TCR_Public/020412.mbx          T R O U B L E D   C O M P A N Y   R E P O R T E R

              Friday, April 12, 2002, Vol. 6, No. 72

                           Headlines

360NETWORKS: Seeks Okay to Enter Into a Settlement with Qwest
ANC RENTAL CORP: Intends to Consolidate at Las Vegas Airport
ADELPHIA BUSINESS: Continuing Workers' Compensation Programs
ADVANTICA RESTAURANT: Noteholders Tender $89 Mill. of Old Notes
ALPINE GROUP: Can't Make Timely Filing of Form 10-K

ASIA PACIFIC WIRE: NYSE Denies Delisting Appeal
ATCHISON CASTING: French Unit Files Petition for Reorganization
BCE TELEGLOBE: Fitch Junks Rating on $1.3BB Senior Unsec. Notes
BENZ ENERGY: CDNX Delists Shares For Violating Requirements
CALL-NET ENT: Satisfies All Conditions Under Plan of Arrangement

CALL-NET: S&P Drops Credit Rating to SD Over C$2B Exchange Offer
CHIPPAC INC: Gross Profit Plummets & Net Loss Swells in 2001
CLIMACHEM INC: Can't Make Form 10-K Filing with SEC on Time
CRESCENT REAL ESTATE: $375MM Sr. Notes Offering Priced at 9.25%
DIVERSIFIED CORPORATE: Will Delay Form 10-K Filing with SEC

DUANE READE: S&P Assigns BB- Rating to $110M Senior Unsec. Notes
ELGAR HOLDINGS: S&P Hatchets Corp. Credit Rating to Junk Level
ENRON CORP: Court OKs Susman Godfrey as Debtor's Defense Counsel
EXODUS COMM: EMC Takes Action to Recover $2M Symmetrix 8430 Unit
FACTORY CARD: Successfully Emerges from Chapter 11 Proceedings

FEDERAL-MOGUL: Wins Nod to Hire Gibbons Del Deo as Co-Counsel
FINOVA: Sells $485MM Franchise Finance Portfolio to GE Entities
FRUIT OF THE LOOM: Can't Beat Form 10-K Filing Deadline
FLAG TELECOM: Board Approves Proposed Debt Restructuring Plan
FOURTHSTAGE TECHNOLOGIES: Appoints Dei Maggi as President & CEO

GENTEK: Seeks Credit Pact Revision on Expected Covenant Breach
HASBRO INC: Feeble Financial Profile Prompts Fitch's BB Rating
HAYES LEMMERZ: Court Fixes June 3 Bar Date for Proofs of Claim
HAYES LEMMERZ: Court Okays Jay Alix as Debtor's Crisis Manager
ICG COMMS: Court Approves Bond & L/C Pact with Wells Fargo

IT GROUP: Court Allows Continue Use of Cash Management System
IWO HOLDINGS: S&P Ups Rating to B Over Acquisition by US Unwired
KAISER ALUMINUM: Committee Signs-Up Akin Gump as Co-Counsel
KMART CORP: Pushing for Joint Fee Review Committee Appointment
LTV CORP: LTV Steel Products, LLC, Files Chapter 11 Petition

LIFEPOINT HOSPITALS: S&P Revises BB- Rating Outlook to Positive
MEMC ELECTRONIC: Names Nabeel Gareeb to Replace von Horde as CEO
MAGELLAN HEALTH: S&P Affirms B+ Counterparty Credit Rating
MARINER POST-ACUTE: LCT Has Until May 15 to Decide on Leases
MCLEODUSA INC: Obtains Open-Ended Lease Decision Time Extension

MICRO WAREHOUSE: S&P Withdraws Ratings Due to Insufficient Info
MRS. FIELDS: S&P Drops Credit Rating to B Over Weak Performance
NATIONAL STEEL: Retains Williams & Connolly for Bribery Work
NATIONSRENT INC: Can't Make Form 10-K Filing on Due Date
NET2000: Delaware Court Fixes July 1, 2002 as General Bar Date

NORTEL NETWORKS: Amends & Extends Revolver to April 7, 2003
NORTEL NETWORKS: S&P Cuts Lease P/T Certificates Rating to BB-
OPTI INC: Will Distribute Tripath Equity Stake to Shareholders
PACIFIC GAS: Files Modified 2nd Amended Plan & Discl. Statement
PACIFIC GAS: Makes $67MM+ Property Tax Payments to CA Counties

PENN SPECIALTY: Has Until May 3 to Decide on Unexpired Leases
PHARMACEUTICAL FORMULATIONS: Sets Timetable for Rights Offering
PILLOWTEX: Bartlett, et al., Seek Temporary Allowance of Claims
PRECISION SPECIALTY: Committee Taps Eskin as Litigation Counsel
PRECISION SPECIALTY: Court Okays Asset Sale Bidding Procedures

RAILWORKS CORP: Anticipates Bigger Net Loss for Full-Year 2001
ROMACORP INC: S&P Affirms B Rating Following Bank Loan Amendment
SCAFFOLD CONNECTION: Safway Acquires Assets from Receiver KPMG
SENGAC: Trustee Hires Keen to Help Dispose of Retail Portfolio
SUN COUNTRY: Reaches Tentative Agreements with All Labor Groups

TAPESTRY VENTURES: Has Until June 24 to Meet CDNX Requirements
TEMBEC: Completes Redemption of $250MM 9.875% Sr. Notes due 2005
TOUCHSTONE SOFTWARE: Can't File Form 10-K with SEC on Time
TRANSFINANCIAL HOLDINGS: Will Delay Form 10-K Filing with SEC
TRI-STAR GOLD: Fails to Maintain CDNX Listing Requirements

UNITED ARTISTS: S&P Keeping Watch on B- Corporate Credit Rating
VALLEY MEDIA: Court Approves Retention of BSI as Claims Agent
VERADO HOLDINGS: Sells Denver Data Center to ViaWest Internet
WAVERIDER COMMS: Commences Trading on OTCBB Effective April 10

* PwC Predicts 200 Public Company Bankruptcy Filings in 2002

* Mary Jo White Joining Debevoise & Plimpton to Head Litigation

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

                           *********

360NETWORKS: Seeks Okay to Enter Into a Settlement with Qwest
-------------------------------------------------------------
360networks inc., and its debtor-affiliates seek to enter into a
Settlement Agreement with Qwest Communications Corporation
wherein the Debtors will restructure their contractual and
business relationship with Qwest Communications.

Shelley C. Chapman, Esq., at Willkie Farr & Gallagher, in New
York, relates that prior to the Petition Date, the Debtors and
Qwest Communications were parties to 16 agreements.  The Debtors
and Qwest were to provide unactivated dark fiber, collocation
space, conduit and related services to each other.

Ms. Chapman categorizes the Agreements as:

     A. Collocation Agreements

        Under these Agreements, one of the parties provides space
        in its collocation facility to the other party.

     B. Fiber Indefeasible Rights of Use

        Fiber IRUs grant the use of dark fiber, and provide for
        one party to make payments to obtain the IRU and activate
        specific fiber along a specific route for a specific
        duration.

     C. Conduit Sales

        Conduit sales convey title in conduit and provide for one
        party to make payments to obtain the use of a specific
        conduit.

According to Ms. Chapman, under the Agreements, the Debtors have
the continuing obligation to maintain and repair the fiber,
conduit and collocation space being used by Qwest and Qwest has
the ongoing obligation to reimburse, compensate or pay the
Debtors.  "Payments are typically made in fixed amounts over the
course of the Agreements, unless an emergency repair is
required," Ms. Chapman adds.

To restructure the relationship between the Debtors and Qwest
Communications, the parties agree to enter into a Settlement
Agreement, which provides that the Debtors:

     (i) Debtors receive in excess of $26,000,000 from Qwest;

    (ii) Debtors amend and assume 12 of the Agreements;

   (iii) Debtors reject 4 of the Agreements;

    (iv) Debtors enter into a new IRU Agreement with Qwest;

     (v) Debtors are relieved from certain obligations, which
         some Debtor parties can no longer perform;

    (vi) Debtors convey certain conduit to Qwest; and

   (vii) Debtors receive certain conduit from Qwest.


The Settlement Agreement further provides that:

    -- the Debtors' non-recurring payments and Qwest's non-
       recurring payments owed under any of the Assumed Contracts
       will be netted against each other and the Debtors will
       receive $26,000,000 over time, upon the completion of
       certain milestones.

    -- 12 of the Agreements will be amended and assumed and 4 of
       the Agreements will be rejected.

    -- the Parties will enter into a Metro Fiber IRU Agreement,
       wherein Qwest will provide certain dark fiber to the
       Debtors at locations to be agreed to between the Parties.

    -- the Parties waive all claims against one another with
       respect to the Rejected Contracts including any claims for
       rejection damages by Qwest.

    -- the Parties will remain liable only for ongoing
       obligations and payments under the Assumed Contracts,
       other than the debtors fixed payments and Qwest's fixed
       payments.

    -- the Debtors will grant Qwest a first priority security
       interest and continuing lien upon all of the Debtors'
       right, title, interest in the fiber subject to Qwest's IRU
       interests, free and clear of liens, interests and
       encumbrances against the fiber.

    -- the conduit that the Debtors convey to Qwest under
       certain of the Assumed Contracts will be free and clear
       of liens, interests and encumbrances.

    -- the conduit that the Debtors receive from Qwest under
       certain of the Assumed Contracts will be free and clear
       of any liens, interests and encumbrances.

In addition, Ms. Chapman explains that the amendments provide
protections to the Debtors and their creditors in such a way
that:

     (i) the amendments set a cap for any administrative claims
         Qwest could claim against the Debtors; and

    (ii) the amendments permit the Debtors to assign such
         agreements without Qwest's consent.

The Settlement Agreement will:

   (i) allow the Debtors to receive in excess of $26,000,000 on
       an expedited basis and avoid possible claims from damages
       arising from the Debtors' rejection or non-performance of
       certain Agreements;

  (ii) allow the Debtors to retain rights to conduit, fiber and
       collocation space that are to be part of the Debtors'
       ongoing business plan, and critical to their
       successful reorganization;

(iii) allow the Debtors to receive these benefits without the
       need for costly litigation over various issues including
       the amount of claims arising from the rejection of
       Agreements or the ownership of fiber or conduit under the
       Agreements.

The Debtors believe that these benefits far outweigh any
possible detriment caused by the assumption of obligations under
the Assumed Contracts. (360 Bankruptcy News, Issue No. 21;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


ANC RENTAL CORP: Intends to Consolidate at Las Vegas Airport
------------------------------------------------------------
ANC Rental Corporation, and its debtor-affiliates ask to assume
and assign the National Concession Agreement and the National
Lease to ANC.  This would allow ANC to consolidate its
operations under the National and Alamo tradenames at the
McCarran/Las Vegas Airport and secure significant cost savings
at the existing Alamo facility while at the same time improving
service to its customers.

In addition, the Debtors have agreed to enter into a Settlement
with the National and Clark County in Nevada. Mark J. Packel,
Esq., at the Blank, Rome, Comisky & McCauley LLP in Wilmington,
Delaware informs the Court that the Settlement provides that the
County will not object to the Debtors' Motion to approving the
assignment of the concession agreement to ANC. The assumption
and assignment of the agreement foreseen to result in savings to
the Debtors of over $1,500,000 per year in fixed facility costs
and other operational cost savings. (ANC Rental Bankruptcy News,
Issue No. 11; Bankruptcy Creditors' Service, Inc., 609/392-0900)


ADELPHIA BUSINESS: Continuing Workers' Compensation Programs
------------------------------------------------------------
Adelphia Business Solutions, Inc., and its debtor-affiliates
obtained authorization to continue the Workers' Compensation
Programs and to maintain the Liability and Property Programs on
an uninterrupted basis, consistent with prepetition practices.
The Debtors are authorized to pay, when due, all pre-petition
premiums, administrative fees, and other related pre-petition
obligations to either Adelphia Communications Corporation, the
Insurance Companies, or any relevant state agencies to the
extent due and payable post-petition.

Additionally, when due and payable, the Debtors are authorized
to make premium payments and to pay other administrative costs
of the Workers' Compensation Programs and the Liability and
Property Programs relating to a period prior to the Commencement
Date.

In April 1998, according to Judy G.Z. Liu, Esq., at Weil Gotshal
& Manges LLP in New York, Adelphia Communications Corporation
and the Debtors entered into a Management Services Agreement.
Pursuant to this agreement, Adelphia Communications agreed to
provide certain services and resources considered necessary for
the operation and management of the Debtors' business, including
the provision of insurance coverage for Debtors' under the
Insurance Programs.

The Debtors maintain insurance coverage as a "named insured"
under various workers' compensation and general liability and
property insurance policies issued by several different
insurance carriers. The Insurance Programs include coverage for
claims involving, workers' compensation, automobile, aircraft,
commercial general liability, directors' and officers'
liability, and excess and umbrella liability. In exchange for
obtaining coverage under the Insurance Programs, the Debtors
reimburse Adelphia Communications for the Debtors' share of the
premiums and deductibles related to the Insurance Programs.
This is based on a pro rata allocation of costs paid by the
Debtors under the Insurance Programs.

Ms. Liu relates that under the laws of the various states in
which they operate, the Debtors are required to maintain
workers' compensation policies and programs to provide their
employees with workers' compensation coverage for claims arising
from or related to their employment with the Debtors. With the
exception of Ohio, Washington, West Virginia, and Puerto Rico,
the Debtors maintain workers' compensation policies with Royal
Indemnity Company in all of the states in which they operate.
Applicable law in Ohio, Washington, West Virginia, and Puerto
Rico mandates that companies doing business within those states
or territories must acquire workers' compensation coverage
exclusively through the government administered program.
Accordingly, in Ohio, Washington, West Virginia, and Puerto
Rico, the Debtors maintain workers' compensation coverage under
the government-administered programs.

Ms. Liu explains that the premiums for the Workers' Compensation
Programs are paid monthly and are based on a fixed percentage of
the Debtors' estimated annual payroll. The Debtors' average
monthly premiums with respect to the Workers' Compensation
Programs are approximately $200,000 in the aggregate, which are
based upon a percentage of the Debtors' annual payroll.

Following an annual audit of Adelphia Communication and Debtors'
payroll, the named insured entities either pay an additional
premium owed or receive refunds for overpayments previously
made. Based upon an audit of Adelphia Communication and Debtors'
payroll, Ms. Liu submits that Adelphia Communication and Debtors
have been notified that approximately $2,400,000 will be charged
in 2002 for underpayments on premiums for the policy year May
16, 1999 to May 16, 2000, of which the Debtors are responsible
for approximately $380,000 of this underpayment.

Ms. Liu tells the Court that the Debtors also maintain various
general liability and property insurance policies, which provide
the Debtors with primary, umbrella, and excess insurance
coverage for claims relating to commercial general liability,
automobile liability, directors' and officers' liability, and
property damage, which are essential to the ongoing operation of
the Debtors' businesses.

Similar to the Workers' Compensation programs, the general
liability and auto policies are subject to the terms of the MSA,
and, thus, all payments to the Insurance Carriers are made by
Adelphia Communications. Thereafter, the Debtors are obligated
to reimburse the Debtors for the costs and expenses attributable
to the Debtors. Ms. Liu states that the general liability and
auto policies were issued by Royal Insurance Co., the average
monthly premiums for which are approximately $65,000 and
$45,000, respectively.

The property and umbrella policies are issued by Royal Indemnity
and Liberty Mutual.  These are financed through A.I. Credit
Corporation, which pays the entire annual premium up-front, and
then bills Adelphia Communications on a monthly basis. Adelphia
Communications pays the entire monthly premium amount and the
Debtors, pursuant to the MSA, are obligated to reimburse
Adelphia Communications for their share of the premium. Ms. Liu
submits that the average monthly premiums for the Debtors'
property and umbrella coverage are approximately $20,000 and
$15,000, respectively.

The Debtors are required to reimburse Adelphia Communications
for the deductible related to each claim arising under the auto
policies, which is paid on a per claim basis. Under the
automobile policies, Ms. Liu notes that the Insurance Companies
pay the full amount of each settlement, and then charge Adelphia
Communications for the settlement amount up to the applicable
deductible. The deductible under the auto insurance policies is
approximately $500 per claim and the Debtors pay approximately
$1,600 per month for deductibles under the automobile policies.

The deductible for claims under the Property Programs varies
according to the damage in an event.  In the event of a property
loss, Adelphia Communications pays the full amount necessary to
correct the damage, and then submits a claim to the insurance
carrier. If uncontested, the carrier then pays Adelphia
Communications the amount of the claim minus the deductible, and
the Debtors would then reimburse Adelphia Communications for the
deductible.

Ms. Liu contends that it is essential to the continued operation
of the Debtors' businesses and their efforts to reorganize that
the Insurance Programs be maintained on an ongoing and
uninterrupted basis. The Debtors are obligated to reimburse
Adelphia Communications for all costs attributable to the
Debtors under the Insurance Policies, without which, Adelphia
Communications can terminate the Debtors' coverage under the
Insurance Programs.

If the Insurance Policies are allowed to lapse, the Debtors
might be exposed to substantial liability for damages resulting
to third parties or property of the Debtors and others. Ms. Liu
claims that continued effectiveness of the directors' and
officers' liability policies is necessary to the retention of
qualified and dedicated Senior management. Furthermore, pursuant
to the terms of many of their leases, as well as the guidelines
established by the United States Trustee, the Debtors are
obligated to remain current with respect to certain of their
primary insurance policies.

Ms. Liu argues that the maintenance of the Workers' Compensation
Programs is indisputably justified, as applicable state law
mandates this coverage. Furthermore, with respect to the
Workers' Compensation Claims, the risk that eligible claimants
will not receive timely payments with respect to employment-
related injuries could have a devastating effect on the financia
l well-being and morale of the Debtors' employees, and their
willingness to remain in the Debtors' employ. Departures by
employees at this critical time may result in a severe
disruption of the Debtors' businesses to the detriment of all
parties in interest. A significant deterioration in employee
morale undoubtedly will have a substantially adverse impact on
the Debtors, the value of their assets and businesses, and their
ability to reorganize.

Ms. Liu asserts that the amounts the Debtors pay to maintain the
Insurance Programs are minimal in light of the size of the
Debtors' estates, and the potential negative exposure of the
Debtors if such insurance coverage were absent. (Adelphia
Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


ADVANTICA RESTAURANT: Noteholders Tender $89 Mill. of Old Notes
---------------------------------------------------------------
Advantica Restaurant Group, Inc. (OTCBB:DINE) announced the
expiration of its offer to exchange up to $212.0 million of
registered 12-3/4% senior notes due 2007 to be jointly issued by
Denny's Holdings, Inc. and Advantica for up to $265.0 million of
Advantica's 11-1/4% senior notes due 2008, of which $529.6
million aggregate principal amount is currently outstanding.

The Company reported that an aggregate of approximately $89.0
million principal amount of Old Notes was tendered in the
exchange offer which exceeds the minimum tender condition of
$50.0 million. The final total of tendered and accepted Old
Notes will be subject to certain guaranteed delivery procedures
and Advantica's final review of the transmittal documents and
acceptance of Old Notes validly tendered. The exchange offer
expired at 5:00 p.m., New York City time, on April 9, 2002 and
is expected to close on April 15, 2002.

Subject to the foregoing, upon the closing of the exchange
offer, Advantica will have $71.2 million aggregate principal
amount of New Notes outstanding and $440.6 million aggregate
principal amount of Old Notes outstanding.

UBS Warburg LLC has acted as the dealer manager in the exchange
offer.

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

DebtTraders reports that Advantica Restaurant Group's 11.250%
bonds due 2008 (DINE08USR1) are quoted at a price of 79. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=DINE08USR1
for real-time bond pricing.


ALPINE GROUP: Can't Make Timely Filing of Form 10-K
---------------------------------------------------
The Annual Report on Form 10-K for the year ended December 31,
2001 of The Alpine Group, Inc. cannot be timely filed because
the Company, in conjunction with its accountants, Arthur
Andersen LLP, is in the process of resolving certain issues
which were recently brought to the Company's attention.

The Alpine Group, Inc., headquartered in New Jersey, is a
holding company for the operations of Superior TeleCom Inc.
(NYSE: SUT), Alpine's 51% owned subsidiary, which is the largest
North American wire and cable manufacturer and among the largest
wire and cable manufacturers in the world. Superior TeleCom
manufactures a broad portfolio of products with primary
applications in the communications, original equipment
manufacturer and electrical wire and cable markets. It is a
leading manufacturer and supplier of communications wire and
cable products to telephone companies, distributors and system
integrators; magnet wire and electrical insulation materials for
motors, transformers and electrical controls; and building and
industrial wire for applications in construction, appliances,
recreational vehicles and industrial facilities.

At September 30, 2001, The Alpine Group had a working capital
deficit of approximately $80 million.


ASIA PACIFIC WIRE: NYSE Denies Delisting Appeal
-----------------------------------------------
Asia Pacific Wire & Cable Corporation Limited (OTC Bulletin
Board: AWRCF) announced that its appeal of the NYSE staff's
decision to delist the Company was denied by the Committee of
the Board of Directors of the Exchange.

Tom Tung, Chairman of Asia Pacific Wire & Cable, stated,
"Obviously, we are disappointed in the Committee's decision,
however, it will have no impact whatsoever on the initiatives we
have already implemented to increase shareholder value. The
Company's strategic expansion and restructuring plan has already
met with success and will continue as planned. In addition, the
Company will still trade on the OTC Bulletin Board as we pursue
alternative listing options on other U.S. exchanges or markets."

Step one of the restructuring plan was recently completed with
the shareholder approval of the Company's acquisition of Crown
Century Holdings Limited and its wholly-owned subsidiary,
Pacific Electric Wire & Cable (Shenzhen) Co. Ltd. This
acquisition will immediately boost the overall profitability of
the Company. Step two of the plan consists of the consolidation
of the Company's Thai operations and it is expected that this
will be completed within a few weeks.

"We firmly believe that these actions demonstrate our commitment
to enhancing our share price and market capitalization and we
will continue to look for additional ways to increase
efficiencies and value throughout the Company," Mr. Tung added.

Asia Pacific Wire & Cable Corporation is a leading manufacturer
of wire and cable products for the telecommunications and power
industries in selected markets in the Asia Pacific Region.


ATCHISON CASTING: French Unit Files Petition for Reorganization
---------------------------------------------------------------
Atchison Casting Corporation (NYSE: FDY) announced that Fonderie
d'Autun, a French corporation and wholly-owned subsidiary of
Atchison Casting Corporation, has filed a voluntary petition for
reorganization with the local court in Chalons, France.  FDA
intends to present a plan of continuing operations for approval
by the court. The objective is to complete the foundry's
conversion from a production facility for cast iron radiators to
automotive and appliance castings, and to reduce losses
generated by producing radiator castings.

"FDA has entered two new markets, automotive castings and
appliance castings, to replace its declining cast iron radiator
volume", said Hugh Aiken, CEO.  "Production and shipment of the
new products is growing, but start-up expenses, combined with
losses on radiator castings, is causing FDA to operate at a
loss.  "The Company's agreements with its lenders prohibit
sending funds to FDA. This reorganization is the only means
currently available to finish the conversion to new products and
to attempt to make FDA viable," Aiken added.

