clerk's Office official copies of the
        claims and interest registers and provide the Clerk's
        Office with any information regarding the claims and
        interest registers upon request;

     i) maintain an up-to-date mailing list for all entities
        that have filed a proof of claim or interest, which
        shall be available upon request of a party in interest
        or the Clerk's Office;

     j) provide access to the public for the examination of the
        original proofs of claim and interest filed in this case
        without charge during regular business hours;

     k) record all transfers of claims and provide notice of the
        transfers as required by the Bankruptcy Rule, if
        directed to do so by the Court;

     l) act as the Debtors solicitation agent in respect of any
        plan of reorganization and to receive and tabulate
        ballots in connection to the plan;

     m) make all original documents available to the Clerk's
        Office on an expedited immediate basis;

     n) comply with applicable federal, state, municipal and
        local laws, rules, statutes, ordinances, orders,
        regulations and other requirements of Federal Government
        Departments and Bureaus;

     o) provide temporary employees to process claims, as
        necessary;

     p) promptly comply with such further conditions and
        requirements as the Clerk's Office or the Court may
        hereafter prescribe; and

     q) provide such other claims processing, noticing,
        balloting and related administrative services as may be
        requested from time to time by the Debtor.

The Debtor will treat Trumbull's compensation as an
administrative expense of the estate and be paid in the ordinary
course of business. Trumbull will submit to the office of the
U.S. Trustee monthly copies of the invoices it submit to the
Debtor for services rendered. The specific rates of Trumbull are
not disclosed.

Optical Datacomm, LLC, supplies network integration services
solutions and design and manufactures custom connectionized
fiber optic, copper and coaxial cable assemblies to
telecommunication companies worldwide. The Company filed for
chapter 11 protection on November 17, 2001. H. Jeffrey Schwartz,
Esq. at Benesch, Friedlander, Coplan & Aronoff, LLP and Joel A.
Waite, Esq. at Young Conaway Stargatt & Taylor represent the
Debtor in its restructuring efforts. In its petition, the
Company listed estimated assets of $10 million to $50 million
and estimated debts of $50 million to $100 million.


OUTSOURCING SOLUTIONS: Likely Default on Facility Concerns S&P
--------------------------------------------------------------
On March 22, 2002, Standard & Poor's lowered its credit rating
on St. Louis, Missouri-based Outsourcing Solutions, Inc. (OSI)
to single-`B' and placed the rating on CreditWatch with negative
implications.

The rating actions follow the company's recent filing of a SEC
Form 8K announcing that it will be restating its financial
results for third-quarter 2001. Additionally, OSI's filing
indicated that the resulting $8.2 million decrease of income
before income taxes will likely cause the company to be in
default of its bank credit facility and its CP conduit
facilities, thereby precluding the company from additional
borrowings until an amendment or waiver is obtained under each
agreement. The company is currently in discussions with its
lenders and other appropriate parties to obtain the required
amendments or waivers.

Standard & Poor's will monitor the progress of the company's
discussions with its lenders and will resolve the CreditWatch
listing upon confirmation and analysis of the credit and CP
facilities amendments or waivers.

Standard & Poor's is concerned about the negative financial
impact resulting from this adjustment and what it means for
future financial results. Moreover, any adverse changes to OSI's
bank credit facility and its CP conduit facility agreements may
negatively affect the company's cost of funds and its funding
flexibility. However, should the company be unable to reach an
agreement with its lenders, ratings will be seriously affected.


PACIFIC GAS: Expected to Amend Disclosure Statement Tomorrow
------------------------------------------------------------
The Court has set the following Schedule for Upcoming Events in
Pacific Gas and Electric Company's Bankruptcy Case

April 3 -  Deadline for PG&E to file amended disclosure
           statement and plan of reorganization, incorporating
           the March 26 decisions.
April 11 - Next hearing on PG&E's disclosure statement.
April 15 - Deadline for CPUC to file its plan and disclosure
           statement.
April 24 - Next and tentatively final hearing on PG&E's
           disclosure statement. Status conference on CPUC's
           disclosure statement and plan of reorganization.
May 3    - Deadline for objections to CPUC's disclosure
           statement.
May 9    - Hearing on objections to CPUC's disclosure statement.
June 17  - Target date for the beginning of solicitation for
           PG&E's and CPUC's plans of reorganization.

PG&E says it is close to resolving the objections to its
disclosure statement, which would be a milestone in the case. In
a press release, the company expresses confidence that it will
continue to make progress as it works toward the confirmation
process.

Judge Montali said he will not authorize voting on any plan
until he has been informed that mediation has been completed. As
previous reported, the utility and the State have been trying
this month to negotiate their vast differences with a
professional mediator's help. All parties to those talks have
signed vows of confidentiality.

Judge Montali also said that he won't decide the critical
states' rights issues before authorizing balloting. (Pacific Gas
Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service,
Inc., 609/392-0900)   


PERLE SYSTEMS: Fails to Comply with Nasdaq Listing Requirements
---------------------------------------------------------------
Perle Systems Limited (Nasdaq: PERL/TSE: PL) announced that it
received the decision of the Nasdaq Listing Qualifications Panel
to delist the Company's common shares from the Nasdaq Stock
Market, due to the Company no longer complying with the
requirements for continued listing. This action will be
effective with the opening of business on Monday, April 1, 2002.
The Company's common shares are immediately eligible to trade on
the OTC Bulletin Board.

Notwithstanding this change in market status, management remains
focused on ensuring that the restructuring strategy it has
implemented will continue to produce operating profits and is
continuing to work towards its previously announced cash
earnings per share forecasts of US$0.14 to US$0.16 for fiscal
2002.

The Company's listing on the Toronto Stock Exchange remains
unaffected by this development.

Perle is a leading developer, manufacturer and vendor of award-
winning networking products. These products are used to connect
remote users reliably and securely to central servers for a wide
variety of e-business and general business applications. Perle
specialises in Internet Protocol (IP) connectivity applications,
with an increasing focus on mid-size IP routing solutions.
Product lines include routers, remote access servers, serial
servers, multi-port serial cards and network controllers. Perle
distinguishes itself by its ownership of extensive networking
technology, depth of experience in major network connectivity
environments and channel relationships in major world markets.
Perle has offices in 9 countries and sells its products through
distribution channels worldwide. Its common shares are traded on
The Nasdaq Stock Market (symbol PERL) and The Toronto Stock
Exchange (symbol PL).

For further information about Perle and its products, access the
Company's Web site at http://www.perle.com


PLASTIC SURGERY: Files for Chapter 11 Reorganization in Calif.
--------------------------------------------------------------
The Plastic Surgery Company (Amex: PSU) -- http://www.tpsc.com-
- announced that the Company and its wholly owned subsidiaries
filed voluntary petitions for relief under Chapter 11 of the
United States Bankruptcy Code with the U.S. Bankruptcy Court for
the Central District of California.  The operations of the
Company and its subsidiaries will continue during the bankruptcy
proceedings.

The Plastic Surgery Company owns and/or operates the only
national chain of cosmetic surgery and cosmetic laser centers.  
The Company operates outside of the managed care market and
provides private pay, fee-for-service cosmetic surgery and laser
procedures through a retail network of surgery centers. These
services include cosmetic surgery, cosmetic laser skin
treatments and physician-directed skin care all under the
national umbrella of Personal Image Centers.


POLAROID CORP: Seeks Okay to Continue Employee Severance Program
----------------------------------------------------------------
Polaroid Corporation and its debtor-affiliates seek the Court's
authority to continue the employee severance program to current
employees terminated on or before June 30, 2002.

Mark L. Desgrosseilliers, Esq., at Skadden, Arps, Slate, Meagher
& Flom, LLP, in Wilmington, Delaware, recounts that the current
Severance Program extends only to employees that are terminated
between the periods of October 20, 2001 through March 31, 2002,
for an estimated amount of $5,700,000.

The Debtors estimate that about 504 employees will be terminated
in the period between October 20, 2001 and March 31, 2002.  
These 504 employees will receive approximately $2,700,000 in
severance payments.  However, the Debtors wish to continue the
headcount reduction of another 250 employees by June 30, 2002.
The expected severance cost for the additional employees is
$1,400,000.

Mr. Desgrosseilliers notes that the extension does not exceed
the cost to be incurred under the Program.  "This is due to the
large number of voluntary terminations by the Employees, thereby
not qualifying under the Severance Program," Mr.
Desgrosseilliers explains.

Furthermore, Mr. Desgrosseilliers contends that the Debtors need
to extend the Severance Program to retain key employees further
until all or part of their assets are sold. (Polaroid Bankruptcy
News, Issue No. 13; Bankruptcy Creditors' Service, Inc.,
609/392-0900)


PRIME RETAIL: Says Violations of Certain Loan Covenants Likely
--------------------------------------------------------------
Prime Retail, Inc. (OTC Bulletin Board: PMRE, PMREP, PMREO)
announced its operating results for the fourth quarter ended
December 31, 2001.

Quarter FFO Results:

Funds from Operations was $5.3 million after allocations to
minority interests and preferred shareholders, for the quarter
ended December 31, 2001 compared to $13.5 million for the same
period in 2000.  FFO for the quarter ended September 30, 2001
was $5.5 million.

The decrease in FFO and FFO per diluted share for the fourth
quarter of 2001 compared to the same period in 2000 is primarily
due to (i) a loss in net operating income, partially offset by
interest expense savings, resulting from sales of certain
properties during the comparable periods, (ii) higher borrowing
costs; iii) an increase in the provision for uncollectible
accounts receivable of $1.4 million resulting in part from
certain tenant bankruptcies, disputes, abandonments and store-
closings and (iii) a reduction in average occupancy in the
Company's outlet center portfolio (91.3% and 92.9% during the
fourth quarters of 2001 and 2000 respectively).  The Company
sold four outlet centers on December 22, 2000 and two additional
properties were sold during the first quarter of 2001.  FFO for
the third quarter of 2001 included a non- recurring loss of $1.0
million, or $0.02 per diluted share, related to the refinancing
of first mortgage loans on Prime Outlets at Birch Run.

Full Year FFO Results:

FFO was $25.3 million after allocations to minority interests
and preferred shareholders, for the year ended December 31, 2001
compared to $58.0 million for the same period in 2000.  The FFO
results for the year ended December 31, 2001 include a non-
recurring loss of $1.0 million, related to the refinancing of
first mortgage loans on Prime Outlets at Birch Run.  The FFO
results for the year ended December 31, 2000 included net non-
recurring items totaling (negative)$2.5 million.  Such non-
recurring items included (i) severance and other compensation
costs aggregating $2.4 million, (ii) professional fees of $1.5
million related to refinancing activities, and (iii) $1.1
million of transaction and construction termination costs;
partially offset by a gain on the sale of outparcel land of $2.5
million.  Excluding the net impact of these non-recurring items,
FFO was $26.3 million for the year ended December 31, 2001 and
FFO was $60.5 million for year ended December 31, 2000.

The decrease in FFO and FFO per diluted share for the year ended
December 31, 2001 compared to the same period in 2000 is
primarily due to (i) a loss in net operating income, partially
offset by interest expense savings, resulting from sales of
certain properties during the comparable periods; (ii) higher
interest expense resulting from an increase in borrowing costs
and reduced capitalization of interest on development projects;
(iii) an increase in the provision for uncollectible accounts
receivable of $5.9 million resulting in part from certain tenant
bankruptcies, disputes, abandonments and store-closings and (iv)
a reduction in average occupancy in the Company's outlet center
portfolio during the comparable periods (90.3% and 91.6% during
2001 and 2000 respectively).  In addition to the property sales
previously mentioned, the Company also sold a 70% joint venture
interest in Prime Outlets at Williamsburg during February, 2000.

GAAP Results:

In accordance with accounting principles generally accepted in
the United States, the GAAP loss before loss on sale of real
estate and minority interests was $10.7 million and $64.5
million for quarters ended December 31, 2001 and 2000,
respectively.  The GAAP loss before loss on sale of real estate
and minority interests was $97.4 million and $96.3 million for
the years ended December 31, 2001 and 2000, respectively.

The GAAP results for 2001 include (i) a non-recurring provision
for asset impairment of $63.0 million, (ii) a non-cash third
quarter charge of $1.9 million related to an interest rate
subsidy agreement on a joint venture's mortgage loan on Prime
Outlets at Birch Run and (iii) a non- recurring third quarter
loss of $1.0 million related to the refinancing of first
mortgage loans on Prime Outlets at Birch Run.

During the third quarter of 2001, management determined that
certain events and circumstances had occurred, including reduced
occupancy and limited leasing success, that indicated that four
of the Company's wholly owned properties were permanently
impaired.  As a result, the Company recorded a third quarter
provision for asset impairment representing the write-down of
the carrying value of these properties to their estimated fair
value in accordance with the requirements of Statement of
Financial Accounting Standards No. 21.

The GAAP results for 2000 include the following significant non-
recurring items:

     -- provisions for asset impairment aggregating $68.7
million ($60.1 million in the fourth quarter) representing the
write-down of nine properties, including the Company's
investment in two joint venture projects and land previously
held for development, to their estimated fair value in
accordance with the with SFAS No. 121;

     -- a loss of $14.7 million related to the discontinuance of
the Company's e-commerce subsidiary, primeoutlets.com inc., also
know as eOutlets.com;

     -- third quarter transaction and construction termination
costs aggregating $1.1 million included in other charges;

     -- general and administrative expenses consisting of
severance and other compensation costs aggregating $2.4 million
through the first two quarters;

     -- second quarter professional fees included in general and
administrative expenses of $1.5 million related to refinancing
activities;

     -- a loss of $1.8 million related to the discontinuance of
the Company's Designer Connection retail outlet stores; and

     -- a first quarter gain on the sale of outparcel land of
$2.5 million included in other income.