"For fiscal years 2000 and 2001, FDA recorded net sales of $17.7
million and $17.4 million, respectively, and net income of
$230,000 and net loss of $88,000, respectively.  For the first
half of fiscal 2001 and fiscal 2002, FDA recorded net losses of
$190,000 and $1.6 million, respectively, on sales of $8.1
million and $8.3 million, respectively.

If FDA continues operations at a reduced level under a plan of
reorganization, certain employee severance expenses may result.
If such expenses arise, there could be a charge in an amount
between $1 million and $3 million.  These expenses would be paid
by the French government, whom FDA would be obligated to repay.
It is possible that such a charge could be partially offset by
gains related to the extinguishment of certain liabilities. If
FDA is not able to continue operations, charges for equipment
leases and site cleanup could amount to between $4 million and
$12 million. Should FDA not be able to meet the cleanup
obligations, the French government might be able to make a claim
against the prior owner. The Company guaranteed payment of
certain contingent liabilities of up to 100 million French
francs (currently US$13.3 million) when it purchased Autun, for
the cost of environmental restoration, if any, in the event FDA
were closed and a claim was successfully made against the prior
owner. These estimates are subject to change; the actual
amounts, if any, might not be known for several years or more.

"It is difficult to predict the effect on the Company of the
reorganization petition filed by FDA," said Hugh Aiken, Chief
Executive Officer of the Company.  "Our objective is to complete
the restructuring at FDA and make it a profitable foundry,
subject to the availability of resources."

ACC produces iron, steel and non-ferrous castings for a wide
variety of equipment, capital goods and consumer markets.


BCE TELEGLOBE: Fitch Junks Rating on $1.3BB Senior Unsec. Notes
---------------------------------------------------------------
Fitch Ratings has lowered its rating of BCE Teleglobe's $1.3
billion of senior unsecured notes to 'CCC-' from 'B+' and placed
the company's debt on Rating Watch Negative. Fitch's analysis
has indicated that the likelihood of a debt restructuring is
high and the probability its credit facility being extended past
July 2002 is low.

BCE Inc., Teleglobe's parent, will be reviewing strategic
alternatives for Teleglobe, including reassessing the
continuance of funding Teleglobe under its current plan, as well
as the possibility of restructuring or renegotiating Teleglobe's
debt. Concurrently, Teleglobe management intends to thoroughly
review its operations and current business plan. Fitch believes
the consideration of a debt restructuring is a change in stance
on the part of BCE and is a strong indication that BCE will not
be supporting Teleglobe's senior unsecured noteholders. The now
removed Rating Watch Evolving had considered that if BCE were to
support the bank facility, an upgrade would be possible. This
rating was initiated by Fitch as a service to users of its
ratings. The rating is based on public information.

At the end of 2001, BCE Teleglobe had approximately $2.7 billion
in total debt, including the $1.3 billion fully drawn bank
facility, which matures July 2002. Fitch believes that BCE's
current review of strategic alternatives for Teleglobe is a
strong indication that the company is experiencing difficulty in
its discussions with its bank syndicate to renew the facility
with an extension. Fitch has concluded that BCE's alternatives
for Teleglobe are limited. On a stand-alone basis, Teleglobe
does not have sufficient cash flow to service its credit
facility.

The Negative Rating Watch will remain in place until BCE's
strategic plans are made explicit and it is clear as to whether
or not a restructuring will occur.


BENZ ENERGY: CDNX Delists Shares For Violating Requirements
-----------------------------------------------------------
Effective at the close of business April 9, 2002, the common
shares of Benz Energy Inc. were delisted from CDNX for failing
to maintain Exchange Listing Requirements. The securities of the
Company have been suspended in excess of twelve months.


CALL-NET ENT: Satisfies All Conditions Under Plan of Arrangement
----------------------------------------------------------------
Call-Net Enterprises Inc. announced that all of the conditions
for its previously announced capital reorganization of Call-Net
by means of a plan of arrangement have been satisfied, and that
the plan of arrangement is now effective.

Call-Net's common shares (FON) and the Class B Non-Voting Shares
(FON.B) will be posted for trading on The Toronto Stock Exchange
at the opening of the exchange on or about April 15, 2002 in
substitution for the presently listed common shares (CN) and
Class B Non-Voting Shares (CN.B), which will be delisted at that
time.

Call-Net Enterprises Inc. is a leading Canadian integrated
communications solutions provider of local and long distance
voice services as well as data, networking solutions and online
services to businesses and households primarily through its
wholly-owned subsidiary Sprint Canada Inc. Call-Net,
headquartered in Toronto, owns and operates an extensive
national fibre network and has over 100 co-locations in nine
Canadian metropolitan markets. For more information, visit the
Company's Web sites at http://www.callnet.caand
http://www.sprintcanada.ca

DebtTraders reports that Call-Net Enterprises Inc.'s 9.375%
bonds due 2009 (CN09CAR1) are quoted at a price of 29. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=CN09CAR1for
real-time bond pricing.


CALL-NET: S&P Drops Credit Rating to SD Over C$2B Exchange Offer
----------------------------------------------------------------
Standard & Poor's lowered its ratings on Call-Net Enterprises
Inc. and removed them from CreditWatch on April 10, 2002.
Corporate credit rating is down at 'SD'. The rating action
follows a successful negotiation with the company's bondholders
and shareholders regarding a comprehensive C$2.0 billion
recapitalization plan launched February 20, 2002.

There is no event of default as defined under the terms of the
indentures of the affected senior unsecured bonds; however,
Standard & Poor's also defines default to be instances where
bondholders receive significantly less than par. The downgrade
of the corporate credit and senior unsecured debt ratings,
therefore, reflects the nature of the exchange offer announced
by Call-Net, which saw bondholders receive less than face value
on about US$1.7 billion of long-term debt outstanding.

Standard & Poor's will very shortly assess Call-Net's revised
business and financial profile and assign a new corporate credit
rating to the company, and a debt rating to its new 10.625%
US$377.0 million senior secured notes due December 31, 2008,
both of which are expected to be rated in the single-'B'
category.


CHIPPAC INC: Gross Profit Plummets & Net Loss Swells in 2001
------------------------------------------------------------
ChipPAC is one of the world's largest independent providers of
semiconductor packaging, test, and distribution services. It
offers one of the broadest portfolios of leaded and laminate
packages for integrated circuits and supplies packaging
solutions to the leading semiconductor companies that service
the computing, communications and multi-application end markets.
It provides high end packaging solutions, including ball grid
array packages, or BGA packages, the most advanced type of mass
produced package. In addition to providing assembly and test
services on a global basis, it is the largest semiconductor
packaging and test service provider in mainland China. As
consumers demand smaller electronic devices with more
functionality, there is a greater requirement for power
regulation and generation, which ChipPAC expects to drive demand
for its power packages. The Company states that it is the leader
in high-volume assembly, test and distribution of discrete and
analog power packages and also one of the leading providers of
advanced packaging products that address the needs of
semiconductors used in wireless LAN and handset applications,
including chip-scale, stacked die and flip-chip technologies.

Revenue consists of fees charged to customers for packaging,
testing, and distribution of their integrated circuits. From
1996 to 2001, revenue increased from $179.2 million to $328.7
million, a cumulative annual growth rate of 11.4%, primarily
from the growth of substrate, or BGA packaging, and, in 2000,
from the growth of test revenue and the acquisition of its
Malaysian business. The semiconductor industry is however
inherently volatile, with sharp periodic downturns and
slowdowns. These downturns have been characterized by, among
other things, diminished product demand, excess production
capacity and accelerated erosion of selling prices. The
semiconductor industry is presently recovering from the worst
downturn in its history. ChipPac expects conditions to improve
in 2002. Due to the severity of this downturn for the
semiconductor industry and for its customers, it has also
experienced the first decline in revenue on a year-over-year
basis in its history. This in turn has had a significant impact
on operating results. Revenue for the year ended December 31,
2001 declined to $328.7 million, or by 33.5%, compared to the
year ended December 31, 2000.

Gross profit during the year ended December 31, 2001 was $31.1
million, a decrease of 71.5% from the year ended December 31,
2000. Net loss increased to $93.7 million for the year ended
December 31, 2001, compared to net income of $2.9 million for
the year ended December 31, 2000.

ChipPAC's ongoing primary cash needs are for operations and
equipment purchases. The Company spent $46.4 million on capital
expenditures during the year ended December 31, 2001 compared to
$93.2 million in capital expenditures during the year ended
December 31, 2000 and anticipates spending $30.0 million in
capital expenditures in 2002, not including any buy out of
operating leases, which it expects will not exceed $18.0 million
in 2002. The Company no longer has the ability to borrow
additional funds under the $20.0 million capital expenditure
line portion of its senior credit facilities, which expired on
July 31, 2001. Outstanding borrowing on the capital expenditure
line at December 31, 2001 was $14.1 million and bore a weighted
average interest rate of 6.77% in 2001.

Under the terms of the agreement relating to its acquisition of
the Malaysian business, during the period from June 1, 2000 to
June 30, 2003, Intersil is entitled to receive additional
contingent incentive payments based upon the achievement of
milestones relating to the transfer of business previously
subcontracted by Intersil to a third party. In the event that
Intersil were to achieve all the milestones, ChipPAC would pay
Intersil an additional sum of approximately $17.9 million in the
aggregate. As of December 31, 2001, it has cumulatively paid
Intersil $7.9 million under this arrangement.

In June 2001, the Company issued $50.0 million of 8.0%
convertible subordinated notes and $15.0 million of 12.75%
senior subordinated notes in a private placement. A majority of
these funds were used to pay down term loans and revolving loans
under the senior credit facility. The $50.0 million of 8.0%
convertible subordinated notes are convertible into shares of
Class A common stock at a conversion price of $9.96 per share,
subject to adjustment at any time prior to June 15, 2011 and
bear an interest rate of 8.0% per annum. The $15.0 million of
12.75% senior subordinated notes bear an interest rate of 12.75%
per annum and mature on August 1, 2009.

As of December 31, 2001, ChipPAC's total debt consisted of
$383.6 million of borrowings, which was comprised of $50.0
million of revolving loans, (which fully utilized the borrowing
capacity under its revolving loans), $118.6 million in term
loans, $165.0 million of senior subordinated notes and $50.0
million of convertible subordinated notes. The revolving credit
line under its senior credit facilities matures on July 31,
2005, and had a weighted average interest rate of 6.0% in 2001.
The term loans mature on July 31, 2005, have amortization
payments due each quarter and had a weighted average interest
rate of 8.2% in 2001.

The Company's senior credit facilities require that it meet
specified financial tests, including, without limitation, a
maximum leverage ratio, a minimum interest coverage ratio,
minimum fixed charge coverage ratio, a maximum senior leverage
ratio and, for 2002 only, a minimum consolidated adjusted EBITDA
amount. In conjunction with its $65.0 million private placement
in June 2001, the lenders of its senior credit facilities
amended the financial tests for the period July 1, 2001 through
December 31, 2004. Its senior credit facilities also contain
covenants restricting operations. There were no violations of
these covenants through December 31, 2001 amended as follows. On
December 31, 2001, these covenants were waived for 2002 and
three new covenants were established for 2002: (1) a requirement
to raise at least $20.0 million in junior capital by March 1,
2002, which was fulfilled by ChipPAC through an underwritten
public offering of its Class A common stock, which was completed
in January 2002, (2) a minimum EBITDA requirement based on a
rolling 12 months ending March 31, 2002, June 30, 2002,
September 30, 2002 and December 31, 2002, of $30.0 million,
$26.0 million, $32.0 million and $40.0 million, respectively,
and (3) a capital expenditures limit of $30.0 million in 2002
with an exemption for a buyout of existing operating leases.

In January 2002 hipPAC issued 11.4 million shares of its Class A
common stock in an underwritten public offering. Not only did
this offering meet the requirements of its debt instruments but
the net proceeds of the offering also allowed it to pay off the
entire amount outstanding under its revolving loans and a
portion of the principal amount of its term loans.

The weakness in demand in 2001 for packaging and test services
has adversely affected Company cash flows from operations,
however, ChipPAC believes that its existing cash balances, cash
flows from operations and available borrowings under its senior
credit facilities provide sufficient cash resources to meet
projected operating and other cash requirements for the next
twelve months. An event of default under any debt instrument, if
not cured or waived, could have a material adverse effect on it
and it may require capital sooner than currently expected. There
is no assurance that additional financing will be available when
needed or, if available, that it will be available on
satisfactory terms. In addition, the terms of the senior credit
facilities and senior subordinated notes significantly reduce
the Company's ability to incur additional debt. Failure to
obtain any such required additional financing could have a
material adverse effect on the Company.

Other than the covenants on the debt as discussed above, ChipPAC
has no performance guarantees or unconsolidated entities. Its
off-balance sheets commitments are limited to equipment
operating leases, leases on office and manufacturing space and
additional contingent incentive payments to Intersil. Its total
off-balance obligations are approximately $99.8 million.

In 2001, 2000, and 1999 cash (used in) provided by operations
was ($12.2) million, $46.2 million, and $45.9 million,
respectively. Cash from operations mainly consisted of net
(loss) income plus depreciation and amortization less
utilization for working capital.

In 2001, 2000, and 1999 cash used in investing activities was
$52.8 million, $130.5 million, and $56.5 million, respectively.
In 2001 and 1999, cash used in investing activities mainly was
invested in property and equipment. In 2000, in addition to the
acquisition of property and equipment, cash was invested in the
purchase of the Malaysian business, including purchased
intellectual property.

In 2001, 2000, and 1999, cash provided by (used in) financing
activities was $88.0 million, $71.0 million, and ($26.5)
million, respectively. Cash was mainly provided by or used in
debt issuance, debt prepayment, stock issuance, and stock
redemption.

On February 14, 2002, ChipPAC sold an additional 1,425,600
shares of Class A common stock in conjunction with the
underwriter's exercise of their over allotment option at the
public offering price of $6.00 per share. In connection with
this sale, the Company received net proceeds of approximately
$8.0 million, after deducting underwriting discounts and
commissions and estimated offering expenses. The Company used
$4.0 million of the net proceeds from the sale of the additional
shares sold on February 14, 2002 to further pay down term loans.
As of February 14, 2002, term loans had a remaining balance of
approximately $86.2 million and revolving loans had been repaid
in its entirety.


CLIMACHEM INC: Can't Make Form 10-K Filing with SEC on Time
-----------------------------------------------------------
ClimaChem Inc. has notified the SEC that additional time is
needed to complete development of appropriate disclosure for
inclusion in the "Notes to Consolidated Financial Statement" and
"Management's Discussion and Analysis of Liquidity and Capital
Resources" sections of its Form 10k.

The Company's Form 10-K when filed, will report an audited loss
before income taxes and extraordinary gain of approximately
$2,000 compared to a audited loss before income taxes and
extraordinary gain of approximately $13,838,000 from the
corresponding period of last year.  ClimaChem believes that the
reduced loss before income taxes and extraordinary gain was
primarily due to gains on the sale of certain assets and the
benefit from the termination of firm purchase commitment
recognized in 2001.

                          *   *   *

As reported in the December 17, 2001 edition of Troubled Company
Reporter, Standard & Poor's raised its ratings on ClimaChem
Inc., with negative outlook.

The upgrade reflects payment of the interest that was due
December 1, 2001, on the company's $105 million, 10.75% senior
notes. The interest was paid during the 30-day cure period under
the indenture. The next interest payment on the senior notes is
due in June 2002.

                               Ratings Raised

                                    To            From
      ClimaChem Inc.
         Corporate credit rating         CC            D
         Senior unsecured debt           C             D


COVANTA ENERGY: Seeks Okay to Maintain Existing Bank Accounts
-------------------------------------------------------------
Covanta Energy Corporation, and its debtor-affiliates ask that
they be allowed to maintain all bank accounts under the current
bank account numbers following the commencement of their Chapter
11 cases.  The Debtors assure the Court that no checks issued or
dated prior to the Petition Date will be honored, without a
prior Court order.

Deborah Buell, Esq. at Cleary, Gottlieb relates to Judge
Blackshear that the Debtors transition to Chapter 11 will be
smoother and more orderly, with a minimum of harm to operations
if this request is granted.

Ms. Buell offers that all parties' interests (including
employees, vendors and customers) will benefit by preserving
business continuity, and by avoiding the disruption and delay to
the Debtors' payroll activities and other business that would
result if all accounts were closed and new ones opened. The fact
that the Debtors have hundreds of bank accounts would lend
itself to a level of confusion that would hinder the Debtors'
rehabilitative efforts.

Ms. Buell asks that the Court waive the requirement that the
Debtors' close their pre-petition bank accounts and open new
ones. The Debtors agree to stamp all post-petition checks with a
legend indicating that a debtor in possession has issued them.
(Covanta Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 609/392-0900)


CRESCENT REAL ESTATE: $375MM Sr. Notes Offering Priced at 9.25%
---------------------------------------------------------------
Crescent Real Estate Equities Company (NYSE:CEI) announced that
its operating partnership has priced its private offering of
$375 million in senior, unsecured notes due 2009 at 9.25%. The
issue price of the notes is 100%. Closing of the offering is
expected to occur on April 15, 2002.

The securities offered will not be registered under the
Securities Act of 1933, as amended, or any state securities laws
and, unless so registered, may not be offered or sold in the
United States except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act and applicable state securities laws.

Crescent Real Estate Equities Company, through its subsidiaries,
owns and manages some of the highest quality properties in the
country. Its portfolio consists primarily of 74 office buildings
totaling 28 million square feet located in six states, as well
as world-renowned luxury resorts and spas and upscale
residential developments.

                             *   *   *

As previously reported in the Troubled Company Reporter,
Standard & Poor's affirmed its ratings on Crescent Real Estate
Equities Co. and Crescent Real Estate Equities L.P. and removed
them from CreditWatch, where they were placed on Jan. 23, 2002.
The outlook remains negative.

        Ratings Affirmed And Removed From CreditWatch

      Issue                           To            From

Crescent Real Estate Equities Co.
    Corporate credit rating         BB            BB/Watch Neg
    $200 million 6-3/4%
       preferred stock               B             B/Watch Neg
    $1.5 billion mixed shelf  prelim B/B+   prelim B/B+/Watch Neg

Crescent Real Estate Equities L.P.
    Corporate credit rating         BB            BB/Watch Neg
    $150 million 6 5/8% senior
       unsecured notes due 2002      B+            B+/Watch Neg
    $250 million 7 1/8% senior
       unsecured notes due 2007      B+            B+/Watch Neg


DIVERSIFIED CORPORATE: Will Delay Form 10-K Filing with SEC
-----------------------------------------------------------
Diversified Corporate Resources, Inc. has not yet finalized
certain financial statement presentations.  The problem has
resulted in a delay in the filing of the Form 10-K.  When filed
the Company anticipates reporting a substantial operating loss
for the year 2001. During the year 2000, the Company reported an
operating profit. Until the Form 10-K is finalized, management
of the Company is not inclined to release an estimate of its
operating results for the year ended December 31, 2001.

Diversified Corporate Resources, Inc. is an human capital
services firm that provides a range of professional technology,
engineering and technical personnel on a contract and permanent
placement basis to high-end specialty employment markets, with a
focus on the information technology (IT), telecommunication and
engineering industry niches. The Company currently operates a
nationwide network of offices to support its Fortune 500 and
other client companies.

                               *  *  *

As reported in the November 15, 2001 edition of Troubled Company
Reporter, Mr. Anthony G. Schmeck, the company's Chief Financial
Officer and Treasurer, stated, "The 2001 economic downturn
coupled with the paralyzing effect on our business of the
September events have had negative impact on our balance sheet
and financial liquidity.  We are currently not in compliance
with certain financial covenants contained in our credit
agreement with our Primary lender and have been unable to meet
the October 2001 obligation due to the former owners of certain
of our subsidiaries.  Mr. Schmeck continued, "Discussions with
all parties are underway and we expect to satisfactorily
conclude these talks soon."

"We believe we are at or near a cyclical low for the demand for
our primary services," Mr. Moore commented.  Mr. Filarski, named
President and elected to the Board of Directors in August 2001,
stated that "This is the right environment to position the
Company for what many experts and industry watchers believe will
be an upturn in the cyclical staffing business sometime during
2002."


DUANE READE: S&P Assigns BB- Rating to $110M Senior Unsec. Notes
----------------------------------------------------------------
A 'BB-' rating was assigned on April 10, 2002, to drug store
operator Duane Reade's proposed $110 million senior unsecured
convertible notes due in 2022. The other ratings on Duane Reade
were also affirmed at that time. Proceeds from the debt issuance
will be used to repay amounts outstanding under the company's
credit facility and a portion of the 9.25% senior subordinated
notes. Rating outlook is stable.

The ratings on Duane Reade reflect its good New York City market
position in the favorable chain drug store industry and
consistent improvements in operating performance. These
strengths are partially offset by its leveraged capital
structure and narrow geographic focus.

New York, New York-based Duane Reade is one of the largest drug
chains in the New York City metropolitan area. The company had
$247.1 million debt outstanding as of December 29, 2001. More
than half of its 200 stores are located in Manhattan. Duane
Reade is the market leader in the New York metropolitan area
with a 30% share; CVS Corp. is its closest competitor with a 22%
market share. Convenience is a significant competitive factor in
drug store retailing. Duane Reade's success is largely
attributable to its convenient locations and effective
merchandising of non-prescription merchandise. The company
carries 33% more front-end merchandise than the national
average. The larger assortment drives traffic and profitability,
as gross margins on front-end merchandise are two times higher
than those on prescription drugs.

Over the past five years, Duane Reade has improved store
operations, with management focusing on systems development;
merchandising enhancements designed to increase sales of higher-
margin products, such as cosmetics and photo finishing; and high
growth of its pharmacy operations. However, Duane Reade's
operating margin decreased in 2001 to 15.6% from 16.4% in 2000
due to factors primarily related to the World Trade Center
disaster. An increased portion of lower-margin pharmacy and
third-party reimbursement pharmacy sales also contributed to the
margin decline. Future growth plans should bolster the company's
position in its core market. Duane Reade will open 60 to 70
stores over the next two years in the New York City area, more
than half of which will be outside Manhattan. Still, the company
faces intense competition from CVS and Rite Aid Corp., and it is
increasing its business risk by expanding outside of its core
Manhattan market.

Duane Reade's financial profile modestly improved following the
company's successful secondary stock offering in June 2001 and
the use of the $130.6 million of proceeds to repay a portion of
the amounts outstanding under its senior credit facility. Total
debt to EBITDA decreased to 5.5 times in 2001 from 5.9x in 2000.
EBITDA coverage of interest was 1.9x in 2001 versus 1.8x in
2000. Credit protection measures are expected to improve
slightly due to the lower cost of the proposed note issue and
the expectation for better operating results. However,
significant improvement is not anticipated as Standard & Poor's
expects Duane Reade to use internally generated cash to fund
growth. The company has good financial flexibility, with $69.2
million available under its $80.0 million secured revolving
credit facility as of Dec. 29, 2001, and no significant near-
term debt maturities.

                            Outlook

The ratings are supported by Duane Reade's solid New York City
market position in the favorable chain drug store industry.
Upside rating potential is limited by risks associated with the
company's growth plans, especially into less-penetrated markets.


ELGAR HOLDINGS: S&P Hatchets Corp. Credit Rating to Junk Level
--------------------------------------------------------------
On April 10, 2002, Standard & Poor's lowered its corporate
credit rating on Elgar Holdings Inc. to 'CC' because of concerns
about the company's severe liquidity problems. Elgar is
operating under a waiver of its credit facility, which calls for
the full amount of loans outstanding--$13.8 million plus accrued
interest--to be repaid by June 28, 2002. Rating outlook is
negative.

Elgar is the holding company for San Diego, California-based
Elgar Electronics Corp., which designs and manufactures power
conditioning equipment used in testing and instrumentation.
Elgar Electronics' products serve semiconductor and automated
test equipment markets. These industries are in the midst of a
protracted downturn that is likely to pressure sales and
profitability over the near to intermediate term.

As a result of lagging industry demand and weaker sales,
operating margins decreased to about 9% in 2001 from 16% in
2000. Industry conditions are likely to remain weak during the
first half of 2002 and keep margins depressed.

Elgar Holdings is highly leveraged, with a total debt of $104
million compared with EBITDA of just $5.4 million for 2001. Cash
flow coverage of interest was 0.6 times for 2001. Elgar has to
obtain other sources of funding to meet its debt service and
working capital requirements.

                            Outlook

The ratings could be lowered in the near term unless the company
improves its liquidity.


ENRON CORP: Court OKs Susman Godfrey as Debtor's Defense Counsel
----------------------------------------------------------------
Judge Gonzalez authorizes Enron Corporation, and its debtor-
affiliates to employ and retain Susman Godfrey LLP as their
class action defense counsel under a general retainer effective
as of the Petition Date.  The Court approves Susman's retain
subject to the terms of the Protocol for Allocation of Legal
Work among Enron Law Firms dated February 15, 2002.

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

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

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

Moreover, Susman regularly charges for reimbursement of out-of-
pocket expenses including secretarial overtime, travel, copying,
outgoing facsimiles, document processing, court fees, transcript
fees, long distance phone calls, postage, messengers, overtime
meals and transportation. (Enron Bankruptcy News, Issue No. 19;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


EXODUS COMM: EMC Takes Action to Recover $2M Symmetrix 8430 Unit
----------------------------------------------------------------
EMC asks the Court to compel Exodus Communications, Inc., and
its debtor-affiliates to return a $2,000,000 Symmetrix 8430
unit. This equipment was loaned to the Debtors so they could
provide services to end-user Sony Corp., and to facilitate a
swap-out with another piece of equipment under lease.

Wilmer C. Bettinger, Esq., at Pepper Hamilton LLP in Wilmington,
Delaware, informs the Court that pre-petition, the Debtors had
contacted EMC for the lease of a Symmetrix 3830. Since such
equipment was not available, EMC shipped a Symmetrix 8430 unit
instead. The Debtors, however, concluded that the loaned
equipment was too expensive. As a result, Mr. Bettinger relates
that EMC agreed to take back the loaned equipment and replace it
with the much less expensive Symmetrix 3830-50 unit plus
supporting cards. But before the equipment swap could take place
and before any lease document was signed, the Debtors filed
their Chapter 11 petitions.

Mr. Bettinger states that since the Petition Date, the Debtors
have continued to use the loaned equipment to provide post-
petition services to Sony.  Additionally, the Debtors informed
EMC of their wish to enter into a lease supplement for a less
expensive Symmetrix 3830-50 unit.  To this end, EMC crafted
Master Lease Agreement Supplement No. 34. The supplemental lease
lists the cost of the unit plus the supporting cards at only
$268,280. Further, the Debtors are to pay EMC a down payment of
$111,785 upon execution, while the remaining $156,495 will be
spread-out over seven months of rent payments. Mr. Bettinger
indicates that the lease agreement was signed with both parties
acknowledging that the downpayment was to compensate the
Debtors' post-petition use of the loaned equipment.

Since the execution of the lease, the Debtors have not paid EMC
the downpayment and neither has there been a swap-out of the
loaned equipment with the leased equipment. The Debtors thus owe
these amounts to EMC:

                    Downpayment   -  $120,728
                    January rent  -  $ 22,357
                    February rent -  $ 22,357
                    March rent    -  $ 22,357
                    April rent    -  $ 22,357
                    --------------------------
                    Total         -  $210,156

Mr. Bettinger contends that the Debtors have no right to the
loaned equipment since no lease agreement was ever signed.
Therefore, the automatic stay does not apply. With that, EMC has
the right to immediately terminate all maintenance and
networking services for the loaner equipment without notice to
the Debtors. (Exodus Bankruptcy News, Issue No. 16; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


FACTORY CARD: Successfully Emerges from Chapter 11 Proceedings
--------------------------------------------------------------
Factory Card & Party Outlet Corp., formerly known as Factory
Card Outlet Corp., announced that its amended plan of
reorganization became effective and the Company has successfully
emerged from Chapter 11.  The announcement comes within weeks
after the United States Bankruptcy Court for the District of
Delaware had confirmed the Company's amended plan.

"This is an exciting time for all of us," said Gary Rada,
President & Chief Operating Officer of Factory Card & Party
Outlet.  "The dedicated effort of our management team and 3,000
company associates during the past three years was a key factor
in achieving such an incredible turnaround."  Mr. Rada also
stated, "Our emergence allows us to focus our energies towards
future growth while better serving our customers and increasing
value for our shareholders."

"The plan reflects the confidence the vendor community has in
our dedicated associates, who have achieved a dramatic
turnaround," said James Constantine, Executive Vice President
and Chief Financial and Administrative Officer of Factory Card &
Party Outlet.

"We are extremely pleased that the Company achieved this
milestone in its history," said Jim Harrison, President of
Amscan, one of the company's largest party suppliers.  "The
commitment and dedication of this outstanding management team
has enabled them to reach this point.  We are excited about our
continued partnership as the Company continues to grow and be
one of the major players in our industry."

Wells Fargo Retail Finance, the Company's existing lender is
providing a $40 million credit facility to fund working capital
needs for the reorganized Company.  "We were pleased to provide
the financing," said Kent Dahl, Wells Fargo Retail Finance
President.  "Factory Card & Party Outlet has worked hard, and we
have remained extremely supportive of their efforts to
turnaround the Company."

Under the terms of the amended plan, within 60 days of the
Company's emergence from Chapter 11, most of its general
unsecured creditors will share receipt of at least 90 percent of
the common stock of the reorganized Company and cash
distributions of $1.0 million.  In addition, creditors will
receive $2.6 million, three years from emergence, subject to
certain prepayment provisions. Pursuant to the amended plan the
existing stock of Factory Card Outlet Corp. has been cancelled.
Holders of the cancelled stock will receive 5 percent of the
common stock of the reorganized Company and warrants to purchase
an additional 10 percent of the common stock of the reorganized
Company at various premiums to reorganization equity value.

Factory Card & Party Outlet, based in Naperville, Illinois,
operates 172 Company-owned retail stores, in 20 states, offering
a vast assortment of party supplies, greeting cards, gift-wrap
and other special occasion merchandise at everyday value prices.


FEDERAL-MOGUL: Wins Nod to Hire Gibbons Del Deo as Co-Counsel
-------------------------------------------------------------
Federal-Mogul Corporation and its debtor-affiliates obtained the
authority and approval from the Court to employ and retain
Gibbons Del Deo Dolan Griffinger & Vecchione for representation
before the U.S. District Court for the District of New Jersey,
nunc pro tunc to December 14, 2001.

The compensation will be payable to the firm on an hourly basis
plus reimbursement of actual necessary expenses and other
charges  incurred by Gibbons. The firm's current hourly rates
are:

       Partners               $ 260-600
       Associates               150-240
       Paraprofessionals         80-125

The professional duties that Gibbons will render to the Debtors
include:

A. providing legal advice with respect to the Debtors' powers
    and duties as debtors-in-possession in the continued
    operation of their business and management of their
    properties generally and in particular, in connection with
    such asbestos-related issues as may be heard before Judge
    Wolin in the United States District Court for the District of
    New Jersey;

B. preparing and pursuing confirmation of a plan and approval of
    a disclosure statement;

C. preparing on behalf of the Debtors necessary applications,
    motions, answers, orders, reports and other legal papers as
    may be heard before Judge Wolin in the United States
    District Court for the District of New Jersey;

D. appearing on behalf of the Debtors in connection with matters
    presented to Judge Wolin in the United States District
    Court for the District of New Jersey and protecting the
    interests of the Debtors in such matters; and

E. performing all other legal services for the Debtors that may
    be necessary and proper in these proceedings. (Federal-Mogul
    Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service,
    Inc., 609/392-0900)


FINOVA: Sells $485MM Franchise Finance Portfolio to GE Entities
---------------------------------------------------------------
The FINOVA Group Inc. (OTC Bulletin Board: FNVG) announced that
is has sold approximately $485 million of its franchise finance
portfolio to GE Capital Franchise Finance Corporation and GE
Capital Canada Equipment Financing Inc., for approximately $490
million.  This sale includes substantially all the performing
assets in FINOVA's franchise finance portfolio, and represents
approximately 7.5% of the Company's total financial assets at
December 31, 2001.  FINOVA will continue the orderly liquidation
of approximately $220 million of its retained franchise finance
portfolio, which substantially consists of non-performing
assets.  The Company will use the net proceeds from the
transaction to repay a portion of the loan it obtained in August
2001 from Berkadia, LLC.

The FINOVA Group Inc., through its principal operating
subsidiary, FINOVA Capital Corporation, is a financial services
company headquartered in Scottsdale, Arizona.

DebtTraders reports that Finova Capital Corporation's 7.500%
bonds due 2009 (FINOVA9) are quoted at a price of 36.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=FINOVA9for
real-time bond pricing.


FRUIT OF THE LOOM: Can't Beat Form 10-K Filing Deadline
-------------------------------------------------------
Fruit of the Loom Vice President - Finance and Acting Chief
Financial Officer G. William Newton tells the Securities and
Exchange Commission that it will not be possible to prepare a
Form 10-K for the year ended December 31, 2001 in a timely
manner.

Mr. Newton reminds the SEC that FTL filed for protection under
Chapter 11 on December 29, 1999.  "The added burdens related to
the Case, coupled with changes in personnel, have resulted in a
delay in the completion of the financial statements and related
notes.  [FTL] continues to operate its businesses and manage its
property as debtor-in-possession. . . .  On March 15, 2001,
[FTL] filed a disclosure statement [and f]irst, second and third
amendments to the Disclosure Statement were filed with the
Bankruptcy Court on December 28, 2001, February 4, 2002, and
March 22, 2002. . . .

"Since the Filing Date, the accounting and financial staff, who
are critical to the preparation of the Form 10-K, have been
required to devote substantial amounts of time to the
reorganization process and related issues, including updating
the registrant's strategic business plan and responding to
numerous requests for information from various constituencies in
the reorganization cases, including pre-petition secured
lenders, post-petition secured lenders and the Official
Committee of Unsecured Creditors.  In addition, [FTL]'s
financial and accounting staff have had the primary
responsibility for preparing the Schedules of Assets and
Liabilities and Statement of Financial Affairs for each of the
34 entities which is a debtor in the Case. Most recently, the
registrant's financial and accounting staff have had the primary
responsibility for preparing the financial projections and other
financial information included in the Disclosure Statement, as
amended, and the Amended Reorganization Plan.  Accordingly, for
these reasons, [FTL] is unable to provide the information
required by the Form 10-K in the prescribed time without
unreasonable effort or expense."

Fruit of the Loom Inc. discloses that it expects to report that
net sales decreased $518,400,000 or 22.0% in 2001 compared to
2000, and that gross earnings increased $42,400,000 or 32.6% in
2001 compared to 2000. The registrant expects to report an
operating loss of $46,000,000 in 2001 compared to an operating
loss of $143,200,000 in 2000.

Fruit of the Loom Ltd. discloses that it expects to report that
net sales decreased $211,800,000 or 13.6% in 2001 compared to
2000, and that gross earnings increased $72,500,000 or 31.2% in
2001 compared to 2000. The registrant expects to report
operating earnings of $70,100,000 in 2001 compared to an
operating loss of $44,200,000 in 2000. (Fruit of the Loom
Bankruptcy News, Issue No. 52; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


FLAG TELECOM: Board Approves Proposed Debt Restructuring Plan
-------------------------------------------------------------
The Board of Directors of FLAG Telecom Holdings Limited (Nasdaq:
FTHL; LSE: FTL) approved a proposal to restructure the
obligations of FLAG and its subsidiaries.

The Board of Directors has authorized FLAG's management and
advisors to negotiate with certain creditors, including
representatives of the FLAG Atlantic Bank Group, holders of its
various Senior Notes, and significant trade creditors, regarding
a comprehensive financial restructuring. FLAG will attempt to
reach agreement with these representatives regarding the
material terms of a financial restructuring in the coming weeks.

Under the Proposal, FLAG would exchange:

      (a) The FLAG Atlantic Bank debt of approximately US$257
million for approximately US$70 million in cash and new common
equity of FLAG;

      (b) US$430 million of FLAG Limited 81/4% Senior Notes due
in 2008 for approximately US$170 million of New Senior Notes of
FLAG; and

      (c) $US300 million and Euro 300 million of FLAG 11 5/8%
Senior Notes due in 2010 for approximately US$150 million in
cash, approximately US$40 million of New Senior Notes of FLAG
and new common equity of FLAG.

Under the Proposal, all trade creditors and equipment suppliers
would be paid in full in the ordinary course of business or
through vendor financing.

The Proposal anticipates that, as is common in restructurings of
this type, existing common equity holders will be substantially
diluted.

FLAG intends to manage its business in a focused manner,
conserving capital and reducing costs where appropriate. It will
continue to provide core backbone capacity to traditional
carriers, Internet Service Providers and other content
providers.

There can be no assurance that FLAG will be able successfully to
restructure its obligations, or that any successful
restructuring would be accomplished under terms set forth in the
Proposal. In particular, at this point none of FLAG's creditors
mentioned above have agreed to the Proposal.

FLAG Telecom is a leading global network services provider and
independent carriers' carrier providing an innovative range of
products and services to the international carrier community,
ASPs and ISPs across an international network platform designed
to support the next generation of IP over optical data networks.
FLAG Telecom has the following cable systems in operation or
under development: FLAG Europe-Asia, FLAG Atlantic-1 and FLAG
North Asian Loop. Recent news releases and information are on
FLAG Telecom's Web site at http://www.flagtelecom.com


FOURTHSTAGE TECHNOLOGIES: Appoints Dei Maggi as President & CEO
---------------------------------------------------------------
Fourthstage Technologies has made several changes with respect
to its management team, in accordance with approval of its Board
of Directors.  Mr. Al Dei Maggi has been appointed as President
and Chief Executive Officer; Mr. Stephen Martin has been
appointed Vice President and Chief Financial  Officer; and Mr.
Kevin P. Craig, formerly Chief Executive Officer will assume the
position of Chief Technology Officer.

Mr. Dei Maggi has over 15 years experience in Executive
Leadership positions, building and managing successful teams in
several top Technology Companies.  He has over 20 years
experience in Advanced Technology Sales and Marketing, and has
acquired an International business reputation in more than  10
countries, including North America, Europe, Japan, Australia and
New Zealand.  Mr. Dei Maggi has, among other credits; served as
the CEO of Xyterra Computing, Inc; CEO of NetworkTwo; VP and
General Manager of Integrated Micro Products; Vice President of
Predirect Marketing of Sequent Computer Systems, Inc (now IBM);
Founder and CEO of Toltec Computers/Edge Computers; and has been
a member of the Board of Directors of several companies.

Mr. Martin has served as Chief Financial Officer of Xyterra
Computing, Inc.; Chief Financial Officer of Clear Data
Communications, Inc; Vice President of Finance of Nortel
Networks Corporation; Vice  President/Head Structured Trade
Finance of the First National Bank of Chicago ["FNBC"- now Bank
One]; Vice President and Division Head - Communications Lending
at FNBC, and Vice President and Regional Manager- Eastern Europe
at FNBC.

Mr. Craig was a Founder and CEO of Fourthstage Technologies,
Inc., and became CEO and President of Aperian, Inc., known as
Fourthstage Technologies, Inc., after its merger with Aperian,
Inc., in April 2001. Mr. Craig served in various positions with
Intel Corporation, including Director of Enterprise Architecture
Labs; and was also with Advanced Micro Devices, Inc., as its
Manager-Technology Development.  Mr. Craig is a member of the
Board of Directors of Fourthstage Technologies, Inc.

Fourthstage Technologies provides technology integration
systems. The company filed for Chapter 11 Reorganization under
the U.S. Bankruptcy Code in the Bankruptcy Court for the
District of Arizona in Phoenix on December 31, 2001.


GENTEK: Seeks Credit Pact Revision on Expected Covenant Breach
--------------------------------------------------------------
On March 31, 2002, JPMorgan Chase Bank, administrative agent for
the lenders under GenTek's credit agreement dated April 30,
1999, as amended and restated August 9, 2000 and August 1, 2001,
betweem GenTek, Noma Company, the several lenders from time to
time party thereto, The Bank of Nova Scotia, Bankers Trust
Company and JPMorgan Chase Bank, gave notice stating that
GenTek's failure to furnish an audit without a "going concern",
or like qualification or exception, constituted a default under
the Credit Agreement and that during the period of default, the
Lenders have no obligation to make any loan or issue any letter
of credit to the Company.

The qualified auditor's opinion was given due to the Company's
anticipated non-compliance with certain financial covenants in
the Credit Agreement when results for the quarter ending March
31, 2002 are finalized. GenTek's non-compliance with either the
audit or financial covenants gives the Lenders the right to
accelerate the senior debt repayment obligations. If this were
to occur, GenTek would have to seek alternative sources of
financing. No assurances can be given as to the availability of
such financing.

However, GenTek is in discussions with its Lenders regarding
amending the Credit Agreement, which it anticipates will
continue through the late spring. Prior to receipt of the
default notice, as a precautionary measure and to demonstrate
its operating liquidity to its customers, suppliers and
employees, GenTek drew all remaining amounts available under its
revolving credit facility during the first quarter of 2002,
which approximated $155 million. Based on its current outlook,
the Company believes this level of liquidity will be sufficient
to fund its operating requirements for the foreseeable future.
The Company further believes that it will be able to reach an
agreement with the Lenders on an acceptable amendment to the
Credit Agreement.


HASBRO INC: Feeble Financial Profile Prompts Fitch's BB Rating
--------------------------------------------------------------
Hasbro, Inc.'s 'BB' senior unsecured debt rating is affirmed by
Fitch Ratings. In addition, the company's new $380 million
secured bank credit facility is rated 'BB+'. The new facility,
which replaces its previous 'BB+' rated $650 million facility,
continues to be secured by receivables, inventories and
intellectual property. As of December 31, 2001, Hasbro had total
debt outstanding of approximately $1.2 billion. The Rating
Outlook remains Negative.

The ratings reflect the company's strong market presence and its
diverse portfolio of brands balanced against the cyclical and
shifting nature of the toy industry. The ratings also consider
the challenges the company continues to face in refocusing its
strategy on its core brands and its weak financial profile. The
Negative Outlook reflects uncertainty as to the company's
ability to successfully execute its strategy and its ability to
achieve revenue targets for its core brands as well as Star Wars
in 2002.

Hasbro, with 2001 revenues of about $2.9 billion, is the world's
second largest toy and game company. Key brands include
Monopoly, Clue, Playskool, Play-doh, GI Joe, Mr. Potato Head,
and Pokemon. The company also holds some significant licenses,
including Star Wars and Disney (beginning with Monsters, Inc.).
Hasbro's Star Wars license agreement requires the company to pay
significant guaranteed royalties. The spring 2002 release of the
next movie from the trilogy is expected to boost sales of Star
Wars related products, and though Hasbro has conservatively
forecasted sales of these products, to the extent expectations
are not met, Hasbro's profitability would be impaired.

During 2000 Hasbro refocused its long-term strategy on promoting
its core brands and de-emphasizing its reliance on faddish
product. The company envisions its revenue base being generated
nearly equally by its toys and games segments, with a
contribution by licensed products as well. The company has also
made progress in reducing its cost structure, eliminating about
$100 million in operating expenses in 2001 and projecting an
additional $100 million reduction over the next several years as
it brings its cost structure in line with its smaller revenue
base. As a result, profitability (measured by EBITDA as a
percent of revenues), though still below historical levels,
increased to 15.2% in 2001 from its low point of 9.2% in 2000.
While the long-term goals appear sound, the ultimate success of
its initiative remains uncertain.

Despite improvements to its cost structure, Hasbro's financial
profile remains weak due to the substantial acquisition and
share repurchase activity the company underwent from 1997-1999,
which nearly doubled the company's debt burden. However,
increased profitability, coupled with nearly $200 million in
debt reduction, helped improve Hasbro's credit protection
measures in 2001. Leverage and EBITDA coverage of interest
improved to 2.8x and 4.2x, respectively, in 2001 from 4.0x and
3.1x in 2000, and are reflective of the assigned ratings.



HAYES LEMMERZ: Court Fixes June 3 Bar Date for Proofs of Claim
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware sets
June 3, 2002, as the deadline by which creditors of Hayes
Lemmerz International, Inc., and its debtor-affiliates must file
their proofs of claim or be forever barred from asserting their
claim.

The Debtors have mailed notice of the June 3 Bar Date, together
with customized proof of claims forms, to all known creditors.

The June 3 Bar Date apply to all claims except:

A. claims listed in the Schedules of Assets and Liabilities or
      any amendments thereto, which are not included as
      "contingent", "unliquidated", "disputed" and not disputed
      by the holders thereof in terms of amount, classification
      or the Debtors' identity against the creditor with which
      the claim is scheduled;

B. claims for which proofs already filed against the specific
      Debtor;

C. claims already allowed or paid pursuant to Court order;

D. Administrative expense claims defined under section 503(b)
      and 507(a)(1) in Chapter 11 of the Bankruptcy Code.

E. claims by a holder of the Debtors' public notes, including
      the 11-7/8% Senior Notes due June 15, 2006; 11% Senior
      Subordinated Notes due July 15,2006; 9-1/8% Senior
      Subordinated Notes due July 15, 2007; 8-1/4% Senior
      Subordinated Notes due December 15, 2008 which are issued
      by the Debtors or other debt of the Debtors arising solely
      on account of the holders' ownership interest in or
      possession of such public bonds, which must be filed by the
      relevant indenture trustee for such public debt
      obligations. Any debtholder who wishes to assert a claim
      against the Debtors that is not based solely upon the
      outstanding prepetition principal and interest due on
      account of its ownership of such securities must file a
      proof of claim on or before the General Bar Date; and

F. Debtors' claims against other Debtors.

Furthermore, any claim arising from rejection of an unexpired
lease or executory contract be required to be filed by the
latest of (a) 30 days after the date the Debtors are given
authority to reject such agreement; (b) any date ordered by the
Court; and (c) the Rejection Bar Date.


HAYES LEMMERZ: Court Okays Jay Alix as Debtor's Crisis Manager
--------------------------------------------------------------
Hayes Lemmerz International, Inc., and its debtor-affiliates
obtained authority and approval from the Court to continue
employing Jay Alix & Associates Services, LLC as their crisis
managers.