Merchant Sales:

Same-space sales in the Company's outlet centers increased
(decreased) by 2.9% and (2.0)% for the fourth quarter and year
ended December 31, 2001, respectively, compared to the same
periods in 2000.  "Same-space sales" is defined as the weighted-
average sales per square foot reported by merchants for space
opened and occupied since January 1, 2000.  During the fourth
quarter and years ended December 31, 2001, same-store sales
decreased by 2.1% and 5.0%, respectively, compared to the same
periods in 2000.  "Same-store sales" is defined as the weighted-
average sales per square foot reported by merchants for stores
opened and operated by the same merchant since January 1, 2000.  
For the fiscal year ended December 31, 2001, the weighted-
average sales per square foot reported by all merchants was
$241.

Going Concern:

The Company's liquidity depends on cash provided by its
operations and potential capital raising activities such as
funds obtained through borrowings, particularly refinancings of
existing debt, and cash generated through asset sales.  Although
the Company believes that estimated cash flows from operations
and potential capital raising activities will be sufficient to
satisfy its scheduled debt service obligations and sustain our
operations for the next year, there can be no assurance that it
will be successful in obtaining the required amount of funds for
these items or that the terms of the potential capital raising
activities, if they should occur, will be as favorable as the
Company has experienced in prior periods.

During 2002, the Company is required to make certain additional
mandatory principal pay-downs on its mezzanine loan (the
"Mezzanine Loan") aggregating $25.4 million from net proceeds
from asset dispositions or other capital transactions within
specified periods pursuant to the terms of a modification to the
original terms of the Mezzanine Loan.  Although the Company in
the process of seeking to generate additional liquidity though
new financings and the sale of assets, there can be no assurance
that it will be able to complete asset dispositions or other
capital transactions within the specified periods or that such
asset dispositions or other capital transactions, if they should
occur, will generate sufficient proceeds to make the additional
mandatory pay- downs of the Mezzanine Loan.  Any failure to
satisfy these mandatory principal prepayments within the
specified time periods will constitute a default under the
Mezzanine Loan.

As of December 31, 2001, the Company was in compliance with all
financial debt covenants under its recourse loan agreements.  
However, there can be no assurance that it will be in compliance
with its financial debt covenants in future periods since its
future financial performance is subject to various risks and
uncertainties, including, but not limited to, the effects of
increases in market interest rates from current levels, the risk
of potential increases in vacancy rates and the resulting impact
on its revenue, and risks associated with refinancing its
current debt obligations or obtaining new financing under terms
less favorable than it  has experienced in prior periods.

Based on its current financial projections, the Company believes
it will not be in compliance with respect to debt service
coverage ratios under certain debt facilities during 2002.  The
debt facilities are fixed rate tax- exempt revenue bonds in the
amount of $18.4 million and a recourse bridge loan in the amount
of $111.4 million.  In the event of non-compliance, the holders
of the Affected Fixed Rate Bonds may elect to put such
obligations to the Company at a price equal to par plus accrued
interest and the Bridge Loan lender may elect to accelerate its
maturity.  Additionally, noncompliance or defaults with respect
to debt service coverage ratios under these debt facilities may
trigger cross- default provisions with respect to other debt
facilities, including the Mezzanine Loan.

The Company intends to meet with the affected lenders to discuss
potential resolutions including waiver or amendment with respect
to such non-compliance provisions.  If the Company is unable to
reach satisfactory resolution with the affected lenders, it will
look to (i) obtain alternative financing from other financial
institutions, (ii) sell the project or projects where non-
compliance is likely to occur or (iii) explore other possible
capital transactions in order to generate cash to repay the
amounts outstanding under such debt facilities.  There can be no
assurance that the Company will obtain a satisfactory resolution
with its affected lenders or that it will be able to complete
asset sales or other capital raising activities sufficient to
repay the amounts outstanding under such debt facilities.  
Should the Company be unable to secure additional sources of
liquidity or reach satisfactory resolution with its lenders,
there would be substantial doubt about the Company's ability to
continue as a going concern.

Prime Retail is a self-administered, self-managed real estate
investment trust engaged in the ownership, development,
construction, acquisition, leasing, marketing and management of
outlet centers throughout the United States and Puerto Rico.  
Prime Retail's outlet center portfolio currently consists of 44
outlet centers in 25 states and Puerto Rico totaling
approximately 12.4 million square feet of GLA.  As of February
28, 2001, Prime Retail's outlet portfolio was 87.7% occupied.  
The Company also owns two community shopping centers totaling
227,000 square feet of GLA and 154,000 square feet of office
space.  Prime Retail has been an owner, operator and a developer
of outlet centers since 1988.  For additional information, visit
Prime Retail's Web site at http://www.primeretail.com


SAFETY-KLEEN: Gains Okay of Tiered Clean Harbor Break-Up Fee
------------------------------------------------------------
Judge Peter Walsh enters his Order finding that in the hearing,
Safety-Kleen Corp. and its debtor-affiliates demonstrated "a
sound business justification" for authorizing the payment of the
Expense Reimbursement or Termination Fee to Clean Harbor under
the circumstances, timing and procedures set out in the Motion.
He further adjudges that the amount of these fees is fair and
reasonable, and was negotiated by the parties in good faith.  
The Debtors' payment to Clean Harbors of these fees is found to
be (i) an actual, necessary cost of preserving the Debtors'
estates, (ii) of substantial benefit to the Debtors' estates,
(iii) reasonable and appropriate in light of the size and nature
of the sale and the efforts that have been and will be expended
by Clean Harbors notwithstanding that the proposed sale is
subject to higher or better offers, and (iv) necessary to ensure
that Clean Harbors will continue to pursue the proposed
acquisition of the Acquired Assets.

Judge Walsh finds on the evidence that the proposed Termination
Fee was a material inducement for, and condition of, Clean
Harbors' entry into the sale agreement.  Clean Harbors is
unwilling to commit to hold open the offer to purchase the
Acquired Assets under the terms of the Agreement unless Clean
Harbors is assured of payment of the Termination Fee or Expense
Reimbursement in accord with the terms of the Agreement. Thus,
assurance to Clean Harbors of the Termination Fee or Expense
Reimbursement promotes more competitive bidding by inducing
Clean Harbors to make a bid that otherwise would not have been
made, and without which bidding would have been limited.

Further, because the Termination Fee induced Clean Harbors to
research the value of the Acquired Assets and submit a bid that
will serve as a minimum or floor bid on which other bidders can
rely, Clean Harbors has provided a benefit to the Debtors'
estates by increasing the likelihood that the price at which the
Acquired Assets will be sold will reflect their true worth.

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

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

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

    $7,000,000 if consummation of an Alternative Transaction
               occurs after Clean Harbor secures a Refinancing
               Commitment from its lenders. (Safety-Kleen
               Bankruptcy News, Issue No. 30; Bankruptcy
               Creditors' Service, Inc., 609/392-0900)    


SAFETY-KLEEN CORPORATION: Full-Year 2001 Net Loss Tops $229MM
-------------------------------------------------------------
Safety-Kleen Corp. announced that it has filed with the
Securities and Exchange Commission consolidated financial
statements for the fiscal year 2001, ending August 31, 2001.  
Previously, the Company had filed results for the first three
quarters of FY 2001 in September 2001.