Grenville R. Day, Esq., at Skadden Arps Slate Meagher & Flom LLP
in Wilmington, Delaware, relates that on November 20, 2001, the
Debtors entered into the Employment Agreement, effective as of
October 15, 2001, wherein Jay Alix Services agreed to provide
certain temporary employees to assist the Debtors in their
restructuring process. Pursuant to the Employment Agreement, Jay
Alix Services' staff assumed certain management positions of the
Debtors' businesses. With the Court's approval, Kenneth A. Hiltz
will serve as Chief Financial Officer until such time as a
permanent Chief Financial Officer is recruited. At that time, it
is anticipated that Mr. Hiltz will continue as the Debtors'
Chief Restructuring Officer, with responsibility for assisting
the Debtors' in evaluating and implementing strategic and
tactical options through the restructuring process.

Specifically, Mr. Hiltz's role includes:

A. assist in assuring suitable productivity of the "working
    group" professionals who are assisting the Debtors in the
    reorganization process or who are working for the Debtors'
    various stakeholders;

B. provide leadership to the financial function, including
    assisting the Debtors in strengthening the core
    competencies in the finance organization, particularly cash
    management and general accounting and financial reporting;

C. assist in overseeing development of an operating business
    plan to be used in managing the Debtors for the current year
    as well as for future years;

D. assist in overseeing and driving financial performance in
    conformity with the Debtors' business plan;

E. assist with the preparation of the statement of affairs,
    schedules and other regular reports required by the Court
    or which are customarily issued by the Debtors' Chief
    Financial Officer as well as providing assistance in such
    areas as testimony before the Court on matters that are
    within Jay Alix Services' areas of expertise;

F. assist with financing issues either prior to or during any
    bankruptcy filing and in conjunction with a plan of
    reorganization, or which arise from the Debtors' financing
    sources outside of the United States;

G. assist in negotiations with stakeholders and their
    representatives;

H. assist in negotiations with potential acquirers of the
    Debtors' assets;

I. assist with such other matters as may be requested that fall
    within our expertise.

In addition, under the Employment Agreement Herbert S. Cohen
serves as the Debtors' Chief Accounting Officer, who bears
responsibility for working with the Corporate Controller,
outside accountants and legal counsel, as appropriate, to
identify and implement adjustments, disclosures and changes in
accounting procedures and policies. Also pursuant to the
Employment Agreement, Pilar Tarry assists the Debtors in
developing and implementing cash management strategies, tactics
and processes.  Ms. Tarry works with the Debtors' treasury
department and other professionals and coordinates the
activities of the representatives of other constituencies in the
cash management process.

Kenneth A. Hiltz, the Debtors' Chief Restructuring Officer,
states that the forgoing professionals may be assisted by other
Jay Alix Services' professionals at various levels, as required.
The Debtors will only enlist the services of other JAS
professionals as set forth in this paragraph after first
ensuring that such additional resources do not duplicate the
activities of other employees or professionals. Other Jay Alix
Services' professionals currently assisting the Debtors on a
full-time or substantially full-time basis include Mr. Ronald
Bienias, who is assisting in the cash management process, Mr.
Barry Folse, Mr. Clayton Gring, Mr. Meade Monger and Mr. Bryan
Porter, who are assisting with bankruptcy administration
matters, and Mr. Jeffery Vogelsang, who is assisting with
business planning.

The Employment Agreement provides that Jay Alix Services shall
be compensated for its services on an hourly basis plus
reimbursement for all  reasonable out-of-pocket expenses
incurred in connection with  their services. The at these hourly
rates:

       Principals                      $500-620
       Senior Associates               $385-495
       Associates                      $285-375
       Accountants and Consultants     $200-280

In addition to the listed fees and expenses, the Debtors also
agreed to pay Jay Alix Services a performance fee equal to the
sum of 0.10% of the first $1,000,000,000 of total enterprise
value, and 0.20% of total enterprise value over $1,000,000,000
upon the effective date of  a plan of reorganization proposed by
the Debtors, or the closing of a sale or sales of all or
substantially all of the assets of the Debtors, as proposed by
the Debtors. The Debtors paid a retainer of $300,000.00 to JAS
on October 18, 2001 to secure performance under the Employment
Agreement. (Hayes Lemmerz Bankruptcy News, Issue No. 9;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


ICG COMMS: Court Approves Bond & L/C Pact with Wells Fargo
----------------------------------------------------------
Judge Walsh grants ICG Communications, Inc., and its debtor-
affiliates' request, authorizing them to enter into the
performance bond and Letter of Credit, and modifying the stay so
as to permit Wells Fargo to offset any future amounts drawn on
the Letter of Credit against the Security.

As previously reported, on or about March 2, 2002, Debtor ICG
Telecom Group, Inc. entered into a network services agreement
with a large Internet Service Provider. Due to "certain
confidentiality provisions" the Debtors refuse to name the
particular ISP in this Motion. Pursuant to the ISP Agreement,
ISP will purchase certain telecommunications services from
Telecom on a monthly basis. Under the ISP Agreement, the Debtors
are required to obtain a performance bond in the amount of $2.4
million, which represents the Debtors' anticipated monthly
revenue under the ISP Agreement.  While the Debtors believe that
entering into the ISP Agreement constitutes an ordinary course
of business transaction and thus that court approval of such
agreement is not required, the Debtors tell Judge Walsh they
bring this Motion from an abundance of caution.

Accordingly, the Debtors negotiated the terms and conditions of
a performance bond in the amount of $2.4 million with Principal
and Travelers Casualty and Surety Company.  The Debtors
regularly execute performance bonds in the ordinary course of
business. However, out of an abundance of caution, the Debtors
ask Judge Walsh's authority to enter into the Performance Bond.

As a condition to executing the Performance Bond, Travelers
required the Debtors to obtain a letter of credit to secure the
Debtors' payment obligation with respect to such bond.
Accordingly, the Debtors negotiated the terms and conditions of
an irrevocable standby letter of credit with Wells Fargo Bank.
As security for the Letter of Credit, the Debtors were required
to pledge approximately $2.4 million of Debtor ICG Holdings,
Inc.'s cash collateral.  Accordingly, in order to comply with
Travelers' conditions for providing the Performance Bond, the
Debtors seek this Court's authority to execute the Letter of
Credit. In addition, the Debtors seek relief from the automatic
stay to permit Wells Fargo to offset any future advances made on
the Letter of Credit against the Security.

The Debtors are unable to procure a performance bond without
posting a letter of credit to support the bond and securing the
letter of credit with cash.  The Debtors have negotiated the
Performance Bond at arm's length and pursuant to their business
judgment, which is to be accorded so long as it does not run
afoul of the provisions of and policies underlying the
Bankruptcy Code.

The Performance Bond and Letter of Credit clearly satisfy the
business judgment standard. The ISP Agreement is highly
beneficial to the Debtors. The ISP Agreement, among other
things, expands the Debtors' telecommunications network,
increases the Debtors' revenues, and establishes the Debtors'
relationship with one of the largest Internet Service Providers.
The ISP would not enter into the ISP Agreement unless the
Debtors obtained a performance bond. Likewise, Travelers
would not provide a performance bond unless the Debtors obtained
a letter of credit. In addition, the Performance Bond and Letter
of Credit are the product of arms' length negotiation between
the Debtors and Travelers and Wells Fargo, respectively.
Accordingly, the Debtors believe that entering into the
Performance Bond and executing the Letter of Credit are in the
best interests of the Debtors' estates, creditors and other
parties in interest. (ICG Communications Bankruptcy News, Issue
No. 21; Bankruptcy Creditors' Service, Inc., 609/392-0900)


IT GROUP: Court Allows Continue Use of Cash Management System
-------------------------------------------------------------
The IT Group, Inc., and its debtor-affiliates secured Court
authority to continue to use their Cash Management System as it
may be modified in connection with the Debtors' contemplated
debtor-in-possession financing or as required by the Debtors in
the ordinary course of business.

As stated in the Debtors' motion, the Cash Management System,
which is similar to those commonly employed by corporate
entities of comparable size and complexity to the Debtors,
allows for:

A. overall corporate control of funds,

B. certain cash availability when and where needed among the
      Debtors and Non-Debtor Affiliates, and

C. the reduction of administrative costs through a centralized
      method of coordinating funds collection and movement.

The Debtors' smooth transition into, and operations in, chapter
11 depends on their ability to maintain these bank accounts and
operate this Cash Management System without interruption.

It was also explained to the Court that the Cash Management
System is highly automated and computerized and includes the
necessary accounting controls to enable the Debtors to trace
funds through the system and ensure that all transactions are
adequately documented and readily ascertainable. The Debtors
will continue to maintain detailed records reflecting all
transfers of funds, including, but not limited to, Intercompany
Transactions.

Thus, the operation of the Debtors' business requires that the
Cash Management System continue during the pendency of these
chapter 11 cases. Adopting new, segmented cash management
systems would be expensive, would create unnecessary
administrative burdens, and would be disruptive to the Debtors'
business operations.

The Cash Management System, which is similar to those commonly
employed by corporate entities of comparable size and complexity
to the Debtors, allows for:

A. overall corporate control of funds,

B. certain cash availability when and where needed among the
      Debtors and Non-Debtor Affiliates, and

C. the reduction of administrative costs through a centralized
      method of coordinating funds collection and movement. (IT
      Group Bankruptcy News, Issue No. 8; Bankruptcy Creditors'
      Service, Inc., 609/392-0900)


IWO HOLDINGS: S&P Ups Rating to B Over Acquisition by US Unwired
----------------------------------------------------------------
The corporate credit rating on IWO Holdings Inc. (IWO) was
raised to 'B' and removed from CreditWatch on April 9, 2002,
following the completion of the company's acquisition by US
Unwired Inc. Outlook is stable. IWO is now wholly owned by US
Unwired's subsidiary, Louisiana Unwired LLC. Standard & Poor's
also affirmed its ratings on US Unwired at that time.

IWO provides wireless services primarily in the South and
Southeast, while US Unwired provides wireless services primarily
in the Northeast. Both companies are Sprint PCS Network
Partners.

US Unwired's acquisition of IWO involved a stock for stock
transaction valued at about $241 million and debt assumption of
about $290 million. US Unwired's business position will be
modestly enhanced by the acquisition, adding about 6.2 million
population equivalents and more than 125,000 subscribers. As of
December 31, 2001, US Unwired had about 277,000 subscribers. Pro
forma for the IWO and Georgia PCS acquisitions, subscribers
total about 470,000.

US Unwired's rating reflects its weak cash flow and high debt
leverage, in addition to challenges it faces to simultaneously
integrate Georgia PCS and IWO. These factors are somewhat offset
by management's demonstrated operational execution and the
benefits of its affiliation with Sprint PCS. Nevertheless,
slower industry growth is expected to limit increases in US
Unwired's subscriber base and result in slower cash flow
improvement. Net customer additions grew about 17% in the fourth
quarter of 2001 compared with 24% in the third quarter. On an
annual basis, EBITDA coverage of interest expense is not
anticipated to reach 1 time until 2003. Pro forma for the
Georgia PCS acquisition, given its cash balance of about $85
million at year-end 2001, $80 million availability under its
secured bank facility, and its portfolio of non-core assets such
as cellular operations and towers, US Unwired's liquidity
position appears adequate for the near term.

                           Outlook

The rating incorporates Standard & Poor's expectation that US
Unwired will demonstrate consistent improvement in cash flow
measures in the near term and successfully integrate Georgia PCS
and IWO.


KAISER ALUMINUM: Committee Signs-Up Akin Gump as Co-Counsel
-----------------------------------------------------------
The Official Committee of Unsecured Creditors asks to retain
Akin, Gump, Strauss, Hauer & Feld, LLP as its co-counsel in
Kaiser Aluminum Corporation and its debtor-affiliates' Chapter
11 cases, effective February 22, 2002.

According to Robert Prusak, Co-chairperson of the Official
Committee of Unsecured Creditors, it is necessary to employ and
retain Akin Gump to provide, among other things, the following
assistance:

A. advise the Committee with respect to its rights, duties and
     powers 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 and the Debtors' capital structure and in
     negotiating with holders of claims and equity interests;

D. assist the Committee's investigation of the acts, conducts,
     assets, liabilities and financial condition of the Debtors
     and other parties involved with the Debtors, and of the
     operation of the Debtors' businesses;

E. assist the Committee in its analysis of and negotiations with
     the Debtors or any third party concerning matters related
     to, among other things, the assumption or rejection of
     certain leases of non-residential real property and
     executory contracts, asset dispositions, financing of other
     transactions and the terms of a plan of reorganization for
     the Debtors;

F. assist and advise the Committee as to its communications to
     the general creditor body regarding significant matters in
     these Cases;

G. represent the Committee at all hearings and other
     proceedings;

H. review and analyze all applications, orders, statements of
     operations and schedules filed with the Court and advise the
     Committee as to their propriety;

I. assist the Committee in preparing pleadings and applications
     as may be necessary in furtherance of the Committee's
     interests and objectives; and,

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

Mr. Prusak believes that Akin Gump possesses extensive knowledge
and expertise in the areas of law relevant to these Cases, and
that the firm is well qualified to represent the Committee. In
selecting attorneys, they sought counsel with considerable
experience in representing unsecured creditors' committees in
Chapter 11 reorganization cases and other debt restructurings.
This firm has such experience.

Subject to the Court's approval, Akin Gump charges for its legal
services on an hourly basis in accordance with its ordinary and
customary hourly rates. The current hourly rates charged by the
firm for professionals and paraprofessionals employed in its
offices are:

              Billing Category               Range
        -----------------------------      ---------
                  Partners                 $400-$700
         Special Counsel and Counsel       $285-$600
                 Associates                $185-$430
              Paraprofessionals            $ 55-$165

The firm's professionals expected to have primary responsibility
for providing services to the Committee and their hourly rates
are:

           Professionals       Position        Rate
        -------------------   ----------     ---------
        Lisa G. Beckerman      Partner        $550/hr
        H. Rey Stroube, III    Partner        $550/hr
        Henry J. Kaim          Partner        $500/hr

In addition, Mr. Prusak proposes that all legal fees and related
costs and expenses incurred by the Committee on account of
services by Akin Gump in these cases be paid as administrative
expenses of the estates.

Lisa G. Beckerman, Partner of the law firm Akin, Gump, Strauss,
Hauer & Feld, LLP, indicates that the firm has rendered services
to the Debtors and potential parties in interests in matters
unrelated to these Chapter 11 proceedings, including:

A. Debtors and Nondebtor affiliates: Kaiser Aluminum;

B. Major Business Affiliations of the Debtors' Current Officers
     and Affiliates: Flowserve Corp., Ocean Energy, Inc., Reliant
     Energy Inc., Temple Inland, MAXXAM, Inc., New Jersey
     Resources Corp.;

C. Majority Shareholders and their Affiliates and Professionals:
     MAXXAM, Inc.;

D. Minority Shareholders Holding 5% or More of Voting
     Securities: Capital Group Internat'l, Inc., and certain
     affiliates and subsidiaries;

E. Debtors' Professionals: Arthur Andersen, Lazard Freres & Co.,
     Jones Day, Kramer Levin, Resources Connections, Richards
     Layton & Finger, Seyfarth Shaw;

F. Indenture Trustees and Other Significant Parties in the
     Debtors Major Debt Issuances: JP Morgan Chase, Bank One
     Trust, State Street Bank and Trust Company and certain
     affiliates and subsidiaries;

G. Parties to Collective Bargaining Agreements: International
     Brotherhood of Teamsters, Local 986, International Union of
     Operating Engineers, Engineer Local 39;

H. Debtors' Material Lenders: The CIT Group and certain
     affiliates and subsidiaries, Bank of America and certain
     affiliates and subsidiaries;

I. Proposed Lenders and their Professionals: Bank of America,
     Latham & Watkins and certain affiliates and subsidiaries;

J. Material Holders of the Debtors' Debenture and their
     Professionals: Bank of Hawaii, Bakers Trust Company,
     Citibank, NA, Credit Suisse Asset Management, Dexia BIL-BSTN
     Internat'l, Farrallon Capital Management, Fidelity Advisors,
     Illinois Annuity Insurance Co., Legg Mason High Yield Fund,
     Merrill Lynch, Morgan Stanley, Oppenheimer, Prudential
     Insurance, Smith Barney, SunAmerica, The Liberty Funds,
     Abbot Lab Annuity Retirement Fund, Alliance Capital
     Management, HSBC Bank, IBM Pension Fund, Offit Bank, RBC
     Dominion Securities, State Street Global Advisors, Whitney
     Nat'l Bank;

K. Parties With Significant Contracts: The Boeing Companies,
     Coral Energy Resources, Kinder Morgan, Cytec Industries,
     Occidental Chemical Corp.;

L. Parties To Material Litigation With The Debtors: AXA
     Corporate Solutions, Southwire Company, The Boeing Company,
     Vought Aircraft Industries And Certain Affiliates And
     Subsidiaries;

M. Other Parties In Interest: Enron Metals, North American
     Energy, Reynolds Metals Corp.;

N. Debtors' Largest Unsecured Creditors And Material Trade
     Creditors: Bank One Trust, Bryan Cave, Coral Energy
     Resources LP, Foster Pepper & Shefelman, Kinder Morgan,
     Thelen Reid & Priest, American Power Company, Morgan Lewis
     & Bockius, State Street Bank And Trust Co.;

O. Proposed Committee Professionals: Houlihan Lokey Howard &
     Zukin;

P. Members Of The Creditors' Committee: Bank One Trust, Merrill
     Lynch, Pension Benefit Guaranty Corp., State Street Bank
     And Trust. (Kaiser Bankruptcy News, Issue No. 5; Bankruptcy
     Creditors' Service, Inc., 609/392-0900)


KMART CORP: Pushing for Joint Fee Review Committee Appointment
--------------------------------------------------------------
After consulting with the United States Trustee, the Unsecured
Creditors' Committee, and the Financial Institutions' Committee,
Kmart Corporation and its debtor-affiliates ask the Court to
establish a joint fee review committee in these cases.

The Debtors propose that the Fee Review Committee will:

     (i) review compensation and expense reimbursement requests,
         and

    (ii) establish a process that will assist the Debtors in
         budgeting for such anticipated fees.

The Debtors further suggest that the Fee Review Committee
consist of:

     (a) a representative of the Office of the United States
         Trustee for the Northern District of Illinois;

     (b) two representatives of the Debtors; and

     (c) one chairperson -- each, a "Committee Representative" --
         for each of the Official Unsecured Creditors' Committee
         and the Official Financial Institutions' Committee, as
         designated by each of such Committees.

Moreover, the Debtors recommend that these parties serve ex
officio, without voting rights, on the Fee Review Committee:

     (1) one representative of lead counsel to the Debtors; and

     (2) one representative of lead counsel to each of the
         Committees.

John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher &
Flom, in Chicago, Illinois, emphasizes that once the Court
approves the relief requested, the Fee Review Committee should
meet immediately to begin work to establish, among other things,
budgeting and monthly fee review protocols for these cases.
"The first report of the Fee Review Committee should include a
summary description of the protocols agreed to by the Fee Review
Committee," Mr. Butler asserts.

According to Mr. Butler, establishing the Fee Review Committee
will assist greatly in facilitating the compensation request and
expense reimbursement process by creating a framework within
which to address issues related to the submission of
applications for compensation and expense reimbursement.  "The
proposed Fee Review Committee will reduce costs by regulating
the professional fees incurred in these Chapter 11 cases and
streamlining the review of the multitude of fee applications
that will be filed by the professionals in these cases," Mr.
Butler explains.

In addition, Mr. Butler continues, the Fee Review Committee will
help the Debtors anticipate the professionals' fees to be
incurred during the remainder of these chapter 11 cases.  "This
will greatly assist the Debtors in budgeting for such
compensation and expense requests," Mr. Butler says. (Kmart
Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


LTV CORP: LTV Steel Products, LLC, Files Chapter 11 Petition
------------------------------------------------------------
LTV Steel Products, LLC, has brought a separate proceeding under
Chapter 11, joining the other LTV Debtors.  S. Todd Brown, Esq.,
at Jones Day Reavis & Pogue is counsel for this Debtor.  The
Petition and related information is averred to by Sheri H.
Edison, Assistant Secretary for the Debtor.

LTV Steel Products' Schedules reflect no interests in real
property, but the Debtor's interests in personal property are
valued at $29,699,284.  Against this, the Debtor lists
unsecured, nonpriority claims which it totals at $8,365,629.89.

This Debtor shows no cash on hand or on deposit, identifying
$29,699,284 in intercompany receivables consisting of $34,873
owed by Georgia Tubing Corporation of Independence, Ohio, and
$29,664,411 owed by LTV Steel Company of that same town and
state.

In its list of creditors, the Debtor includes the property
taxing agencies for the various states in which it has done
business, listing each obligation as contingent and unliquidated
in most.  The Debtor lists an obligation of $3,272,893.94 to the
Cuyahoga County Treasurer in Cleveland, Ohio, for property
taxes, saying that the obligation is contingent.  Other
creditors holding significant dollar claims are the Summit
County Treasurer of Akron, Ohio, for $272,686.02, the Trumbull
County Treasurer of Warren, Ohio for $102,032.62, and the Wood
County Treasurer of Bowling Green, Ohio, for $143,916.04.

All taxing agencies collecting sales tax are listed as holding
contingent and unliquidated obligations in unknown amounts.

The remainder of the creditors holding unsecured claims consist
of the balance of any taxing agencies, regulatory agencies, and
environmental agencies, all of which are listed as holding
contingent claims for $0 amounts.

This Debtor is not a party to any executory contracts or leases.

The Debtor identifies no income for the calendar year of 2001, a
negative income of $167,886,000 for the calendar year of 2000,
and a negative income of $155,488,000 for the calendar year of
1999.  No payments to any creditor are shown to have been made
in the 12 months preceding the Petition Date.

John Delmore of Independence, Ohio, is listed as the person who
kept or supervised the keeping of this Debtors' books and
records.

The case number for this proceeding is 02-40979. (LTV Bankruptcy
News, Issue No. 28; Bankruptcy Creditors' Service, Inc.,
609/392-00900)


LIFEPOINT HOSPITALS: S&P Revises BB- Rating Outlook to Positive
---------------------------------------------------------------
On April 10, 2002, Standard & Poor's revised its outlook on
LifePoint Hospitals Inc.'s 'BB-' corporate credit rating to
positive.

The speculative-grade ratings of the Brentwood, Tennessee-based
LifePoint reflect the company's strong positions in its small-
market locations, offset by its dependence for most of its cash
flow on about one-quarter of its hospitals.

LifePoint owns and operates 23 nonurban hospitals in eight
states. These facilities are located in the Southeast, mostly
concentrated in Kentucky and Tennessee. LifePoint typically has
the only hospital in the markets it serves. Aggressive physician
recruitment, and service additions and enhancements, are the
company's key growth strategies to address the significant
migration of local population to surrounding areas for certain
services. However, the company's revenue concentration in two
states leaves it vulnerable to legislative and economic changes
within these markets.

LifePoint Hospitals has been active in its efforts to improve
its credit protection measures. Proceeds of an equity offering
in 2001, were used to repay debt. Strong free cash flow, after
meeting all capital needs and funding all acquisition activity,
has allowed LifePoint to accumulate significant cash. The use of
this cash to repay high interest rate debt may further enhance
cash flow, and will reduce further its current lease-adjusted
debt to capitalization ratio of 35% as of December 31, 2001.
Ample liquidity is provided by a fully available $200 million
credit facility.