The results reflect a relatively consistent revenue stream for
Safety-Kleen during the period reported, once the effect of
closed, ceased and sold facilities is eliminated, and indicate a
slight gain in revenues over FY 2000 for the Branch Sales and
Service Division.  The results also report a net loss of
approximately $229 million, which includes unusual events of
approximately $45 million in reserves for early facility
closures and approximately $55 million in expenses primarily
associated with the restatement of the Company's fiscal year
1997 - 1999 financial statements and audits of financial
statements for fiscal years 2000 and 2001.  The Company also
recorded net asset impairment charges of approximately $8
million related primarily to a wastewater treatment facility and
the former headquarters of Safety-Kleen.

"The fiscal 2001 results are in line with what we reported for
the first three quarters last September," said Company Chairman,
CEO and President Ronald A. Rittenmeyer.  "Right now, our focus
is on emerging from bankruptcy before the end of this year.  
And, as a result of some tough decisions we've made and the
commitment of our employees throughout the Company, we're making
real progress in that direction."

Rittenmeyer noted that the Company recently reached a definitive
agreement with Clean Harbors, Inc., to acquire Safety-Kleen's
Chemical Services Division (CSD).  Pursuant to the terms of that
agreement, Clean Harbors would purchase the CSD from Safety-
Kleen for $46.3 million in cash and the assumption of certain
liabilities, including environmental liabilities valued at
approximately $265 million.  The agreement is subject to
approval by the U.S. Bankruptcy Court and various regulatory
agencies, and that process will take several months.  On March
8, 2002, the Court approved the bidding and auction procedures
for the sale of the CSD.

"One of our primary objectives during the past several months
has been to streamline operations and focus on a core business
involving Safety-Kleen's parts washer and waste management
services," said Rittenmeyer.  "Selling the CSD would allow us to
sharpen that focus even further, while at the same time aligning
the customers of that division with a recognized industry
leader."

The Court also recently approved the extension of Safety-Kleen's
debtor-in-possession (DIP) financing and an increase in the DIP
financing to $200 million -- from the previously established
$100 million -- to accommodate additional cash and letter of
credit requirements.  Proceeds from the DIP financing may be
used to fund, among other things, working capital, capital
expenditures, general corporate purposes and certain other
Chapter 11 expenses.

Rittenmeyer also noted that the Company has completed -- subject
to final regulatory review -- the replacement of closure and
post-closure financial assurance mechanisms at all of its active
facilities, ensuring back-up of the Company's ability to meet
its commitment to properly close facilities at the end of their
useful life and to maintain those sites for an extended period
of time after closure.  He also noted that the Company is
continuing its efforts to upgrade information systems,
strengthen internal controls over operations and service, and
establish tighter controls and procedures to help ensure the
integrity of its financial data.

"All of these items -- the CSD sale agreement, the extension and
increase in the DIP financing, the financial assurance
replacement and the progress in key initiatives throughout the
Company -- represent significant steps toward enabling Safety-
Kleen to emerge from bankruptcy as a stronger, healthier and
more competitive company," said Rittenmeyer.

A complete copy of Safety-Kleen's Form 10-K/A for the fiscal
year 2001, as filed with the SEC is available on line at
http://www.safety-kleen.com


SERVICE MERCHANDISE: Court OKs Sale of All Fixtures & Equipment
---------------------------------------------------------------
Landlords submit limited objections to the Service Merchandise
Company, Inc., and its debtor-affiliates' motion to sell all of
its furniture, fixtures and equipment:

Landlord                       Leased Property Location
--------                       ------------------------
Weingarten Realty Investors   Store #415 in Danville Plaza
                              Shopping Center, Monroe, Louisiana

Weingarten Nostat, Inc.       Store #313 in Westland Fair
                              Shopping Center, Las Vegas, Nevada

                              Store #172 in Argyle Village
                              Square, Jacksonville, Florida

Markum West Shopping          Store #261 in Markum Shopping
Center, LP                    Center, Little Rock, Arkansas

Segal Dev't. Associates, LP   Store #821 in West Belt Plaza,
                              Waine, New Jersey

LaSalle National Bank, NA     Store #559 in Norride, Illinois

Grewe Limited Partnership     Store #293 in Mid River Plaza,
                              St. Peters, Missouri

Ramco-Gershenson, Inc.        Store #533 in West Oaks Shopping
                              Center, Lakeland, Florida

B. Gail Reese, Esq., at Wyatt, Tarrant & Combs, LLP, in
Nashville, Tennessee, asserts that before the Debtors are
authorized to sell specific Fixtures, an analysis of each lease
must be conducted to determine who owns the Fixtures, the
Debtors, the landlord, or a third-party.  "The Debtors might be
selling Furniture, Fixtures and Equipment that they do not own,"
Ms. Reese explains.

Thirteen other landlords disagree with the Debtors' objection:

Landlord                      Leased Property Location
--------                      ------------------------
Cermak Plaza Associates       Store #054, Cermak Plaza, Illinois
IRT Property Company          Store #294, Slidell, Los Angeles
Colonial Plaza Associates     Store #109, Ft. Myers, Florida
Melaver, Inc.                 Store #157, Savannah, Georgia
Delta & Delta Realty Trust    Store #229, Salem, New Hampshire
R-C Properties, Inc.          Store #078, Lixington, Kentucky
Heritage Realty Mngt., Inc.   Store #271, Birmingham, Alabama
Venture Colerain, LLC         Store 039, Cincinnati, Ohio
Wyman Boozer Realty Co.       Store #153, Columbia, S. Carolina
Burlington Coat Factory       Store #827, Paramus, New Jersey
Meyerland Plaza, LP           Store #384, Houston, Texas
Johnson City Crossing, LP     Store #536, Johnson City,
                                          Tennessee
Cheyenne Leasing Company      

On behalf of these Landlords, Robert C. Goodrich, Jr., Esq., at
Stites & Harbison, PLLC, in Nashville, Tennessee, argues that:

  (a) the sale of Fixtures is prohibited under Section 363 or
      under any other provision of the Bankruptcy Code;

  (b) the Debtors have not established that they are entitled
      to sell the Fixtures free and clear of liens, claims and
      encumbrances under Section 363(f) of the Bankruptcy Code;

  (c) the Debtors cannot modify the terms of the Lease under
      the authority of Section 363 of the Bankruptcy Code or
      any other authority, as does the Proposed Order;

  (d) entry of the Proposed Order constitutes an unlawful
      taking of property without just compensation in violation
      of the Fifth Amendment to the U.S. Constitution;

  (e) the Debtors failed to comply with the requirements
      set forth in the Federal Bankruptcy Rule of Procedure
      7001; and

  (f) the Debtors have not established that they are entitled
      to shorten the ten-day stay after entry of the Order.

                           *      *      *

After hearing the merits of the case, Judge Paine authorizes the
Debtors to proceed with the sale of all of its Furniture,
Fixtures and Equipment. (Service Merchandise Bankruptcy News,
Issue No. 29; Bankruptcy Creditors' Service, Inc., 609/392-0900)


SPECIAL METALS: Titanium Metals Discloses $27 Million Exposure
--------------------------------------------------------------
Titanium Metals Corporation (NYSE: TIE) announced that it has
learned that Special Metals Corporation (Nasdaq: SMCX) and its
U.S. subsidiaries have filed voluntary petitions for
reorganization under Chapter 11 of the U.S. Bankruptcy Code in
Lexington, Kentucky.  Special Metals is a New Hartford, New York
based manufacturer of high-performance nickel-based alloys.