                           Outlook

Continued strong cash flow coupled with adherence to a modest,
well-disciplined acquisition policy without material use of
debt, could lead to an upgrade.


MEMC ELECTRONIC: Names Nabeel Gareeb to Replace von Horde as CEO
----------------------------------------------------------------
MEMC Electronic Materials, Inc. (NYSE: WFR) announced the
retirement of CEO, Klaus von Horde.

Simultaneously, the Company announced the appointment of Nabeel
Gareeb as MEMC's President and Chief Executive Officer,
replacing Mr. von Horde.

Mr. Gareeb joins MEMC from International Rectifier (NYSE: IRF),
El Segundo, California, a leading supplier of power
semiconductors and systems solutions. Mr. Gareeb joined
International Rectifier in 1992 and was most recently its Chief
Operating Officer. In this role, Mr. Gareeb was responsible for
worldwide operations, Research and Development, and Marketing of
the core products of the company. In addition, he was
responsible for administrative functions such as Human Resources
and Information Technology. Prior to assuming those duties, Mr.
Gareeb held other senior management positions at International
Rectifier.

"We are excited to have Nabeel Gareeb join our management team,"
commented John Marren, Chairman of MEMC. "Nabeel brings
outstanding industry, operational, and customer experience to
MEMC, and he will play a critical leadership role in the
continuing development and implementation of our long-term
business strategy. Nabeel understands the tremendous opportunity
MEMC has as we emerge from the industry's downturn."

"We want to thank Klaus von Horde for his dedication to MEMC
over the past several years. Klaus guided the Company through a
difficult market environment, and he was a key figure in last
year's operational restructuring. We appreciate his leadership
and efforts through that important process," concluded Marren.

"I am excited about MEMC's future," commented Mr. Gareeb. "I
look forward to bringing the customer's perspective to MEMC, a
pioneer in the silicon wafer industry. This perspective will be
extremely valuable in shaping and executing the long-term
strategy for the benefit of MEMC's customers, stockholders, and
employees."

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.

As previously reported, MEMC Electronic Materials had, at
December 31, 2001, a total shareholders' equity deficit of about
$20 million.


MAGELLAN HEALTH: S&P Affirms B+ Counterparty Credit Rating
----------------------------------------------------------
Standard & Poor's said it revised its outlook on Magellan Health
Services Inc. to negative because the results of Magellan's
continuing operations in behavioral health managed care, now its
sole business, were considerably weaker in the six months ended
Dec. 31, 2001, than in the past several years.

At same time, Standard & Poor's said that it affirmed its
single-'B'-plus counterparty credit rating on Magellan.

"Magellan's near-term prospects for a return to the robust
operating results it had experienced in the past are poor," said
Standard & Poor's credit analyst Charles Titterton. Business
conditions have recently squeezed margins, particularly in
employee assistance programs. In addition, the significant loss
of covered individuals at Magellan's largest customer, Aetna
Inc., will affect revenue in the quarter ended March 31, 2002.

Magellan's leverage continues to improve slowly. Nevertheless,
in December 2001, management needed to obtain an amendment from
its bank group to a covenant in its credit agreement that called
for a decline in a key leverage ratio. Standard & Poor's
believes that if the current run rate of operating results does
not improve, Magellan might have to seek another amendment of
this covenant.

Ongoing concerns remain, including extremely high leverage,
contingencies arising from discontinued operations and a
concentration of business in two large customers that account
for more than 30% of revenue.

If results in the quarter ended March 31, 2002, adjusted for
normal seasonality, decline from those posted for the fourth
quarter of 2001, the ratings might be lowered, possibly by a
notch. On the other hand, Standard & Poor's could affirm the
ratings if Magellan can show operating income commensurate with
that recorded for the December quarter and can demonstrate that
it is on a path to profitability commensurate with historical
profitability levels from continuing operations.

Magellan remains by far the largest provider of behavioral
health managed care in the country and has generally maintained
its market share in the face of heavy competition. Although it
has faced complaints from covered individuals and health care
providers about control of provider networks, it appears to have
maintained a generally good reputation among the wide range of
companies and insurers that are its clients.

DebtTraders reports that Magellan Health Services' 9.375% bonds
due 2007 (MGL1A) are quoted at a price of 79. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=MGL1Afor
real-time bond pricing.


MARINER POST-ACUTE: LCT Has Until May 15 to Decide on Leases
------------------------------------------------------------
As successors-in-interest, Living Centers of Texas, Inc. (LCT)
leases from the lessor, Mokla Associates, a skilled nursing
facility commonly referred to as the Lindsay Care Center, which
is located at Highway 19 West, Lindsay, Oklahoma 73052, and
subleases it to Amity Health Care Corp.

Pursuant to the Court's 365(d)(4) order, the period within which
LCT has the right to assume or reject the Master Lease and
Sublease was extended to and including the earlier of (i) the
effective date of the Plan and (ii) May 15, 2002.

On or about February 8, 2002, LCT sent to Mokia (leasor) and
Amity (sublessee) Lease Notices stating its intention to reject
the Master Lease and assume and assign the Sublease to Mokia.

LCT, Mokia, and Amity have agreed to enter into a Stipulation
which provides for an extension of LCT's time to assume or
reject the Master Lease and Sublease, so that the parties can
attempt to negotiate a settlement pertaining to the Debtors'
disposition of the Master Lease and the Sublease.

The parties stipulate and agree that the period within which the
Debtors may assume, assume and assign, or reject the Master
Lease and the Sublease is extended to and including April 30,
2002, notwithstanding any provision in the Plan or the 365(d)(4)
Order to the contrary. Accordingly, the Lease Notices are
withdrawn and shall have no further force or effect. (Mariner
Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service,
Inc., 609/392-0900)


MCLEODUSA INC: Obtains Open-Ended Lease Decision Time Extension
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware extends
the time within which McLeodUSA Inc. will assume or reject
unexpired leases of nonresidential real property through the
effective date of its Plan of Reorganization.

DebtTraders reports that McLeodusa Inc.'s 11.375% bonds due 2009
(MCLD2) are quoted at a price of 25.25. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=MCLD2for
real-time bond pricing.


MICRO WAREHOUSE: S&P Withdraws Ratings Due to Insufficient Info
---------------------------------------------------------------
The ratings on Norwalk, Connecticut-based Micro Warehouse Inc.,
a direct marketer of computer products, were withdrawn on April
10, 2002. The withdrawal was based on insufficient information
from the company to maintain the rating.

The previous ratings had been downgraded and left on CreditWatch
on December 21, 2001, due to deteriorating operating
performance, weakening credit protection measures, and limited
financial flexibility.


MRS. FIELDS: S&P Drops Credit Rating to B Over Weak Performance
---------------------------------------------------------------
The corporate credit rating on Mrs. Fields Original Cookies Inc.
was lowered to 'B' on April 9, 2002. Rating outlook is negative.

The downgrade was based on the company's limited liquidity and
weakened credit measures caused by declining operating
performance. Operating performance has been negatively affected
by the general economic downturn, which was exacerbated by the
events of September 11, 2001, which led to a decrease in mall
traffic. Most of the Mrs. Fields' stores are located in shopping
malls.

The company's EBITDA fell 19.6% to $23.6 million in 2001 as
comparable-store sales decreased 3.6% and operating margins
declined to 30.4% from 34.8% in 2000. As a result, credit
measures weakened and leverage increased, with EBITDA coverage
of interest at only 1.5 times and total debt to EBITDA at 5.7x
for the 12 months ended December 29, 2001. Moreover, the company
has a $7 million interest payment due in June 2002 and, as of
December 29, 2001, had only $3.6 million in cash and $5.0
million available on a $10 million revolving credit facility.
Although the company has renewed its revolving credit facility
through March 31, 2003, the facility reduces in stages from the
current $10 million limit to a $4 million limit in February
2003, requiring it to be replaced.

Salt Lake City, Utah-based Mrs. Fields operates 453 stores and
franchises 981 stores in the U.S. and several other countries.
Stores sell freshly baked cookies, brownies, pretzels, and other
food products through six specialty retail chains.

                            Outlook

The outlook reflects Standard & Poor's expectation that, in the
current economic environment, Mrs. Fields will be challenged to
stem its sales decline. If the company's liquidity position
deteriorates or if credit measures continue to weaken, the
ratings could be lowered.


NATIONAL STEEL: Retains Williams & Connolly for Bribery Work
------------------------------------------------------------
National Steel Corporation, and its debtor-affiliates sought and
obtained the Court's authority to employ and retain Williams &
Connolly, including David M. Zinn, Esq., as special counsel
regarding pending and potential litigation matters, nunc pro
tunc to the Petition Date.

Mark P. Naughton, Esq., at Piper Marbury Rudnick & Wolfe, in
Chicago, Illinois, explains that Williams & Connolly has
represented the Debtors for two years with respect to numerous
pending and potential litigation matters arising from an alleged
bribery scheme perpetrated against the Debtors by certain former
employees and vendors.  "This litigation has already resulted in
one substantial recovery for the Debtors amounting to $3,400,000
and a default judgment against other parties in the amount of
$36,421,402," Mr. Naughton says.  The Debtors request that
Williams & Connolly continue on representing them since the firm
is already familiar with the issues involved.  Williams &
Connolly has considerable experience in handling these matters
and is already familiar with the Debtors' business operations.

David M. Zinn, a partner of Williams & Connolly, relates that as
of the Petition Date, the firm has accrued but not yet billed
the Debtors approximately $43,000 in fees and other expenses.
The Debtors will compensate the firm at its standard hourly
rates:

     Paul Martin Wolff                      $550
     David M. Zinn                          $350
     Paul Hourihan                          $300
     Matthew Amatruda                       $270
     Heidi Murdy                            $215

According to Mr. Zinn, Williams & Connolly is willing to
continue working on the matters on behalf of the Debtors.  Mr.
Zinn asserts that the firm holds no interest adverse to the
Debtors or their estates nor do they have any connection with
the Debtors or any parties in interests with respect to the
matters on which they are required to serve as special counsel.
(National Steel Bankruptcy News, Issue No. 4; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


NATIONSRENT INC: Can't Make Form 10-K Filing on Due Date
--------------------------------------------------------
As reported on a current report filed on December 20, 2001,
NationsRent, Inc. and its subsidiaries  filed voluntary
petitions under Chapter 11 of Title 11 of the United States Code
with the United States Bankruptcy Court for the District of
Delaware in Wilmington, Delaware on December 17, 2001.
The petitions have been jointly designated as Case No. 01-11628
(PJW). The Debtors continue to operate their business and manage
their properties as debtors-in-possession pursuant to sections
1107 and 1108 of the Bankruptcy Code.

Since the date the Debtors filed their Chapter 11 petitions, the
Debtors' accounting and financial staff, who are integral to the
preparation of NationsRent's periodic reports to be filed
pursuant to the Securities Exchange Act of 1934, as amended,
have been primarily engaged in dealing with bankruptcy related
matters and, together with NationsRent's advisors, formulating a
detailed business plan which will form the basis of a
reorganization plan. The development and implementation of the
reorganization plan includes, among other burdens, the
administration of the Chapter 11 cases; preparing detailed
financial budgets and projections; formulating and preparing
disclosure materials required by the Bankruptcy Court, including
Monthly Operating Reports; reconciling and resolving proofs of
claim; analyzing accounts payable and receivable; assembling
data for the valuation and schedule of the Debtors' assets and
liabilities and statement of financial affairs to be filed with
the Bankruptcy Court; and seeking debtor-in-possession
financing. In addition, the Debtors' application for retention
of their independent auditor has not yet been approved by the
Bankruptcy Court. As a result of the foregoing, NationsRent's
financial statements for the year ended December 31, 2001 have
not been completed or audited. In light of the significant
resources and time dedicated by NationsRent's accounting and
financial staff to matters related to the Chapter 11 petitions,
and the requirement that the retention of the Debtors'
independent auditor be approved by the Bankruptcy Court prior to
the completion and audit of NationsRent's financial statements,
NationsRent has been unable to prepare its annual report on Form
10-K for the year ended December 31, 2001.  NationsRent intends
to file its annual report on Form 10-K as soon as its financial
statements have been prepared and audited. In addition,
NationsRent has and will continue to file its Monthly Operating
Reports as required by the Bankruptcy Court.

NationsRent expects that the results of operations for the year
ended December 31, 2001 will show a significant decline in its
net income from prior year amounts. NationsRent is unable to
make a reasonable estimate of the results at this time because
it is completing its analysis of the appropriate charges to be
reflected in its results of operations for the year ended
December 31, 2001 as a result of filing for bankruptcy
protection and other matters discussed above. However,
NationsRent has determined that there has been an impairment of
its intangible assets related to acquired businesses as a result
of filing for bankruptcy protection and related matters.
NationsRent expects to write-off such intangible assets related
to acquired businesses at December 31, 2001. The balance of
intangible assets related to acquired businesses was
$770,824,000 at September 30, 2001.

DebtTraders reports that NationsRent Inc.'s 10.375% bonds due
2008 (NATRENT) are quoted at a price of 1. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NATRENTfor
real-time bond pricing.


NET2000: Delaware Court Fixes July 1, 2002 as General Bar Date
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware fixes
July 1, 2002 as the General Bar Date by which creditors of
Net2000 Communications Inc. and its debtor-affiliates must file
proofs of claim or be forever barred from asserting that claim.

The Court rules that each person or entity that wishes to assert
a claim against the Debtors that arose before the Petition Date,
shall file a written proof of that claim and must be received on
or before 4:00 p.m. of the Claims Bar date by:

           Bankruptcy Services, LLC
           Attention: Net2000 Communications Claims
                      Processing Department
           70 E. 55th Street, 6th Floor
           New York, NY 10022
           Telephone: (212) 376-8494

Proofs of claim are not required to be filed on account of:

      a) claims that are already properly filed with the Court or
         the Altman Group;

      b) claims not listed as "disputed," "contingent" or
         "unliquidated" in the Schedules; and who agrees with the
         nature, classification and amount of such claim set
         forth in the Schedules;

      c) claims or interest previously has been allowed by, or
         paid pursuant to, an order of this Court; and

      d) claims of one Debtor against another.

Any entity holding a rejection damages claim shall be required
to file a proof of claim no later than the earlier of the
General Bar Date or 30 days after the entry of the applicable
Rejection Order.

Net2000 Communications, Inc., providers of state-of-the-art
broadband telecommunications services to high-end customers,
filed for chapter 11 protection on November 16, 2001. Michael G.
Wilson, Esq. at Morris, Nichols, Arsht & Tunnell represents the
Debtors in their restructuring effort. When the Company filed
for protection from its creditors, it listed $256,786,000 in
assets and $170,588,000 in debts.


NORTEL NETWORKS: Amends & Extends Revolver to April 7, 2003
-----------------------------------------------------------
Nortel Networks (NYSE:NT) (TSE:NT.) announced that the company,
in cooperation with its bankers, has successfully completed the
amendment and extension of its April 2001 revolving bank credit
facility for an additional 364 days.

The company and the 27 banks in the global syndicate all had to
agree to the extension and amendment before it could become
effective. Tuesday, the company announced that it had delivered
a notice to fully draw down the US$1.75 billion April 2001
facility, and planned to exercise its one year term loan option,
as the facility was due to expire and unanimous agreement had
not been reached. Frank Dunn, president and chief executive
officer, Nortel Networks, explained that, by this action, the
company was taking advantage of the favorable terms in its
current facilities rather than see this source of liquidity
eliminated.

Noting that Nortel Networks has no immediate need for the funds,
Dunn said, "The amended agreement is the arrangement we've all
been working towards and I am pleased that the company and its
bankers were able to come to an agreement. We believe that our
strong cash balance and undrawn bank facilities continue to
provide Nortel Networks with ample liquidity."

As announced Tuesday, Nortel Networks expects to report a cash
balance at March 31, 2002 of approximately US$3.0 billion, which
includes approximately US$500 million in tax recoveries received
during the first quarter. An additional amount of approximately
US$700 million was received in early April, representing the tax
recovery related to a recent change in tax legislation in the
United States.

The amendment extends the term of the revolving facility to
April 7, 2003 and reduces the size of the facility by US$575
million to US$1.175 billion. The amended facility maintains the
financial covenant(a) in the April 2001 facility, and includes
higher pricing reflecting the current credit and bank
environment. Following the planned repayment of the drawn amount
Wednesday, the full amount of the amended revolving facility
remains committed and available. Together, the amended credit
facility and Nortel Networks other existing credit agreements
entered into in December 2001 and April 2000, provide the
company with significant sources of liquidity.

Nortel Networks is an industry leader and innovator focused on
transforming how the world communicates and exchanges
information. The company is supplying its service provider and
enterprise customers with communications technology and
infrastructure to enable value-added IP data, voice and
multimedia services spanning Metro and Enterprise Networks,
Wireless Networks and Optical Long Haul Networks. As a global
company, Nortel Networks does business in more than 150
countries. More information about Nortel Networks can be found
on the Web at http://www.nortelnetworks.com

DebtTraders reports that Nortel Networks Ltd.'s 6.125% bonds due
2006 (NT06CAN1) are trading between 74.5 and 75.5. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NT06CAN1for
real-time bond pricing.


NORTEL NETWORKS: S&P Cuts Lease P/T Certificates Rating to BB-
--------------------------------------------------------------
Standard & Poor's lowered its rating on Nortel Networks Lease
Pass-Through Trust's pass-through trust certificates series
2001-1 to double-'B'-minus from triple-'B'-minus. The outlook
remains Negative. The rating on the trust is dependent upon
Nortel Networks Ltd.'s (Nortel) corporate credit rating, which
was lowered to double-'B'-minus from triple-'B'-minus on April
9, 2002.

The lowered rating on the pass-through trust certificates
reflects security interests in five single-tenant, office/R&D
buildings leased to Nortel. Nortel guarantees the payment and
performance of all obligations of the tenant under the leases.
In October 2001, the rating was lowered to triple-'B'-minus from
triple-'B'.


OPTI INC: Will Distribute Tripath Equity Stake to Shareholders
--------------------------------------------------------------
OPTi Inc. (Nasdaq:OPTI) announced that its Board of Directors
has declared a distribution of its holdings of shares of common
stock in Tripath Technology Inc. (Nasdaq:TRPH) to its
shareholders. OPTi currently holds 1,992,112 shares of Tripath
common stock. OPTi will distribute a dividend of 0.1666 shares
of Tripath stock on each share of the Company's common stock.

The record date for the dividend will be April 24, 2002 and the
dividend distribution date will be May 30, 2002. The ex-dividend
date will be set by the Nasdaq National Market in accordance
with Nasdaq marketplace rules. Nasdaq will post its
determination of the ex-dividend date on its Dividend Daily List
Index once that determination is made. Shareholders who wish to
trade their shares of OPTi prior to the dividend distribution
are advised to consult their brokers or other marketplace
professionals for more information regarding the ex-dividend
date.

The Board made the determination to provide the dividend based
upon the Company's current cash and asset position. The Company
believes that cash and assets remaining after distribution of
the dividend will be sufficient to satisfy the Company's working
capital, liabilities and other cash requirements while the
Company continues to review its previously announced proposed
plan of liquidation. The Board believes that the distribution is
in the best interests of the shareholders.


PACIFIC GAS: Files Modified 2nd Amended Plan & Discl. Statement
---------------------------------------------------------------
Pursuant to the Court's directions made at the March 26 hearing
on the Disclosure Statement, Pacific Gas and Electric Company
and PG&E Corp. have filed the modified Second Amended Disclosure
Statement for their Second Amended Plan of Reorganization,
incorporating modifications through April 3, 2002.  This version
of the Disclosure Statement is not significantly different from
the previous version, filed on March 7, 2002.  Amendments have
been made to resolve many disclosure-related objections.  and to
reflect progress made in the chapter 11 case.

                           Preemption

* Interpretation of February 7 Decision

In the face of criticism by the State and the CPUC that in the
previous version, the Proponents have rewritten the Memorandum
Decision issued by the Court on February 7, 2002, the Proponents
have made, in this version, certain insertions and amendments to
their summary of their interpretation of the February 7
Decision.

As in the March 7 version, the Proponents note that in the
February 7 Decision, the Bankruptcy Court declined to approve
the December 19, 2001 Disclosure Statement filed by the
Proponents because the Bankruptcy Court rejected the Proponents'
contentions regarding express preemption of state law by Section
1123 of the Bankruptcy Code. The Bankruptcy Court nonetheless
held that "the Plan could be confirmed if Proponents are able to
establish with particularity the requisite elements of implied
preemption," the Proponents note.

As in the previous version, this version says,

   "the Bankruptcy Court stated that it 'believes the Plan could
    be confirmed if Proponents are able to establish with
    particularity the requisite elements of implied preemption,'
    and further stated that 'if the Disclosure Statement is
    amended consistent with the February 7 Decision, the court
    will approve it and let the Proponents test preemption at
    confirmation.' Thus, while the Bankruptcy Court did not
    accept the Proponent's argument that federal law expressly
    preempts state law for all purposes under the Plan, the
    February 7 Decision does provide that preemption is possible
    upon a proper showing."

The following additions (in {}) have been made:

-- {The Court stated that Proponents must show facts that lead
    the Court to find that the "application of those laws to the
    facts of PG&E's proposed reorganization are economic in
    nature rather than directed at protecting public safety or
    other noneconomic concerns, and that those particular laws
    stand as an obstacle to the accomplishment and execution of
    the purposes and objectives of Congress and the Bankruptcy
    Code."}

-- {While rejecting Proponents' express preemption argument, the
    Court also stated that ". . . the court agrees that}
    restructuring {generally} is a proper purpose of chapter 11
    and {that} the Bankruptcy Code would seem to indicate at
    least some preemptive intent in favor of restructuring, which
    would preempt a state regulator's absolute veto power over
    bankruptcy restructuring".

* Implied Preemption

(1) The following sentences have been added (See prior entries
     at [00313] DISCLOSURE OBJECTION -- Calif., Ex Rel., DTSC, Et
     Al. And [00314] DISCLOSURE OBJECTION -- Calif. Public
     Utilities Commission, and in particular [00313], I2.):

    {The following discussion summarizes the showing that
    Proponents intend to make in support of their request that
    certain state laws will be impliedly preempted upon approval
    of the Plan. Other parties, including the CPUC and the State,
    dispute the accuracy and completeness of these statements,
    Proponents' interpretation of the February 7 Decision, and
    the showing Proponents intend to make in support of implied
    preemption. However, the CPUC and the State agree that
    whether or not the particular state laws are impliedly
    preempted will be determined by the Bankruptcy Court at the
    Confirmation Hearing.}

(2) The Proponents hold on to their position that the
    disaggregation accomplished by the Internal Restructurings
    and the Reorganized Debtor Spin-Off will enable the
    disaggregated entities to borrow approximately $2 billion
    more than if such businesses were to remain under CPUC
    jurisdiction. In response to CPUC's comment that it is
    unclear as to what is meant by "indirect" jurisdiction, the
    Proponents have deleted the phrase "(direct or indirect)" put
    in brackets after the word "jurisdiction.

(3) The previous version of the Disclosure Statement says: "The
    CPUC has not changed its regulatory policies regarding
    recovery of procurement and other utility costs since the
    Petition Date to provide assurance to the capital markets
    that the Debtor will be regulated in a manner which would
    return it to an investment grade credit standing." In its
    objection, the CPUC points out that this is a statement of
    opinion and not fact. In this modified version of the
    Disclosure Statement, the phrase "Proponents will demonstrate
    that" has been added at the beginning of the statement.