In 1998, TIMET invested $80 million in convertible preferred
securities of Special Metals.  In the fourth quarter of 2001,
TIMET recorded an impairment charge related to its investment in
Special Metals that reduced the carrying amount of such
securities, including accrued dividends and interest, to a then
estimated fair value of $27.5 million.  TIMET expects to re-
evaluate the estimated fair value of this investment in light of
Special Metal's Chapter 11 filing and other developments.  
Accordingly, TIMET could record an additional impairment charge
in the first quarter of 2002.

Titanium Metals Corporation, headquartered in Denver, Colorado,
is a leading worldwide integrated producer of titanium metal
products.  Information on TIMET is available on the world wide
web at http://www.timet.com


SPORTS CLUB: Kayne Anderson Completes $10.5MM Private Placement
---------------------------------------------------------------
On March 18, 2002, The Sports Club Company, Inc. completed a
$10,500,000 private placement of a newly created class of
preferred stock to Kayne Anderson Capital Advisors, L.P. and
several of its affiliates. The net proceeds of the offering
(estimated to be approximately $10,000,000) will be added to
working capital to support the growth of the Company's recently
developed Clubs in Washington, D.C., Boston and San Francisco.

The private placement involved the issuance and sale of 10,500
shares of Series B Convertible Preferred Stock at a price of
$1,000 per share. The Series B Preferred may, at the option of
the holder, be converted into shares of common stock at a price
of $3.00 per share (subject to adjustment under certain
circumstances); entitles each holder to one vote for each share
of common stock into which such Series B Preferred is
convertible; and provides for the payment of dividends at an
annual rate of $90.00 per share. Dividends are cumulative, do
not accrue interest and, at the Company's option, may be paid in
additional shares of Series B Preferred.

The Sports Club Company operates four sports and fitness clubs
(the Clubs) under The Sports Club/LA name in Los Angeles,
Washington D.C. and at Rockefeller Center and the Upper East
Side in New York City. The Company also operates the Sports
Club/Irvine, The Sports Club/Las Vegas and Reebok Sports
Club/NY. SCC's Clubs offer a wide range of fitness and
recreation options and amenities, and are marketed to affluent,
health-conscious individuals who desire a service-oriented club.
The Company's subsidiary, The SportsMed Company, operates
physical therapy facilities in some Clubs. At September 30,
2001, the company's total current liabilities exceeded its total
current assets by about $25 million.


SWEET FACTORY: Wants Lease Decision Deadline Moved until May 31
---------------------------------------------------------------
Sweet Factory Group and its affiliated debtors ask for more time
from the U.S. Bankruptcy Court for the District of Delaware to
decide on unexpired leases of nonresidential real property . . .
for the second time.  The Debtors seek an extension until the
earlier of the Effective Date of the Plan and May 31, 2002.

The Debtors tell the Court they have moved swiftly to evaluate
their operations, determine the disposition of their various
store locations and formulate a reorganization plan.

The plan process will identify the leases of non-residential
real property associates with the "core" group of stores that
will constitute their business operations following the
confirmation, the Debtors relate to the Court. The Plan, the
Debtors explain, provides for the assumption or rejection of the
Leases upon confirmation.  In this regard, the Debtors believe
that they should be afforded the opportunity to prosecute their
pending Plan to confirmation and determine the disposition of
the Leases as part of that process.


TRANSTECHNOLOGY: Obtains Extension of Existing Forbearance Pacts
----------------------------------------------------------------
TransTechnology Corporation (NYSE:TT) said that it had agreed to
an extension of its existing forbearance agreements with its
senior lending group and its subordinated debt holders from
March 27, 2002 until April 3, 2002 and April 5, 2002,
respectively.

The company and its senior and subordinated lenders are in the
midst of negotiating a longer-term extension of those agreements
and require the additional time to complete the negotiation and
documentation of the extensions.

The company also said that that it had completed the sale of 10
acres of vacant land it owned in Union, New Jersey for $2.3
million and had applied the proceeds towards reducing its senior
debt. Following the application of these proceeds, the company's
senior debt was $30 million and its subordinated debt was $78
million.

The company also stated that it was in continuing discussions
relative to the sale or spin-off of its three remaining
retaining ring operations in the United States, England and
Brasil, and hoped to complete those transactions within the next
few weeks.

TransTechnology Corporation -- http://www.transtechnology.com--  
headquartered in Liberty Corner, New Jersey, designs and
manufactures aerospace products with over 380 people at its
facilities in New Jersey, Connecticut, and California. Total
aerospace products sales were $81 million in the fiscal year
ended March 31, 2001.


TRI-NATIONAL DEV'T: Senior Care Says Press Releases are False
-------------------------------------------------------------
Senior Care Industries Inc. (OTCBB:SENC) management reacted
angrily to a series of recent press releases by Tri-National
Development Corp. (OTCBB:TNAVQ) wherein Michael Sunstein, the
person responsible for operations of Tri-National during its
bankruptcy proceedings, claimed that their Mexican subsidiary
had already started development of the Vinas de Bajamar land
adjacent to the Bajamar Ocean Front Hotel and Golf Resort and
was opening an office to sell lots to consumers.

Mervyn A. Phelan Sr., chairman of Senior Care, stated that,
"investigators hired by Senior Care have continually visited the
Vinas de Bajamar property over the last several months and as
recently as two days ago, they found the property filled with
weeds. The office, which Tri-National claims it is renting, is
an abandoned shack filled with bullet holes and a floor that has
fallen through to the ground from dry rot."

He stated that the investigators found that "the only access to
the property is overgrown and had clearly not been used by
anyone for years."

Furthermore, he said that "a search of the records in the local
municipality where the property is located shows that none of
the land has ever been subdivided into lots and that there is no
master planned community for the Vinas de Bajamar acreage which
has been approved by governmental body. Counsel for Senior Care
in Mexico has assured the company that any sale of lots which
have not been registered is illegal in Mexico."

Phelan went on to say that Senior Care has not commented on Tri-
National's press releases in the past and has attempted to work
entirely through the bankruptcy court.

However, "I just couldn't continue to read the completely
misleading and false things Sunstein has been saying in recent
press releases without letting people know that there aren't any
subdivided lots, no approved master plan, no office, no
employees and most important, no money in Tri-National to
develop anything."

He then pointed to recent monthly operating reports filed by
Tri-National in their bankruptcy case to prove that the bankrupt
company has been operating with little or no money, with "most
of its money coming from the sale of stock in Tri-National to
people willing to buy restricted shares from the treasury of the
company."

Phelan explained that Senior Care purchased 650 acres of Vinas
de Bajamar from Tri-National's Mexican subsidiary in May of 2001
and has reported in its regulatory filings that the property had
a fair market value of approximately $23,000 per acre according
to an appraisal completed by an American MAI appraiser in April
of last year.

Though the Vinas de Bajamar acreage near the golf resort totals
nearly 2,500 acres, Tri-National's Mexican subsidiary only owned
650 acres when it filed bankruptcy, according to the schedules
filed with the court, Phelan stated. He said the rest of the
acreage belongs to a trust controlled by a Mexican bank
according to local records.

Senior Care Industries is a specialty real estate development
firm constructing a focused portfolio of real estate uniquely
designed and located to meet the needs of a growing senior
citizen population. The company entitles land it acquires in
order to develop and construct age-restricted residential
projects that are on the cutting edge of design and efficiency.

In addition, Senior Care develops commercial properties that are
ancillary to its senior projects. Senior Care continues to
actively seek land for development or existing large apartment
complexes that can be converted to senior housing. For
additional information, see http://www.seniorcareind.com


TWINLAB CORPORATION: Feeble Financials Spur S&P to Junk Rating
--------------------------------------------------------------
On March 28, 2002, Standard & Poor's lowered its corporate
credit rating on Twinlab Corp at 'CCC+'. The rating outlook is
negative.

The downgrade reflects operating results below Standard & Poor's
expectations and diminished financial flexibility. Sales
declined 17.5% in 2001 versus the previous year due to lower
volume to a major customer and weakness in the company's herbal
product line. Sales to health and natural foods stores moderated
as these customers worked off excess inventories during the
year, while sales to mass merchants grew somewhat. With
unabsorbed factory overhead from low sales volumes and reduced,
although still high operating expenses, Twinlab reported a $19.8
million operating loss for 2001, adjusted for non-cash charges.
This follows a $17.4 million operating loss in 2000, a year when
the company was challenged with implementing a new computer
system, and had losses from unabsorbed overhead.

Twinlab is taking steps to lower its cost structure, including
reducing headcount and closing its Tempe facility, for about $15
million in savings annually. In March 2002, Twinlab received an
amendment to its bank facility relaxing its EBITDA covenant.
With $6 million available on the company's secured revolving
credit facility, liquidity is a concern.

Hauppauge, New York-based Twinlab manufactures and markets
vitamins and nutritional supplements sold in 95% of health food
stores as well as through mass merchants and direct-to-consumer
channels.
                            Outlook

If credit protection ratios or financial flexibility continue to
deteriorate, ratings could be lowered.


USG CORP: Judge Wolin Will Review His Advisors' Fees & Expenses
---------------------------------------------------------------
Finding that the Special Masters occupy a unique position in the
chapter 11 cases of USG Corporation and its debtor-affiliates,
and as the Court has decided that their continued employment is
necessary for the efficient administration of these cases and
the best interests of the Debtors' creditors, equity holder and
estates, Judge Wolin rules that it is:

      ORDERED that pursuant to 28 U.S.C. Section 157 and the
Order of this Court issued December 10, 2001 the reference of
these cases to the Bankruptcy Court, Judge Randall J. Newsome
and Judge Judith K. Fitzgerald presiding, is hereby withdrawn
with respect to any application for an allowance of fees filed
by any of the Advisors, and it is further

      ORDERED that the Advisors may make application for the
allowance of their fees and expenses from the debtors' estates
directly to this Court in the first instance, requesting that
such applications be reviewed and approved by the Court pursuant
to the substantive standards set forth in 11 U.S.C. Section 330,
and it is further

      ORDERED that any application for the allowance of fees and
expenses should be allocated between the debtors, and it is
further

      ORDERED that, although by its terms local bankruptcy rule
2016-2 does not apply to applications for allowance of fees and
expenses by the Advisors, local rule 2016-2(d) governing
information requirements relating to compensation requests is
hereby incorporated by reference and made applicable to
applications by the Advisors pursuant to this Order, and it is
further

      ORDERED that the Advisors may make interim applications
for the allowance of fees and expenses pursuant to 11 U.S.C.
Section 331 on a monthly basis, and it is further

      ORDERED that an application for the allowance of fees and
expenses pursuant to this Order shall not set forth a hearing
date for the application and no hearing will be held unless
written objection is filed with the Court no later than ten days
after service upon the objecting party of the fee application
and it is further

      ORDERED that no Administrative Order or other Order in any
of the above-captioned cases governing applications for the
allowance of fees and expenses to professionals shall apply to
an application by any of the Court Appointed Advisors pursuant
to this Order except as provided below with respect to service,
and it is further

      ORDERED that any application made pursuant to this Order
shall be served on the same parties and in the same manner as
provided by applicable rule as superseded or modified by any
Administrative Order of the Bankruptcy Court governing
applications for the allowance of fees and expenses to
professionals for which the has not been withdrawn, and it is
further

      ORDERED that this Order shall not limit the Court's
ability, upon adequate notice, to charge fees and expenses of
the Advisors upon parties besides the debtors on the grounds of
equity, rules of procedure, or other law. (USG Bankruptcy News,
Issue No. 21; Bankruptcy Creditors' Service, Inc., 609/392-0900)


VELOCITA CORP: Banks Waive Potential Loan Covenant Violations
-------------------------------------------------------------
Velocita Corp., a national broadband networks provider,
announced that it has reached agreement with a consortium of
banks for a waiver of potential breaches of certain financial
covenants in the company's credit agreement.

The agreement between Velocita and the banks provides for a
waiver of certain financial covenants through April 15, 2002.  
The waiver requires Velocita to comply with its other covenants
in the credit agreement and forego further borrowing under the
credit agreement and further limits the ability to make certain
restricted payments to its affiliates.

During the waiver period Velocita expects to continue
discussions with its bank lenders regarding modification of the
terms of its credit agreement.  In addition, Velocita will
continue to explore strategic relationships and alternatives.  
If, at the end of the waiver period, the company has not
obtained an amendment to, or a waiver under, the credit
agreement, the company will be in default with respect to
certain financial covenants under the credit agreement.  The
Company is unable to predict when or if it will be able to
obtain the necessary modifications of its credit agreement from
its banks, or whether the banks will at any point pursue any or
all remedies available to them.

In connection with the waiver, Velocita also announced today
that it will file for a 15 day extension of the filing of its
annual report on Form 10-K, scheduled to be filed on April 1,
2002, and delay reporting its 2001 results of operations.

Velocita Corp. -- http://www.velocita.com-- based in the  
greater Washington, D.C. area, is a broadband networks provider
serving communications carriers, Internet service providers, and
corporate and government customers. Founded in 1998 as a
facilities-based provider of fiber optic communications
infrastructure, Velocita has agreements with AT&T to construct
approximately half of AT&T's nationwide fiber optic network.  
These construction agreements with AT&T serve as the foundation
for Velocita, formerly known as PF.Net, to grow and expand its
own network, as well as add service offerings.  Cisco Systems
provides all optical and IP equipment to power Velocita's
network.


VIADOR INC: Shareholders' Equity Deficit Tops $2.4MM at Dec. 31
---------------------------------------------------------------
Viador Inc.(TM) (OTC Bulletin Board: VIAD), announced financial
results for its fourth quarter and fiscal year ended December
31, 2001.  In the fourth quarter of fiscal 2001, Viador achieved
revenue of $1.6 million, compared to $1.4 million reported in
the third quarter of 2001 and $5.0 million reported for the
fourth quarter of fiscal 2000.