(4) Challenged by the CPUC of the validity of the discussion,
    the Proponents have deleted the following sentences regarding
    the Term Sheet filed by the CPUC: "In contrast, the CPUC in
    its proposed term sheet has not proposed any structural
    regulatory reforms to sustain the economic viability of the
    Debtor under continued CPUC regulation, but instead has
    proposed that the Debtor's retail rate revenues be
    intentionally held below even minimal cost of service
    ratemaking levels for a period of time in order to pay past
    debts."

(5) The modified Second Amended Disclosure Statement says: "Nor
    may the CPUC under state or federal law confiscate property
    {without just compensation} by forcing the Debtor or
    Reorganized Debtor to operate at a financial loss or to
    accept assignment of contracts from third parties, such as
    above-market power purchase contracts between the DWR and
    wholesale power suppliers." At the suggestion of the CPUC,
    the phrase "without just compensation" has been inserted.

(6) The modified Second Amended Disclosure Statement provides
    that, "in the case of safety regulation of the Debtor's
    natural gas transmission and storage system, the substantive
    standards established by the Department of Transportation
    (the "US DOT") under the federal Pipeline Safety Act will
    continue unchanged, whether implemented directly by the US
    DOT or by the CPUC delegation from the US DOT."

    The version before modification says: "...the substantive
    standards established by the Department of Transportation
    under the federal Pipeline Safety Act will continue
    unchanged, even though the CPUC will no longer administer
    that program under its current delegation from the Secretary
    of Transportation; rather, this authority will be exercised
    directly by the Department of Transportation."

(7) According to the modified version of the Disclosure
    Statement, "the Proponents intend to follow the established
    procedures for the transfer or reissuance of permits and
    licenses under state and federal law." The phrase "federal
    law" has been added. Moreover, in response to the comment by
    the State, the Proponents simply say "permits and licenses"
    instead of "most permits and licenses"

    The modified version also specifies: "Proponents do not seek
    to impliedly preempt such state law or override such federal
    law."

(8) With the phrase "including under CEQA to the extent
    applicable" inserted, the modified Disclosure Statement says:
    "Following the Effective Date, state subdivisions and
    agencies will continue to have jurisdiction to regulate the
    Reorganized Debtor, ETrans, GTrans and Gen on an ongoing
    basis as provided by state law, {including under CEQA to the
    extent applicable,} consistent with ordinary constitutional
    principles (e.g., that under the Supremacy Clause of the
    United States Constitution, the FERC has exclusive
    jurisdiction over the rates, terms and conditions of
    interstate electric and gas transmission service
    and sales of power for resale in interstate commerce)."

(9) A footnote says: "The referenced CPUC decisions indirectly
    restrict and impose obligations on the utility holding
    companies through the CPUC's direct jurisdiction over the
    utilities and their transactions with their parent companies.
    To the extent it is determined that the CPUC decisions
    lawfully assert direct jurisdiction over the holding
    companies, Proponents will demonstrate that implied
    preemption of such jurisdiction is necessary to effectuate
    the transaction required by the Plan."

                       Sovereign Immunity

The Proponents add this paragraph to address sovereign immunity
issues:

   "As an initial matter, the Proponents believe that the CPUC,
    the Office of the California Attorney General ("AG"), and
    each agency of the State on whose behalf the AG has appeared
    in this case have waived sovereign immunity. In addition, the
    Proponents also preserve the argument, which they expect to
    assert with greater specificity at the Confirmation Hearing,
    that the State and all State agencies have waived sovereign
    immunity based upon (a) the aggregate effect of the acts by
    the CPUC, the AG, and various agencies, which have
    constituted a pervasive waiver of sovereign immunity for
    those agencies, and, effectively, for all agencies and for
    the State in general, and (b) the argument that the "non-
    unitary" government analysis advocated by the CPUC, the AG
    and others does not require Proponents demonstrate that each
    agency has waived its sovereign immunity based upon the
    particular facts of its involvement in the Chapter 11 Case."

              Restructuring Of The Generation Business

As described in the previous version of the Disclosure
Statement, on or before the Effective Date, the majority of the
assets associated with the Debtor's current generation business
will be transferred to Gen and its subsidiaries or affiliates
and Gen will operate as a separate electricity generation
company thereafter. Gen and its subsidiaries will operate and
manage the generation facilities (with the exception of two
small non-FERC hydroelectric facilities) and associated lands in
accordance with FERC and NRC operating license conditions, all
applicable local, state and federal environmental laws and
regulations, and consistent with sound environmental stewardship
policies.

This version of the Disclosure Statement specifies: "Gen and its
subsidiaries will operate and manage its hydroelectric
generation facilities consistent with a commitment to continued
collaborative negotiations with stakeholders related to the
relicensing of these facilities."

A footnote says, "proponents note that prior predictions of
adverse environmental impacts associated with the transfer of
Debtor's hydroelectric generation facilities were based on the
assumption that new owners of the projects would significantly
change operations to maximize revenues and that, for the same
reason, new owners of the non-project lands owned by Debtor in
the affected watersheds would launch a massive commercial
development program as to such lands unfettered by environmental
and land use restrictions. That assumption, however, is
inapplicable here. Under the power sales agreement (PSA) between
Gen and Reorganized Debtor, dispatch rights will be governed by
operating procedures, which, inter alia, will reflect operating
practices in effect as of the effective date of the PSA and all
legally binding obligations such as license conditions. Further,
the Reorganized Debtor will by using the output it receives
under the PSA for the same purpose as Debtor does today: to best
meet the load requirements of its retail customers. Also, Gen
has no incentive to increase revenue by increasing output during
the term of the PSA. The PSA rewards Gen for availability-most
of its revenue under the PSA is based on capacity and is not
dependent on energy. In any event, Gen has no discretion to
increase output during the term of the PSA because dispatch is
reserved to the Reorganized Debtor. Thus, for approximately
twelve years, there will be no significant changes in project
operations."

             Capitalization; Assets and Liabilities

Gen is a California limited liability company with Newco as its
sole member. The Debtor is the sole shareholder of Newco. On or
before the Effective Date, the Gen Assets will be transferred to
Gen and its subsidiaries. Gen will transfer to the Debtor an
estimated $850 million in cash resulting from the issuance of
New Money Notes (such cash to be placed in a segregated account
and drawn upon proportionately, together with the cash
transferred to the Debtor by ETrans and GTrans, as the first
source of cash payments to holders of Allowed Claims),
approximately $1.25 billion in Long-Term Notes and $300 million
in QUIDS Notes.

The amount of Cash to be paid by Gen to the Debtor will be
reduced by the amount necessary to fund Gen's near term working
capital requirements. Further, the amounts of Gen Long-Term
Notes and QUIDS Notes are each subject to reduction in the
amounts equal to the Cash to be paid by the Debtor in lieu of
fractional Gen Long-Term Notes and QUIDS Notes, respectively. In
addition, the amount of Gen Long-Term notes is further subject
to reduction by Gen's proportionate share of Excess Cash used to
satisfy Claims. In contrast, if the estimated aggregate amount
of Allowed Claims at the Effective Date is greater than the
estimated aggregate amount of Allowed Claims, which was used to
determine the aggregate amount of Long-Term Notes, additional
Gen Long-Term Notes will be issued and the amount of Gen New
Money Notes (and Cash to be paid by Gen to the Debtor will be
reduced by an approximately equal amount.

                       Sale of Gen Output

Pursuant to the Plan, Gen and the Reorganized Debtor will enter
into a power sales agreement whereby the Reorganized Debtor will
purchase the output generated by Gen's facilities and produced
under its power purchase agreements.

         Land Associated with the Hydroelectric Business

The Debtor owns approximately 132,000 acres of land that
historically have been associated with hydroelectric generating
facilities. Approximately 60% (or roughly 78,000 acres) of these
lands will be retained or ultimately owned by the Reorganized
Debtor, provided that the parcel boundaries are adjusted as
described below. These lands are comprised of numerous legal
parcels. Certain of these legal parcels contain the Debtor's
hydroelectric operational facilities (such as generators and
reservoirs) or linear project operational facilities (such as
canals and flumes) that are defined by FERC-licensed project
boundaries. Other parcels contain facilities such as
headquarters that support operations.

The Reorganized Debtor will retain title to parcels of land
surrounding Gen's hydroelectric facilities that are completely
outside the FERC boundaries and on which no operational
facilities, assets, or rights are located (currently estimated
to be approximately 30,000 to 36,000 acres). All other legal
parcels wholly or partially encumbered by FERC-licensed project
boundaries will be transferred to Gen on the Effective Date. On
those legal parcels that contain both FERC-licensed operational
facilities and land outside the FERC boundaries, Gen will apply
for a lot line adjustment, subdivision approval or other
regulatory approval necessary to adjust the parcel boundaries to
conform, to the degree feasible, to the FERC-licensed project
boundaries or the location of such operational facilities,
assets or rights. In any event, Gen must retain rights necessary
for the continued operations of its hydroelectric business. Upon
such parcel boundary adjustment, which will not take place until
after the Effective Date, Gen (or its affiliates or
subsidiaries) will reconvey to the Reorganized Debtor any such
land outside such adjusted parcel boundary. Any land retained by
or reconveyed to the Reorganized Debtor will be subject to
easements, leases or other interests for use in connection with
the ongoing operations of Gen, ETrans and, GTrans and Gen as
contemplated under the Plan.

In this modified Disclosure Statement, the Proponents specify
that "Before the Confirming Hearing, Proponents will document
the proposed status of each affected parcel. The parcels of land
retained by or reconveyed to Reorganized Debtor may or may not
be considered used and useful for public utility purposes and
therefore may or may not be sold or transferred without review
by the CPUC under Public Utilities Code Section 851.

                 Statement of Proponents' Intentions

As previously reported, the Proponents stated their intention to
seek an expedited interlocutory appeal of an order denying
approval of the Disclosure Statement on the grounds that the
Bankruptcy Court erred in the February 7 Decision finding that
express preemption is not applicable to the Plan. The CPUC and
the City and County of San Francisco (CCSF) (joined by the
State) argued against this position.

The modified Second Amended Disclosure Statement advises that,
on March 18, 2002, the Bankruptcy Court entered its Order and
Judgment Disapproving Disclosure Statement; Rule 54(b)
Certification, pursuant to Rules 54(b) and 58 of the Federal
Rules of Civil Procedure and Rules 7054, 9014 and 9021 of the
Federal Rules of Bankruptcy Procedure. In it, the Bankruptcy
Court disapproved the First Amended Disclosure Statement for the
reasons set forth in its February 7, 2002 Memorandum Decision,
found that there was no just reason to delay review of its
ruling on express preemption but that the other issues addressed
in its February 7, 2002 Memorandum Decision remained subject to
further litigation and thus were reserved for final rulings in
connection with the plan confirmation process. The Court
directed the clerk to enter the March 18 Order as a final
judgment pursuant to Rule 54(b) of the Federal Rules of Civil
Procedure.

On March 22, 2002, the Proponents filed a Notice of Appeal from
the March 18 Order and an election to have the appeal heard by
the United States District Court, and at the same time filed a
protective motion requesting leave to appeal that order on a
discretionary basis under 28 U.S.C. Section 158(a)(3).

On or about March 29, 2002, the CPUC and the City and County of
San Francisco served the Proponents with a Notice of Cross-
Appeal from the March 18 Order. In addition, on or about April
1, 2002, the California Attorney General's Office filed a
separate Notice of Cross-Appeal from the March 17 Order on
behalf of a number of governmental entities. All of these
parties identified for cross-appeal the following two issues:
(1) whether the Bankruptcy Court erred in entering judgment
under Rule 54(b) of the Federal Rules of Civil Procedure
concerning its ruling on express preemption; and (2) whether it
was an abuse of discretion under Rule 54 for the Bankruptcy
Court to determine that there was no just reason to delay the
entry of judgment on its express preemption ruling. In addition,
the CPUC and CCSF also identified as an issue for cross-appeal
the question of whether the March 18 Order complies with the
requirements of Rule 58 of the Federal Rules of Civil Procedure.

      Settlement and Support Agreement with Senior Debtholders

The modified Second Amended Disclosure Statement advises of the
Court's approval of the Settlement and Support Agreement between
the Plan Proponents and certain holders of Senior Indebtedness,
i.e. the holders of approximately $2 billion in Commercial Paper
Claims, Floating Rate Note Claims, Medium Term Note Claims,
Senior Note Claims and Revolving Line of Credit Claims. (See
prior entries at [00308] and [00243] and the relevant item in
this issue of the newsletter.)

Pursuant to the Settlement and Support Agreement, the principal
amount of the Class 5 Claims held by the holders of Senior
Indebtedness who are parties to the Agreement will be fixed, and
interest will accrue and be paid at certain agreed-upon rates,
but such accrual and payment at the agreed-upon rates may cease,
and prior payments of interest may be recharacterized under
certain circumstances, including a determination by the
Bankruptcy Court that the Debtor is insolvent, the confirmation
of a plan of reorganization other than the Plan, and certain
breaches of the Settlement and Support Agreement by such
holders. These holders of Senior Indebtedness have agreed to
vote their Class 5 Claims, currently held or acquired in the
future, in acceptance of the Plan.

         Motion Seeking Authorization to Pay Certain Claims

Pursuant to the Court's order authorizing Debtor to pay allowed
pre-petition claims for amounts of $5,000 or less (or
voluntarily reduced by the claimant to $5,000), undisputed
mechanics' lien claims and undisputed reclamation claims, the
modified Second Amended Disclosure Statement advises that the
Debtor will pay all such claims on or before July 31, 2002, with
interest at the Federal Judgment Rate from the Petition Date
through June 30, 2002. (See prior entries at [00304] and the
relevant entry in this issue of the newsletter.)

                   Claims and Equity Interests

The modified Second Amended Plan, like previous versions of the
Plan, provides for the payment by the Debtor all Allowed Claims
in full. Allowed Claims shall include the amounts owed with
respect to the period prior to the Petition Date and applicable
interest accrued and unpaid during such period. Holders of
Allowed Claims will also be paid in Cash accrued and unpaid
interest due on such Allowed Claims from the Petition Date
through the Effective Date (Post-Petition Interest), except as
otherwise provided in the Plan. Any Post-Petition Interest shall
be calculated and paid on the Allowed Claim at the lowest non-
default rate in accordance with the terms specified in the
applicable statute, indenture or instrument governing such
Allowed Claim or, if no such instrument exists, or if the
applicable instrument does not specify a non-default rate of
interest, Post-Petition Interest will be calculated and paid on
the Allowed Claim at the Federal Judgment Rate. Except as
provided under applicable non-bankruptcy law, Post-Petition
Interest will not be paid on the following Allowed Claims:
Administrative Expense Claims, Environmental, Fire Suppression
and Tort Claims, and Chromium Litigation Claims.

The following provisions regarding payment of interest have been
added:

   {Pursuant to an Order entered by the Bankruptcy Court on April
    9, 2001 authorizing the interim use of each collateral, the
    Debtor has paid and will continue to pay Post-Petition
    Interest to the holders of Allowed Clams in Classes 3a, 3b
    and 4a.

    In addition, pursuant to the Settlement Order, the Debtor,
    will make

    (i)  payments, as soon as practicable but no later than ten
         (10) days after approval of the Disclosure Statement, of
         pre-petition interest and Post-Petition Interest accrued
         through the applicable Initial Calculation Date (F
         February 28, 2002) to the holders of Allowed Class 5
         Claims for Senior Indebtedness and the holders of
         Allowed Claims in Classes 4c, 4f, 4g and 11, and

    (ii) payments on or before July 30, 2002, of pre-petition
         interest and Post-Petition Interest accrued through the
         applicable Initial Calculation Date (June 30, 2002)

     to the remaining holders of Allowed Class 5 Claims and the
     holders of Allowed Claims in Classes 1, 2, 6, 7, and 10.

     In addition, the Debtor will make payments of Post-Petition
     Interest accruing on and after the applicable Initial
     Calculation Date and through the last day of the last
     calendar quarter ending prior to the Effective Date in
     arrears in quarterly installments (or in the case of such
     first quarter following the Initial Calculation Date, such
     portion of a quarter) as follows:

    (x) on the first Business Day of the next calendar quarter to
        the holders of Allowed Class 5 Claims for Senior
        Indebtedness and the holders of Allowed Claims in Classes
        4c, 4f, 4g and 11 and

    (y) within 30 days following the end of the calendar quarter,
        to the remaining holders of Class 5 Allowed Claims and
        the holders of Allowed Claims in Classes 1, 2, 6, 7 and
        10.

     Any Post-Petition Interest that accrues during the period
     commencing on the first day of the calendar quarter in which
     the Effective Date occurs and ending on the Effective Date
     will be paid on the Effective Date.}

The modified Second Amended Disclosure Statement continues with
the following amended provision:

     Pursuant to the Settlement Order and the Settlement and
     Support Agreement, the accrual and payment of Post-Petition
     Interest will terminate if

     (i)   the Debtor is determined by a Final Order of the
           Bankruptcy Court to be insolvent (on a balance sheet
           basis), with such interest accrual termination
           effective as of the date of insolvency, as determined
           by the Bankruptcy Court,

     (ii)  upon conversion of the Chapter 11 Case to a case under
           Chapter 7; provided that there is not a subsequent
           determination of the Bankruptcy Court that there are
           assets of sufficient value to pay Post-Petition
           Interest on the applicable Allowed Claims, or

     (iii) under circumstances that would allow for
           recharacterization, as described below.

    The amounts to be paid pursuant to the Settlement Order on
    account of Post-Petition Interest may be re-characterized and
    treated as partial payment of the principal amount of the
    applicable Allowed Claims under the following circumstances:

    (i)  in the event that the Bankruptcy Court determines, by
         entry of a Final Order, that the Debtor is insolvent (on
         a balance sheet basis), from the date of insolvency as
         determined by the Bankruptcy Court; or

    (ii) if the Plan is not confirmed and another plan of
         reorganization is confirmed, in which case any payment
         of pre-petition interest and Post-Petition Interest made
         pursuant to the Settlement Order and the Settlement and
         Support Agreement that exceeds the amount of pre-
         petition interest and Post-Petition Interest otherwise
         required to be paid to the holders of the affected
         Allowed Claims under the terms of such other confirmed
         plan of reorganization may, in the sole discretion of
         the proponent(s) of such plan, be recharacterized and
         treated as a partial payment of the principal amount of
         the applicable Allowed Claims.

Provision regarding payment of interest to holders of Disputed
Claims remains the same, as follows:

    "As to any Disputed Claim, within ten (10) days after a Final
     Order or the filing of a stipulation making such Disputed
     Claim an Allowed Claim, the holder of such Allowed Claim
     shall receive all pre-petition interest and, to the extent
     payable, Post-Petition Interest accrued and payable on such
     Allowed Claim pursuant to the Plan as of such date."

Provision regarding payment of fees and expenses is
substantially the same as in the previous version of the
Disclosure Statement, as follows:

   "To the extent allowed by law and any underlying agreement,
    (a) any unpaid fees and expenses accrued through the
    Confirmation Date of the Bond Trustees and the trustees under
    the Mortgage, and various indentures, including, but not
    limited to, the Southern San Joaquin Valley Power Authority
    Agreement (acting in their capacities as trustees and, if
    applicable, acting in their capacities as disbursing agents),
    the Issuer of the PC Bonds, and their respective
    professionals, and Bank of America, N.A., in its capacity as
    administrative agent under the Revolving Line of Credit
    (including such administrative agent's attorney's fees),
    shall be paid by the Debtor within ten (10) days after the
    Confirmation Date. Any such fees and expenses accruing after
    the Confirmation Date shall be payable as provided in the
    applicable agreement providing for such payment, or, in the
    case of Bank of America, N.A., in its capacity as
    administrative agent under the Revolving Line of Credit, at
    least quarterly. Upon payment of such fees and expenses, such
    Persons shall be deemed to have released their Liens securing
    payment of their fees and expenses for all fees and expenses
    accrued through the Effective Date."

Like the previous versions, the modified Second Amended
Disclosure Statement provides that, to the extent the Plan
provides for the satisfaction of a portion of an Allowed Claim
through the issuance of Long-Term Notes, the holder of such
Allowed Claim will receive one Long-Term Note from each of
ETrans, GTrans and Gen. The approximate allocation of such Long-
Term Notes among the issuers will be as follows: ETrans-27%;
GTrans-21%; and Gen-52%. Based on the amounts of Long-Term Notes
provided on Exhibit E to the Disclosure Statement, the Long-Term
Notes received would consist of $325,000 from ETrans, $250,000
from GTrans and $625,000 from Gen.

The holder of such Allowed Claim would also receive unpaid Post-
Petition Interest and a placement fee of $30,000 in Cash.
(Previous versions say that the holder will receive its pro rata
portion of a placement fee.)

In addition, this version of the Disclosure Statement provides
that, if the ETrans Long-Term Notes and the GTrans Long-Term
Notes both had maturities of greater than 10 years, the holder
of the General Unsecured Claim would receive additional
placement fees of $1,625 and $1,250, respectively.

"No fractions of Long-Term Notes or QUIDS Notes will be
distributed. To the extent that the estimated aggregate amount
of Allowed Claims at the Effective Date is greater than those on
which the aggregate amount of Long Term-Notes was based, as
applicable, additional Gen Long-Term Notes would be issued. At
the same time, the amount of Gen New Money Notes would be
decreased by an approximately equal amount. Since the absolute
amount of Gen Long-Term Notes would increase, the relative
allocations of the Long-Term Notes among ETrans, GTrans and Gen
received by the holders of Allowed Claims would change. At the
same time, and as a result of the foregoing, the total amount of
Reorganized Debtor New Money Notes would be increased by
approximately the same amount by which the Gen New Money Notes
are decreased. The actual allocation percentages will be equal
to fractions, expressed as percentages, the numerators of which
are the principal amounts of ETrans Long-Term Notes, GTrans
Long-Term Notes and Gen Long-Term Notes to be issued after
giving effect to Excess Cash (without taking into account any
reduction in such issuance to occur as the result of the payment
of Cash in lieu of fractional Long-Term Notes), respectively,
and the denominator of which is the sum of the foregoing."
(Pacific Gas Bankruptcy News, Issue No. 29; Bankruptcy
Creditors' Service, Inc., 609/392-0900)


PACIFIC GAS: Makes $67MM+ Property Tax Payments to CA Counties
--------------------------------------------------------------
Pacific Gas and Electric Company made property tax payments
totaling $67.8 million to the 49 counties in which it operates.
This amount represents full and timely payment of property taxes
due for the period from January 1 to June 30, 2002.

"Pacific Gas and Electric Company does more than just provide
electricity and gas to our customers throughout northern and
central California -- we also fund vital public services through
payments to local governments, like the ones being made today,"
said Gordon R. Smith, president and chief executive officer of
Pacific Gas and Electric Company. "We are pleased to be able to
keep this commitment."

When combined with the $145 million in local government
franchise fees that the utility is paying this month -- Pacific
Gas and Electric Company will have distributed more than $212
million to California cities and counties so far in 2002.