GAAP net income was $0.3 million for the fourth quarter of 2001
compared to a $4.1 million net loss in the third quarter of 2001
and a net loss of $13.0 million in the fourth quarter of 2000.  
Pro forma net loss, which excludes unusual or non-recurring
events or transactions, amortization of stock-based
compensation, goodwill amortization, the reversal of various
accruals, extraordinary gain on extinguishment of debt,
restructuring expense, and impairment loss associated with the
restructuring was $0.5 million for the fourth quarter of 2001
compared to a pro forma net loss of $3.7 for the third quarter
of 2001 and a pro forma net loss of $10.6 million for the fourth
quarter of 2000.

GAAP diluted earning per share for the fourth quarter of 2001
were $0.01 based on 37.9 million weighted average shares.  This
compares with a net loss per share of $0.16 for the third
quarter of 2001, based on 26.0 million weighted average shares,
and a loss per share of $0.72 for the fourth quarter of 2000,
based on 18.0 million weighted average shares.

Excluding the unusual or non-recurring events or transactions,
amortization of stock-based compensation, goodwill amortization,
the reversal of various accounting accruals, restructuring
expense, and impairment loss associated with the restructuring
totaling $0.4 million, Viador's pro forma operating loss was
$0.4 million in the fourth quarter of 2001, compared to $3.3
million in the third quarter of 2001 and $11.0 in the fourth
quarter of 2000.

The Company's president, Stan Wang, said, "The Q4 results
demonstrate Viador's ability to execute in challenging economic
conditions. We have balanced the expenses and workforce of the
Company to a level commensurate with its revenue prospects,
thanks to the dedication of our employees and the continued
support of our customers.  With leading technology and
additional funding, Viador is now an excellent choice for
customers with large-scale data analysis and report distribution
challenges."

At December 31, 2001, the company recorded a total shareholders'
equity deficit of about $2.4 million.

Viador Inc. combines proven experience, technology and
partnerships to deliver self-service portals for leading
businesses and organizations worldwide. The Viador E-Portal
facilitates enterprise-wide productivity gains, including
increased revenue from new e-services, improved partner
communications, better customer relationships and retention, and
streamlined, paperless information distribution at lower cost.
Over 350 leading companies have chosen Viador for their self-
service portal needs. Viador is headquartered in Sunnyvale,
Calif. For more information, call 408-735-5956 or visit the
Viador Web site at http://www.viador.com


VIASYSTEMS INC: Fitch Further Downgrades Senior Sub Debt Rating
---------------------------------------------------------------
Fitch Ratings has downgraded Viasystems Inc.'s senior
subordinated notes rating to 'CC' from 'CCC-' and the company's
senior secured bank facility rating to 'CCC' from 'B-'. The
ratings are placed on Rating Watch Negative, which will be
resolved pending the outcome of the company's potential
recapitalization and covenant compliance regarding its bank
agreement.

The rating actions reflect the increased risk of bankruptcy due
to the low degree of financial flexibility the company has
within its bank covenants, the announcement today that
Rothschild Inc. has been retained to advise the company on
alternatives to restructure its capitalization, and the overall
negative economic and industry conditions which should continue
to pressure the financial performance of the company. Viasystems
has obtained a waiver from its bank group for 60 days while the
recapitalization plans are examined. In addition, today's action
reflects the company's continued weakened credit protection
measures and further deterioration of its end markets. The
company continues to suffer from its exposure to
telecommunications and networking customers (more than 50% of
FY2001 revenues) due to the difficult industry environment.
Other factors considered are the concentrated customer base and
overall limited revenue visibility in the marketplace.

Fitch estimates Viasystems' interest coverage ratio was
approximately 1.2 times as of December 31, 2001, and leverage
(total debt-to-EBITDA) at 9x, up from less than 4x at year-end
2000. Fitch expects that leverage will increase materially over
the next few quarters as a result of cash flow pressures more so
than an increase in total debt.

As of December 31, 2001, the company had cash of $34.2 million
and total debt of approximately $1.0 billion, consisting of
approximately $500 million of senior subordinated notes due
2007, nearly $100 million of senior unsecured notes, $440
million of term loans, and $10.6 million drawn under Viasystems'
$150 million revolver. The reduction in the company's revolver
in the second half of 2001 was mainly a result of the company
using the proceeds from the placement on July 2, 2001, of $100
million of senior unsecured notes due 2007, with deferred
interest payments to its majority owner. Fitch estimates that
the company will not be in compliance with its sole financial
covenant, a senior secured debt-to-EBITDA figure of 4.2x and due
to profitability concerns for the next few quarters, there is
significant risk that the company will not remain in compliance
with this covenant. Access to the capital markets remains
limited.

The electronics manufacturing services industry experienced
lower gross margins, lower EBITDA margins, and deteriorating
credit statistics for 2001, and companies continue to be
affected by an aggressive pricing environment and a more severe
downturn in the telecommunications equipment industry as there
is limited visibility regarding revenue growth, earnings, and
orders. Viasystems has responded with an aggressive cost cutting
program, including shifting a majority of its PCB production to
its China facilities and reducing its workforce by more than
20%. However, competitive pricing pressures still exist and
Fitch anticipates that EBITDA margins will continue to be
pressured for the remainder of 2002.


W.R. GRACE: 12% Contingent Fee for Fresenius & Sealed Air Suits
---------------------------------------------------------------
The Official Committee of Asbestos Property Damage Claimants and
the Official Committee of Asbestos Personal Injury Claimants, in
the chapter 11 cases of W. R. Grace & Co., and its debtor-
affiliates, obtained approval from the U.S. Bankruptcy Court to
employ the law firms of Cozen O'Connor and McKool Smith as co-
special counsel to prosecute the Sealed Air and National Medical
fraudulent transfer claims on behalf of the estate.

The professional services for which the Asbestos Committees
desire to employ Law Firms include, without limitation, the
following:

       (i) analysis, investigation and prosecution (including
representation in any ensuing appeals) of the fraudulent
transfer claims; and

       (ii) performing such other legal services as may be
required and as are deemed to be in the best interests of the
Asbestos Committees and their constituencies which they
represent.

With the Court's approval, the Law Firms are willing to
undertake this representation on a contingency fee basis:

      Contingency Fee            Recovery Amount
      ---------------            ---------------
            10%               The first $1,000,000,000
            11%            $1,000,000,000 to $2,000,000,000
            12%              In excess of $2,000,000,000

The term "Recovery Amount" refers to a sum of money equal in
amount to the full fair market value of all relief obtained or
received by the Debtors' estates as a proximate result of the
claims, including, but not limited to, money, guaranteed
payments, tangible or intangible property, business interests,
compensatory damages, exemplary damages, attorney's fees,
prejudgment interest, and/or post judgment interest (whether
through trial, judgment or settlement of the Claims). The term
"Recovery" includes the fair market value of any relief obtained
or received, including all amounts of money or property that are
to be received by the Debtors' Estates over any period of time.
In the event of a resolution acceptable to the Asbestos
Committees and the Debtors' Estates that includes multiple
issues in the bankruptcy proceeding, including issues unrelated
to the Claims, the amount of the Recovery shall be determined by
agreement of the Committees and the Firms, subject to approval
of this Court, or by this Court in the absence of agreement. The
Law Firms have agreed amongst themselves to the manner in which
they will share such fees. (W.R. Grace Bankruptcy News, Issue
No. 21; Bankruptcy Creditors' Service, Inc., 609/392-0900)


WINSTAR COMMS: Trustee Wins Nod to Enter into Employment Pacts
--------------------------------------------------------------
Christine Shubert, the Chapter 7 Trustee for Winstar
Communications, Inc.'s estate, obtained Court order:

A. authorizing the Debtors to enter into employment agreements
     with Kenneth Zinghini, Donald Schneider, Charles Persing,
     and Paul Lang; and

B. expanding the Carve-Out under the Debtors' Second Amended
     and Restated Senior Secured Super-Priority DIP Credit
     Agreement dated July 6, 2001.

According to Michael J. Menkowitz, Esq., at Fox Rothschild
O'Brein & Frankel LLP in Wilmington, Delaware, in connection
with the Sale of the Debtors assets to IDT, the Debtors entered
into a Management Agreement pursuant to which, among other
things, IDT agreed to employ all employees of the Debtors,
subject to the Debtor's right to retain a reasonable number of
employees to assist in the continued administration of the
Debtors' estate and an orderly completion of the Cases. The
Debtors wish to retain the employment services of Messrs.
Zinghini, Schneider, Persing and Lang for this purpose upon the
terms and subject to the conditions contained in the Employment
Agreements described below.

Mr. Menkowitz submits that the Debtors have negotiated the terms
and conditions of the Employment Agreements containing retention
and severance elements to induce each Employee to remain in the
Debtors' employ to assist in the continued administration of the
Debtors' estate and an orderly completion of the Cases. The
Employment Agreements, which are subject to Bankruptcy Court
approval, cover the following individuals, each of whom is
currently employed by the Debtors in the following capacity:

      Name                          Title
      ----                          -----
      Kenneth Zinghini      SVP and Corporate Counsel
      Donald Schneider      SVP, Human Resources &
                                 Administration
      Charles Persing       VP, Corporate Development
      Paul Lang             VP, Finance

In summary, the Employment Agreements provide that:

A. The Debtors and the Employees will commit to an initial
     employment term of three months, with an "at-will"
     employment relationship thereafter;

B. The Employees will report to Impala Partners, the Debtors'
     restructuring advisors, or such other designee as the Court
     deems appropriate;

C. The Employees' base salaries will continue at current levels,
     for an aggregate cost of approximately $70,000 per month;

D. Each Employee is entitled to severance pay equal to six
     months of his base salary if his employment is terminated
     by the Debtors, for an aggregate cost of approximately
     $415,000;

E. Each Employee's accrued and unused paid time off for 2001
     will carry over and be paid to the Employee following the
     Bankruptcy Court's approval of the Employment Agreements,
     for an aggregate cost of approximately $50,000;

F. The Employees are entitled to continued employee benefits and
     expense reimbursement consistent with the Debtors' prior
     practices and policy.

In order to support the Debtors' obligations to pay all amounts
due to the Employees under the Employment Agreements and the
allowed amounts due to the Debtor's Professionals and the
Interim Trustee Group, Mr. Menkowitz relates that the Trustee
has negotiated with the lenders under the DIP Credit Agreement
to create a "carve-out" from the collateral securing such DIP
Lenders' loans which requires that in the event the Debtors do
not pay any amount due and payable under the Employment
Agreements and amounts due to the Debtor's Professionals and the
Interim Trustee Group, those parties shall obtain the allowed
benefits of such "carve-out." The Trustee submits that each
Employee is a highly qualified, experienced professional who is
proficient in their respective areas of employment. The Trustee
believes that each Employee has the skills necessary to assist
the Debtors in completing these Chapter 7 cases.

Mr. Menkowitz said that the DIP Lenders have agreed to expand
the Carve-Out as provided herein, which the Trustee believes is
necessary to ensure that services necessary to the
administration of the Debtors' estates will continue to be
provided by the Employees, the Debtors' Professionals and the
Interim Trustee Group. (Winstar Bankruptcy News, Issue No. 25;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


ZENITH INDUSTRIAL: Engages Sidley Austin as Bankruptcy Attorneys
----------------------------------------------------------------
Zenith Industrial Corporation seeks permission from the U.S.
Bankruptcy Court for the District of Delaware to engage the law
firm of Sidley Austin Brown & Wood as its general reorganization
and bankruptcy counsel.

The Debtor relates to the Court that this case is likely to be
complex and they need an international firm with extensive
experience in insolvency and bankruptcy for a representation.

The Debtor is retaining Sidley Austin to:

     a) provide legal advice with respect to the Debtor's powers
        and duties as debtor-in-possession in the continued
        management and operation and of its business and
        properties;

     b) take all necessary action to protect and preserve the
        Debtor's estate including prosecuting actions on behalf
        of the Debtor, defending any actions commenced against
        the Debtor, negotiating any and all litigation in which
        the Debtor is involved and objecting to claims filed
        against the Debtor's estate;

     c) prepare on behalf of the Debtor all necessary motions,
        answers, orders, reports and other legal papers in
        connection with the administration of the Debtor's
        estate;

     d) perform any and all other legal services for the Debtor
        in connection with both this chapter 11 case, and with
        the formulation and implementation of the Debtor's plan
        of reorganization;

     e) advise and assist the Debtor regarding all aspects of
        the plan confirmation process, including securing the      
        approval of a disclosure statement by the Bankruptcy
        Court and the confirmation of a plan at the earliest
        possible date;

     f) give legal advice and perform legal services with
        respect to general corporate matters, and advice and      
        representation with respect to obligations of the
        Debtor, its Board of Directors and its officers;

     g) give legal advice and perform legal services with
        respect to matter involving the negotiation of the terms
        of and the issuance of corporate securities, matters
        related to corporate governance and the interpretation,
        application or amendment of the Debtor's corporate
        documents, including its Certificates of Incorporation,
        by-laws and material contracts, and matters involving
        stockholders and the Debtor's legal duties toward them;

     h) give elgal advice and perform legal services with
        respect to related real estate and tax issues; and

     i) render such other services as my be in the best interest
        of the Debtor as agreed upon Sidley Austin and the
        Debtor.

Sidley Austin's customary billing rates are:

     Partners               $340 to $650 per hour
     Associates             $160 to $375 per hour
     Para-professionals     $$80 to $160 per hour

For the filing of this chapter 11 case, Sidley Austin received a
$250,000 general retainer fee.

Zenith Industrial Corporation, a leading worldwide, full-service
Tier 1 supplier of highly engineered metal-formed components,
complex modules and mechanical assemblies for automotive OEMs
filed for chapter 11 protection on March 12, 2002. Joseph A.
Malfitano, Esq., Edward J. Kosmowski, Esq., Robert S. Brady,
Esq. at Young Conaway Stargatt & Taylor, LLP and Larry S. Nyhan,
Esq., Matthew A. Clemente, Esq., Paul J. Stanukinas, Esq. at
Sidley Austin Brown & Wood represent the Debtor in its
restructuring efforts. When the Company filed for protection
from its creditors, it listed estimated debts and assets of more
than $100 million.

                          *********

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

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

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

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

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

                          *********

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

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