This will be the third property tax payment Pacific Gas and
Electric Company has made to California counties since filing
for Chapter 11 bankruptcy protection last April. The last of
these twice-yearly payments was made on December 10, 2001. At
that time, the utility also paid $67.8 million to the counties
in property tax.

A full listing of county-by-county payments:

                   COUNTY                     TOTAL
                 --------------           -------------
                 Alameda County           $5,388,535.73
                 Alpine County                24,744.44
                 Amador County               480,134.04
                 Butte County              1,530,105.56
                 Calavaras County            236,338.61
                 Colusa County               371,560.39
                 Contra Costa County       4,474,367.51
                 El Dorado County            424,933.32
                 Fresno County             5,218,863.67
                 Glenn County                283,603.37
                 Humboldt County             538,902.42
                 Kern County               1,795,963.13
                 Kings County                351,703.41
                 Lake County                 229,563,10
                 Lassen County                34,149.81
                 Madera County               587,583.37
                 Marin County                803,143.51
                 Mariposa County             281,639.58
                 Mendocino County            390,072.83
                 Merced County               752,191.30
                 Modoc County                118,248.30
                 Monterey County           1,134,486.17
                 Napa County                 429,448.33
                 Nevada County               582,556.87
                 Placer County             1,885,918.74
                 Plumas County             1,354,062.37
                 Sacramento County         1,153,294.47
                 San Benito County           255,464.77
                 San Bernardino County       306,691.53
                 San Francisco County      4,301,626.43
                 Son Joaquin County        2,648,818.20
                 San Luis Obispo County   11,663,091.65
                 San Mateo County          2,543,872.33
                 Santa Barbara County        300,372.98
                 Santa Clara County        5,296,676.18
                 Santa Cruz county           567,302.60
                 Shasta County             2,233,806.58
                 Sierra County                41,723.73
                 Siskiyou County              74,015.71
                 Solano County             1,490,201.37
                 Sonoma County             1,740,953.25
                 Stanislaus County           498,489.28
                 Sutter County               376,025.74
                 Tehama County               487,852.74
                 Trinity County               47,945.86
                 Tulare County               151,812.07
                 Tuolumne, County            284,468.18
                 Yolo County                 775,304.34
                 Yuba County                 816,015.66
                                          -------------
                 Total                   $67,758,645.53


PENN SPECIALTY: Has Until May 3 to Decide on Unexpired Leases
-------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, the period within which Penn Specialty Chemicals, Inc.
must decide whether to assume, assume and assign, or reject
unexpired leases of nonresidential real property is extended
through May 3, 2002.

Judge Mary Walrath clarifies that the order is without prejudice
to a landlord's right to require the Debtor to assume or reject
a particular Unexpired Leases before the Extension Date, as well
as the right of the Debtor to seek additional extensions of its
lease decision period.

Penn Specialty, one of the world's largest suppliers of
specialty chemicals THF and PTMEG, filed for chapter 11
protection on July 9, 2001, in the U.S. Bankruptcy Court for the
District of Delaware.  Deborah E. Spivack, Esq., at Richards,
Layton & Finger, in Wilmington, Delaware, represents the company
in its restructuring effort.


PHARMACEUTICAL FORMULATIONS: Sets Timetable for Rights Offering
---------------------------------------------------------------
Pharmaceutical Formulations, Inc. (OTC Bulletin Board: PHFR)
announced that it has been advised by the Securities and
Exchange Commission that they will not review the Company's S-1
Registration Statement in connection with a proposed rights
offering to its stockholders.

In addition, the Company announced that it has set the record
date as of the close of business on May 7, 2002 for stockholders
to participate in the offering.  After the record date, PFI will
request acceleration of the effectiveness of its registration
statement for the offering.  The Company expects to mail the
offering material on or about May 13, 2002 and close the
offering on or about June 25, 2002.  In the next few days, PFI
will notify holders of its 8% and 8.25% convertible subordinated
debentures of their right to participate in the offering,
provided they convert their debentures into common stock prior
to the record date.

This press release does not constitute an offer for sale of any
securities.  The rights offering will be made only pursuant to
the prospectus which the Company will issue after the
registration statement is declared effective.  The rights
offering will not be made in any jurisdiction in which
such offering would not be in compliance with the securities or
"blue sky" laws of such jurisdiction.

PFI is undertaking this rights offering for two reasons:
firstly, to enable its stockholders, other than ICC Industries
Inc. to be able to purchase additional shares of its common
stock at the same price as was used to effectuate conversions of
debt and preferred stock by ICC in December 2001
and January 2002; and secondly, to raise additional capital.

As proposed, each person who is a holder of PFI common stock on
the record date for the offer, other than ICC, will receive 2.8
subscription rights for each share of common stock they hold.
Each employee of PFI who is holder of an option to purchase
common stock will receive 2.8 rights for each share of common
stock covered by the option agreement.  The ratio of 2.8 rights
for each share of common stock will enable non-ICC stockholders
to restore their percentage interests in the Company
substantially to the level that existed prior to the recent ICC
conversions.  This was the objective used in the determination
of the number of rights per share.  Rights holders will be
entitled to purchase one share of common stock for each right
held at a price of $.34 per share.  An aggregate of
approximately 39,560,000 shares of common stock will be sold if
all rights are exercised.  This number includes shares which may
be issued to holders of PFI's convertible subordinated
debentures who convert prior to the record date.  The number of
offered shares will be reduced if such convertible debentures
are not converted by the record date.

The rights will be transferable, and shareholders who exercise
their rights will be able to subscribe for additional shares not
taken up by other rights holders.

ICC has waived any rights it may have to participate in this
rights offering by virtue of its holding of common stock or any
other rights.

The Company's common stock is traded on the OTC Bulletin Board
under the symbol "PHFR".

ICC, the holder of approximately 74.5 million shares
(approximately 87%) of the common stock of PFI, is a major
international manufacturer and marketer of chemical, plastic and
pharmaceutical products with 2001 sales in excess of $1.6
billion.  If the rights offering is fully subscribed, ICC's
ownership of PFI will decline to approximately 60%.

At June 30, 2001, Pharmaceutical Formulations, Inc. had a total
shareholders' equity deficit of about $26 million.


PILLOWTEX: Bartlett, et al., Seek Temporary Allowance of Claims
---------------------------------------------------------------
Samuel B. Bartlett, Joseph B. Elly II, Jean J. Melzar, W. Randle
Mitchell Jr., Malcolm W. Stewart and Walter E. Travis -- the
Claimants -- seek the Court's authority for temporary allowance
of their claims against Pillowtex Corporation and its debtor-
affiliates for voting purposes.

Brian A. Sullivan, Esq., at Werb & Sullivan, in Wilmington,
Delaware, relates that the Debtors disputed the Claimants'
proofs of claims stating that their claims are duplicative.

Mr. Sullivan explains that absent temporary allowance of the
Claimants claims for voting purposes under Bankruptcy Rule
3018(a), each of the Claimants is entitled to cast votes only in
connection with the Chapter 11 plan of Fieldcrest, and only in
these amounts:

     Claimant                          Amount of Scheduled Claim
     --------                          -------------------------
W. Randle Mitchell, Jr.                       $979,377
Walter Travis                                 $278,884
Samuel B. Bartlett                            $297,307
Malcolm W. Stewart                            $344,941
Joseph B. Ely, II                           $3,625,623
Jean J. Melzar                                 $79,664

"These Claimants are now seeking, by this motion, authority to
cast votes not only in connection with the Chapter 11 plan of
Fieldcrest, but also with the Chapter 11 plan of Amoskeag," Mr.
Sullivan asserts.  The Claimants are not seeking entitlement to
vote with the Chapter 11 plan of Pillowtex and nor are they
seeking to have their votes tabulated at the higher amounts in
their asserted proofs of claims, Mr. Sullivan clarifies.  The
Claimants contend that they have legitimate claims against
Amoskeag for retirement obligations owed to them under written
agreements.

Mr. Sullivan tells the Court that implementation of the
Tabulation Rules would wholly deprive the Claimants of their
legitimate rights to cast votes under the Chapter 11 plan of
Amoskeag.  However, in light of the fact that:

     (i) proofs of claim constitute prima facie evidence of the
         amount and validity of the claims; and

    (ii) the Debtors have not asserted any substantive objection
         to the claims,

Mr. Sullivan asserts that the Claimants should at least be
allowed to cast ballots with respect to the Amoskeag Chapter 11
plan in the lower amounts scheduled as owing by the Debtors.
Allowance by this Court to cast votes with respect to the
Chapter 11 plans of both Fieldcrest and Amoskeag will provide:

Claimant                       Debtor                   Amount
--------                       ------                   ------
Samuel B. Bartlett            Amoskeag                 $297,307
                               Fieldcrest               $297,307

Joseph B. Ely, II             Amoskeag               $3,625,623
                               Fieldcrest             $3,625,623

Jean J. Melzar                Amoskeag                  $79,664
                               Fieldcrest                $79,664

W. Randle Mitchell Jr.        Amoskeag                 $979,377
                               Fieldcrest               $979,377

Malcolm W. Stewart            Amoskeag                 $344,941
                               Fieldcrest               $344,941

Walter E. Travis              Amoskeag                 $278,884
                               Fieldcrest               $278,884

Therefore, the Claimants ask the Court to temporarily allow them
to cast ballots with respect to the Chapter 11 plans of both
Fieldcrest and Amoskeag. (Pillowtex Bankruptcy News, Issue No.
25; Bankruptcy Creditors' Service, Inc., 609/392-0900)


PRECISION SPECIALTY: Committee Taps Eskin as Litigation Counsel
---------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
chapter 11 case of Precision Specialty Metals, Inc. asks for
permission from the U.S. Bankruptcy Court for the District of
Delaware to employ The Law Office of Marla R. Eskin as Special
Litigation Counsel.

Reed Smith subsequently determined that it would be unable to
conduct the investigation the Committee wants to undertake and
pursue all the actions as special litigation counsel for
conflict reasons.  The Committee resolved that it would be in
its best interests to employ the services of DKW Law Group, P.C.
to assist the Committee in the investigation of the Debtor's
financial affairs and fraudulent issues as may be necessary and
beneficial to the Committee and the unsecured creditors.

DKW relates that it will require the continued assistance of
Eskin as local counsel in its role as special litigation counsel
to the Committee.

The Committee believes that Eskin is well qualified to act in
the capacity of local counsel and special counsel to the
Committee in this adversary action.

The professional services that the Committee may request Eskin
to perform include:

      a) to assist the Committee and DKW in its investigation of
         the pre-petition acts and conduct of the Debtor and Bank
         of America;

      b) the investigation and analysis on behalf of the
         Committee of the Debtor's related-party transactions and
         accounts, preference and fraudulent conveyance issues,
         and other relevant issues which affect the maximization
         of recovery for the creditors.

Subject to court approval, compensation will be payable to Eskin
on an hourly basis, plus reimbursement of actual, necessary
expenses and other charges incurred by Eskin. The attorney and
paralegal presently designated to represent the Debtors and
their current hourly rates are:

      Marla Rosoff Eskin (Owner)     $250 per hour
      Denise Collett (Paralegal)     $95 per hour

Precision Specialty Metals is a specialty steel conversion mill
engaged in re-rolling, slitting, cutting and polishing stainless
steel and high- performance alloy hot band into standard or
customized finished thin-gauge strip and sheet product. The
Company filed for Chapter 11 petition on June 16, 2001 in the
U.S. Bankruptcy Court for the District of Delaware. Laura Davis
Jones, Esq. at Pachulski, Stang, Ziebl, Young & Jones P.C.
represents the Debtor on its restructuring efforts.


PRECISION SPECIALTY: Court Okays Asset Sale Bidding Procedures
--------------------------------------------------------------
Precision Specialty Metals, Inc., the nation's leading stainless
steel conversion mill, announced that it has received approval
from the U.S. Bankruptcy Court, District of Delaware, of bidding
procedures and related activities in connection with the sale of
its assets.

"We are pleased that the bidding procedures were approved and
that PSM has continued to serve our customers and operate our
business without interruption throughout the restructuring and
sale process," said Precision Specialty Metal's President and
Chief Executive Officer Lawrence F. Hall.

As previously announced, Precision Specialty Metals reached an
agreement for the sale of its assets to California-based PSM
Acquisition Corp. for approximately $16.1 million in cash.
Under Section 363 of the Bankruptcy Code, the sale agreement is
subject to higher and better offers, which may be submitted to
Michael S. Goldman of TM Capital at One Battery Park Plaza, 35th
Floor, New York, NY 10004, fax (212) 809-1450.  The auction of
PSM's assets will be conducted in Los Angeles on May 2, 2002.

The transaction is subject to customary conditions, including
the expiration or termination of the waiting period under the
Hart Scott Rodino Antitrust Improvements Act.  The transaction
is scheduled to close on or before May 13, 2002.

Headquartered in Los Angeles, Precision Specialty Metals is a
specialty steel conversion mill engaged in re-rolling, slitting,
cutting and polishing stainless steel hot band into standard or
customized finished thin-gage strip and sheet product.  PSM is
the sole stainless steel conversion mill in the Western United
States, and the largest independent conversion mill in the U.S.
Its products are consumed by the automotive, aerospace,
construction, computer and appliance industries.

The Company filed its voluntary petition in the U.S. Bankruptcy
Court for the District of Delaware in Wilmington on July 16,
2001.


RAILWORKS CORP: Anticipates Bigger Net Loss for Full-Year 2001
--------------------------------------------------------------
On September 20, 2001, RailWorks Corporation and 22 of its
subsidiaries filed voluntary petitions for relief under Chapter
11 of the Bankruptcy Code in the United States Bankruptcy Court
for the District of Maryland. As a result of this bankruptcy
filing, the Company's management and personnel have been
focusing on bankruptcy and reorganization-related matters, which
have caused delays in the collection and review of information
and documents relating to the preparation of the Annual Report
on Form 10-K for the year ended December 31, 2001. As a result,
the Company will not be able to file its Annual Report on Form
10-K for the year ended December 31, 2001 on a timely basis.

RailWorks anticipates that it will report a net loss for the
year ended December 31, 2001 greater than the $60.0 million loss
for the year ended December 31, 2000.

Founded in March of 1998, RailWorks Corporation (RWKS)is a
leading supplier of rail system products, track construction,
rehabilitation, repair and maintenance and installation of
electrification, communication and signaling equipment for rail
applications, and related products and services throughout North
America.


ROMACORP INC: S&P Affirms B Rating Following Bank Loan Amendment
----------------------------------------------------------------
The ratings on Romacorp Inc. and parent Roma Restaurant Holdings
Inc. were affirmed and removed from CreditWatch on April 9,
2002. Romacorp's corporate credit rating was affirmed at 'B'.
Outlook is negative.

The affirmation followed the company's successful negotiation of
an amendment to its credit agreement. Under the terms of the
amendment, for the quarter ended March 24, 2002, required EBITDA
was reduced to $11.5 million from $15.0 million and the required
interest coverage ratio was reduced to 1.4 times from 1.7x.
However, the required EBITDA will increase to $12 million for
the quarter ending September 22, 2002, and to $14 million for
the quarter ending March 23, 2003. The company was not in
compliance with the previous terms of its credit agreement for
the 12 months ended March 2002.

The ratings on Romacorp and parent Roma Restaurant Holdings
reflect the company's relatively small size in the highly
competitive restaurant industry, declining operating results,
and a highly leveraged capital structure. These factors are
somewhat offset by the company's strong brand recognition for
ribs in its primary markets.

Dallas, Texas-based Romacorp operates and franchises Tony Roma's
restaurants, specializing in baby-back ribs. The company
operates 60 restaurants and franchises 192 restaurants in 29
states and 24 foreign countries and territories.

Operating performance declined in the first nine months of
fiscal 2002 as comparable-store sales fell 5.7%, following a
gain of 2.3% in all of fiscal 2001. The deterioration was
partially attributable to weakness in the company's markets that
are sensitive to fluctuations in tourism after the events of
Sept. 11, 2001; more than one-third of company-owned restaurants
are in Florida or Las Vegas. In addition, operating margins
declined to 13.4% from 14.1% the previous year. This resulted
from an increase in the cost of baby-back ribs, which represent
about 25% of the cost of sales for the company, and higher labor
and utility costs. Problems related to the supply of European
beef and subsequent import restrictions on Danish ribs caused
rib prices to rise more than 40%. Although rib prices have
trended down, they are inherently volatile.

Credit measures are weak, with EBITDA coverage of interest at
1.5x for the 12 months ended Dec. 23, 2001, and leverage is
high, with total debt to EBITDA at about 5.8x. Financial
flexibility is provided by a $22.5 million revolving credit
facility, of which $7.2 million was available as of Dec. 23,
2001.

                         Outlook

The company is expected to improve operating results and credit
protection measures as the cost of baby-back ribs moderates.
Failure to achieve improved operating performance or continued
weakness in the company's markets that are sensitive to
fluctuations in tourism could result in a downgrade.


SCAFFOLD CONNECTION: Safway Acquires Assets from Receiver KPMG
--------------------------------------------------------------
Effective April 5, 2002, Safway Steel Products Inc. acquired the
scaffold assets of Scaffold Connection Corporation of Fort
Saskatchewan, Alberta (Canada). Safway negotiated the
transaction with the court appointed receiver, KPMG.

The company will operate in Canada under the name Safway
Scaffold Services, Inc. with offices in Alberta, British
Columbia, Newfoundland, and New Brunswick.  Initially, Safway
will focus its efforts on providing services to refineries and
other industrial sites. Many of the core employees of Scaffold
Connection will be retained by Safway.

In making the announcement, Marc Wilson, Safway's President and
CEO said, "We are all very excited about the chance to
demonstrate Safway's expertise and commitment to providing
world-class service to the Canadian scaffold market."

Safway Steel Products Inc. is the largest scaffold, shoring and
concrete forming company in the United States and has over 60
U.S. locations. Safway provides sales, rental, labor services,
training, engineering, design, project management, and
computerized inventory management.  Safway products and services
are used for new construction and renovation projects,
petrochemical plants, power plants, shipyards, and other
industrial sites.


SENGAC: Trustee Hires Keen to Help Dispose of Retail Portfolio
--------------------------------------------------------------
The Chapter 7 Trustee for Sengac, Inc., the women's apparel
retailer, has filed an application to retain Keen Realty, LLC to
assist in the disposition of the company's U.S. retail
portfolio. The locations operate as Rodier Paris. Keen Realty is
a real estate firm specializing in restructuring retail real
estate and lease portfolios and selling excess assets. Sengac,
Inc., filed for Chapter 7 bankruptcy court protection on March
4, 2002.

"We have nine fantastic locations available in some of the
eastern half of the country's best malls and metropolitan retail
areas." said Craig Fox, Keen Realty's Vice President. "The
street locations include Third Avenue and 75th street in New
York City, Newbury Street in Boston and Walnut Street in
Philadelphia, as well as great mall locations in Galleria at
Tysons II in McLean, VA, Old Orchard Shopping Center in Skokie,
IL and Riverside Square in Hackensack, NJ. We are encouraging
prospective purchasers to put in their bids immediately as our
time frame for marketing these properties is extremely short."
The retail sites range in size from 750+ square feet to 1,600+
square feet. For over 15 years, Keen Consultants, LLC has had
extensive experience solving complex problems and evaluating and
selling real estate, leases and businesses in bankruptcies,
workouts and restructurings. Keen Consultants, a leader in
identifying strategic investors and partners for businesses, has
consulted with over 130 clients nationwide, evaluated and
disposed of over 165,000,000 square feet square of properties,
and repositioned nearly 9,000 stores across the country.

Companies that the firm has advised include: Northern
Reflections, Edison Bros., Cosmetic Center, Long John Silver,
Caldor, Citibank, N.A. (Ames Dept. Stores), Cumberland Farms,
Fayva Shoe, Herman's Sporting Goods, K-Mart, Merry-Go-Round
Stores, Neiman Marcus, Petrie Retail Inc., and Woodward &
Lothrop. Most recently Keen has sold over $125 million of excess
properties for Family Golf Centers, $80 million of excess
properties for Service Merchandise, raised approximately $5
million for Filene's Basement, $4 million for CODA/Jeans West,
and raised $5.5 million for Learningsmith Inc. In addition to
Country Road Clothing, other current clients include: Country
Road Clothing, Warnaco Retail dba Speedo Authentic Fitness,
Cooker Restaurant Corp., Matlack Truck Systems, Inc., U.S.
Trucking Company, Anamet Industrial and Graham Field Health
Products.

For more information regarding the sale of the Rodier Paris
locations, please contact Keen Realty, LLC, 60 Cutter Mill Road,
Suite 407, Great Neck, NY 11021, Telephone: 516-482-2700, Fax:
516-482-5764, e-mail: krc@keenconsultants.com, Attn: Craig Fox.


SUN COUNTRY: Reaches Tentative Agreements with All Labor Groups
---------------------------------------------------------------
Sun Country Airlines has now reached tentative agreements with
all of its labor unions, with Wednesday's addition of an
agreement between the company and the union that represents its
flight attendants, the International Brotherhood of Teamsters
Local 2000.

The deal is the third and final agreement of the airline's three
labor unions. On April 4, Sun Country and the Transport Workers
Union, which represents the airline's dispatchers, signed an
agreement that was unanimously ratified by its membership. Prior
to that, on March 25, the company reached an agreement with the
Airline Pilots Association for a new pilot contract.

The three labor contracts contain identical provisions
including:

--  A two year pay freeze from February 16, 2002 to
February 29, 2004

      --  A three year term of the contract that extends through
March 31, 2005

      --  Common benefits for all employee groups including
medical insurance, dental insurance and 401k and future
discussions of long-term disability and life insurance benefits.

      --  In addition, all past liabilities related to accrued
sick leave and vacation as well as past grievances have been
resolved and/or nullified under the new labor agreements.

         Motions before the United States Bankruptcy Court,
                     District of Minnesota

The new labor agreements, which have also been co-signed by MN
Airlines, LLC will be subject to bankruptcy court approval at a
hearing this Friday, April 12.

MN Airlines has agreed to purchase certain assets of Sun Country
Airlines from the airline's only secured lien holder, USBank. A
final motion on the assumption and assignment of certain
contracts to MN Airlines to facilitate this transaction will
also be heard in bankruptcy court this Friday.

Approval by the judge would allow the sale of assets to close on
Monday, April 15th and enable the new ownership group to assume
operation of the airline under an exemption recently granted by
the Department of Transportation.

                   Government Approval Process

On Friday, April 5, the Department of Transportation approved a
joint application by Sun Country Airlines and MN Airlines, LLC
(MNA) for an exemption allowing Sun Country to continue to
operate under its existing certificates.

With the approval of the exemption, MN Airlines can now close on
the asset acquisition while the Department of Transportation and
Federal Aviation Administration complete their formal review of
the transfer of the authority to MNA.

                          New Schedule

Sun Country Airlines also announced its new summer schedule,
servicing eleven cities with nearly 90 scheduled service
departures and arrivals per week in Minneapolis/St. Paul. The
airline is also servicing numerous scheduled flights other
cities around the country.

Sun Country President and CEO David Banmiller said, "The new
labor agreements and summer schedule are moving the new Sun
Country Airlines in a very positive direction. With the
commitment our ownership group, MN Airlines, we're adding new
service and bringing back employees. The airline is on track to
achieve our goal of profitability."


TAPESTRY VENTURES: Has Until June 24 to Meet CDNX Requirements
--------------------------------------------------------------
Tapestry Ventures Ltd. (CDNX -TPV) announced that it has
received notice from CDNX that Tapestry will be designated as an
Inactive Issuer should it fail to satisfy CDNX that it will meet
all Tier 2 Tier Maintenance Requirements by June 24, 2002. The
common shares of Tapestry Ventures Ltd. resumed trading on March
28, 2002 following a halt of trading of the common shares since
August 8, 2000.


TEMBEC: Completes Redemption of $250MM 9.875% Sr. Notes due 2005
----------------------------------------------------------------
Tembec Inc. announced that Tembec Industries Inc., its wholly-
owned subsidiary, has completed the redemption of its US$250
million 9.875% Senior Notes due 2005 at a price equal to
103.292% of the principal amount plus accrued interest.

Tembec is an integrated Canadian forest products company
principally involved in the production of wood products, market
pulp and papers. The Company has sales of approximately $3.5
billion with over 50 manufacturing sites in the Canadian
provinces of New Brunswick, Quebec, Ontario, Manitoba, Alberta
and British Columbia, as well as in France and the United
States. Tembec's Common Shares are listed on the Toronto Stock
Exchange under the symbol TBC. Anyone wishing to receive
Tembec's future press releases can do so by subscribing on line
to Tembec's distribution list at http://www.tembec.com

As reported in the March 08, 2002 edition of Troubled Company
Reporter, Standard & Poor's assigned a BB+ rating to Tembec
Inc.'s proposed US$275.0 million senior unsecured notes. The
rating reflects its competitive cost structure within the
cyclical, commodity-oriented forest products industry; its
aggressive, yet measured, growth strategy; and its good revenue
diversity. These strengths are offset by Tembec's currently high
debt levels.


TOUCHSTONE SOFTWARE: Can't File Form 10-K with SEC on Time
----------------------------------------------------------
During the first quarter of fiscal year 2002, TouchStone
Software Corporation, Inc. continues to redesign its business
model as well as make numerous changes in an attempt to maintain
a reasonable number of employees based on current revenue. A
time consuming and necessary part of these activities, with an
overall reduction in staff, requires an extension of time.
Therefore, as a result of the above activities, the Company has
been unable to gather the information to be included in the Form
10-KSB in a timely manner without unreasonable effort or
expense.

TouchStone Software Corporation, Inc. and its consolidated
subsidiaries, is a provider of system management software, which
includes basic input/output software upgrades, personal computer
diagnostics for personal computers and embedded systems. System
management software is one of the fundamental layers in any
microprocessor-based system (including PCs) architecture and
provides an essential interface between the system's operating
software and hardware.

As reported in the November 29, 2001 edition of Troubled Company
Reporter, Touchstone Software has suffered recurring operating
losses, has an accumulated deficit of $19,186,883 at June 30,
2001, and is largely dependent on its investment portfolio to
fund projected future operating losses, and accordingly, is
subject to a number of risks. Principally among these risks are
marketing of its products and services which are susceptible to
competition from other companies and the volatility in the value
of the Company's investment portfolio on which it is dependent
to fund its short term operating cash deficits. These factors,
among others, raise substantial doubt about the Company's
ability to continue as a going concern at June 30, 2001.


TRANSFINANCIAL HOLDINGS: Will Delay Form 10-K Filing with SEC
-------------------------------------------------------------
As a result of management time devoted to the sale of
TransFinancial Holdings, Inc.'s financial services operations in
connection with the dissolution and liquidation of the Company
as previously approved by the stockholders, TransFinancial was
unable to complete and file with the SEC the required Form 10-K
within the prescribed time period.

The principal anticipated change in the Company's results of
operations is that operations will show improvement in 2001
relative to 2000, because most of the costs associated with the
closure of the Company's transportation operations occurred in
2000. Nevertheless, the Company is expected to have a loss in
2001 as a result of those closure costs incurred in 2001.


TRI-STAR GOLD: Fails to Maintain CDNX Listing Requirements
----------------------------------------------------------
Effective at the close of business April 9, 2002, the common
shares of Tri-Star Gold Corp. were delisted from CDNX for
failing to maintain Exchange Listing Requirements. The
securities of the Company have been suspended in excess of
twelve months.


UNITED ARTISTS: S&P Keeping Watch on B- Corporate Credit Rating
---------------------------------------------------------------
On April 9, 2002, Standard & Poor's said that its 'B-' corporate
credit rating on Englewood, Colorado-based movie exhibitor
United Artists Theatres Co. remained on CreditWatch with
positive implications, following the announcement that revised
plans to consolidate the company into Regal Entertainment Group
include the repayment of all of United Artists' debt.

The new plan will still consolidate the ownership of United
Artists, Regal Cinemas Inc., and Edwards Theatres Inc. under
Regal Entertainment Group and more closely integrate the
operations of the three companies. Thus, United Artists will
still benefit from the improved profit potential of being
managed as part of a larger, more modern theater circuit. In
addition, the revised plans will improve United Artists'
financial profile by repaying its debt with proceeds from a
planned equity offering by Regal Entertainment.

In resolving the CreditWatch listing, Standard & Poor's will re-
evaluate its view of United Artists based on the completion of
the planned consolidation and the business and financial
strategies for the new Regal Entertainment entity. The review
will include an evaluation of whether these plans warrant
equalizing United Artists' corporate credit rating with that of
the consolidated Regal Entertainment Group.


VALLEY MEDIA: Court Approves Retention of BSI as Claims Agent
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approves
the application of Valley Media, Inc. to employ Bankruptcy
Services LLC as Claims and Noticing Agent.

As Claims and Noticing Agent, BSI will:

      a. Prepare and serve required notices in this Chapter 11
         case;

      b. Within five days after the mailing of a particular
         notice, file with the Clerk's Office a certificate or
         affidavit of service that includes a copy of the notice
         involved, an alphabetical list of persons to whom the
         notice was mailed and the date of mailing;

      c. At any time, upon request, satisfy the Court that the
         Claims and Noticing Agent has the capability to
         efficiently and effectively notice, docket and maintain
         proofs of claim and proofs of interest;

      d. Maintain copies of all proofs of claim and proofs of
         interest filed;

      e. Maintain official claims registers by docketing all
         proofs of claim and proofs of interest on claims
         registers;

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

      g. Maintain all original proofs of claim in correct claim
         number order, in an environmentally secure area and
         protect the integrity of such original documents from
         theft and/or alteration;

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

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

      j. Provide access to the public for examination of copies
         of the proofs of claim or interest without charge during
         regular business hours;

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

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

      m. Provide temporary employees to process claims, as
         necessary; and

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

BSI will also assist the Debtor in:

      -- the preparation of schedules, statements of financial
         affairs and master creditor lists;

      -- the reconciliation and resolution of claims; and

      -- the preparation, mailing and tabulation of ballots for
         the purpose of voting to accept or reject a plan or
         plans of reorganization in this chapter 11 case.

For professional fees, the Debtor agrees to pay BSI in its
customary hourly rates as:

      Kathy Gerber           $195 per hour
      Senior Consultants     $175 per hour
      Programmer             $125 to $150 per hour
      Associate              $125 per hour
      Data Entry/Clerical    $40 to $60 per hour

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


VERADO HOLDINGS: Sells Denver Data Center to ViaWest Internet
-------------------------------------------------------------
Verado Holdings, Inc. and its wholly-owned subsidiary Verado,
Inc. (OTC Bulletin Board: VRDOQ.OB) announced that it closed
the sale of the Company's Denver, Colorado data center to
ViaWest Internet Services, Inc. and an affiliate of ViaWest. The
closing occurred on March 29, 2002. The terms of the transaction
were not disclosed.

Verado Holdings, Inc., headquartered in Denver, Colorado, is a
provider of outsourced managed and professional services and
data center solutions for businesses. Verado's state-of-the-art
data centers host, monitor and maintain mission-critical Web
sites, e-commerce platforms and business applications. Verado
provides managed services to enterprises including MetLife
Investors, KBKids.com, Toshiba, Parascript and more. Verado
filed for Chapter 11 reorganization on February 15, 2002 in the
U.S. Bankruptcy Court for the District of Delaware.


WAVERIDER COMMS: Commences Trading on OTCBB Effective April 10
--------------------------------------------------------------
WaveRider Communications Inc. (OTCBB:WAVC) announced it will
commence trading on the OTC Bulletin Board effective April 10,
2002 under the trading symbol WAVC.

"While we would have preferred a move to the Nasdaq Small Cap
exchange, the OTC Bulletin Board provides for ongoing liquidity
for our shareholders and continued access to the financial
markets for the company," said Bruce Sinclair, President and
Chief Executive Officer, WaveRider Communications Inc. "With the
completion of our recent financing initiatives, and the
introduction and growing customer acceptance of our Last Mile
Solution(R) Starter Kits, we expect WaveRider is positioned to
execute our business plan for 2002 and achieve revenue gains in
2002, leading to profitability for Q4, 2002."

WaveRider Communications Inc. -- http://www.waverider.com-- is
a leading wireless information technology company that develops,
manufactures and markets products for data communications and
Wireless Internet Networking (WIN). WaveRider's high performance
products use direct sequence spread spectrum technology and
operate in the license-free 900 MHz and 2.4 GHz ISM frequency
bands. NCL Series Wireless Bridges and Routers provide the
wireless connection between single or multiple computer
networks. Integrated network management features ensure data is
quickly forwarded to its intended destination based on network
conditions. WaveRider's LMS (Last Mile Solution(R)) Product
Family connects wireless modems that offer high-speed
connections to the Internet for business and residential
customers. WaveRider is traded on the OTC Bulletin Board under
the symbol WAVC.


* PwC Predicts 200 Public Company Bankruptcy Filings in 2002
------------------------------------------------------------
Of the 200 public companies that PricewaterhouseCoopers predicts
will file for bankruptcy in 2002, 50 percent will be in the
manufacturing sector, and 20 percent in the service sector.
This is according to PricewaterhouseCoopers' Phoenix Forecast:
Industry Bankruptcies and Restructurings 2002.

The report goes on to predict that the majority of public
company bankruptcies will be concentrated in the
telecommunications, auto, computer hardware, metals (steel),
chemical and retail industries.

"What we're seeing in each of these sectors is the continuing
economic fallout that comes after a period of nine or ten years
of unbridled growth," said Carter Pate, author of the report and
managing partner of PricewaterhouseCoopers Financial Advisory
Services.  "We had a sharp and difficult contraction, compounded
by the events of September 11th, and these have exacerbated
conditions for companies already beset by high leverage and
other risks."

PricewaterhouseCoopers based its forecast on 2001 bankruptcy
data, as compared with 1991 figures, and on an analysis of
currently under-performing public companies.  The report finds
that the industry concentration of Chapter 11 filings in 2001
differed markedly from that of 1991.  Of the public companies
that filed for bankruptcy in 2001 for which liability data were
available, 27 percent were service sector firms and 34 percent
were manufacturing companies, representing a slight increase in
manufacturing bankruptcies and a large increase in service
sector bankruptcies over the past decade.

However, for the public companies where complete liability data
were available, manufacturing accounted for less of total
liability than the previous recession:  21 percent of total
liabilities in 2001 vs. 46 percent in 1991.  Within the
manufacturing sector, industrial and commercial machinery firms
dominated 1991 filings, while the electronic and electrical
equipment sectors led manufacturing bankruptcies in 2001.
As a predictor of future business failures,
PricewaterhouseCoopers also identified public companies with six
consecutive quarters of accelerating declining earnings.  Out of
234 firms within this category, 47 percent are within the
manufacturing sector, and 23 percent the services sector.  Those
industries likely to see increased numbers of bankruptcies -
telecommunications, auto, computer hardware, metals (steel),
chemicals, and retail - lie primarily within the manufacturing
sector, and have experienced significant distress over the past
18-24 months.

Highlights of the Report:

Telecommunications

      - Failures will include CLECs, co-location and long-haul
fiber companies and larger emerging carriers hurt by weak
markets and over-leverage.  Subsidiary listings, rights offering
and de-mergers are expected as firms cancel expansion plans or
avoid debt downgrades.

      - Recovery is predicted for late 2002/early 2003, and
strong long-term growth as telecomm spending relative to
GDP(Gross Domestic Product) doubles over next decade.

Automotive

      - Industry is yet to absorb negative impact of zero percent
        financing strategy

      - Continued decline in Big Three's market share, profit
        margins and branded dealerships (12% decline since 1991)

      - Replacement parts manufacturers will face substantially
        weakened profits


Metals

      - Steel industry distress: 25 domestic steel/steel-related
        firms filed Chapter 11 since 1998, including #3 and #4
        producers, of which 5 in 2001

      - Outlook positive: thanks to depressed imports and weak
        demand, supply expected to fall and prices to rise

      - Profits will rebound with recovery of economy and auto
        industry, as 25 percent of steel supply goes to
        automotive applications

Computer Hardware

      - 2Q2001 saw 2 percent decline in worldwide shipments-
        first decline in industry's history; 8 percent total in
        global PC shipments for FY2001

      - Industry rebound by 2003: computer hardware spending (40
        percent of IT spending) to rise with IT spending ($1.7
        trillion by 2003), and top 5 vendors to own over 70
        percent of global market

Chemicals

      - 2001 worst year in 2 decades, due to rising energy costs,
        excess capacity and economic slowdown.  Sales and income
        for top 20 commodity and diversified companies declined
        in 3Q2001, and industrial sales declined 6.3 percent in
        2001

      - Despite expected poor short-term financial results, 2002
        will see improved profits (still below profits peak 2000
        levels), consolidations, and 17.3 percent decline in oil
        prices over 2000 levels.

Retail

      - Approx. 9 percent of 200 bankruptcies forecast for 2002
        to occur in wholesale and retail sectors, compared with
        19 percent of 257 public bankruptcy filings in 2001

      - Recovery: Painful cost-cutting, inventory management and
        debt restructuring by chain and department stores will
        lead to improved profits in 2002; consumer demand to
        drive growth of discount stores

Carter Pate, managing partner of PricewaterhouseCoopers
Financial Advisory Services, is author of The Phoenix Effect:
Nine Revitalizing Strategies No Business Can Do Without (Wiley,
March 2002) as well as a co-author of Workouts and Turnarounds
II (1999).

                          *   *   *

PricewaterhouseCoopers -- http://www.pwcglobal.com-- helps its
clients develop and execute integrated solutions to build value,
manage risk and improve their performance.  Drawing on the
knowledge and skills of 155,000 people in 150 countries, we
provide a full range of business advisory and consulting
services to leading global, national and local companies and to
public institutions.


* Mary Jo White Joining Debevoise & Plimpton to Head Litigation
---------------------------------------------------------------
Debevoise & Plimpton announced that Mary Jo White, who served as
United States Attorney for the Southern District of New York
from June 1993 to January 2002, will join the firm as partner
and Chair of its 150 lawyer litigation department.  Ms. White, a
widely respected prosecutor of complex business crimes,
terrorism, organized crime and racketeering cases during her
tenure as head of the premier prosecutorial office in the
country, had previously been a partner of the firm from 1983 to
1990.

Rick Evans, Presiding Partner of Debevoise, says, "We are
excited that Mary Jo has decided to return to the firm as head
of our already leading litigation practice.  She is one of our
nation's preeminent lawyers, and her unique blend of experience,
intellect, leadership and judgment will be an enormous asset to
our clients."

Ms. White will chair the litigation group of the firm, which
includes 32 partners, 10 counsel and 108 associates who are
engaged in a broad range of disputes in U.S. federal and state
courts and agencies and before arbitration tribunals worldwide.
The group has tripled in size from 50 litigators in 1982, the
year before Ms. White first became partner, to its current
position as one of the largest such groups in New York City.

"I am very happy and honored to be joining Debevoise," says Mary
Jo White. "The firm has a tremendous client base, a very strong
litigation practice and values that I share and greatly admire.
I look forward to working closely with the firm's lawyers and
clients, helping to build an even stronger litigation practice
for the future and being involved in an exciting practice with
some of the finest lawyers in the nation."

Ms. White expects to concentrate on internal investigations and
defense of companies and individuals accused by the government
of involvement in white collar or corporate crime or civil
securities law violations, and on other major business
litigation disputes and crises.  For her criminal work, she will
lead an existing Debevoise team that includes seven former
Assistant U.S. Attorneys with extensive experience in major
commercial investigations and prosecutions.  In addition to her
prosecutorial experience as U.S. Attorney, Ms. White has over a
decade of experience in the private sector, representing clients
in parallel civil and criminal proceedings, white collar
criminal investigations, SEC enforcement proceedings involving
allegations of accounting and other securities law violations
and internal investigations. This broad experience will enable
her to provide advice and representation to clients on a very
wide range of matters.

As U.S. Attorney, Ms. White oversaw the successful investigation
and prosecution of many of the last decade's most prominent and
complex criminal actions, involving white collar and securities
and financial institution frauds, corporate criminal wrongdoing,
international terrorism, international money laundering,
official corruption, organized crime, racketeering and gang
activity by the largest and most violent gangs in New York City.
Her terrorism prosecutions included actions against individuals
with ties to al-Qaeda, the Osama bin Laden terror group, as well
as the conviction of Ramzi Yousef, the mastermind of the 1993
World Trade Center bombing.

Prior to serving in the Southern District, Ms. White served as
Chief Assistant and Acting U.S. Attorney in the Eastern District
of New York.  She was the first and only woman to serve as the
U.S. Attorney for the Southern District of New York, widely
regarded as the premier U.S. attorney's office in the country.
She was recently recognized by The National Law Journal as one
of the nation's ten top women litigators.

From 1978 to 1981, Ms. White served as an Assistant U.S.
Attorney in the Southern District of New York, where she became
Chief Appellate Attorney of the Criminal Division.  Prior to
that, she worked as an associate at Debevoise from 1976 to 1978.
Ms. White served as a law clerk to Hon. Marvin E. Frankel in the
Southern District of New York and was admitted to the Bar in New
York in 1975.  She graduated from William & Mary, Phi Beta Kappa
(B.S., Psychology, 1970), The New School for Social Research
(M.A., Psychology, 1971) and Columbia Law School (J.D. 1974)
where she was a top officer of the Law Review.

                            *   *   *

Debevoise & Plimpton, an international law firm with over 500
lawyers, provides its clients with a full range of services in
corporate, litigation, tax and trusts and estates law from
offices in New York, Washington, D.C., London, Paris, Frankfurt,
Hong Kong and Moscow.

The firm has been involved in many of the most prominent
investigations and litigations of recent years involving major
financial reversals, restatements of reported financial results,
allegations of securities fraud or other corporate wrongdoing.
Its litigators also practice in such areas as SEC enforcement,
mass tort product liability, antitrust, intellectual property,
international arbitration, bankruptcy, mergers and acquisitions,
consumer fraud, employment matters and major contract disputes.

Additional Biographical information:

Mary Jo White served as the United States Attorney for the
Southern District of New York from June 1, 1993 until January 7,
2002.  Ms. White was the first and only woman to serve as the
United States Attorney for the Southern District of New York,
widely recognized as the premier U.S. Attorney's office in the
country.  As U.S. Attorney, Ms. White supervised more than 200
Assistant United States Attorneys with the responsibility of
enforcing the federal criminal and civil laws of the nation.
Ms. White also served as the first Chairperson of Attorney
General Janet Reno's Advisory Committee of United States
Attorneys from all over the country.

Under Ms. White's leadership, the U.S. Attorney's Office for the
Southern District of New York has successfully investigated and
prosecuted numerous cases of national and international
significance. These include cases involving large scale white
collar and complex securities and financial institution frauds
as well as cases involving corporate criminal liability,
terrorism, international money laundering, police and other
corruption, organized crime, civil rights, environmental law
violations, narcotics trafficking and major racketeering cases
that have dismantled the largest most violent gangs in New York
City.

Prominent among those cases are:

      * Terrorism: Prosecution of those responsible for the
bombing of the World Trade Center in 1993; the terrorists who
planned to blow up the United Nations, the FBI Building in
Manhattan, and the Lincoln and Holland Tunnels; the terrorists
who plotted to simultaneously blow up a dozen jumbo jets; those
responsible for the bombings of the U.S. Embassies in Nairobi,
Kenya and Tanzania in 1998, including Osama Bin Laden; and the
investigation of the terrorist attacks of September 11, 2001 on
the World Trade Center and the Pentagon.

      * Corporate Criminal Liability: Prosecutions including the
conviction of Bankers Trust Company for earnings management
related offenses; and Republic New York Securities Corporation
for securities fraud and the payment of over $600 million in
restitution to investors.

      * Securities Fraud: Prosecutions of cases involving
financial statement and accounting fraud, IPO fraud, fiduciary
fraud, Internet fraud and insider trading.

      * Racketeering: Prosecutions against members of organized
crime, including John A. Gotti and the "Mobstock" cases
involving numerous organized crime members and associates who
had infiltrated the stock market; the indictment for widespread
racketeering and related charges against 39 defendants including
alleged members and associates of five different La Cosa Nostra
families; RICO gang prosecutions against the leaders and members
of 25 of NYC's largest most violent gangs.

Ms. White herself has received numerous awards and honorary
degrees for her professional accomplishments, including: the
George W. Bush Award for Excellence in Counterterrorism and the
Agency Seal Medallion given by the CIA; the Director of the
FBI's Jefferson Cup Award for Contributions to the Rule of Law
in the Fight Against Terrorism and Crime; the Sandra Day
O'Connor Award for Distinction in Public Service; the John P.
O'Neill Pillar of Justice Award given by the Respect for Law
Alliance; The New York County Lawyers' Association Edward
Weinfeld Award for Distinguished Contributions to the
Administration of Justice; the Respect for Law Alliance's
"Prosecutor of the Year" Award; the Federal Law Enforcement
Foundation's "Community Leadership Award"; the "Law Enforcement
Person of the Year" Award from the Society of Professional
Investigators; the "Magnificent 7" Award from Business and
Professional Women USA; the Anti-Defamation League Lawyer's
Division "Human Relations Award"; the National Organization of
Women's "Women of Power and Influence Award"; St. John's
University Criminal Justice Program "American Prosecutor's
Award"; the Columbia University School of Law Association's
"Medal for Excellence; and was named to The National Law
Journal's 2002 list of Top 10 Women Litigators.

From 1983 through March 1990, Ms. White was a litigation partner
at Debevoise & Plimpton, where she specialized in white collar
defense work, SEC enforcement matters, and commercial and
professional civil litigation.  From 1978 to 1981, Ms. White
served as Assistant U.S. Attorney in the Southern District of
New York, where she became Chief Appellate Attorney of the
Criminal Division.  Prior to that, she worked as an associate at
Debevoise from 1976 to 1978.  Ms. White served as a law clerk to
the Hon. Marvin E. Frankel in the Southern District of New York
and was admitted to the Bar in New York in 1975.  She graduated
from William & Mary, Phi Beta Kappa (B.S., Psychology, 1970),
The New School for Social Research (M.A., Psychology, 1971) and
Columbia Law School (J.D. 1974) where she was an officer of the
Law Review.


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

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

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

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

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

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

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

                           *********

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
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.  Information
contained herein is obtained from sources believed to be
reliable, but is not guaranteed.

The TCR subscription rate is $625 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each.  For subscription information, contact Christopher
Beard at 240/629-3300.

                      *** End of Transmission ***